Categories: General Market Commentary
Topics: General Market Commentary- DPC

Gold's Pullback Is a Buying Opportunity

Gold just reminded us that it’s still a volatile asset.

But let’s not mistake a short-term dip for a change in the bigger picture. Nothing in the macro backdrop or policy landscape has shifted. If anything, this kind of pullback tends to reinforce a bullish trend—not end it.

Gold 3 month chart

The “Run It Hot” Setup Is Still in Play

Let’s go back to the core idea from my original article: The Trump administration is actively running the economy hot. We're talking about aggressive fiscal spending, tariff-induced supply shocks, and a central bank that's been more than willing to play along.

That trifecta: stimulus, supply stress, and monetary compliance, creates persistent inflation and growing pressure on the U.S. dollar. And guess what? A few red candles on a gold chart don’t change that.

  • Tax cuts, tariff-related revenues, and even refund checks are still feeding into the system.
  • The national deficit and debt path? Still shooting up with no serious talk of austerity.
  • And tariff pass-throughs? We're not done yet. Companies are still slowly raising prices to offset higher costs.

A short-term dip in gold doesn’t undo years of policy excess. If anything, it gives markets and policymakers a chance to pretend inflation is “under control” just long enough to double down on the same playbook.

Focus on Real Yields, Not Daily Noise

Gold doesn’t care about day-to-day headlines. It moves based on real yields and how much faith people have in fiat currency.

Sure, you might see some gold selling if:

  • CPI data comes in a little cooler than expected
  • The dollar pops from short-covering
  • Risk-on assets catch a bid

But the long-term direction? That’s still driven by:

  • Massive government deficits that have to be funded somehow
  • A Federal Reserve stuck between inflation optics and recession fears
  • Sticky inflation expectations, even if month-to-month data gets noisy

In that world, real yields hit a ceiling. And when real yields stay structurally below inflation, gold shines. A dip that still leaves gold well above long-term trendlines is just that—a dip. Not a trend reversal.

This Dip Was More About Positioning Than Fundamentals

What we just saw wasn’t some deep macro rethink. It was a classic positioning washout.

Gold had a huge run earlier in the year. As it climbed, more traders jumped in, especially leveraged players and trend followers. But when gold didn’t break to new highs on the latest economic headline, and yields or the dollar bounced a bit, those weak hands bailed.

That’s actually bullish for three reasons:

  1. It clears out froth and reduces the risk of a bigger unwind later.
  2. It transfers gold from short-term traders to long-term holders (think central banks, institutions, and allocators with staying power).
  3. It rebuilds the “wall of worry” that bull markets tend to climb.

Gold remains well above its 200-day moving average. 

The Macro Picture Still Points to Higher Gold

Let’s be real: for gold not to make a run at $6,000, you’d need to see:

  • A political shift back to fiscal responsibility (not happening)
  • A Fed willing to trigger a deep recession to crush inflation (nope)
  • A structurally stronger dollar driven by reform, not just rates (not even close)

Instead, here’s what we are seeing:

  • More stimulus, not less
  • A Fed that’s constrained by political pressure
  • A dollar that’s behaving more like a tactical trade than a global fortress

That backdrop is exactly what supports:

  • Ongoing central bank gold buying
  • More institutions adding gold as a hedge, not just against recession, but against reckless policy
  • A longer runway for rising nominal prices, even if real rates bounce around in the short term

The price path may zigzag. The policy path is a straight line.

Put simply: gold just reminded us it’s volatile. But the bigger picture, the reason to own it, hasn’t budged.

The thesis is intact. The macro trend is alive and well. And the path to $6,000 still looks wide open… just a little more stair-step than straight shot.

And gold scripts still offer the best path to massive gains in the gold space.

Keep coming back,

Chris Curl

Chris Curl
Editor, Daily Profit Cycle