Summary

• Gold’s 27% drawdown from the January peak reflects a sharp unwind in the rate-sensitive layer of the market, the deeper structural bid has softened cyclically, but the core thesis remains intact.
• Real rates still matter for marginal pricing, especially when positioning is crowded, but fiscal dominance places a ceiling on how far rates can rise.
• The upside comes when markets recognize that the Fed’s real-rate ceiling is binding. At that point, gold will reassert its role as the hedge against the limits of policy credibility.

Gold’s 27% correction reflects an unwind of rate-sensitive positioning, not a breakdown of the structural bull case. Real rates still drive short-term price action, but fiscal dominance limits how far rates can rise. The next repricing begins when markets