Gold down big today
Is the rally over?
Gold went down big today.
Does that mean the recent gold rally is over?
Investing time frame matters
We previously wrote about looking at your portfolio and even building your portfolio using the time frame approach compared to the asset class approach.
If you’re looking at the short term, gold has gone up parabolic.
It went up too much and too fast.
While some investors may say any of the following reasons to explain the record gains:
Inflation
Currency debasement
Geopolitical conflicts
Global central banks diversifying away from US Treasuries
etc.
The real reason behind the record run up in gold prices in the past few months were mostly driven by momentum and emotions.
That means, if an investor is looking at gold from the short term time frame, it looks like it’s over hyped and due for a correction.
Which we saw today.
If you’re concerned, take a deep breath and ask yourself why you’ve chosen to invest in gold in the first place.
Better yet, ask yourself that same question for every single investment and asset class you’ve invested.
If the reason you went into a particular investment no longer is valid, then exiting or selling makes a lot of sense.
If you’re like most investors, forgetting your “why” in any particular investment is very common.
It’s easy to lose track, especially after an investment has gone up so much.
It’s day like today to go back to the basics
If you’re a long term investor, the main thesis for gold hasn’t changed.
Similar to the why of investing in real estate, if an investor invests based on a long term time frame, the long term thesis on investing in real estate will continue to work for many years:
Asset value increase due to inflation
Debt value decrease due to currency debasement (money printing)
Mortgage balance gets paid down by tenants
Matthew Piepenburg’s recent interview is a great video detailing the long term investment thesis for gold.
It’s a good refresher to remind us the why:
If you like my work, I invite you to share it with others.
Eric Chang
Belgrade, Serbia
October 21, 2025
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