Gold's Violent Reversal: How Far Does Rally Go? | Gary Wagner

Gary S. Wagner · TheGoldForecast.com (Wagner Financial Corporation)

Gold's 2026 correction of about a third is severe but far milder than the 2011-2015 halving.

Wagner compares the 2026 drop with the 2011 to 2015 slide. In 2011 gold meandered between $1,900 and $2,000, broke below, and took about five years to fall roughly in half, bottoming near $1,000. He says his technical studies confirm a deep correction this year, with about a third of the price coming off the top. He says that is nothing like the halving of 2011 to 2015, which implies the 2026 drawdown is closer to a sizeable pullback than a full bear cycle.

“our technical studies, I believe confirms that we did experience a deep correction. About a third of the price of gold per ounce came off the top, but that's nothing like we saw when the price of gold was halved”at 1:43

Gary S. Wagner · TheGoldForecast.com (Wagner Financial Corporation)

Gold no longer rallies on inflation; higher inflation expectations now push it lower via Fed hike bets.

Historically higher inflation was a bullish tailwind for gold. In the recent period, rising inflation expectations have pushed gold lower. Wagner's explanation is that markets price in what the Fed will do, namely raise rates, and higher rates are poison for gold. He cites CME FedWatch showing roughly an 80% probability of a December hike, and says that expectation is what is driving the market. He calls the relationship between inflation, oil and gold a much more complex read than before.

“what we saw was higher inflation expectations took gold lower. And the reason being because they took in what the Fed will do which is to raise rates. And that's poison for gold prices.”at 2:29

Gary S. Wagner · TheGoldForecast.com (Wagner Financial Corporation)

Gold's bottom looks in; next solid target is about $4,400 if it closes above resistance.

Gold found support near $3,800 and rebounded to about $4,100 to $4,155. Wagner calls the $4,000 area a key level and the bottom a good start to a return to bullish sentiment, but says gold is not out of the water yet. The first resistance zone matches the 38.2% Fibonacci retracement, which runs from the $4,700s to $4,000. Wagner wants to see a close above that zone, not just a wick, before the next target. If that breakout occurs, he sees about $4,400 as the next solid target within weeks, and calls that still an exceptional year. He holds gold himself, buying small incremental amounts.

“Our next real solid target is about 4,400. Okay. And I think I think if it goes there, that's still an exceptional year, unquestionably.”at 11:26

Gary S. Wagner · TheGoldForecast.com (Wagner Financial Corporation)

Gold is in a long-term bull market; short-term swings are noise to buy through.

Wagner believes gold is in a long-term bullish market, with deep peaks and valleys along the way. He compares it to real estate and quality stocks, which he says tend to perform over ten to fifty years despite sharp drops. He argues that a 25 to 30 percent decline in a year is noise, and that dollar-cost averaging through the swings is the way to lower the chance of losses. He holds gold himself and buys small increments, so his view is grounded in his own position.

“because I believe long term it's in a bullish market. The question is how long of a term? In other words, what do you have to wait?”at 14:05

Gary S. Wagner · TheGoldForecast.com (Wagner Financial Corporation)

Gold's safe-haven bid during the Iran military action has been muted compared with past crises.

Wagner notes that gold has not reacted to military action in the way you would expect of a safe haven. He says he doesn't know whether investors have become jaded to geopolitical shocks. He points to the lack of a flight-to-safety bid as a reason gold has not benefited from the Iran conflict, while the budget deficit could become a risk that would push gold down in future. He presents this as an observation rather than a firm forecast.

“oddly, we're not seeing the same kind of reaction to the safe haven in gold when the military action came in this time. I don't know if individuals are jaded to it.”at 21:59

Gary S. Wagner · TheGoldForecast.com (Wagner Financial Corporation)

Gold could retest $4,750 and the $4,975 high, but likely not before about two years.

Wagner names $4,750 as the first achievable number, which he says might take about two years, though it is not yet ridiculous. He also says the higher high at $4,975 came in and the tops up there will get hit again, but he doesn't expect that this year. He suggests five or ten years for those tops, and says $5,000 has already become a benchmark. He frames these as long-dated targets, not year-end calls.

“The first achievable number, it might take two years to go, but it's not yet ridiculous, is $47.50.”at 24:46

Gary S. Wagner · TheGoldForecast.com (Wagner Financial Corporation)

Gold sells off alongside equities because traders sell it to raise cash for margin calls.

When stocks sell off, Wagner's explanation for gold falling is that holders need liquidity to cover margin calls. Gold is a liquid asset they can sell to raise capital without liquidating the positions they want to keep. He says leveraged professional and institutional traders are liquidating whatever they can, holding on because they believe the selloff will pass. He sees this as a continuing feature of trading behaviour. He does not claim this is a permanent break in gold's hedge role.

“if stocks are selling off the reason I believe gold tends to sell off is they need liquidity to cover their margin calls.”at 16:32

Gary S. Wagner · TheGoldForecast.com (Wagner Financial Corporation)

The Iran conflict's oil spike squeezes goods makers, and oil in the 80s still pressures prices.

Wagner says oil is the catalyst for the market's moves and that a military conflict with Iran drove oil above $100 a barrel. Oil has since fallen but remains in the 80s, not at $100. He estimates that 40 to 80 percent of produced goods carry a petroleum component, a rough guess he flags as uncertain. For manufacturers, higher input costs squeeze profit margins. Under pressure, companies are reluctant to raise prices because consumers walk away, so the cost shock hits margins and makes goods and services costs jump quickly.

“I don't know what percentages. I'm just gonna throw a number out, but it could be as much as 40 to 80% of the goods that are produced have a component of it using petrol. We are a petrol society.”at 20:51