I just saw an interesting analysis by Cathie Wood that made me think. The CEO of Ark Invest is warning about gold because something strange is happening with the relationship between gold market capitalization and the M2 money supply in the U.S.

The odd thing is that this ratio has already reached bubble levels not seen since 1934 and 1980. Those were years of intense economic stress, so when you see gold hitting those same historic peaks, it’s hard not to wonder if the recent rally is truly sustainable.

Wood makes an interesting point: the current context is completely different. In the 70s, we had runaway inflation; in the 30s, brutal deflation. But today, the economic situation isn’t the same. She suggests that if the dollar strengthens, gold could suffer significantly because it would be under pressure from multiple angles.

What caught my attention most is that we are already seeing gold start to decline. Wood warns that we might be at a bubble level where risks are real both for the duration and for the price drop. It’s the kind of analysis that makes you rethink whether gold will really keep rising or if we’re about to see a significant correction.

The lesson here is that even when something seems to be in an upward trend, historical numbers can tell us a different story. Definitely something to watch in the coming weeks.