Can gold repeat the 1980s crash scenario?

A question that has been asked many times lately… and the answer is not that simple.

Yes, some compare the current situation to what happened after the January 1980 peak, when gold dropped from $850 to $252 — a loss of nearly 70%.

The logic behind this comparison seems convincing:
If U.S. interest rates remain high… and the dollar stays strong… gold could face real pressure.

But the problem here isn’t the idea…
It’s the exaggeration of the historical comparison.

What happened in the 1980s wasn’t just a “price decline”…
But the result of a clear economic mechanism that must be understood:

First: The strength of the dollar
When the dollar rises, gold becomes more expensive for holders of other currencies, which temporarily reduces global demand.

Second: The high real yield
When U.S. bonds offer a yield higher than inflation, investors can achieve a “safe” real income — something gold doesn’t provide.

In that environment, it was natural for liquidity to shift away from gold.

But…

Are we in the same environment today?

Not exactly.

The current reality is much more complex:

- Geopolitical tensions haven’t disappeared
- Energy risks still exist
- Central banks are buying gold at a historic pace
- Confidence in the global financial system isn’t what it used to be

Yes, high interest rates may put short-term pressure on gold…

But on the other hand, there are structural forces supporting it in the long term.

Therefore, what we see today is not the beginning of a crash similar to the 1980s…

But closer to a “healthy correction” after a strong rally.

A key point many overlook:

Gold is not a tool for maximizing returns.

It is a tool for protecting capital.

It’s not a speculative investment…
But a “strategic hedge” within a portfolio.

The most important question is not:
Will gold go up or down?

But:

Can you afford a portfolio without an element that protects it during crises?

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