Gold forced selling: how the Iran war margin calls nations

0:00The Iran war just margin called central banks into forced gold selling. Very few people understand this mechanism and right now countries that spend years stacking gold are being forced to dump it by the ton, not because they want to but because they have no choice. Turkey just liquidated 58 tons in two weeks. Gulf states are rumoured to be selling secretly and Russia is limiting exports.

0:28So if you own gold or gold miners or any kind of metals, this forced liquidation is either going to wipe you out or it could be the biggest buying opportunity of the decades. So my promise to you is this. By the end of this video, you'll understand exactly how the Iran war margin calls entire countries, which nations are forced to sell next, and the three-phase playbook for positioning yourself before this reset completes.

0:55My name is Felix Prehn. I'm an ex-investment banker. That back there is Winston. He's a golden retriever. He's the real expert around here. And I'm also the founder of the Goat Academy where my retired Wall Street mentors, including metal exchange market makers, teach regular investors the institutional strategies. And we've taught well over 20,000 people these last six years. And our mission is to give regular investors access to the knowledge and the skills, most importantly, that are usually only taught to Wall Street bankers.

1:29So today I'm going to expose how a war in the Middle East just triggered the largest forced gold liquidation in modern history. And guess what? Wall Street saw it coming. And if you've been confused watching gold crash while the Middle East burns, type "confused" in the comments right now because I think it'd be good for us all to see. We're probably all pretty much in the same boat here.

1:51And look, before I give you the data and the proper breakdown, if you want to actually learn how Wall Street picks stocks and metals during chaos like this, not the stuff they teach you on Reddit, but the actual institutional playbook, I'm going to give that to you for free in a live training that's happening anytime now. And you can sign up for that at felixfriends.org/training. There's a link down below. It'll show you the time and your time zone and everything else. And it's free of charge. Completely free of charge. So join thousands of others who are learning how institutions really act in situations like this so you know what the big boys know too.

2:30But let's back up a second. Gold had the most amazing history, the most amazing run-up in 2024, 2025. Central banks were buying hand over fist. China, India, Turkey, Poland. Everybody was stacking and gold hit almost $5,600 an ounce, right? People were saying it's going to hit $6,000, $7,000. Gold bugs are doing victory laps and all that, and then it fell off a cliff. It's still down over $1,000 since just in March. Gold's dropped 15%.

3:00Now the financial media tells you it's profit taking or overbought conditions, some technical correction. But basically they're saying we've got absolutely no idea what's happening. But we now know who at least one of the mystery sellers was. We have a geopolitical dashboard here and you can access this. It's like $6 a week. You can cancel anytime. And if you go into that geo intel there, and then on the map layers, you just toggle everything off and just only leave on the central bank gold. And that basically tells you what banks are buying, which banks are selling in red. And then the ones that are flashing in orange are the ones that are the most interesting right now, which is rumoured sales there, Turkey, and then the Middle East.

3:40And I'm going to explain to you exactly why and when that's going to stop and what that means for the gold price. Because Turkey's central bank swapped about 60 tons of gold in just two weeks, which is another way of selling it without having to physically move it around. And that's about 10% of Turkey's entire gold stockpile just in two weeks.

4:02And you might think, "Ah, that doesn't sound like a lot." Well, Turkey's selling is bigger than all the ETF outflows of the entire world. So yes, this does really, really matter. In ETFs, we saw about 43 tons leave. Turkey, about 60 tons got sold. One country, more selling pressure than every gold ETF investor on earth combined. And Turkey has been the most aggressive gold buyer of the last 10 years, or one of. They were buying gold specifically to reduce their dependence on the US dollar. The Iran war forced a complete 180 for these guys. Turkey now desperately needs dollars they spent a decade trying to escape.

4:46So why do countries like Turkey and Gulf states have to sell? It's not a strategic choice. It is a survival choice. Turkey imports 90% of its oil, its energy, 98% of its gas. They produce almost no energy domestically. When the Iran war started and oil prices went from $70 up to $90 and beyond $100, their import bill, their energy bill exploded.

5:33The way this works is that for literally every $10 increase in oil, Turkey needs an extra $4 to $5 billion US dollars per year. So oil went up $50, if you do the maths. So countries like Turkey have three choices, all of them pretty terrible. You let their currency crash, which is political suicide, right? That's not going to happen. Two is burn through all the US dollar reserves that they have. They were already doing that, by the way. They're already pretty low. Or three, you sell gold for US dollars. So you take another short-term hit to survive another week. And they chose option three.

6:26Now, how do they actually do it? The mechanism isn't really that important, but they hold about $30 billion worth of gold at the Bank of England and London. So they entered into what's called a gold for foreign exchange swap agreement and basically they say, here's our gold, you now basically own it, you give us dollars for it, and we have a right to buy it back if we ever come across dollars by accident. Like a pawn shop for central banks. Basically they walked in with their grandmother's golden necklace and the necklace was 58 tons and the pawn shop was the London bullion market. When you sell that much gold, what happens to the price? It drops.

7:03Now, Turkey is bad, but Turkey doesn't have the biggest problem that the Gulf states have. And they have it much worse. And to understand why, I need to explain to you how a currency peg works. And I know it doesn't sound very exciting, but it's literally the number one thing driving what's going on in the market right now. It's what the Saudis have. It's what the Qataris have. It's what all these countries here in the Gulf, Kuwait and so on, have. They have linked their currency to the US dollar.

7:38So let me try and explain that to you in a way that hopefully makes sense. And please let me know if this is landing for you. Imagine your country's currency reserves are a bathtub which is full of dollars. There is a tap here too. There's a tap and that tap normally delivers more US dollars, the faucet. So there is also a hole in here. Let's make a little hole. That up here is the hole, the faucet. And what happens here? Well, that's where dollars flow out.

8:14So in normal times, say you are Saudi Arabia, what happens? Well, you sell oil every single day and for that oil you get dollars. Hence why this beautifully drawn tap up here is giving you lots and lots of dollars. So your bathtub's always full. Now why would dollars leave the bathtub? Well, businesses want to sell, businesses trade, that kind of thing, right? You're importing food, you're importing machinery and so on. And you pay for those in dollars. A little bit of dollars leave, but the oil tap's up, right?

8:52So Saudi Arabia has pegged their currency at 3.75 to the good old US dollar. The UAE has done the same. Qatar's done the same. Bahrain's done the same. Oman's done the same. Kuwait has a basket peg that's also mostly dollar. And it all works because their number one product is oil and they sell that in dollars. So they've always got enough dollars to maintain this setup, this bathtub setup.

9:24Now, here's what the Iran war did. It turned off the faucet. It literally just cancelled the faucet. No more oil going out because the Strait of Hormuz is closed. And therefore these guys are collecting a lot less money. They cannot physically export. Saudi is an exception, by the way. They have a pipeline. We also have that on here. If you click on energy infrastructure, you can see this green line here, which is the East-West pipeline the Saudis have. So they're a little bit better off than everybody else in that part of the world. The others are not looking quite so happy.

10:03What happens when you're not getting any new dollars in, but actually more dollars are leaving? Why? Well, you still need food, right? 80% of their food is literally incoming by ship. You need machinery to repair your plants, your desalination plants and so on. Your military spending is going through the roof because you're defending yourself. So more and more dollars are leaving and therefore your bathtub is starting to empty out.

10:40Now if that empties out, your currency would lose a tremendous amount of value. You would get crazy inflation, your economy would collapse and the faith in your economic system would collapse. So the central banks in these countries have to do whatever it takes to prevent that margin call from toppling the economy. And of course, people are leaving the Middle East, right? Expats, investors are pulling their money out, companies are moving.

11:05Money out, everyone's just hedging, which is natural. It's normal. Hopefully it'll all return to the beautiful pre-war status quo. But when this happens, people panic and the central bank has to provide the people who are leaving and the companies who are moving their money out and the people who are buying equipment overseas and the arms manufacturers, they have to give them dollars from the bathtub which is draining.

11:32So Saudi and these Middle Eastern countries had the same three choices Turkey has. One is break the peg, as in we're linked to the dollar. And if you do that it is literally political suicide. It's crazy. You're not going to do that, because these countries operate on subsidised fuel, no income tax and all that stuff. There is a system in place there, you don't want to break it. And number two, you burn through your US dollar reserves, but they're already draining every day. And number three is you take some of the gold you have and you convert that into United States dollars and you use those United States dollars to put them back into the bathtub.

12:17This is the margin call. You're forced to sell your collateral, your gold, to meet your obligations, the currency. It's the same mechanism that a retail trader gets getting margin calls in their brokerage account, except it's tons of gold here and not tens of thousands of dollars perhaps. Does that make sense?

12:46Now, are these numbers confirmed? We have no confirmation that countries like Saudi Arabia are selling, but there are rumours that they are selling in London. 45 tons of net London outflows in the first 2 months of the year. Now, IMF does these filings, they don't confirm it, but the truth is that the sovereign wealth funds in that part of the world, like the PIF in Saudi and the QIA in Qatar and all these guys, they don't report their gold holdings to the IMF. They don't have to. They almost certainly hold gold indirectly through ETFs, futures contracts, accounts in London and so on, and they can sell those quietly. And one of the things I learned from one of my mentors is always, like you said, always look at the vault data. When that doesn't match up with the official narrative, then you probably are on to something.

13:37So you now understand this. You now understand that the war disrupts oil flow. The oil flow is no longer flowing, going the way it was, and therefore they're getting less US dollars flowing in. And at the same time the costs are going up, they're going to pay for the war. So more dollars are flowing out, so they probably have to sell gold to get dollars.

14:07But if you think this is therefore the end of the gold bull market, well, I would disagree with you on that politely. And of course doesn't mean I'm right, I'm not a financial adviser or registered or whatever. But just think this through. Russia just restricted, as in made it illegal, to export gold. One of the largest gold producers in the world. Well, you can still bring out 100 grams, which is about $15,000 US. Not exactly institutional level money. So bigger bars than that you can't export any more. So what does that mean? Well, that removes a lot of gold from the international market. You saw what happened to the silver price when China restricted exports.

14:48Why would Russia be doing that? Well, they got kicked out of the LBMA in 2022. The G7 banned Russian gold imports. So Russia is building a parallel payment system and a parallel gold market. Now, this export restriction or ban kicks in when? It kicks in in April 2026.

15:12So imagine you're a Russian gold holder. What are you going to be doing? You're going to be selling your gold and you're going to maybe put it in another asset, or maybe you're going to buy some gold a little bit later overseas or whatever. Because you don't really want your asset locked in by law into Russia. You want to have the ability to move it around. If you own kilogram gold bars, you're the kind of person who wants to move their money about. So Russian holders are going to be liquidating before the 1 May cutoff. It's a date you might want to write down. And we're going to see some more volatility there in gold. More gold's going to hit the market. Probably more downward pressure.

15:51Tell me if this is useful so far. Did anybody tell you that central banks could get margin calls? Did you see that on CNBC? Let me know down below in the comments. But let me organise the framework here for you, because what we're seeing is three forces pushing gold down at the same time.

16:05So the first is essentially the oil shock. These are countries who are importing energy. Turkey, we just saw it. India, most of the states of Europe, the European Union. They're burning through their dollar reserves to pay for oil, and we see some of them selling gold to raise more dollars. India has become a net seller since January for the first time in many, many years.

16:38The second set is the US dollar peg countries. So countries who link their currency to the US dollar, which is basically the entire Gulf. And if I look at the LBMA data, to me that suggests these guys are selling pretty significantly because they're not getting the oil revenue they were expecting.

16:59And then number three, we've got war funding. Countries at war or funding wars. Russia, Poland are monetising gold to fund military operations, and possibly you could add the Gulf nations to that. Russia sold $30 billion worth of gold last year, ongoing. In Poland, they're talking about monetising about 550 tons of gold, $13 billion, for defence spending.

17:26Now, the biggest state gold buyer, China, 27 tons in 2025, it could be a lot more, paused gold purchases in Q4 2025. They paused. So the gold market has lost its strongest buyers, the central banks. And I'm not the only one saying this. I listened to a security strategist, commodity strategist at TD Securities, and he said, and I quote, "The economic shock from the war in Iran will likely dent demand for bullion from some central banks while forcing others to sell from gold reserves to meet their dollar obligations."

18:02Now, does all of this change the longer term picture? Well, the war creates more dollar demand, less dollars being generated for the Middle East. There's all that forced selling and all of that happening. And it's also pushing up the interest rate, the US government debt pace, which again makes gold less attractive because I could now move my money into US government debt and I'd earn 5% or something. So that's what money does. Money will flow to the safe havens that give it the most interest.

18:35But I think if we zoom out a little bit here, and this always depends on time horizon, I'm not giving you advice here. But do I believe the US government is going to cut interest rates at some point? Yes, I do. Do I believe the US government is going to print loads more money? Yes, I do. Do I think they're going to artificially keep interest rates down? Yes, I do, because they've got that crazy deficit they've got running. And all of that will mean that the dollar will lose value.

19:06If I look at what the Russians are doing, restricting gold exports, creating their own international financial system, all of that removes demand from the US dollar and all of that undermines the long-term value of paper money. Fiat money. So in my brain, the long-term story for gold is unchanged. We just have an opportunity that could run for quite a while where gold prices will be somewhat lower. And I know some people will get frustrated with that. But if you are the kind of person who only likes to buy things when they're going up, think about whether that's the logical thing to do.

19:49So if this has been useful for you, imagine what we can do if we spend 2 hours together and I actually just teach you how Wall Street makes their decisions, how they decide what to buy, when to buy it, because we can follow these money flows. And yes, we have fancy maps and that sort of thing, but even without this, there's actually a much easier way of just tracking where the money is pouring in. And I always try to make as much of that available to you guys as possible.

20:15We have trackers here that tell you is the smart money buying gold or silver. They've been selling a lot. This thing was at really negative and they've suddenly switched positive here, which again is kind of interesting. Always go against the flow or always go with the flow, which one would you prefer? We can understand that. So this has been a significant shift and I've been sharing this for the last couple of weeks. We look at the gold premium, the silver premiums, all these things give us data points. We look at the COMEX inventory, they're all data points. They're not the one single answer, but when you understand the structure, the rule book that Wall Street puts around it, and you can then just follow that rule book, I think you're in a position where you could potentially make a lot better decisions.

21:04We've also just published a report in here, Precious Metals Bull Market 2026, which is a full length research report that we put out, 21 pages. And we don't just write it from a point of view of we're a gold bull and therefore we're going to love gold all the time. We just look at the data. So you get that as well.

21:24Join the community down below. As I say, it's like $6 a week or something. Cancel if you don't like it, we won't ask you any questions. If you get value out of it, I'd love to hear it. And I thank you for watching, I thank you for tuning in. And I'd love for you to show up for yourself on the live training and share this with somebody so other people are starting to understand what's really going on out there.

21:45All the best. We are in a crisis. You know it, I know it, Winston knows it, your neighbour's dog knows it. And oil tankers are getting attacked in the Persian Gulf. The crisis seems to be getting worse.