Why Does the Liquidity Crisis Behind Gold’s Plunge Echo 2008, When Gold Subsequently Rebounded? - www.tmgm.com

AI desk brief

Gold’s plunge to a more-than-one-year low is being framed as a liquidity-driven selloff rather than a classic safe-haven bid, with investors reportedly selling bullion to raise cash after equity losses. The move accelerated once gold broke a key support level formed in July, leaving the metal under pressure despite escalating Middle East tensions.

The piece argues that a resilient US economy and higher-for-longer Fed rates could keep Treasury yields elevated and cap any rebound in gold. It also draws a 2008 parallel, saying a longer-term recovery remains possible if the Fed eventually cuts in 2027 and if ongoing US debt expansion supports the metal over time.