Last week's gold selloff was the kind of move that makes people reconsider everything. The precious metal dropped sharply, silver got absolutely demolished, and suddenly everyone was writing obituaries for the historic rally that had dominated headlines for months.

But veteran economist Ed Yardeni isn't buying the bearish narrative. His $6,000 gold target by the end of 2026? Still intact. His $10,000 forecast for later this decade? Also still in play.

"I'm still sticking with my 6,000 by the end of the year," Yardeni said in his latest morning briefing. "At the end of the decade... I think 10,000 is reasonable."

So what actually happened last week, if not the end of gold's bull run?

The Timeline Doesn't Add Up

The popular explanation for the selloff centers on President Donald Trump's nomination of Kevin Warsh as the next Federal Reserve chair. Warsh has a reputation as a hawk, and markets supposedly freaked out about tighter monetary policy ahead.

Yardeni isn't convinced. He pointed out that gold prices tracked by the SPDR Gold Shares (GLD) were already tumbling Thursday night, well before Warsh's name was formally announced Friday.

"I was watching it the night before," Yardeni said, noting that gold had already declined by hundreds of dollars at one point.

If the market was reacting to Warsh, it had some seriously impressive precognition. More likely, Yardeni argues, traders were responding to diminishing geopolitical uncertainty. Reports emerged that Iran was open to negotiations, and other global flashpoints seemed to be cooling down. The fear trade was losing steam.

Leverage Was The Real Culprit

Here's where things get interesting. On Friday afternoon, CME Group raised margin requirements on gold, silver, and other metals futures because of extreme volatility. When margin requirements go up, traders face a choice: post more capital or close their positions.

Guess which option most people chose?

"That meant a lot of the leverage that we get in the precious metals futures markets had to consider whether it wanted to remain leveraged and make margin calls or cash in the chips," Yardeni explained. "So there's a lot of cashing in of the chips going on."

This is classic forced selling, the kind that feeds on itself. Silver got hit especially hard because it's less liquid than gold and tends to attract more leverage. When margin calls hit illiquid markets, things get ugly fast.

Warsh Isn't The Hawk You Remember

Yardeni acknowledges that Warsh built his reputation as a hawk during the financial crisis, opposing zero interest rates and additional rounds of quantitative easing. But he cautioned against assuming Warsh's views haven't evolved over the past fifteen years.

Looking at Warsh's more recent commentary, Yardeni sees someone increasingly focused on supply-side growth, productivity gains, and the deflationary potential of technological advances like artificial intelligence.

"He sounds much more like a supply-sider today," Yardeni said. "That's a very different framework than the one people remember from 2009."

There's another factor: Fed chairs are consensus builders by necessity. Even the most opinionated economists tend to moderate their views once they're running the Federal Open Market Committee.

"We've never really had a Fed chair who was a lone dissenter," Yardeni noted. "They lead by persuasion, not by force."

The Case For $6,000 Gold

Yardeni's gold outlook isn't built on traditional valuation metrics. He admits he doesn't have a valuation model for gold, just like he doesn't have one for Bitcoin (BTC). Instead, he thinks about gold as a portfolio stabilizer.

When he plots gold and the S&P 500 on the same chart using identical scales, he notices they tend to move inversely on a cyclical basis, even though their long-term trends point upward together.

"That corroborates that gold is a good diversifier for a portfolio if you want to take some of the volatility out of the portfolio," he said.

As stock markets climb higher, investors naturally get nervous about giving back gains. That anxiety creates demand for assets that don't move in lockstep with equities. Gold fits that role perfectly.

"As the stock market goes higher and higher, people feel a little bit less comfortable with it," Yardeni explained. "They don't want to give it back."

If the S&P 500 continues its march toward 10,000 later this decade, Yardeni believes diversification demand alone could push gold toward $10,000 as well. No recession required, no inflation shock necessary. Just investors hedging their bets as their stock portfolios grow larger and scarier.

Volatility Comes With The Territory

In Yardeni's assessment, last week's precious metals crash was a textbook leverage unwind. It wasn't a verdict on monetary policy, it wasn't about Warsh's hawkishness, and it wasn't the end of gold's long-term story.

Sharp selloffs like this are simply part of the package when assets experience sustained rallies. Volatility, he said, comes with meltups.

The message for gold investors? Last week hurt, but the fundamental case is bruised rather than broken. The $6,000 target remains on the table, and anyone who got shaken out might want to reconsider whether they're underestimating gold's role as portfolio insurance in an increasingly expensive stock market.