Cathie Wood warns gold bubble as M2 ratio spikes historic
Gold prices have begun to retreat from recent highs, shifting investor focus from whether a decline will happen to how deep and prolonged the correction could become.
Ark Invest chief executive Cathie Wood said gold has reached a late-cycle extreme, raising the risk that the pullback may extend beyond a short-term dip.
Wood shared her assessment on social media platform X on Jan. 29, pointing to valuation signals that suggest exhaustion rather than the start of a sustained rally.
“Odds are high that the gold price is heading for a fall,”
Cathie Wood said.
Her analysis centred on gold’s market capitalisation as a percentage of the US money supply, known as M2, which includes cash, checking deposits, and savings accounts.
Wood noted that the ratio recently reached an all-time high, surpassing levels last seen during the 1980 peak when inflation and interest rates climbed into the mid-teens.
She said comparable extremes in the gold-to-M2 ratio only occurred during the early 1930s and around 1980, both of which were followed by long adjustment periods rather than durable bull markets.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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