Odaily Planet Daily News: Prominent investor Cathie Wood posted on the X platform stating that the likelihood of a decline in gold prices is high. During today's trading session, the ratio of gold market value to U.S. money supply (M2) reached a historical high, surpassing the peak recorded in 1980, a period when inflation and interest rates had risen to around double digits. More astonishingly, the gold-to-M2 ratio has reached the highest level ever recorded during the Great Depression in 1934. During that crisis, on January 31, 1934, the U.S. dollar depreciated against gold by nearly 70%, the government banned private ownership of gold, and M2 collapsed. Today's U.S. economy is vastly different from the periods of double-digit inflation in the 1970s or the deflationary depression of the 1930s. Indeed, foreign central banks have been reducing their reliance on the U.S. dollar for years; however, the 10-year U.S. Treasury yield peaked at 5% at the end of 2023 and has since dropped to 4.2%.
Finally, she stated, "Although parabolic surges often push asset prices to heights most investors never anticipate, such astonishing rallies typically occur toward the end of a cycle. We believe the current bubble is not in artificial intelligence, but rather in gold. A stronger U.S. dollar could burst this bubble, as it did from 1980 to 2000, when gold prices fell by more than 60%."