Gold’s Worst Week Since 1983... What Comes Next?

Did Poland just break the gold market?

For nearly a decade, Poland’s central bank couldn’t buy gold fast enough.

From just 103 tons in 2018, they aggressively stacked reserves to 550 tons by early 2026 — vaulting past the UK to become the 11th largest gold holder globally and Europe’s self-proclaimed “golden power.”

They were the world’s biggest reported buyer, adding more than 100 tons in 2025 alone, and Governor Adam Glapiński even announced plans in January to push reserves to 700 tons, officially positioning Poland as a major player in the global gold market.

Then, everything flipped in March 2026.

Glapiński proposed tapping gold reserve profits — and potentially selling some bullion outright — to fund $13 billion in defense spending rather than taking EU loans that came with strings attached from Brussels. 

The mere suggestion sent shockwaves through commodity markets and contributed to gold prices wobbling at exactly the wrong moment.

You see, this marked something we haven’t seen in the modern central bank gold buying era: a major accumulator openly discussing liquidation. And the timing couldn’t have been worse — it came just as gold crashed through $5,000/oz and entered bear market territory after hitting an all-time high of $5,589 in early March.

Gold dropped 11% in a single week, folks. That makes it the worst performing week for the precious metal since 1983. 

So here’s the question everyone’s asking: is this the end of gold’s historic bull run, or is this just a temporary shakeout before the next leg higher?

The short answer is that we may be looking at a classic flush of overleveraged retail positions, not a fundamental breakdown of the structural case for gold. 

Let’s dive into why…

Poland Just Broke the Gold Market

The traditional narrative tells us that gold prices should’ve soared during the current Third Gulf War against Iran. 

After all, this is a generational geopolitical crisis rife with energy infrastructure getting obliterated, and oil prices spiking well into the triple-digits (we still haven’t seen the high for oil yet!). 

It’s a classic safe-haven scenario, right?

Instead, gold got absolutely hammered.

But here’s what actually happened — and why it doesn’t change the long-term thesis one bit…

First, let’s talk about who was buying gold over the past year. 

Central banks? Absolutely. They added 863 tons in 2025, well above the 2010-2021 average of 473 tons annually. China extended its buying streak to 15 consecutive months. 

Of course, new buyers like Malaysia and South Korea re-entered the market after years of absence.

But the real fuel for gold’s rocket ship from $2,600/oz to over $5,500/oz came from what a few analysts called “the tourists” — retail investors, systematic hedge funds, and generalist money managers who piled into precious metals chasing momentum.

These weren’t long-term holders, mind you. They were leveraged traders riding the “debasement trade” — the idea that unsustainable fiscal deficits would force central banks to inflate away government debt.

So when oil prices exploded in March and inflation fears reignited, central banks globally pivoted and started getting hawkish. 

Then the Fed trimmed its 2026 rate cut projections from two down to one. We saw 10-year Treasury yields jump above 4.3% as the dollar index jump above 100 a few weeks ago. 

This created a liquidity crisis for leveraged gold positions. Futures traders facing margin calls had to sell what they could (not what they wanted to), and the stronger dollar made gold more expensive for international buyers, forcing portfolio managers to rebalance after gold’s massive run-up.

In other words, paper gold got flushed as the futures market experienced cascading liquidations as overleveraged positions unwound.

But here’s the critical distinction: physical gold premiums stayed elevated throughout the selloff. 

Demand from coin buyers, jewelers, and institutional investors holding actual metal remained steady. 

You see, the physical market told a completely different story than the futures screen.

And here’s the catch… the underlying drivers of the debasement trade haven’t changed! 

U.S. fiscal deficits aren’t shrinking, and Central banks are still diversifying away from dollar reserves. In other words, dear reader, the structural case for gold as a hedge against currency debasement remains intact.

What we witnessed in March wasn’t the death of the gold bull market. 

No, it was the necessary shakeout of weak hands that happens in every major bull run before the next leg higher begins.

The Golden Bear Market: Crisis or Opportunity?

Over the short term, gold will be looking to reclaim and hold the $5,000 level. 

That psychological barrier became support-turned-resistance, and breaking back above it would signal that the worst of the selloff is behind us. 

The next major test comes at $5,200 — where gold was trading before the crash began.

However, always keep your eyes on the long-term picture, because that’s what matters. 

Then, you can see that price targets from major institutions haven’t budged.

J.P. Morgan’s 2026 forecast sits at $6,300/oz, and Goldman Sachs actually raised their target to $5,400/oz, explicitly framing gold’s rally as a “debasement trade” driven by fiscal concerns rather than a commodity supercycle.

The point is, structural demand remains rock solid. 

This year, central banks are expected to purchase roughly 850 tons of gold, which nearly matches last year’s pace; J.P. Morgan estimates average quarterly demand of 585 tons from central banks and investors combined — well above the threshold needed to push prices higher.

However, what’s particularly striking isn’t where gold prices will sit a year from now, but rather the evolution in how gold itself gets held and traded. 

The World Gold Council just announced they’re developing shared infrastructure for digital gold — combining history’s greatest safe-haven asset with 21st century blockchain technology.

That convergence of traditional store-of-value with modern settlement infrastructure could unlock entirely new demand from a generation of investors who want gold’s stability with crypto’s accessibility.

We’ll talk about that one next time.