The McAlvany analysts are unanimous this week regarding both their focus and their conclusions. Recent pullbacks in precious metals prices were both healthful and overdue. The analysts variously overlap and diverge in their identification of macro factors driving the fundamental picture, but that fact will give you many reasons to be optimistic. The metals are strong, and continue to respond to powerful forces pushing them forward. Pullbacks that characterize any healthy bull market ought not to disrupt a fully informed investing plan.
Key Takeaways:
- Important things continue to matter; lesser things continue to distract
- China has been on the record favoring gold reserves for years
- The technicals support the fundamentals
The McAlvany Weekly Commentary: Gold & Silver: Turbulent Reversals & Ratio Opportunities
David and Kevin delve into the precious metals markets, assuring listeners that the gold and silver bull market sails on strong despite significant reversals. They spotlight the dramatic pullback after parabolic climbs, but frame it as healthy profit-taking in an overbought but fundamentally sound uptrend, not a trend reversal. Technical indicators like Fibonacci retracements and moving averages showed buyers rushing back in, reinforcing resilience amid volatility that David calls “your friend” for spotting opportunities. The conversation pivots heavily to the gold-silver ratio, which dipped into the low 40s (signaling silver as temporarily overvalued), presenting a prime chance to swap 10-15% of silver holdings into gold to compound ounces without new capital. Broader drivers get their due: persistent global dysfunction, massive U.S. debt burdens, unquenchable inflation, eroding dollar hegemony, central bank gold hoarding, and six straight years of silver supply deficits all underpin higher prices. Lesser threads touch on geopolitical shifts, central bank demand outpacing speculation, and metals as essential “stupidity insurance” in a world of policy missteps and liquidity ebbs.
Hard Asset Insights: Noise vs. Signal
Morgan cuts through the market’s recent chop with a clear-eyed distinction between fleeting noise and enduring signal in this February 6 update. He portrays the past couple of weeks’ volatility as classic intra-trend turbulence, ripples within powerful secular currents favoring precious metals, hard assets, a softer dollar, and weaker U.S. bonds. The dominant theme, unpacked in depth, is a profound global monetary regime shift: the slow eclipse of the petrodollar system and U.S. Treasury dominance by a gold-centered neutral reserve asset, a “100-year storm” now gathering force. Lewis traces this signal back to China’s 2009 PBOC white paper calling for a supranational reserve disconnected from any single nation’s credit. Even U.S. voices, like Jamieson Greer’s Davos nod to Keynesian ideas for neutral reserves to fix trade imbalances and Triffin’s Dilemma, hint at converging recognition of the need for change. Amid this capital rotation into real assets, short-term distractions like the Kevin Warsh Fed Chair nomination fade as pure noise. The takeaway? Tune out the cacophony, endure inevitable retracements, and heed the true signal promising outsized rewards as the old rules give way to the new.
Golden Rule Radio: Opportunity Inside Volatility
Rob, Miles, and Tory unpack the recent market, turning what could feel like a gut punch into a silver-lined invitation for savvy investors. They lead with the sharp, headline-grabbing pullbacks in precious metals, but assert that fundamentals remain rock-solid. Volatility is merely shaking out weak hands in an ongoing secular uptrend. They dig into triggers: China’s abrupt halt on five silver/commodity funds to curb risk, CME’s repeated margin hikes fueling forced sales and margin calls, and speculation about big players (rumors swirling around JP Morgan’s massive shorts) benefiting from the shakeout. Technicals get close attention—silver finding support near $75 (61.8% Fibonacci retracement, aligning with the 100-day MA), gold holding firm around $4,400 (78.6% Fib on the recent leg), the gold-silver ratio spiking to 57:1 after tightening to 46:1 (suggesting a potential bottom in the ratio and buying window). Broader context touches on equities softening, the dollar ticking up modestly, and cryptos dipping, but the core message shines through: this is trading-driven noise in a multi-phase bull run. The hosts encourage dip-buying, urging patience as mainstream capitulation looms.
