A Quick Update on Our $4,400 Gold Entry

In our March 20 report, “Gold Is Breaking Its Most Important Rule,” we argued that the market was mispricing gold by unwinding its exposure due to rising real interest rates. The prevailing view was that higher oil prices, driven by supply disruptions linked to the Strait of Hormuz, would lift inflation expectations and pressure gold. However, this interpretation overlooked the more dominant driver: structural indebtedness.

Rather than higher inflation expectations derailing gold’s bull market, the expansion of fiscal deficits, accelerated by war-related spending and rising global military outlays, continues to provide a powerful tailwind. At the time, with gold trading at $4,623, we identified an “ideal long-term accumulation zone” around $4,400. While prices briefly dipped below that level, gold has since rebounded to $4,820, marking a 10% move higher.

Gold rebounding from our $4,400 “ideal re-entry level” (now at $4,820)

Recent geopolitical developments reinforce this view. While details of the latest agreement remain limited (or unconfirmed), it appears that Iran retains control over the Strait of Hormuz and may be settling transit flows in Chinese yuan (potentially equivalent $2mln per transit). Reports also suggest that China played a key role in facilitating the ceasefire, effectively strengthening its strategic influence in the region through its relationship with Iran.

At the same time, Gulf states have been forced to reassess the reliability of U.S. security guarantees, particularly given the limited effectiveness of traditional defenses against missile and drone attacks. This could prompt a recalibration of regional alliances, potentially weakening one of the structural pillars supporting the U.S. dollar.

The market response reflects this shift: the dollar is weakening while gold is rallying. In our view, this is not coincidental but a direct repricing of geopolitical and monetary dynamics. Gold has now reclaimed its 20-day moving average at $4,729, and as long as prices hold above this level, the structural bull trend remains intact.

Bottom line: The +10% gold rally is not just justified, it remains one of the highest-conviction trades in the current macro environment. Please revisit the full report here.

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