Innes Says Gold Selloff Signals Bull Run Into 2027 as Sovereigns Raise Dollar Liquidity
Updated
Updated · Kitco NEWS · May 25
Innes Says Gold Selloff Signals Bull Run Into 2027 as Sovereigns Raise Dollar Liquidity
1 articles · Updated · Kitco NEWS · May 25
Stephen Innes said gold’s recent drop looks like emergency sovereign reserve liquidation, not a break in the long-term uptrend, after the Iran war and Strait of Hormuz shock triggered a scramble for dollar funding.
Oil’s surge drove yields and inflation expectations sharply higher, pressuring non-yielding gold while energy-importing countries sold reserves to stabilize currencies and pay for costlier imports.
Innes argued that pattern is temporary: once the energy shock starts hurting growth, credit and employment, bond markets could shift toward pricing easier central-bank policy into 2027.
That pivot, he said, would restore gold’s appeal just as structural forces—underinvestment in mines, pipelines and power systems, plus AI- and defense-led commodity demand—keep the physical economy strained.
China’s reserve strategy underscores the broader case, Innes said, with gold serving as neutral monetary insurance in a fragmented world of sanctions risk, trade conflict and reserve weaponization.
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Gold’s 2026 Rollercoaster: From Geopolitical Selloff to Bullish Projections Above $5,000/oz
Overview
In early 2026, gold prices saw a sharp selloff as escalating geopolitical tensions in the Middle East led to a surge in oil and gas prices. This spike fueled expectations of higher inflation and possible interest rate hikes, causing investors to worry about prolonged disruptions to oil supplies. As a result, the U.S. dollar strengthened, further reducing gold’s appeal. Despite this, the report highlights that the selloff was a tactical move driven by immediate market pressures, not a fundamental rejection of gold. The underlying structural drivers for gold remain strong, supporting a positive long-term outlook.