Gold and silver markets have a way of driving people crazy. People who recognize the metals’ intrinsic value tend to accumulate them no matter their cost in fiat currency. But even gold and silver bugs have to live in the fiat currency world, so it’s nice when markets reflect reality and the metals start heading for much higher fiat prices.
However, a funny thing often happens on the way to the forum. Turns out, governments and major financial players are far more powerful than metals bugs sometimes think they are. Fans of metals typically assume that reality will intrude sooner rather than later (probably because it does so in their lives), but if all markets can remain irrational longer than you can remain solvent, metals markets can be particularly irksome because they’re regarded by gold bugs as—and are—the most valuable over time—over time.
In the short term, however, the metals are attacked relentlessly. The attacks are not always overt, they’re often subtle—calling gold a barbarous relic, not including it in managed portfolios, ignoring it, talking it down, emphasizing that it has no yield—and of course it’s even outlawed at times. Anything to keep it out of sight and out of mind, and therefore keep it undervalued and its message muted.
Yes, the metals talk. They tell stories about those in control of the economic and financial systems. If capitalism is all about listening to markets regarding what to buy or sell for how much, free metals markets tell those who will listen how competent the nation’s money managers are and/or how healthy its economic and market conditions are.
The analysts whose work is summarized below continue to put into words the metals’ message. Those metals are saying that America is in some dire straits. Sure, there have been some helpful changes in our economic system over the past 21 months, but $40 trillion in debt is still $40 trillion in debt. When your GDP is $30 trillion and you’re trying to rebuild the nation and the economy while you pay down the debt, well, let’s just say that that’s a tall order—a Mount Everest-sized order.
So gold and silver are getting a bit bolder with their message. Most of the world has received and acted upon the memo they’ve sent far and wide, but Americans are still enthralled with shiny AI objects. The memo sits unread on their stock certificates.
If you love tech and rockets and financial companies, go for it. Rock those stocks. But always—and especially in times like these—consider tempering the stock message that happy times are here again with the more sober advice that we’re not out of the woods yet. Call it insurance for your portfolio. David talks about this concept in the Commentary this week.
Key Takeaways:
- Is it wise to put all your eggs in the golden basket?
- Millions of obfuscatory words later, the Fed’s dilemma remains the same
- Asian gold buying still over the top
The McAlvany Weekly Commentary: Can the Fed Make Inflation Disappear?
David and Kevin kick off their discussion by tackling a pointed question: if the Federal Reserve can’t bring inflation back to 2%, might it simply adjust how inflation is defined—potentially “prettying it up” even as households still feel higher real-world costs? From there, the conversation turns into listener Q&A with a strong theme of risk and balance: David explains how “when to sell” precious metals isn’t a simple price target but a relative benchmark (like the Dow/gold ratio), and he frames reductions as a gradual, not an exit, strategy. Kevin introduces the “Perspective Triangle”—preservation (gold/sometimes silver), growth/income, and cash for liquidity—then revisits how “triangle updates” keep allocations aligned over time. The hosts also weigh silver-to-gold swaps using ratio gains, discuss how rising interest rates can pressure real estate and refinance math, and answer whether 100% allocation makes sense (the easy answer: no). They further cover commodities allocation basics, vaulting geography considerations, and Basel III’s regulatory tilt toward physical gold—while ending on portfolio prudence for retirees and elderly widows, plus a nod to how cash targets and active risk controls can matter when markets reprice.
Hard Asset Insights: Between a Rock and a Hard Place
Morgan opens by noting that, while he’s traveling and thus keeping things brief, the market message is anything but minor: precious metals prices have jumped sharply higher, which he views as bullish confirmation that gold and the broader metals complex may be past its corrective phase and ready to rejoin the primary uptrend. He links the setup to a mix of Warsh-related uncertainty and shifting policy crosscurrents—Warsh’s hawkish talk paired with reluctance to hike, plus Treasury’s currency-market intervention to strengthen the yen and weaken the dollar, and continued Chinese buying. On the technical and fundamental side, he points to gold breaking above a downtrend line since January, closing above the 50-day moving average, and miners surging (21%+ on the week). He also cites a labor-market narrative (unexpected job losses, lower participation, revisions) as effectively giving Warsh the cover to avoid a September hike—reflected in FedWatch odds falling. Still, Morgan argues the “rock and hard place” dynamic ultimately favors metals either way, with timing the only real question.
Golden Rule Radio: Metals Gain Momentum
The hosts’ takeaway is that they are watching a genuine momentum shift in precious metals. Tory, Miles, and Rob point to gold, silver, platinum, and palladium all rallying strongly as the U.S. dollar slid back under 100, with gold jumping sharply in the last couple of days and technical “breakout” attempts beginning to form (gold especially). The clearest driver, they argue, is the East-to-West flow: Chinese gold-backed ETF inflows have stretched to 14 straight days, with additional buying signals from South Korea, all reflecting growing distrust of U.S. fiscal/monetary policy and a broader move from paper claims to physical assets. They also connect the story to the Fed being boxed in—higher rates raise debt-service costs on a huge national debt—while inflation pressures and AI-driven spending/wealth creation keep the math messy. Geopolitics adds fuel via heightened uncertainty around Treasury/Japan currency moves, U.S.-China alignment, Iran, and oil volatility. Finally, they emphasize portfolio discipline: rebalance after equities hit fresh highs, buy dips rather than chase spikes, and validate breakout levels rather than assume the job is done.
