Gold faces a liquidity reckoning as the dollar gains strength

Garner believes the market is misjudging the impact of Governor Kevin Warsh’s focus on restoring price stability through money supply reduction rather than just interest rate adjustments. This strategy aims to reverse years of currency debasement, a trend that historically pushed investors toward gold. As speculative capital flows out of risk assets like cryptocurrencies and tech stocks, she anticipates a period of mass liquidation across commodity markets.

Investors seeking safety and yields are increasingly gravitating toward U.S. Treasuries, which Garner views as the most logical destination for capital in a cooling market. She expects gold to find a durable bottom between $3,600 and $3,700 an ounce, a level she considers a necessary reset after years of liquidity-fueled gains. For traders looking to navigate this volatility, she suggests utilizing inexpensive, far-out-of-the-money put spreads if gold rallies toward the $4,350 to $4,400 range, rather than attempting to outright short the metal in a unpredictable environment.