The price of gold has been through 3 bubbles which burst since the U.S. went off the gold standard. Though the price took years to surpass the earlier peak it never fell back to the pre-bubble level.
War and Inflation Are Supposed to Be Gold’s Friends. Not This Time.
Investors would have been better off in microcap stocks than in the oldest source of safety
By James Mackintosh, The Wall Street Journal, March 22, 2026
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At one point Thursday the gold price was down 14% from before the Israeli-U.S. war against Iran began…
Put simply, gold had become wildly popular over the past year, so when the war started it was the obvious thing to sell, either for caution or to pay down debt…
As speculators pull in their horns, gold should naturally suffer…
As with all assets, once the crowd has left, the price can return to tracking what counts as fundamentals. In gold’s case, that means inflation, interest rates and geopolitics. But how many of the buyers of the past few years have to sell to get there remains unknown. If those sellers include central banks, there could be a lot farther to fall before gold rediscovers its luster. [end quote]
As the price of oil rises many countries will sell their gold to pay for oil. American investors who leveraged purchases of gold funds or even stock funds will sell gold to meet margin calls.
Last week’s fugly Control Panel intensified this week so I’ll just post a link to last week’s Control Panel instead of repeating myself. All the links are below.
The options market is predicting a higher chance that the Federal Reserve will raise the fed funds rate than reducing it before September because inflation is too high.
https://www.nytimes.com/live/2026/03/22/world/iran-war-oil-trump
Iran and the United States traded threats over critical energy infrastructure in the Middle East, with Tehran vowing on Sunday to retaliate if President Trump followed through on a warning that he could target Iranian power plants.
Mr. Trump said late Saturday that the United States would “obliterate” the power plants — which millions of Iranians depend on — if Tehran did not fully open the Strait of Hormuz within 48 hours. The strait, a key oil shipping route, has been choked off by Iranian strikes. [end quote]
Financial stress is rising. The Fed has begun a little quiet QE. Even Fed Chair Jerome Powell mentioned the stagflation of the 1970s, if only to say that today’s economy isn’t seeing it. He left off the word “yet.”
The METAR for next week is stormy but probably not critical…yet.
Wendy
https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html