Core Viewpoint - The recent decline in gold prices raises questions about the stability of gold as a safe-haven asset, particularly in light of significant market movements and central bank purchasing patterns [2][4]. Short-term Volatility - The recent pullback in gold prices since late April is attributed to three main factors: easing tariff tensions, a reduction in geopolitical risks, and a return to reasonable levels of implied volatility after a period of high speculation [4][5]. - Gold prices have recently hovered around $3,300, with speculative funds withdrawing at the fastest rate this year, although overall prices remain above this key level [5]. Long-term Logic - The long-term value of gold is supported by the risks associated with the credit currency system, with historical annualized returns of 9% over the past 50 years and a significant increase in the last 20 years [6][9]. - The U.S. federal debt has surpassed $36 trillion, accounting for 120% of GDP, with projections indicating it may exceed $40 trillion, which undermines the credibility of the dollar [7][9]. - Central bank gold purchases have averaged over 1,000 tons annually for the past three years, with emerging markets like China and Turkey being the primary contributors, reflecting a shift towards diversifying currency systems away from the dollar [7][8]. Investment Recommendations - Gold ETFs are recommended as an ideal tool for gold investment, allowing for low-cost entry and liquidity compared to physical gold [8]. - Investors are advised to maintain a gold allocation of 5% to 10% in their portfolios, with strategies for those holding physical gold to average down their costs rather than panic selling [8].