| | | | We’ve seen this bubble pattern play out countless times over the years — GameStop (GME), Tilray (TLRY), even Super Micro Computer (SMCI) more recently. It starts with a clean rally, turns parabolic, gets fueled by euphoria, then chops sideways.
After that, the trapdoor opens. Price collapses back to earth, usually wiping out months of gains in a matter of days or weeks.
Gold is following that playbook right now.
This Isn’t a New Pattern
This type of blow-off top followed by a violent retrace isn’t unique to stocks. Bitcoin’s been through the cycle multiple times — surge, consolidate, retrace. Rinse and repeat. It’s a natural part of how speculative markets move.
Now, could gold keep running? Absolutely.
But the longer it goes without a real pullback, the more likely it is we see that classic flush. The current rally has been strong, but it hasn’t touched major support since November 2023. That’s a long stretch to go without retesting a key level, especially in a commodity known for mean reversion.
A sustainable rally builds on solid foundations — clean retraces, consolidations and steady stair-step moves. When it goes exponential, watch out. That’s when the bubble psychology takes hold, and what follows is rarely fun for late longs.
If you’re long gold, you don’t need to panic. But you should be realistic. Expecting a straight shot to $5,000 without any shakeouts is wishful thinking. History suggests we’re more likely to see a sharp pullback first — possibly even a full round trip to the breakout level — before any serious move higher resumes.
Gold bulls may still have their moment. Just don’t forget how these patterns usually play out.
Now be sure to join me live at 9:15 a.m. ET for “Morning Monster,” my market-open livestream on YouTube!
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