Gold
Gold $5,000? a debate with Campbell Harvey of Research Affiliates
Marks is looking at it backwards. The question should be how to value the alternatives … currency, bonds, stocks …without an answer to that question, why would you hold them instead of gold?
And despite his rhetoric, Buffett has actually left billions on the table by choosing to own … not land, not apartments, nor candy … but TBills, instead of gold.
Harvey looks for evidence of gold’s hedging value and can’t find it.
Gold was there for over ten billion years before any currency, bond or stock was even imagined. Why would you ask it to justify itself before johnny-come-lately alternatives?
And all theory aside, the fact is that gold has trounced stocks … not only the last year or so, but so far this century.
The numbers are right here:
The First Twentyfive Years
And those are just up to the beginning of 2025 … they don’t include 2025’s spectacular 69% increase.
A better question is why should you own stocks!
The answer to that is when they present good value. If they don’t, you own gold instead. Looking for a reason to own gold is asking the wrong question … it’s the default asset … it’s what you own until you find a reason to own something else. Marks, Buffett, Harvey, smart as they are, err by overlooking the most basic thing.
The single most important factor in getting the right answer is asking the right question.
You would think being wrong about something for 26 years would prompt some deeper reflection.
Of course, reality is a bit more forgiving than forcing us to choose only one asset to hold. We can own gold and stocks and bonds and other things, to our benefit. But to exclude gold from consideration? It’s both not smart and wrong.
Live from Kitco
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US financial markets were closed Monday in observance of the Martin Luther King holiday, but in futures trading, the S&P is off sharply while the metals are on even more sharply. Treasuries are down modestly. The USDX is down.
As with previous episodes, the stock selloff is likely transitory. But it’s apt to deepen before it eases. Recall SS has tipped a first quarter stock selloff, and the pieces are falling into place.
Gold continues to make new highs. Silver seems determined to break $100. Platinum and copper are in the zone. The dollar is in the pits.
Stocks are still near their highs in terms of dollars, but are extending one of the deepest bear markets on record in terms of gold:
Je Sus!
This is happening in REAL time, I not seen anything this scale since 911 or the Fall of the Berlin wall!!!!!!!!!!!!!!!!!!!
Just been feeding Mum & the dog, watching BBC 6 pm News………..& BABY they pissed!!!!
The BBC now has said the unthinkable………NATO is going away!!!!!
NATO will end America is NOT under our thumb any more & The Europeans are in full disarray!
“What are China & Russia doing?” asked the BBC anchor
“I think they just laughing & eating popcorn” came the Davos reporter
DEmark is sell ALL US debt/assets…………Europe will have to look for another partner. The German leader has been trying to contact Putin!!!
My Friends this is history before you very eyes!
Mike
You can say that again!
Great line about the popcorn. Global drama like you’d never expect outside the movies. Who’da thunk Greenland would ever be the global geopolitical flashpoint.
FWIW I will shed no tears for NATO. It had mission-creeped itself into an imperial monster, unable to resist devouring new territory, including territory of the former Soviet bloc. This has caused unnecessary war. Its original mission meanwhile is obsolete and superfluous … who would doubt that if one of its core members were truly threatened by an aggressor, that others, including the US, wouldn’t come to its aid. You don’t need a supranational org for that. There was no NATO before WWII, and that didn’t prevent an allied response.
No shortage of market drama either. Including a debt-inspired rout in the Japanese bond market spilling over into US treasuries. Yet despite that and the plunge in the S&P, thanks to largely to the multiple metals and commodities, our fully diversified Model Portfolios are in the green.
On NATO:
A Year of Trump 2.0: Strategy Report Card
“… as far back as 1951 no less than General Dwight Eisenhower (not yet elected U.S. President) stated, “If in ten years, all American troops stationed in Europe for national defense purposes have not been returned to the United States, then this whole project (NATO) will have failed.”
https://www.telegraph.co.uk/us/news/2026/01/20/canada-military-us-invasion-trump-carney/
It’s understandable if they’re getting a little paranoid, but I doubt any American invasion of Canada is in the works. It would be very unpopular here in the US, let alone Canada. Did you ever see the movie Canadian Bacon? The idea was so ridiculous it was a source of comedy.
There’re quite a few people that would be happy to be able to travel between America and Canada without the paperwork, but anything more would be totally unnecessary at best.
Wow!
Its just gone 8 am here in Blighty, am feeding Jess (dog) & myself… Mum be up soon……..am going to get some rest then this afternoon onwards i will once again be ready for the next dose of instant history!
https://www.telegraph.co.uk/business/2026/01/21/trump-crossed-lines-cut-off-global-credit-card/
Who has the Gold Limey?
Silver getting slaughtered!
At first gold held up, then followed silver lower. Apparently Trump withdrew the military threat and then the tariff threat over Greenland, claiming a “framework” to have been reached. Oh! … another international agreement [yawn]. But it’s noteworthy that Trump has actually done nothing but talk.
This noise imposed and removed a transient premium from metals prices … the underlying drivers of debt and inflation remain. Trend channels remain intact.
Trump apparently claims he has negotiated “mineral rights” in Greenland. This should be worth just as much as his “oil rights” in Venezuela. Less than the cost to American global credibility from all the disruption and drama. Or his own … voters will not reward him for this.
I suspect “Greenland” was a decoy, he trying to deliver a deal to Russia. The “Green Goblin” did not show up & Trump basically drove a “Horse & cart” through Davos!
The British PM is hiding in “De Bunker”.
Mike
Trump wanted Greenland. He’s a real estate guy. It would have been his biggest deal ever. Alas he is also undisciplined, and lets his craving to be the center of attention lead him to talk when he shouldn’t.
We’re still waiting for peace to break out in Ukraine. Even if it does, there had to be a better way. Far as I know, the Trump admin has continued to deliver military aid to the “Green Goblin” and people continue to die. NATO continues to exist. Eisenhower was right when he uttered the words I quoted earlier:
“… as far back as 1951 no less than General Dwight Eisenhower (not yet elected U.S. President) stated, “If in ten years, all American troops stationed in Europe for national defense purposes have not been returned to the United States, then this whole project (NATO) will have failed.”
If it’s not within his power to end the war outright, it is at least to get the US out of it.
If Trump was right when he said America should have Greenland then giving up on it was a failure by his own standard. Talking too much before laying the groundwork invited the opposition to harden its position, making it just that much more difficult. He certainly didn’t achieve much else besides ticking off a lot of people who used to be friends.
I 100% agree my only hope is after this sh1t storm is over we get some peace!
Lets take stock:-
Biden pulled US forces out of Afghanistan, the British went mad. I was there (in government) & i have never seen an reaction like it from “Them”.
Then Biden told Putin “he should invade” (Green light).
Trump comes in & does NOT attack Russia, he holds back the Limey/Frog/Krouts……..does his best to avoid escalation. He bitch slaps the Green Goblin, then the British PM …..he refuses point blank to let them steal Russian assets…….
The Europeans get chased out of Africa, they then start planning Iran attack……….which goes wrong very quickly. Trump like Kennedy at the bay of pigs refuses to get drawn in. Has a very gentlemanly agreement with Iran were a certain amount of bombing goes on……….then suddenly Trump declares Iran nuke bomb project wiped out…….thus no need for anymore action.
The European scum plan an “colour revolution” in Venezuela & give an almost unknown “activist” the Nobel peace prize to legitimise her as their puppet. Trump lunches a preemptive attack & kidnap’s the Bus driver & Mrs Bus Driver……& wipes out the Cuban protection team.
At this point you can sure as Hell be sure that Mr & Mrs Busdriver are now “assisting Trump with his enquires”.
With No time to spare & few options “They” decide to go for Iran colour revolution 2.0 in the hope of gaining Iran & its energy resources for their use. They fail to reach critical mass & the mostly Kurds are stuffed out with the help of Turkey intel.
Turkey tells the World that they go Iran’s back……………Trump has threatened to attack……but has made todate little real effort.
Now tell me whom do you think is the real energy Trump (Team America) is fighting?
I suspect a lot of it is the same military industrial complex that Eisenhower also warned about so many years ago. America might look like a war-loving bully from the outside, but most ordinary folks I know really do just want to get along. They care more about domestic issues like affordability and immigration. This was a big reason Trump was elected … he promised to put “America First”.
For whatever reason, when they go to Washington people get obsessed with the rest of the world and act like they’ve entered a giant game of Risk. World domination is the object of the game. Call it the swamp, neocons, the MIC, whatever, but if it’s not healthy and strong at home, any would-be empire is on the same track Rome was in its decline and fall.
He’s courting big congressional losses in November. Which would kneecap his presidency and could mean more serial impeachments. Then the opposition is set up to win in 2028 and reverse his entire agenda. If that happens, all he will have succeeded in doing is creating a lot of heat and noise. Personally I’d like to see him succeed if only so we don’t get overrun with another wave of mass illegal immigration. He’s done well on this, but the federal debt, monetary system, tax code, Social Security, Medicare, etc are all still a mess and could use a deep spring cleaning. Imagine if he channeled his considerable leadership in such productive ways.
https://www.telegraph.co.uk/news/2026/01/21/west-once-more-betraying-kurds/
Right on time
https://www.carscoops.com/2026/01/americans-us-tariff-costs/
Greentanamo: Trump Deal Gives US Sovereignty Over Small Pockets Of Greenland For Military Bases
Can you stand the excitement.
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The British press are now ramping “Poor Kurds” line ……which means:-
A. The primally anti Iran force got the sh1t kicked out of them with Turkish help.
B. “They” want to re group for (yet) another attempt
C. “They” want the option of a slow burn campaign of Kurd attacks on Iran
D. “They” want to punish Turkey
F. “They” quite like Turkey as well
My stars and garters. Gold and platinum at new all time highs … again. I sold a bit of each just now just because of the speed of ascent and the surge taking my allocations above their upper limits. I had to do this with silver just last week and copper not long before that, and still wound up with bigger positions than before. Just can’t keep these metals down!
“Lets ROCK!!!”
🎶🎸🥁🎹🧨🎊🎉🎵
Mega’s Dispatch from England:- Defeat has a certain odor
I touch very briefly on Large Geo-politics then move on to local Blighty news.
It seems that there WILL be a Meeting in the UAE involving America/Russia & Ukraine. Please note how NO European nation will be taking part…………I also see “SUDDENLY” Germany & Italy have turned the EEC……..a scape goat must be found!
Meantime Back in Blighty things are moving fast here. A sitting Labour MP has just resigned his seat. In Manchester a VERY safe seat for the Labour party………this means the Marxist leader of Manchester is about to throw his hat in the ring to become the replacement MP.
He made no secret that he intends to challenge the Prime Minster.
So Space cadets wot does this mean?
The PM & his “Crew” have threatened to pull the plug & call a general election if any attempt is made to unseat him. I think that the labour mps would call him on that,With the loss of Ukraine & a mega ecomnic sh1t storm incoming were Labour mps would be forced to cut all the “Free bees” they been giving away for the last 30 years.
Thus i FULLY expect “GE” this year……& Labour give back the keys to someone else!
Where is Farage in all this? Is he still in the game?
Yes very much so…………….his party has 7 MPs but is might form the next government.
Tory Mp’s are now joining & there is talk of Labour MPs joining.
🧨💥
Metals exploding.
Could gold break $5000 and silver crack $100 yet this week? With gold now at $4960.60 and silver at $98.95 … with only hours left … you know they want to …
Tin
Anyone else getting the feeling there’s more to the metals bull than just a collection of unrelated individual stories?
Commodity Prices Are Rising Together and the Reasons Go Deeper Than Supply Shocks
Inflation creates shortages.
Demand is unlimited as human desires. Only when it is underwritten by currency can it result in rising prices. An excess of such demand looks just like a shortage of supply.
This is true regardless of whether the item is oil, metal, or housing. The shortages of the 1970s, the 2020s, all spring from the same source; easy money.
Silver 99.74…………..come on Baby!
YYEESSS!!!!!!!!!!!
$100.26
Next up … Gold $5000 …
This is an important chart. It shows the world stock market as priced in gold. This update indicates that in terms of gold, stocks have crashed over the past year. Crashed to the tune of -57.93%. A ten year version of the same shows them to be priced below where they were in 2016. These are total return figures, too, meaning that in terms of gold, stocks have lost money over the past ten years.
The speed and depth of the plunge in stocks over the past year indicates an oversold state prone to reversal. This could happen by gold selling off in terms of dollars, stocks rising in terms of dollars, or both falling or both rising but one more than the other, but for our present purposes, it doesn’t matter. This is about the relationship between gold and stocks.
I’ve moved some funds from gold into stocks. A small enough amount that I’m still overweight gold and underweight stocks, just not as lopsided as before, leaving plenty of room for more in due course. As a reminder, my use of the term “stocks” without further qualification doesn’t mean any particular subset of stocks, but the entire asset class, although I remain overweight XS (foreign) stocks versus US stocks. Not only are US stocks much more richly valued, but a weak dollar favors XS stocks.
I’m also watching commodities that have so far been left behind … conspicuously including oil. Although we don’t know when, here too some mean reversion is in the cards.
So wots next?
Here.
Nat gas is the commodity of the day, soaring into the incoming blizzard. It will go back down, though not all the way.
Meanwhile a catalyst that might derail the metals express is nowhere in sight. We have only the technicals to flash caution signals. But one we might anticipate is hot official inflation readings finally waking up the dozy Fed to the fact that it’s easing into an inflationary minefield. Consumer prices lag asset prices, and asset prices have been inflating. Even foreign currencies are rising against the dollar, or looked at the other way around, the dollar is falling faster than its fiat rivals. DXY was down 0.90% today, a big move by forex standards. JPY is having troubles of its own as the longer JGB maturities have been crashing, or spiking in yield terms. This all adds up to a pig working its way through the inflationary pipeline.
If there is any honesty left in government inflation stats, either the dollar strengthens and asset prices crash, or the CPI, PPI, PCE, etc ramp higher.
The Japan bond market crash was upstaged by the Davos drama when it happened, but has no less financial impact:
Bond fears are boosting gold prices, 2026 gains will be found in commodities rather than tech – UBS’ Michael Zinn
“Geopolitical and macroeconomic fears are pushing sovereign yields into dangerously high territory – with gold the chief beneficiary – while commodities, small caps and international equities will likely steal Big Tech’s thunder ahead of the midterms, according to Michael Zinn, managing director and senior portfolio manager at UBS.
… Zinn was asked how concerned he was about the ongoing market impacts of U.S. threats toward Greenland, he said markets appear more concerned with fixed income yields in Japan…”
Trump Says Canada Will Face 100% Tariffs if It “Makes A Deal With China”
Dear Mr President: It couldn’t hurt to try to get along better with Canada. If you want to limit China’s footprint in our North American neighborhood, you might start by asking yourself what might we have been doing to drive our erstwhile friends into the arms of China in the first place. All stick and no carrot is doing things the hard way, and getting the whole world ticked off at you is not a winning formula for success.
Trump said tariffs would bring factories ‘roaring back.’ So why are manufacturing jobs on the decline?
So if everybody goes to work in manufacturing, who’s going to provide the services? Unemployment is below 5%; it’s not as if roaring new factory jobs could be filled without people leaving other jobs. It’s already hard enough to find carpenters, plumbers, electricians, people to cook and wait tables in restaurants, health care services.
Government’s job is to level the playing field, not force the outcome of the game.
ICE just “Iced” another one………………
Not the greatest PR. FWIW though this one was reportedly armed and physically violent.
https://www.zerohedge.com/political/border-patrol-agent-shoots-armed-suspect-minneapolis
Could Fed Chair Powell’s Successor Be…Jerome Powell?
If Trump really wanted to do something useful with the Fed, he could push for laws prohibiting it from targeting interest rates and from holding anything but Treasuries and gold on its balance sheet. Or just end it.
From Adam Sharp at the Daily Reckoning:
Gold and Silver: “Something’s Wrong”
Yep, we missed something while Trump was doing Davos
So, Next week?
Mike
Gold just smashed through the $5000 barrier like it wasn’t even there, Silver has put even more distance between itself and the $100 mark.
Near term direction is a crap shoot, but the magnitudes are likely to be bigger than normal, whichever way they go. Given how fast it’s come this far, silver is a high risk short term bet; gold is the safer of the two. I still like platinum as the left behind play, even though it’s a lot less left behind than it was, and copper may be even better than gold at this point.
The dollar is crashing, a major tailwind for the metals. As long as it continues, so does the tailwind. The Trump admin is on record as wanting a weaker dollar, but the speed of the decline may invite intervention … a risk for the metals. Position sizing is the name of the game. As always, whether something is a buy or sell depends heavily on how much you have already.
Long term? In the proportions of our multi-metal Model Portfolios, I still like ’em all.
Silver’s rally may be topping as prices impact industrial demand, gold shrugs off Greenland deal to move above $5,000/oz – Heraeus
Silver is extremely overbought and investors shouldn’t chase prices – BCA’s Ibrahim
Wow
Its coming on 8 am here in Blighty & those metals are flying BABY!
But where is oil?
Mike
Oil is left behind.
So far …
Here’s a pertinent chart.
As I’ve commented before, I expect this metals rally to lead to a broader commodities rally. Notice how gold (black line, IAU) ran up into 2020, then passed the baton to broad commodities (blue line, COMT). I’ve been trimming some gains from hot metals (CPER, IAU, SLV, PLTM) and redeploying them into COMT.
Japan’s Liz Truss moment threatens world with $9tn debt meltdown
PM Sanae Takaichi’s borrowing-funded tax and spending plans risk a mini-Budget-style crisis
https://www.telegraph.co.uk/business/2026/01/26/japans-liz-truss-moment-threatens-9tn-debt-meltdown/
Thanks for the reminder, mega. This is a big story that has gotten a little buried under the political drama. Japan’s bond market is a huge part of global financial markets. Who will win the race to the bottom? The dollar? The yen? US Treasuries? Japanese government bonds?
The winner is the loser!
Mega’s dispatch from England:- Time running out
Well, busy weekend here in Blighty, the Labour party has stopped a sure-firer winner from standing in a local by election. The sitting MP was convinced to “Retire” & the Marxist leader of Manchester city council jogged up to fill the place.
There was no secret that he was being parachuted in so he take over the running of the Labour party & remove that plant pot of a Prime minster we are are “Blessed” with.
“er………………..not so fast” said the labour NEC. His approach was shot down as his nomination was rejected by the WEF/Fabian assholes whom have control of the party right now.
They put out a story about how they didnt want a city leader election in Manchester at this time. This is of course total bollocks its a last ditch attempt to save Starmer from getting sacked from a job he should never have been in to start with.
So, there will be a local election & REform (Nigel Farage) stand a good chance of taking it.
Indeed Reform have been doing rather well a number of ex Tory MPs have joined including my old boss (Former Home sec).
Meantime Starmer himself is in China right now, a week after Canada was there………something BIG is in motion & its going to happen soon.
Mike
Does this mean a Tory-Reform coalition might be taking shape? (Sorry … never understood the parliamentary system or British politics.) Correct me if I’m wrong, but my impression is, to oversimplify, it’s dominated by a rivalry between ordinary folks and the London financial elite, much like ours is with New York’s.
May be………… they need to dump the present leader
This is an update of the chart posted last month showing the relative valuations of the metals we regularly track. It is copper, gold, silver, platinum, each relative to the mean of the four since the beginning of the millennium through the end of last week, 20260124.
Looking at the current data at the end of the chart, silver is the most expensive of the four, followed by gold, then platinum, then copper, based on the history since WTBFOTS (When The Ball Fell On Times Square) 20000101.
Note this is not a chart of dollar prices … taking the metals in terms of each other cancels currency completely out of the equation. As they may be a little hard to make out on the chart, those ending values are:
Copper: -0.4962
Gold: +0.2540
Silver: +0.5874
Platinum: -0.3453
The precise significance of the numerical values isn’t especially vital, but for the mathematically curious, since this is in natural log scale, this means copper is trading at about exp(-0.4962)=0.6288 times (~61%) of its geometric mean valuation of the millennium to date, and silver is trading at about exp(+0.5875)=1.7993 times (~180%) of its geometric mean valuation of the millennium to date.
Metals shot higher yet again today, with gold up $165 or 3.3% to $5175 per troy ounce. This is no mere meme-stock-like trading though, as the DXY (an index of the USD in terms of other currencies) was down a hard 1.25%.
Not to let the metals suck all the oxygen out of our attention room. XS stocks have also been on a tear. The two main XS stock ETFs in our Model Portfolios, VYMI and VSS, are stellar examples, each up over 36% over the past year. And they yield over 3% to boot, taking total returns over 40%, leaving the vaunted S&P and NASDAQ in the dust.
All without any magnificent multi-trillion-dollar AI hyperstocks.
CRESY, an Argentinian ranch stock I’ve occasionally mentioned, is up 11.67% today.
The tide has turned. Overhyped, underyielding, techno-glitz and digital bits of nothing are out; value, dividends and substance are in.
This slipped under my radar
honor power 2
The Honor Power 2, launched in early January 2026, features a fourth-generation silicon-carbon battery with an exceptionally high energy density of 821 Wh/kg. This advanced, high-density technology allows the phone to house a massive 10,080 mAh battery while maintaining a relatively slim 7.98mm profile and a weight of 216g.
821 Wh/kg!!!!!!!!!!!!!!!!!!!!
Trump threatening China via Iran?
Got Popcorn?
Amazon is going to sack off 16,000 !
& just wait till they get robots in the warehouses
AI is starting to bite headcount at Amazon(and elsewhere).
1 programmer, running a team of AI agents(human/machine teaming), can replace X programmers.
Now multiply by thousands.
2 things:
1)Amazon axing 16,000 FTEs today is more than the entire company headcount when I resigned.
2)Gold’s price increase today is more than the entirety of UK Gold Sales proceeds from the Gordon Brown Bottom, if as Chancellor of the Exchequer he had kept the gold rather than sold it.
The UK would have benefitted more in just the last 27 hours retaining their gold, than they did liquidating all of it 27 years ago.
There a bit of symmetry between 1 + 2 as they happened at about the same time.
Gold & Silver in a DEATH Dive!!!!!!!
“NOOOOO…….MONICA!”
Guess who coming to dinner………..
https://www.liverpoolecho.co.uk/news/liverpool-news/chinese-vehicle-giant-chooses-liverpool-33320452