Gold has truly collapsed, or is this an extreme shakeout? Is the legendary main upward wave still on the horizon? Here are my three points of judgment!

Recently, this wave of gold correction has left many people stunned. Nine consecutive declines plus nearly 9% drop in a single day directly broke through the 4100-point level. Although there has been a slight rebound in the past two days, it still looks unstable.

Many believe this is a collapse, but in my opinion, it’s more like an extreme shakeout—this kind of movement has occurred multiple times before. The most recent was during the 2018–2020 gold bull market: gold prices soared to 2073, and the entire market was wildly bullish. Then came a violent shakeout that lasted a year, dropping to 1680, a decline of over 37%. At that time, many thought gold was finished and the bull market was over, but in 2022, it hit new highs again.

The pattern is simple: in every major gold bull market, there’s always a deep shakeout that “forces you to give up your positions.” If this judgment is correct, based on historical trends and looking for a similar pattern, from the peak of 5600 to the recent low of around 4100, the retracement is about 27%. So I said a few days ago that it’s possible to start buying in stages. There’s roughly another 10% or so of volatility left—unless the entire financial system encounters a major problem.

Why do I think this way? There are three main reasons:

1. The rate-cutting cycle isn’t over. The structural changes brought by AI are still ongoing, and long-term liquidity won’t be completely tightened.

2. Gold still has a “last dance.” If the 4100–4300 zone successfully forms a bottom, there’s a chance to push back to 5600 or even higher.

3. The true bear market hasn’t arrived yet. Historically, gold peaks when the rate-cutting benefits are fully realized, and we’re not there yet. The rate-cutting cycle has not officially started; the 10-year U.S. Treasury yield is around 4.4%. Given the current debt levels, it’s approaching the system’s limit. If interest rates continue to rise, fiscal interest payments will become unsustainable, and bank assets will also be under pressure. Therefore, the room for rate hikes is very limited, and eventually, we will enter a rate-cutting cycle.

Coupled with the long-term background of geopolitical tensions and the erosion of dollar hegemony, the main upward wave for gold may not have truly arrived yet—it might be brewing after this deep shakeout. However, the timing could be a bit long; if it happens quickly, it could be after September this year, or if slower, we might have to wait until after April next year. $BTC $ETH #稳定币去利息化博弈升温 #美众议院听证会推进证券代币化 #以太坊L2叙事再升级