War is incredibly convoluted. It seldom goes according to plan. The biggest winners are typically bankers and materiel manufacturers, though precious metals holders often also do well. Strange, then, that the metals have seemingly lost their compass over the past week or two.
When such disconnects occur, it helps to step back to get a more comprehensive view, and seek more information from reliable sources. The content creators featured below specialize in deep dives into complex news developments. Don’t miss the context they provide for the current geopolitical situation and its impact on precious metals.
Key Takeaways:
- Making sense of unexpected data
- The long-term trend still trumps short-term volatility
- Constrained reversals are healthy
The McAlvany Weekly Commentary: The Scramble For Liquidity Is On
David and Kevin focus this week on what they see as a mounting “scramble for liquidity” rippling from private markets into public ones. David argues that years of leverage—especially in private equity and private credit—are now colliding with higher rates and tighter financial conditions. With margin debt at a record $1.28 trillion, stretched valuations (a Buffett Ratio near 218% and a Shiller P/E above 40), and extended private equity hold times, he suggests markets are vulnerable to mean reversion, potentially 25% or more in major indices. The hosts describe how illiquid assets, insurance company funding structures, and redemption pressures (like recent fund suspensions) expose systemic fragilities when momentum fades. They also explore how Middle East conflict has pushed oil higher but, unusually, bond yields higher too—signaling inflation concerns rather than a classic safe-haven bid. Gold’s recent pullback, David contends, reflects leveraged players raising cash, not the end of a bull market; he contrasts existential risks facing debt-laden firms with the longer-term monetary tailwinds supporting precious metals. The underlying thread: liquidity is lifeblood, and when it tightens, everything from tech stocks to crypto feels the squeeze.
Hard Asset Insights: Only Gold is Gold
Morgan opens by conceding that last week’s near-term bullish call on precious metals “hasn’t exactly aged well,” as gold, silver, and mining stocks were hit hard—even amid the shock of a U.S.-Israeli war with Iran. He argues the market skipped the usual safe-haven “pump” and went straight to the “dump,” but maintains that the broader bull market in metals is a matter of when, not if. The real story, he suggests, is oil as Iran’s strategic weapon: with Brent surging and the Strait of Hormuz effectively shut, energy disruptions could push oil toward $150, potentially reigniting U.S. inflation toward—or beyond—4.5%. Add fertilizer and copper supply shocks to the mix, and inflationary pressures compound. Higher inflation would likely mean higher Treasury yields, worsening fiscal strains just as private credit shows cracks and payrolls unexpectedly contract. Morgan sketches a perilous fork in the road: either rates rise and deepen recessionary and fiscal stress, or the Fed caps yields and injects liquidity, crushing the dollar. In a world where U.S. military dominance and the “rules-based order” are questioned, he concludes, trust erodes—and when credit falters, only gold is gold.
Golden Rule Radio: Metals Reset Higher
The Golden Rule Radio hosts open by putting the week’s pullback in perspective, noting that gold slipped about 1% and silver 7%, yet February still closed with record monthly highs and year‑to‑date gains that would make most asset managers blush—gold up over 20% and silver north of 30% in just two months. They frame the recent Iran‑related spike and swift reversal as a textbook “safe‑haven pop and drop,” emphasizing that geopolitics tends to create short bursts of volatility rather than durable trends. The deeper drivers, they explain, are far more structural: expectations for Fed rate cuts, sticky inflation data (PPI and CPI ticking higher), expanding U.S. deficits, and a longer‑term softening trend in the dollar despite recent war‑driven bounces. Technically, gold’s retreat to a 61.8% Fibonacci retracement is described as a healthy reset within a rising channel, with meaningful support well below current levels. Silver, characteristically more volatile, has rebounded sharply off its correction lows, but with the gold‑silver ratio near 60, the hosts favor staying overweight gold rather than chasing a dramatic ratio compression. In short, volatility remains high, but the bull trend appears intact.
