Cathie Wood says gold is a 'late-cycle' bubble as $9 trillion market swing unfolds

Cathie Wood warned that gold shows late-cycle bubble signals just as markets recorded roughly a $9 trillion cross-asset swing, with dramatic moves in precious metals and US equities within a single trading session. Wood’s analysis said gold’s market capitalization as a share of US money supply (M2) hit an all-time intraday high, surpassing the 1980 inflation peak and levels last seen in 1934.

"In our view, the bubble today is not in AI, but in gold," she said, and she cautioned that an eventual upturn in the dollar could puncture the rally as it did between 1980 and 2000. She also noted the 10-year Treasury yield had retreated from its 2023 peak near 5% to around 4.2%.

Not all traders agree with Wood’s framework. Macro traders argued the gold-to-M2 ratio may no longer be reliable in a post‑QE, globalized and digitally collateralized financial system, with one commentator saying, "M2 today isn’t a stable denominator.. it’s fragmented across QE, global dollar liabilities, shadow banking, and digital collateral systems." The market moves were extreme: gold fell roughly 8% intraday, erasing nearly $3 trillion in market value before recovering about $2 trillion by the close; silver dropped more than 12%, wiping out about $750 billion and later regaining roughly $500 billion; and US equities saw the S&P 500 and Nasdaq shed over $1 trillion intraday before a sharp rebound.

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