Hello everyone. Under normal circumstances, with a war still going on, gold should be benefiting from its safe-haven appeal, so why has the price collapsed instead? What does this selloff tell us about trading gold and equity indices, and are there similar periods in history that we can use as reference points? Today, Mr. Gan will go through all of this in the livestream. Below are some notes I put together.
The Gulf states have fallen into a strange trap: oil prices are rising, but their income is falling because they cannot sell enough crude. Why? Because of the Strait blockade.
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As a result, the cash flow gap in the Gulf states has widened sharply. When that happens, they have little choice but to sell assets. And what do they sell? Gold. As we can see from the chart below, their gold reserves have been rising steadily, and with gold prices surging in 2025, the market value of those reserves has already doubled. That means they have plenty of room to sell gold.
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Take a look at this logic chart:
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For gold trading, the 20-week moving average is the key level to watch. Mr. Gan went into the details during the livestream.
We can also look back at 2008, when a liquidity crisis hit and gold was sold off as a source of cash. At that time, everyone was short of money, but gold prices were still elevated, so naturally people sold gold to replenish cash flow. In that kind of environment, price action can become highly irrational. That is obviously the opposite of the usual safe-haven narrative. As the chart shows, gold dropped 35% in just five months.
But once the forced liquidation phase passed, prices returned to a more reasonable level. That said, Mr. Gan also pointed out that the process was extremely painful, and not every trading account could survive it. Right now, we are probably still to the left of the ultimate low. If you use 2008 as a reference, gold could still go on to make fresh all-time highs after the correction. Of course, the drivers behind that would be more complex and multi-layered.
If gold were to fall 35% this time, it would almost certainly break below 4,000 and could drop to around 3,650. So for long-term traders who want to buy the dip in gold, it may still make sense to wait.
Now let’s look at silver. Silver tends to move about twice as much as gold, so it is generally not a great asset for a long-term investment approach. Gold should remain the main benchmark for judging whether the precious metals complex has bottomed.
U.S. Equity Index Analysis
Time-based turning points
Important months: U.S. equity indices tend to see turning points in February, May, August, and October. This is related to the timing of concentrated corporate earnings releases, which influence how large funds assess the direction of the index.
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Real examples: For instance, last February and this February, the U.S. stock market both showed weakness due to specific events, which suggests this time-window rule has been effective. Investors can use these time windows to prepare in advance and build trading plans.
Technical support and risk
Key support line: The most important long-term support line for U.S. equity indices is the 20-month moving average. Using the S&P 500 as an example, the index briefly broke below that moving average during last year’s tariff war in April, but quickly reclaimed it. Right now, 6,250 is an important support level.
Midterm election effect: This is a U.S. midterm election year, so the ruling party has an incentive to keep the index relatively stable. That could limit the size of equity swings. However, the second and third quarters of a midterm year, roughly April through September, are also considered a higher-risk period, so investors still need to watch market volatility closely.
The second and third quarters of a midterm election year, roughly April through September, tend to be a high-risk window.
U.S. Dollar Index
Why the dollar could rise
Inflation expectations: The Strait blockade has pushed oil prices higher and fueled inflation expectations. As a result, market expectations for Fed rate cuts have shifted, with some investors even beginning to price in a possible rate hike in October. That would be supportive for the U.S. Dollar Index.
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Cycle model: According to the Dollar Index cycle model, 2020 to 2026 has been a depreciation cycle, and this year could mark the end of that phase. After that, the dollar may enter a new cycle and could rise quickly.
Trading ideas and suggestions
Trading strategy: When the dollar strengthens, the euro tends to weaken. That means euro futures may offer a short opportunity. Investors can review the related livestream for the specific setup.
Investment advice: Investors already holding dollars can continue to do so. Those who have not yet exchanged into dollars may consider doing so while the exchange rate is favorable. You can also participate through FX futures or financial products linked to the dollar.
Finally, the teacher also answered some audience questions.
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Q&A
Microsoft: Microsoft is a component of the Nasdaq, so the broader U.S. equity market matters more than the stock on its own. Overall, the Nasdaq is not showing exceptional weakness.
Nonfarm payrolls: The market is not mainly focused on payroll data right now. Even if the payrolls report is positive, that may only have a short-term impact. Trump’s handling of the Iran situation matters much more.
Hang Seng Index: The Hang Seng is weaker than U.S. equities and can be seen as a more leveraged version of the A-share market.
Emerging markets: Emerging markets need to be evaluated country by country and region by region. The teacher is more constructive on Japanese equities. Buffett’s move into Japan has had a long-term signaling effect, and although the Nikkei may remain volatile, it could still make new highs in the future.
Market summary: The global economy is going through instability, but not a recession. Governments are changing the way they support markets, and the world is now in a phase of redistribution of market share. Investors can focus on medium-term and short-term trading opportunities, while long-term investors can keep an eye on gold and consider re-entering after the crisis phase has passed.
Key quotes and takeaways
The impact of the Strait of Hormuz blockade on gold, oil, and U.S. equities
This section came from the online livestream. The host introduced Mr. Gan’s market commentary. Mr. Gan said the recent volatility in gold and silver was triggered by the Strait of Hormuz blockade. He explained the Strait’s importance to Middle Eastern oil exports, referenced last year’s related events and market reactions, and stressed that this time the blockade is not a short-term event. It could last for several months and create major volatility across financial assets. He also reminded investors to align their strategies with their own risk tolerance.
Oil transport disruptions in the Gulf and the impact on financial markets
This section focused on the current condition of the Gulf states. Their income depends mainly on crude oil exports, and current transport disruptions have effectively cut off that revenue stream. Research suggests that around 60% of their crude exports have been affected. If revenues keep falling, they may have to sell assets to service debt. The buffer period from existing inventory is about one month, making early April a key point. Whether tankers can move through the Strait after that will be crucial, and this is one of the reasons both gold and oil may remain volatile.
Gulf gold reserves and the effect of liquidation on gold prices
This section discussed asset liquidation by the Gulf states. It pointed out that their gold reserves have increased steadily over the years, and from 2018 to 2020 those reserves roughly doubled. Gold prices did not become highly volatile until last year, and before that the moves were relatively moderate. Because the market value of those reserves is now sitting on large unrealized gains, gold becomes one of the most important assets to monetize when cash is needed. That is one major reason recent gold volatility has been so severe. The chart also showed that the continued rise in Gulf gold reserves means there is more room for reserve sales.
Gold price risk and the logic of liquidation during a liquidity crisis
This section focused on the risks in gold. From a technical perspective, if gold breaks below the 20-week moving average, it could enter a much deeper medium- to long-term correction. Gold has already broken a key level, so caution is needed in the short term. From a fundamental perspective, gold serves as a safe-haven asset during economic prosperity, but during a liquidity crisis it can be sold for cash. If Gulf countries need to deal with a cash squeeze, they may liquidate gold reserves, and at that stage gold can be sold even if it looks undervalued.
Lessons from 2008 and current advice on gold
This section compared the current gold market with 2008. The speaker argued that today’s situation is similar to the global financial crisis, when forced liquidation by financial institutions drove gold down 35%. After the crisis, valuations recovered and gold went on to make new highs. Gold is already down 27% this time, and the final drawdown is still unknown. The key variables are whether the Strait reopens and whether Gulf-state revenues recover. Medium- and long-term investors are advised to wait for more clarity, while short-term speculators may find opportunities in the volatility. If gold rebounds above 4,650 and holds above its moving average, that would count as trend repair.
Silver is more speculative; gold is the better long-term benchmark
This section discussed the investment characteristics of silver versus gold. The speaker argued that silver is more speculative and more volatile, and that from an inventory perspective it is not a good long-term investment. If the timing is right, there may be profits in silver speculation, but silver usually moves about twice as much as gold. When the market is falling, gold should be the main benchmark for judging whether a bottom is forming. By comparison, gold is the better long-term asset. The speaker also mentioned spending extra time on this topic because there were so many questions from viewers.
Why time-cycle research matters for U.S. equity index turning points
This section returned to U.S. equity indices. The speaker emphasized that the most common turning-point months for U.S. indices are February, May, August, and October. He said he has been using this framework for years and that it has been useful. February was used as an example, since the U.S. indices saw volatility both in past years and again this year. He also stressed that this is based on historical statistics rather than any absolute rule. The timing can shift, but the framework still gives investors a useful window in advance, helping reduce trial and error and improve the odds of success.
U.S. equities and the impact of the midterm election year
This section focused on U.S. stocks. The key long-term support line is the 20-month moving average. Using the S&P 500 as an example, last year’s tariff war briefly pushed the index below that line, but the market later recovered. Right now, 6,250 on the S&P is an important support level, which can be used to plan strategies such as bottom-fishing. May could be another turning point and may be useful for options positioning. If the S&P breaks below the 20-month moving average, the market could enter a much deeper correction. Since this is a midterm election year, index volatility may still remain somewhat constrained.
Midterm-election-year risk in Q2 and Q3
This section stayed on the theme of U.S. equities in a midterm election year. Historical data suggest that the second and third quarters, roughly April through September and before October, tend to be relatively weak for U.S. stocks, with an average drawdown of around 5%. May and August deserve special attention. The Q&A also reinforced the point that equities often struggle in those quarters. Since the midterm election is in November, still about eight months away, the market may continue to face volatility in the months ahead.
A pulse-style rise in the Dollar Index this year and related opportunities
In this section, the second speaker explained his view on the dollar. The market had previously expected a weak dollar, but because of the U.S.-Iran conflict and the related rise in inflation expectations, the market is no longer pricing in Fed cuts and has even started discussing possible hikes. He expects the Dollar Index could see a rapid, pulse-like move of 15% to 20% over the next six months. He also discussed related trading strategies and said there is no single correct forecast for the Dollar Index, though in the short term he is leaning toward a sharp move higher.
Five-minute Q&A and thoughts on Microsoft
In this section, the host proposed a five-minute Q&A and said that if viewers understood the content in the PPT on the S&P 500 and the Dollar Index, there were important opportunities there. He also suggested that anyone interested in Mr. Aiwen Gan’s later articles and livestreams should follow him on Tiger or Tiger Community. A viewer then asked about Microsoft. Mr. Gan said he focuses more on the broader U.S. market than on individual stocks. Since Microsoft is a Nasdaq component, he thinks the bigger question is the overall health of U.S. equities, and he does not see the index itself as especially weak.
The next six months of payroll data may matter less than U.S.-Iran developments
This section discussed the outlook for nonfarm payrolls over the next six months. The second speaker said the market is not really focused on payrolls right now. Even a strong payrolls number might only create a short-term effect. By contrast, how Trump handles the Iran situation, whether through negotiations or continued conflict, matters much more for markets.
The Hang Seng as a “leveraged version of A-shares”
In this section, the host asked how the second speaker viewed the Hang Seng Index. The answer was that the Hang Seng has recently been affected by developments in mainland A-shares and has shown more volatility, while also underperforming U.S. equities. In his view, the Hang Seng can be thought of as a more amplified version of the A-share market.
Views on emerging markets, with a preference for Japan
This section discussed how to think about emerging markets. The second speaker said they should not be treated as a single group and instead must be analyzed by country and region. He is more positive on Japanese equities. Buffett’s large move into Japan over the past two years created a long-term signaling effect and helped guide U.S. capital back into that market. The Nikkei may stay volatile, but after a decline it still has a good chance of making new highs. At the same time, the global environment remains complex, so uncertainty is still high.
Global economic conditions and the long-term opportunity in gold
In the final section, the host asked about the current global situation and how investors should respond. The second speaker said the world economy is in turmoil, but that the system is really going through a redistribution of market share rather than a classic recession. That means it is a good environment for looking for medium-term and short-term trading opportunities. He remains constructive on gold over the long run, arguing that the bull market in gold has not yet lasted ten years and still has room to run, potentially to 8,000 or even above 10,000. His final suggestion was to keep watching carefully.
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