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Why didn't gold perform better? Inflation turned out to be higher than the forecasts of all economists on the distribution curve. However, for some reason, gold fell. Gold fell 1.3% to $4,122. And a lot of people ask, " Cavet, why doesn't gold feel better?" So I have my own theory about gold. And it is completely connected to the Federal Reserve and, essentially, to the printing press.
So, the first thing I noticed: the printing press usually causes gold to rise or at least peak about 3-5 years after the money supply expands. Therefore, you should think long-term about the shiny precious metal . Look at this. Here, in February 2009, we started the printing press to get out of the Great Recession with quantitative easing, which later turned into endless QE.
As a result, gold peaked in 2012. This blue line is the Federal Reserve balance sheet, not gold. This is very important to note. Gold peaked right here where I placed the red arrow. So you see there is a delay of about 3 years. After printing money during COVID, gold remained virtually unchanged for a while until it finally began to rise rapidly in 2025 and early 2026, peaking on February 2, 2 days after Kevin Warsh was elected chairman of the Federal Reserve.
Why is this important? Because when a leader appears who ushers in an era of low money printing, gold does not perform well. Let's look at gold prices over time. In the lower left you will see a period of low money printing. This happened after right here , Paul Volcker's drastic actions , where you got a double-dip recession back-to-back after the gold price boom in the '70s, but you had the recessions of 1980 and 1982, which promised higher rates, no money printing or less money printing.
The Fed's balance sheet actually remained quite low, quite nominal until about 2009. So gold has essentially done nothing for 25 years. The gold metal remained at rest while the printing press was turned off. The printing press is off—the gold is not growing. The printing press is on— gold soars to a new 3-year high.
I do n't think it's a coincidence that when we turn on the printing press, or when there's an expectation that it's about to be turned on, I don't think it's a coincidence that gold starts to rise and then peaks 3 years after the press starts. I don't think it's a coincidence that, you know, when COVID started, gold went up in anticipation that we were going to get money printing.
And in anticipation of that peak, and then of course we got the final peak 5 years after the money printing actually started. We are now, unfortunately, in a mode where we do not expect any money printing. This potentially coincides with a peak for gold until the money machine turns on again. When can the cash machine be turned on again?
In my opinion, this will not happen under the Kevin Warsh regime. Kevin Warsh will currently serve as Fed Chairman until May 21, 2030. And remember, there is a lag between when they actually print and when gold peaks. So that means if they replace Kevin Warsh on May 21, 2030, and let's say the Democrats win the 2029 or 2028 elections , they will take office in the '29th.
And then they will replace Kevin Warsh in 2030. Let's say you're in a recession, or for whatever reason we had to start the money machine. What will happen ? And yes, it's just digital money printing. They don't actually run it physically for the Federal Reserve. It's just a spreadsheet. They simply change the number in the table.
They magically create money out of nothing. This is what gold is trying to hedge against with delay. Well, if they do it in 2030, then you'll probably see your next gold peak somewhere between 2033 and 2035 . Depending, of course, on when they turn on the machine based on this story. So a lot of people were saying, "Oh, but Kevet, you know, there's this idea that once we make a deal with Iran, maybe then gold will go up." But I am convinced that bonds will go up after the Iran deal.
So bond prices are rising. Bond yields are falling. Because people see the lack of money printing as a potentially greater fiscal responsibility. It's a crazy phrase, I know. Potentially. This leads to a greater contribution of low momentum, which is what we have been seeing for gold recently. And it also signals less concern about fiscal stability, and therefore gold serves less as a hedge.
So it's not ideal. And this is not the kind of momentum that momentum traders want to participate in, because we are in a clear downtrend. So unfortunately, when you combine Worsh with the money machine timing and momentum, you get a bearish forecast, and I have been sticking with that bearish forecast since January 30th.
January 30th is when I started my bearish forecast for gold. This was 2 days before this peak, which fell on February 2nd. And so I think this will continue until Kevin Warsh changes his mind and turns on the printing press, which would require a very serious recession. Or until Kevin Warsh is replaced and someone else starts printing money again.
Until then, we are in a lost era for gold. I know, that sounds pessimistic. This is not necessarily pessimistic for the economy, but it is certainly not optimistic for gold. If you still want to bet on gold, you can always contact our sponsor on the channel. You can switch to Kalshi. There is now a 57% chance that gold will be worth less than $4,300 by the end of the year.
You can bet on it right here if you want. Or you can just buy gold. There are many things you can do. But now, if you believe, if you want to make a counter-deal and you think that after the Iran deal, gold will skyrocket, then you should consider buying at 4,500, which I think is another possible point.
Of course, this is not personal advice, but the probability of "yes " for 4500 is only 24%. If we eventually make a deal with Iran, you don't even have to hold it until the end of the year. That 24% would probably increase to about 50% if you believe that to be true. I don't think gold will go up after the Iran deal.
So I'm more on the "no" side. I'm just saying: if you want to play against me, that's fine. I respect that. If you believe the Iran deal will cause gold to rise, then the bet at 4,500 or higher could go from 24% to 48%. I wouldn't make this deal, but it would be an option to act against my will. And now I want to clarify.
Kalshi is a channel sponsor. And when you go to kalshi.com/r/meetkevin or click the link in the description, you can get . You can also scan the QR code. So, that's my take on gold. I'm more pessimistic about semiconductors... sorry, I'm more optimistic about semiconductors now after the Iran deal than I am about gold.
So if I were going to buy on a dip, I would be better off buying semiconductors before the expected Iran deal. And I would rather buy semiconductors than gold. Again, this is Kevin Warsh's fault. I think Kevin Warsh will actually cause deflation. Which is generally positive for the AI sector and corporations.
And a more bearish factor for gold. These are also other factors worth considering. You have to consider that artificial intelligence, once developed, will likely be deflationary. Job losses after the build-out are likely to be deflationary. So these are some more factors to take into account. And of course, if you haven't already , remember: if all this worries you, you can always get life insurance in just 5 minutes at meetkevin.com/life.
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I have seen people get policies for small amounts. I'm not an insurance agent, so of course I can't rate your insurance, but go ahead and see for yourself. meetkevin.com/life. I believe that everyone should have life insurance. That's it , boys and girls, goodbye, good luck, go to reinvest1.com and you'll be able to get through this . , Pat Beth-David, .
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