The Real Reason Gold Turned This Week, and Who's Quietly Buying | This Week In Focus

Gold just closed its worst quarter in more than 13 years, then roared back above $4,100 as the new Fed chair signaled he may ease off. Is the gold selloff over, and is gold a buy now?
This week in focus: what actually turned gold around, why the world's central banks never stopped buying, and what happens next, with Rick Rule, Jeff Sarti, and Chris Vermeulen. Plus, Kitco goes live from Rick Rule's Natural Resource Investing Symposium in Boca Raton on Monday.

Anchor Jeremy Szafron breaks down the week: gold's worst quarter in 13 years and the sharp reversal, the Warsh comment that JPMorgan said sent the debasement trade roaring back, the soft jobs report that cooled Fed rate-hike bets, the AI and chip selloff that rotated money into defensives and gold, why Western ETF selling met relentless central-bank buying, the gold miners priced as if gold were only $3,350, and the signals to watch from here. Not investment advice, you decide.

Rick Rule will be hosting the 2026 Rule Symposium on Natural Resource Investing, July 6-10 in Boca Raton, and Kitco will be there on the ground. The in-person event is sold out, but you can join the livestream and access the replays through the year here: (https://cvent.me/XOqdLa?via=Kitco-News)

CHAPTERS
00:00 The Comeback 
00:40 The Turn: Worst Quarter, Then This 
01:30 Why the Fed Blinked 
04:00 The Buyers Who Never Left 
07:00 Silver and the Miners 
10:00 What Comes Next 
13:00 Live From Boca, Monday 

#gold #goldprice #silver
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Disclaimer:  
The videos are not intended to provide trading advice, and the views expressed do not necessarily reflect those of Kitco Metals Inc. Kitco News, its anchors, producers, and reporters are not responsible in any way for the performance or actions of any sponsor, advertiser or affiliate of Kitco News. In no event will Kitco and its employees be held liable for any indirect, special, incidental, or consequential damages arising out of the use of the content in this video.

Transcript

SPEAKER_03 0:00

All right, just days ago, gold closed its worst quarter in more than 13 years, and plenty of headlines were ready to write it off. Then the new Fed chair said just a few words in Portugal and the whole picture just flipped. Now this week gold came roaring back, up more than 2%, back above $4,100. So here's what we're going to get into here. Why the Fed may have just handed gold the turn, a 50-year veterans call on one Washington folds, and why the miners might be the real bargain hiding in plain sight. And maybe the one signal our guest says that matters more than the gold price itself. Plus, on Monday, we're live from Rick Rule's conference in Boca Raton. The symposium is then, and that's this week, in focus. Okay, let's start with what actually happened. A week ago, gold finished uh the quarter down about 13%, its worst three months in more than 13 years, according to CNBC. Now the obituaries got written fast, and the money that bailed on gold mostly ran to the other trade, AI and Tech, which just posted one of its best quarters in years, according to Bloomberg. Then this week it flipped. Now, those same chip and tech start names started to kind of sell off a little bit. One of their worst two-day stretches in almost a month, with money rotating into defensives like utilities and staples, that according to Bloomberg, and gold, I mean, it went the other way here. As of today, gold was around 41.25, up better than 2% on the day. Silver up near 4%. And it wasn't the only metals you'd expect. Platinum, palladium were green too. That looking over at the spot board, a pretty interesting kind of week there. Now, for anyone who's watched gold for a while, this rhythm isn't new. Here's how Rick Rule put the historical version to us.

SPEAKER_00 1:43

In 1975, inflation was becoming a political issue throughout North America, the United States, and Canada. And the consequence of that is that the U.S. political class, perhaps responding to voters' wishes, uh decided to tackle inflation head-on. And the way that you did that, uh, of course, was to increase the interest rate. And while that did uh stop inflation temporarily in its tracks, uh, it had a very deleterious near-term impact uh on a lot of sectors. And the consequence of that was that the political class uh backed down, uh drove the interest rate down, and signaled to savers and investors worldwide that short-term politics in the United States were more important than protecting the integrity of the US dollar. The consequence of that in gold price terms is that in the beginning uh, you know, before the decline, uh gold was priced at about 200 US dollars an ounce. As a consequence uh of that interest rate rise over nine months, the gold price fell by 50%. Gold stocks, by the way, fell further uh to $100 an ounce. And uh the faithful, but not really faithful, gold bugs, who liked gold at $200, decided they didn't like it at $100. And when they sold out, uh they missed a subsequent rise in the gold price from $100 low to an $850 high, which occurred over six years. Is past prologue? I think yes.

SPEAKER_03 3:12

Okay, fall hard, then run. Rules' point is that the long-term case and the short-term price can point in completely opposite directions. So the question this week became: was that the turn? Here's the trigger. Uh at the central bank forum in Portugal, the new Fed chair Kevin Wars said inflation risks have come down. That was the line. And the JP Morgan's trading desk said it was enough to send what they call the debasement trade roaring back. Uh, the bet that the dollar loses value and hard assets rise. Then came the fuel. This morning's jobs report landed soft, just 57,000 new jobs against expectations near 113,000 with labor force participation at a five-year low, according to Bloomberg. Now, markets immediately cut the odds of a July rate hike, and the dollar had its worst day in two months. A weaker dollar, lower rate expectations, that's the classic tailwind for gold. And this moment, the moment that the Fed even hints at backing off, is exactly what Rick Rule told us, the whole gold trade turns on.

SPEAKER_00 4:15

But over time, as we learned in the decade of the 1970s, it is the real interest rate, which is to say the yield above the rate of the deterioration of the US dollar, that sets the tone for the gold price.

SPEAKER_03 4:29

So, did the Fed just blink? That seems to be the debate. Now, here's what got lost in the sell-off. Even while Western investors were dumping gold ETFs two straight months of outflows, the world central banks kept buying, according to the World Gold Council. The biggest buyer on the planet never left. And we talked to Jeff Sarty, who manages about $3.5 billion at Morton Wealth, and he told us that that gap is the whole point.

SPEAKER_02 4:53

I would say that is continues to be the most bullish thing. Listen, even during the speculative excesses when gold reached north of 5,000 announced a couple of months ago, without a doubt, there was some pot money uh that needed to be flushed out. But still, generally speaking, was the average North American Western investor buying gold? No. So I think, you know, from a long-term point of view, we're far away from that. And there still is obviously tremendous upside for that reason.

SPEAKER_03 5:23

So his frame is that gold isn't a trade, it's savings, and the reason to own it hasn't changed.

SPEAKER_02 5:30

Uh we think the path of least resistance is continued inflation and debasement going forward. So the best way to protect against that is gold, without a doubt. You need to store value. And our highest conviction asset within that realm is gold, without a doubt.

SPEAKER_03 5:46

All right. And Rick Rule takes that step even further, but with a number. He points back to the 1970s when the dollar lost about three-quarters of its purchasing power in a decade.

SPEAKER_00 5:58

The US dollar lost 75% of its purchasing power over 10 years, which is what I believe happens over the next 10 years. I believe it's happening as we speak. And the consequence of that, or one consequence of that, was that the gold price ran from $35 an ounce to $850 an ounce. I'm not suggesting that we're going to have a 25-fold increase in the gold price now. What I am suggesting is that the increase in the gold price could easily mirror the deterioration in the purchasing power of the U.S. dollar, which is to say that gold would maintain its purchasing power while the dollar lost 75% of its purchasing power.

SPEAKER_03 6:39

You don't have to accept the exact number to see the thread. Both men are making the same argument, own the thing they can't print more of. And it wasn't just gold this week. Silver ran harder up about 4% to roughly $61 according to the spot boards. Now, silver tends to do that. It lags and then it leaps. Even Chris Vermuln, the technical trader who's been cautious and mostly in cash, gave us a wide range on where it can go.

SPEAKER_01 7:07

It's kind of hit the 618 again, and it is heading towards that 100% measured move. Now, this is a long way down from where we are. This is $40 silver. The upside target for silver is around $165,175 an ounce if it if it starts to find traction here. So there's lots of potential.

SPEAKER_03 7:24

And then there are the miners, and this is where a lot of you live. Now, according to the Bank of America's work, which Rule flagged for us, gold mining stocks are being priced as if gold were only about $33.50 an ounce, hundreds of dollars below where the metal is actually trading.

SPEAKER_00 7:41

The gold mining companies are pricing in substantially lower gold prices. And while I can't speak to the gold prices in 2026, I'm very constructive as to the gold prices later on in the decade. So I think that the discount is unwarranted.

SPEAKER_03 7:55

All right, so rules lower risk way to play is the royalty and streaming names like Wheaton and Frank and Nevada, companies that put up the cash to finance mines in exchange for a slice of gold instead of digging it up themselves. And among the producers, he keeps coming back to one. Uh Gnico Eagle. That's his read, not advice. So where does it go from here? I mean, nobody knows, but our guest gave us the things to actually watch. Rule's base case is that the Fed's toughness doesn't last. Is we end up right back there by year end. He also flagged a risk that if the AI trade cracks, gold could get sold first before it gets bought.

SPEAKER_00 9:01

In my experience, uh if you have a crack, a particularly liquidity-inspired crack, like 2008, which is to say a crack predicated on credit concerns, the market takes no prisoners. Uh the sales aren't made by investors, they're made by margin clerks, and margin clerks sell whatever has a has a bid, and gold usually has a bid. Now the policy response to a market crash has always, in my lifetime, with no exceptions, been uh uh artificially low interest rates and quantitative easing, which is to say bailouts. Uh and what that means is that in the aftermath of the crash, uh precious metals uh uh usually comes back faster. The result of the policy prescription would be extremely bullish for gold.

SPEAKER_03 9:57

And that risk isn't so hypothetical this week. The chip sell-off and the rush into utilities and staples is the exact early warning that Christopher Mulen flagged for us last week.

SPEAKER_01 10:07

Right now, we have been seeing money flowing into utilities. Uh while the long-term chart utilities doesn't look the greatest, over the past couple of weeks, it has been moving up and getting a lot of investor capital. And the way Wall Street and the financial system works is most people just have to stay invested and diversify. So we're seeing a lot of money moving out of look at the mega caps, the the Magnificent Seven. They have been going down, utilities have been going up. Big, smart money is they can't just liquidate because they have to stay actively investing for a lot of people for SEC purposes and to take their assets under management fee. So they move to slower sectors, right? Go to boring old utilities. It doesn't matter what happens in the world. We need electronic electricity, we need um running water and all those things. So we are definitely seeing money looking for safety, smart money, and it's coming out of the Magnificent Seven, which to me is an early warning sign.

SPEAKER_03 10:58

And we've got to go back to Sarty. He says that the real signal isn't even the gold price. You got to look at the bond market.

SPEAKER_02 11:04

The bond market is it is it's the canary in the coal mine. It is what we are watching. When the bond market, if you think about bond vigilantes, when the bond market ultimately raises its raises its hand and says enough, uh, no more of this. Um that's really the timing where gold potentially can go wild through the upside.

SPEAKER_03 11:26

And the honest counter from Vermulen is that the chart could dip lower before it goes higher, even as he sees big upside long term.

SPEAKER_01 11:34

Right now, the chart of gold is looking like it wants to go to about $3,600. That is going to be a sweet spot in terms of if it drops down to this level, to me, it's fair value or it's undervalued. I think it's a great long-term investment. As you mentioned, we we exited out of gold up here just above $5,000. And so we're looking to reload down from this target. And eventually, when gold gets its traction here, the next upside target should be around $8,000 to about $8,600 for gold. So there's lots of upside potential. There's a nice double from pretty much where we are right now.

SPEAKER_03 12:08

So the watch list into the next week. Does the Fed hold or fold? Inflation is still running above 4%, according to Bloomberg. And the yen, I mean, just got hit a four-decade low. And in the big one, does Western money finally come back to the metal it just sold? And a quick programming note before we go. On Monday, I'm going to arrive in Florida to cover Rick Rule's symposium on natural resource investing. It's a great, great show out of Boca Raton. Now, on Tuesday, we're going to start airing those episodes, and they're going to be coming to you all week long. Now, the in-person room is sold out, but we are bringing it to you from the floor all week. The biggest names in gold, silver, mining, and of course the live stream link is available in the description. So we'll see you at the show. That's the week. Gold went from left for dead to leading again, and the people we talked to don't agree on the timing, but they mostly agree on the direction. Rick Rule says that the Fed eventually folds. Tell me in the comments, what are you holding to get through this? I'm Jeremy Safman for all of us here at Kitco News.