Easy Come, Easy Gold: Why the Metal Is Tanking While Inflation Fears Rise

I’ve said it before, and I’ll say it again. I am not a fan of gold (XAUUSD). I get it, it has some vicious rallies. But overall, I’d rather be a long-short type with stocks and bonds. I do allocate to gold — but lightly. And more out of a sense that it fits OK in a permanent portfolio, as there are occasions in which it is practically the only thing that works.
I remember speaking to a group the week I opened my own investment advisory firm. It was early 2012, and I was practically accused of blasphemy. Because at the time, gold was on a run, and my usual chart work said it was highly unlikely to continue. Here we are again.
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Gold was the story of late 2025 and early 2026. Then, it hit a structural wall this month. That has left investors asking why the ultimate inflation hedge is collapsing just as energy-driven inflation fears are reaching a fever pitch. And, why the primary signal for this shift is a staggering outflow from the SPDR Gold Shares (GLD), which recently recorded its largest single-day exit in years — a massive $3 billion liquidation that marked a 13-year high for monthly outflows.
A Closer Look at GLD
This daily chart shows GLD so heavily sold down that the PPO can’t go much further. However, the 20-day and 50-day moving averages indicate there’s a lot more downside risk. And, if any asset class is set up to sell off as violently as it surged, it is this one.
Because, as we all know, gold does not have earnings, does not pay a dividend, and does not have a valuation metric comparable to stocks and bonds. It trades on greed and fear. Suddenly, fear is winning.
Here’s the weekly view. The thing about parabolic moves up is that when the reverse happens, we get technical pictures like the one below. The 200-day moving average is 12% south of Friday’s close.
The current "easy come, easy gold" environment (my phrase to describe what’s happening) is the result of three converging forces that have turned gold’s traditional tailwinds into a macro vice. When equity markets face conditions like this, institutional managers often face margin calls.
Gold is one of the most liquid assets in the world. Managers sell it, not because they have lost faith in the metal, but because it is one of the few assets they can exit at a fair price on short notice to raise cash.