TSCS@SCapStrategist
Right, the bear case, head on, because there is a story doing the rounds that gold tanks soon since central banks will be forced to sell it to scrape together dollars. Let me save you some money.
That story bolts together three completely different things that point in opposite directions.
One, a reserve manager who needs dollars sells Treasuries first, not gold. Gold is the last thing a central bank sells in a crisis, because flogging it crystallises the hedge loss and screams to the whole world that you are desperate. The official sector has been a net buyer right through this war, not a seller.
Two, the version that is actually real is the flush, where leveraged Western holders, the ETFs and the futures crowd, get margin called and puke gold into a dollar squeeze. That is the 2008 move, and it is an entry, not an exit.
Three, the version that genuinely breaks my thesis is central banks pausing their buying, which quietly kicks the floor out.
Here is the only thing worth remembering. The flush and the floor failing look identical on the screen. Gold down hard, both times. The tell is who is doing the selling. ETF outflows with the dollar ripping through its ceiling is a flush, and you buy it with both hands. Official sector demand rolling over for two straight quarters is the floor going, and you cut.
Same chart. Opposite trades. Do not get them backwards.
