A “Gold Bear” in a Bull Market? Setting the Stage -

In a recent episode of the Money Metals Midweek Memo podcast, Mike Maharrey opens with a surprising admission. In the short term, he has <a href="https://www.moneymetals.com/news/2026/03/23/ive-turned-into-a-gold-bear-for-now-004781">turned bearish on gold</a>.
This is not a reversal of conviction but a recognition of current market realities. Maharrey makes clear that his role is not to promote precious metals blindly but to interpret conditions as they are. Right now, sentiment rather than fundamentals is driving the market.
That distinction sets the tone for the entire discussion. While the long-term case for gold remains intact, the near-term environment is being shaped by fear, liquidity pressures, and expectations surrounding central bank policy.
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<h2>Market Turmoil and the Selloff in Gold</h2>
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Gold’s recent price action has been dramatic. After surging above $5,400 amid geopolitical tensions, the <a href="https://www.moneymetals.com/news/2026/03/24/gold-tanking-during-a-crisis-weve-seen-this-pattern-before-004783">metal suffered a sharp correction</a>. It briefly fell below $4,300 and even tested the $4,000 level.
Maharrey emphasizes that this decline must be viewed in context. Gold is not falling in isolation. Stocks, bonds, and other assets have also come under pressure as markets react to <a href="https://www.moneymetals.com/news/2026/03/19/analyst-clive-maund-warns-of-stock-market-crash-004775">war-related uncertainty</a>, particularly surrounding the Iran conflict.
This is a classic sell-everything environment. Investors are retreating into cash and waiting for clarity. The U.S. dollar has strengthened, and oil has become the focal point of volatility, swinging wildly based on shifting headlines.
In such conditions, gold’s safe-haven role can appear temporarily muted. Maharrey notes that this is not unusual. It is part of a recurring pattern seen in past crises.
<h2>The Case Against Gold and Why It Falls Short</h2>
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The primary narrative weighing on gold is the expectation of persistent inflation leading to higher interest rates. Markets increasingly believe the <a href="https://www.moneymetals.com/news/2026/03/19/gold-the-federal-reserve-and-a-catch-22-004773">Federal Reserve will either</a> hold rates higher for longer or potentially raise them further in response to rising oil prices.
Because gold yields nothing, higher interest rates are typically viewed as a headwind. This has created a paradoxical situation. Inflation fears, which are normally bullish for gold, are now driving prices lower.
Maharrey dismantles this logic by returning to first principles. Inflation, properly defined, is the expansion of the money supply rather than simply rising prices. Oil shocks can push prices higher, but they are not the root cause of systemic inflation.
Meanwhile, money supply growth continues even as official narratives suggest tight monetary policy. This disconnect between perception and reality is central to the current mispricing of gold.
<h2>The Dominance of Fed Expectations</h2>
One of the most important insights from the episode is that gold is no longer reacting primarily to inflation itself. It is reacting to expectations about Federal Reserve policy.
Over the past decade, markets have conditioned themselves to respond not to what is happening but to what they believe the Fed will do next. When inflation appears hot, gold sells off due to fears of tightening. When inflation cools, gold rallies due to expectations of easing.
This inversion of logic has created a fragile environment where sentiment can shift rapidly. The current bearishness reflects a widespread belief that the Fed will remain hawkish in the face of rising prices.
Until that belief changes, Maharrey expects continued headwinds for gold in the near term.
<h2>Liquidity Stress and Forced Selling</h2>
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Beyond interest rate expectations, another critical factor is liquidity stress within the financial system.
Maharrey points to growing cracks in the private credit market. Non-bank lenders are beginning to restrict withdrawals, a process known as gating. Funds are limiting redemptions as investors rush for liquidity, which signals deeper structural strain.
This has important implications for gold. In times of financial stress, investors often sell their most liquid assets first to meet margin calls. Gold, being highly liquid, <a href="https://www.moneymetals.com/buy/gold">becomes a prime candidate</a>.
This dynamic was evident during both the 2008 financial crisis and the 2020 pandemic. In each case, gold initially declined before embarking on a powerful rally once liquidity pressures eased.
<h2>War and the Myth of Immediate Safe Haven Demand</h2>
Many investors are confused by gold’s lackluster performance during geopolitical turmoil. The expectation is that war should automatically drive gold higher.
Maharrey challenges this assumption by pointing to historical precedent. Gold may experience an initial surge at the onset of conflict. However, its trajectory is ultimately shaped by broader economic forces, especially monetary policy.
During both the 2008 crisis and the early stages of the pandemic, gold declined sharply before rebounding. The same pattern is unfolding today.
The lesson is clear. <a href="https://www.moneymetals.com/news/2026/03/19/gold-war-and-the-collapse-of-safe-havens-004770">Gold’s safe-haven status is real</a>, but it does not operate in a straight line. Short-term liquidity needs and policy expectations can temporarily override its fundamental drivers.
<h2>The Bigger Picture of Debt and Monetary Policy</h2>
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While the short-term case against gold is rooted in perception, Maharrey argues that the long-term fundamentals remain overwhelmingly bullish.
The U.S. economy is burdened by massive debt, <a href="https://www.moneymetals.com/news/2026/03/19/national-debt-quietly-eclipses-39-trillion-004774">now exceeding $39 trillion</a>. Persistent deficits and rising government spending, especially during wartime, continue to undermine the dollar’s stability.
At the same time, the Federal Reserve faces a difficult choice. It must decide between fighting inflation and supporting an increasingly fragile economy.
Maharrey is clear in his view. When forced to choose, the Fed will prioritize economic support. That means lower interest rates, renewed quantitative easing, and further currency debasement.
<h2>Global Demand Tells a Different Story</h2>
Despite bearish sentiment in Western markets, global demand trends tell a different story.
Asian investors continue to accumulate gold. ETF inflows in Asia are rising even as Western funds experience outflows. <a href="https://www.moneymetals.com/news/2026/03/21/gold-market-manipulation-exposed-004780">Physical demand remains strong</a>, with dealers in places like Singapore preparing for increased buying.
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This divergence suggests the current selloff is not driven by a collapse in underlying demand. Instead, it reflects localized sentiment and financial positioning.
The same pattern is visible in silver. While paper prices remain volatile, physical demand, <a href="https://www.moneymetals.com/news/2026/03/23/china-is-gobbling-up-physical-silver-004782">especially from China</a>, is surging. Imports have increased sharply, and the global silver market is facing another structural deficit.
<h2>Conclusion</h2>
Maharrey’s bearish stance is tactical rather than structural. He expects continued volatility and possible downside in the near term as markets grapple with inflation fears, interest rate expectations, and liquidity pressures.
At the same time, he makes it clear that this bearish case rests on weak foundations. The structural drivers of gold’s bull market, including debt expansion, monetary debasement, and fiscal instability, remain firmly in place.
For investors who understand this distinction, the current pullback may represent an opportunity rather than a warning. Short-term sentiment may dominate headlines, but long-term fundamentals continue to point in a very different direction.

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