ASX Trader: Gold’s wobble spooked the crowd - but the real surge is coming

Gold has just lived through one of the most overdramatised episodes - a simple, healthy two-week pullback was treated as a collapse. But the next big peak is coming, writes ASX Trader.

Gold has just lived through one of the most overdramatised episodes in recent market memory.

A simple two-week shallow pullback — perfectly normal, perfectly healthy, and perfectly expected — was treated as if the entire market structure had collapsed.

Commentators called the top.

Social feeds erupted in panic.

Traders who missed the rally declared the trend “done.”

But the chart never broke.

The structure never failed.

And the pullback was nothing more than a reset inside a powerful, ongoing advance.

If such a minor pause caused this level of fear, investors need to prepare themselves now — because the real emotional tests are still ahead.

The long-term trend remains intact and incredibly strong.

ASX Trader says gold’s price plunge was just temporary.

While a worst-case dip into the 3750 region is technically possible, current momentum suggests the market is gearing up for the next major move: a push into the low-five-thousand range between February and April.

That’s where the next intermediate-term top is expected to form before a deeper multi-month correction in 2026.

And even that won’t end the broader structural advance.

It will be a mid-cycle reset — not a final top.

Gold will likely have a wave peak in 2026 but we are still early in a generational cycle that is only now beginning to gain steam.

Gold’s two week pullback as just a blip on an otherwise bullish structure.

Markets Don’t Peak on Consensus

One of the simplest but most reliable principles in market psychology is this:

Major tops do not form when everyone is calling for them.

Right now, half the internet is predicting a bubble.

Comment threads are full of warnings.

Chartists are recycling the same resistance zones.

Traders who missed the run are discounting it by calling it “overvalued.”

But that is not how markets top.

True peaks occur when disbelief has evaporated.

When everyone is bullish. When optimism becomes complacency. When no one questions the trend.

Gold is nowhere near that environment.

The fear we’ve seen over a tiny two-week dip is not a sign of exhaustion, it’s a sign the trend is still early.

Early-trend fear always looks like mid-trend nervousness.

The real euphoria — the real blow-off — comes later.

Keeping psychology balanced is a key element of trading smart. Photo: Supplied

Seasonality Check: This Was Expected

Before the market enters typical bull season, we pass through a short-term bearish seasonal window.

We’re in that window now.

Tops aren’t in yet, but if traders couldn’t stomach the zigs and zags, this was the time to lock in profits exactly as I warned.

This is where most traders get shaken out.

They see a dip and assume it’s all over.

Professionals? We expect it. We plan for it.

Markets move like a butterfly — every little flutter looks unpredictable when you’re staring too closely.

But when you understand the overall direction, which remains firmly up, you stop reacting emotionally to each tiny move.

Professionals don’t panic through noise.

They manage their psychology.

They stay aligned with structure, sentiment, and seasonality.

These three — seasonality, sentiment, and structure — always line up in cycles. The trick isn’t guessing every move. It’s managing yourself through them.

And months from now, investors will laugh at themselves for ever worrying about this tiny pause.

The gold futures chart.

When Everything Aligns, It’s Not Coincidence

Zoom out and the picture becomes even clearer: money never leaves markets — it rotates.

In expansionary phases, when liquidity is abundant and cheap, capital flows naturally into equities.

Risk assets surge, valuations stretch, and optimism becomes widespread.

That’s the environment we’ve seen for much of the past decade.

But when valuations hit historical extremes, the cycle shifts.

As inflation rises, policy tightens, and consumer spending slows, capital rotates into hard assets — gold, commodities, energy, and tangible stores of value.

This rotation appears loud and clear in the Gold-to-Dow ratio.

Every time this ratio has hit major lows — 1929, 1965, 2000 — equities were expensive and hard assets were cheap. These lows marked the beginning of massive multi-year outperformance in real assets.

And guess what?

We’re back at those levels now.

This is why calling gold a bubble misses the point entirely.

The data shows gold is historically cheap relative to equities.

If there’s a bubble anywhere, it’s in stocks — inflated by years of cheap money, passive flows, and speculative excess.

The rotation is already underway.

History says it accelerates from here.

Gold v equities.

“Markets Always Go Up” — Yes, But Not Every Decade

The classic defence from equity bulls is:

“Don’t worry, markets always go up.”

And over 50-year windows, that’s true.

But zoom into the timeframes that matter for individual careers, financial plans, or retirements and the story changes sharply.

The last three times the Gold-to-Dow ratio hit these levels, stocks went nowhere for an average of 15 years.

Investors spent a decade and a half sitting in dead money.

So the real question every investor must ask is: Can you afford 15 years of no progress?

Most can’t.

That doesn’t mean you need to sit in cash like Warren Buffett.

Investors could consider dollar-cost averaging into undervalued assets instead of blindly clinging to overvalued ones.

Why play with fire when every major cycle tells the same story?

Eventually, you get burned.

Where dead money exists.

Gold Remains Early-Trend — Not Late-Trend

Those calling gold a bubble are ignoring:

• the ratio data, which shows it’s cheap

• the macro environment, which supports hard assets

• the technical structure, which is early-trend

• the sentiment profile, which is still fearful, not euphoric

Equities, not gold, are priced for perfection.

Gold is priced for scepticism — which is exactly where major trends begin.

The two-week pullback was not a warning sign.

It was a gift.

A brief reset before the next advance.

A reality check for emotional traders.

A reminder that professionals trade structure — not fear.

The deeper, longer correction in 2026 will shake out even more people, but it will still be part of the uptrend.

After that correction? The final acceleration into gold’s true peak.

Right now, we’re nowhere near that stage.

We are early.

We are undervalued.

We are rotating.

And we are rising into a generational opportunity.

The bubble isn’t in gold.

The bubble is in equities.

And the market is about to prove it.

DISCLAIMER: Information and opinions provided in this column are general in nature and have been prepared for educational purposes only. Always seek personal financial advice tailored to your specific needs before making financial and investment decisions.