Key Takeaways
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Cathie Wood warns gold may be in a late-cycle bubble.
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Gold and silver suffered a sharp pullback from record highs.
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Forced selling spread to crypto, said analysts.
Ark Invest founder Cathie Wood warned that the precious metal may be heading for another fall, after gold’s price slid sharply from record highs this week in a dramatic market collapse that carried over to crypto.
On Thursday, gold fell nearly 9% from its peak, retreating to around $5,100 an ounce after touching just below $5,600 earlier in the session, wiping trillions of dollars from the metal’s estimated global market value.
Cathie Wood said the rally in gold price shows signs of excess, pointing to valuation measures she says have reached historic extremes relative to U.S. money supply.
“Odds are high that the gold price is heading for a fall,” Wood wrote on X.
She said that during intraday trading, “the market cap of gold as a percent of the US money supply (M2) hit an all-time high: higher than its peak in 1980 when inflation and interest rates soared to the mid-teens.”
In a separate post, Wood drew parallels with the 1930s, noting that “the ratio of gold to M2 has hit the all time high recorded during The Great Depression in 1934.”
She added that during that period, “the dollar devalued relative to gold by almost 70% on January 31, 1934, the government banned private ownership of gold, and M2 collapsed.”
Wood argued, however, that today’s macroeconomic backdrop differs sharply from past crisis periods.
“The U.S. economy today looks nothing like the double-digit inflation-prone 1970s or the deflationary bust of the 1930s,” she said.
Wood added that while foreign central banks have diversified away from the dollar, “the 10-year Treasury bond yield peaked at 5% in late 2023 and is now 4.2%.”
She also rejected the idea that gold’s surge reflects a durable structural shift.
“While parabolic moves often take asset prices higher than most investors would think possible, the out-of-this-world spikes tend to occur at the end of a cycle,” Wood said.
The pullback followed a sharp risk-off move across markets, with gold and silver retreating alongside declines in U.S. technology stocks.
Gold’s fall of roughly 8.7% from its peak erased an estimated $3.4 trillion from the value of all above-ground gold, according to market calculations.
Silver fell even more steeply, dropping close to 12%, as investors sold industrial metals alongside equities.
Bitcoin also fell leading below $83,000.
Victor Olanrewaju, an analyst at CCN, said the speed of the move suggested forced liquidation rather than a reassessment of fundamentals.
“Specifically, the gold price collapsed from near $5,600 to around $5,100 in a matter of minutes,” Olanrewaju said.
He added that silver followed with a comparable decline, while cryptocurrencies were caught in the downdraft.
“As expected, Bitcoin was not left out, leading the crypto market crash with a decline below $83,000,” Olanrewaju said.
The spillover into digital assets triggered widespread liquidations, with automated selling accelerating losses across the sector.
“As cross-asset correlations snapped higher, automated liquidations swept through the crypto market, wiping out $1.68 billion in positions over 24 hours, the largest liquidation event of 2026 so far,” he said.
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