Cathie Wood Warns The Real Bubble Is Gold As Robin Brooks Exposes 'Bogus' Central Bank Buying Myth

The concern satellite is facing a stark informing arsenic ARK Invest's Cathie Wood and erstwhile IIF Chief Economist Robin Brooks signal that the historical rally successful golden is simply a speculative bubble nearing its breaking point.

Wood argues that gold's caller ascent is not a reflection of economical stability, but a “parabolic move” emblematic of a cycle’s end. She notes that the marketplace headdress of golden arsenic a percent of the U.S. wealth proviso (M2) has reached levels not seen since the Great Depression.

"The ratio of golden to M2 has deed the all-time precocious recorded during The Great Depression successful 1934. In that crisis, the dollar devalued comparative to golden by astir 70% connected January 31, 1934, the authorities banned backstage ownership of gold, and M2 collapsed," Wood posted connected X.

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Wood maintains that portion investors are focused connected technology, the existent information lies successful precious metals. "In our view, the bubble contiguous is not successful AI, but successful gold. An upturn successful the dollar could popular that bubble, a la 1980 to 2000 erstwhile the golden terms dropped much than 60%."

Odds are precocious that the golden terms is heading for a fall. Intraday today, the marketplace headdress of golden arsenic a percent of the US wealth proviso (M2) deed an all-time high: higher than its highest successful 1980 erstwhile ostentation and involvement rates soared to the mid-teens and, adjacent much shocking… pic.twitter.com/3nHLqIK22t

While galore bulls recognition the rally to organization diversification, Brooks argues successful a Substack station that the information utilized to enactment this is fundamentally flawed.

Brooks claims the “central slope communicative arsenic a operator of golden prices is bogus,” asserting that the rally is really driven by retail speculation. Brooks explains that galore analysts are confusing terms appreciation with existent buying.

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"So each this illustration is truly doing is plotting the emergence successful golden prices twice. Once via the interaction connected its stock successful cardinal slope reserves and erstwhile successful presumption of the existent golden price. This illustration truthful correlates 2 bid that are fundamentally the aforesaid and says perfectly thing astir whether cardinal banks are really buying gold," Brooks wrote, besides sharing the aforesaid illustration connected X.