Gold at $4,000: No Sellers, All Waiting for a Rebound

Gold at $4,000: No Sellers, All Waiting for a Rebound

Those who bought gold above $4,000 aren't planning to sell. Not even with a 25% correction. The starting premise was simple: part of the rise is due to fundamentals and real demand, but the final leg is pure FOMO, and with India's wedding season over, that demand is fading. The question, posed without anesthesia, was whether they are prepared to lose a quarter of their investment in twelve months.

The majority answer can be summed up in three words: buy more.

The 25% Drop That Almost No One Contemplates

The most repeated argument doesn't deny the drop; it reframes it. An ounce that has appreciated by 35.71% in the last year can fall 25% and still be in positive territory, with 15% accumulated return. Silver is up 31% in the same period. Compared to that, the 3% paid by a fixed-term deposit seems like pocket change. Hence the holding that summarizes half the conversation and turns every dip into an entry opportunity.

The nuance comes when looking at the starting point. A year ago, the ounce was at $2,500; today, talk is of support at $4,000 and a possible correction towards $3,600-$3,700 if that floor gives way. No one disputes that the rise got ahead of itself. What's debated is who feels the pain.

Who Bought at 900 Euros and Who Entered at 5,400

There are portfolios with ounces acquired at 900 euros — escudos, American Eagles, Maple Leafs, Sovereigns, Isabelinas, Britannias — accumulated over years, which today view the chart with indifference. And there are those who admit to having entered at 5,400. These are two opposing psychological positions facing the same asset: for some, a correction is noise; for others, it's the profit and loss statement.

This asymmetry explains why the general tone is calm. The long-term investor doesn't need gold to rise this year; the one who arrived at the peak does.

Can Gold Spend Ten Years Falling?

Here comes the argument that dismantles easy optimism. The price of gold can spend a decade in the red and another decade sideways before tripling. With 200,000 euros in metal, that journey isn't a detail: it's twenty years of patience. The operational question isn't whether gold rises, but whether the holder has the age and stomach to wait for it.

The counterweight is inflation. An ounce that cost about 250 euros in 2001 now trades for 3,700 euros, while those original 250 euros would then fill a shopping basket that now falls short. This is the arena where the metal plays and where fiat money loses.

Ounces That Weigh and Ounces That Don't Exist

Much of the controversy separates two markets that share a price but not a nature: physical gold weighed on a scale and the world of futures, CFDs, and ETFs that replicate its price without moving a gram of metal. The price on screens is formed in this second market, where competition is far from perfect.

From this emerge the most uncomfortable theses: a growing decoupling between the price paid in the East and in the West, and between paper gold and physical gold. The circulating hypothesis is that the arbitrage between the two would eventually break if China consolidated a parallel pricing market backed by third countries. It's a possibility on the table, not a done deal.

The Zimbabwe Warning

Against the narrative of eternal refuge, there's an uncomfortable case. Between 2007 and 2009, with the country mired in brutal hyperinflation, prices doubling in hours, and 100 trillion banknotes, gold holders ate everything but gold. The metal retained its exchange value outside the country; inside, it couldn't buy food. The distance between preserving value and being able to use it is what separates the refuge theory from practice.

Against this backdrop, three narratives coexist. One holds that gold is a store of value and that those speculating on it don't know what they're getting into. Another responds that the price can fall 25%, 50%, or 75% without losing a gram on the scale. And a third reminds us that the United States has printed about 80% of the dollars in circulation in the last three years. None of them definitively answers the question.

Support, according to the most technical analysts, is at $4,000; below that, the floor is sought at $3,600-$3,700, and those with liquidity will buy there. This is the most widespread prediction and also the most fragile: it depends on physical demand holding up while paper sells off.