For Goldman the central banks do not buy gold for décor.

They buy it when trust in currency cracks.

1971: Nixon closes the gold window and central banks scramble to rebuild reserves

2008: the financial crisis triggers the first net buying year in 2 decades

2014: Russia doubles its gold reserves after Crimea sanctions hit

2022: central banks buy over 1,000 tonnes in a single year for the first time on record

Goldman clocks 81 tonnes of central bank gold buying in May, China as the largest buyer.

The bank pencils in $4,900 gold by the end of 2026.

Gold is falling when it should be rising. So when will it rise?

Gold is an indicator of fear.

War, crisis, uncertainty. Gold rises during such times.

The world is exactly like that today. War in the Middle East, relentless sanctions, tariffs, threats.

So gold should be rising right now.

But on the contrary, it's falling.

If such an indicator is falling when everyone is very afraid, it means there is something more dangerous going on.

To understand this, we need to follow 3 separate events.

But first, this question: Who brought gold to this point?

The answer is central banks. In recent years, countries wanting to move away from the dollar have accumulated gold at an unprecedented rate. This was the main force driving gold up.

Now, gold is being sold. Moreover, not by a single hand, but simultaneously from several sources.

So why did these hands suddenly start selling? This is where 3 events come into play.

1. Event: Oil.

In recent months, the Strait of Hormuz has been closed. Oil prices have risen sharply.

Approximately 80% of oil is bought and sold in dollars. When prices rose, governments had to find much more dollars for the same oil.

Governments lacking sufficient dollars began selling their most readily available asset: gold.

This is the first instance of selling gold.

Second event: artificial intelligence.

The biggest investment in recent years has been in artificial intelligence. But these data centers consume a lot of energy. When energy prices rose, costs increased, and expected profits decreased.

Moreover, a large portion of these investments were made with borrowed money. And in the world's cheapest currency, the Japanese yen.

For years, investors borrowed yen from Japan at almost zero interest, investing that money in high-yield assets. So, beneath many of the assets you see on the screen, there is an invisible yen debt.

When profits narrowed, the first crack appeared in this system built on debt.

Third event: where the whole chain connects. Japan.

The yen has been losing value for months, reaching its lowest level against the dollar in 40 years. Japan spent $74 billion to halt this decline, yet it couldn't stop it.

Only one option remained: raising interest rates.

Indeed, Japan raised interest rates to 1%, a level not seen since the mid-1990s.

The moment Japan raises interest rates, the 30-year era of cheap money ends. All the funds that borrowed from Japan for free and invested globally are forced to sell their assets to repay their debts.

This is precisely where the reason for gold's decline becomes clear.

These funds look at the entire portfolio, not individual assets. When a significant loss begins in one corner, they need to rapidly reduce the total risk.

How do they do this? By selling the profits, not the losses. Because the cash is there.

Gold was the most profitable asset during this period. That's why it was the first to be sold.

Now put all the pieces together.

Oil rising in price in the Strait of Hormuz. Governments squeezed by the dollar. Artificial intelligence whose profitability is questioned. Yen debts being resolved. Japan raising interest rates. And on top of that, the forced selling of funds.

None of these alone will collapse the entire market. But they all coincided in the same period.

So when will gold rise?

The answer lies in the hands of those selling it right now. But the order is important.