Precious Metals News & Analysis - Gold News, Silver News from Money Metals Exchange

New Fed Chair Wants to Move the Inflation Goal Posts

Tue, 09 Jun 2026 00:00:00 EST

What do you do if you have a standard that’s not being met?

Move the goalposts!

Of course, you could work harder to meet the goal. But that’s hard. So, why not just change the standard and make it easier to meet?

That seems to be a strategy at the Federal Reserve.

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During his confirmation hearing. New Federal Reserve Chairman Kevin Warsh indicated that he preferred “trimmed averages” for price inflation.

As Reuters explained, in theory, this approach “trims off the fastest-rising prices and fastest-falling prices, leaving a more representative middle set of price changes that typically serves as a good indicator of where inflation is heading.”

But in reality, these analysts are simply removing important data points from consideration.

A trimmed average is determined by removing the high and low numbers in a series before averaging.

For instance, consider this series:

1, 8, 10, 12, 11, 7, 15, 25

The average of this series is 11.1.

To find the trimmed average, you remove 1 and 25 and get 10.5.

Note that the trimmed average understates the true average.

This is how Warsh wants to analyze the Personal Consumption Expenditures (PCE) Price Index.

The PCE is the Fed’s favorite “inflation” measure. That’s because it understates inflation more than the CPI. A trimmed PCE would understate it even more.

You can see by this chart how much better the inflation picture looks using trimmed averages.

https://www.moneymetals.com/uploads/content/trimmed-pce-inflation.png"; width="444" height="474" class="mx-auto p-3" alt="" />

Not everyone is down with this approach. Standard Chartered Bank analysts Steve Englander and Dan Pan wrote, "We think it ⁠is difficult to argue that the disinflation signaled by the trimmed mean is real," noting that trimmed PCE has historically done a worse job of projecting price inflation than core PCE.

This isn’t the first time the powers-that-be have moved the goalposts to make the inflation picture better than it is.

In the 1990s, https://www.moneymetals.com/news/2024/01/15/the-cpi-lie-price-inflation-is-even-worse-than-advertised-002930";>the government revised the CPI formula so that it understated the actual rise in prices. Based on the formula used in the 1970s, CPI is closer to double the official numbers.

Former Federal Reserve Chairman Jerome Powell also got in on the act. During his Jackson Hole speech in August 2020, Powell unveiled a policy framework based on an “average” of 2 percent inflation over time.

"In seeking to achieve inflation that averages 2 percent over time, we are not tying ourselves to a particular mathematical formula that defines the average. Thus, our approach could be viewed as a flexible form of average inflation targeting."

He went on to explain that after periods of price inflation below 2 percent, the central bank was willing to allow it to run “moderately above 2 percent some time.”

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It was a convenient approach at the time. Price inflation had been running at or below 2 percent for years. By rolling out this strategy, he could plausibly tolerate some higher price inflation in the near term.

However, Powell’s averaging theory doesn’t seem to apply after inflation spikes. If it did, the Fed would now be talking about driving price inflation far below 2 percent to average out the past three-plus years of above 2 percent CPI. Nobody is suggesting this approach today. Powell's "flexible average inflation targeting" has gone the way of the Dodo bird since inflation has run far above 2 percent for years.

If you want a more realistic picture of price inflation, a new AI tool called https://realityindex.co/index.html"; target="_blank" rel="noopener">the Reality Index analyzes raw price data without all the adjustments built into government formulas. It provides a more unfiltered look at price movements, and it reveals that things are indeed as bad as people sense.

Economist Jeffrey Tucker used the index to https://www.moneymetals.com/news/2026/06/04/negative-economic-impact-of-pandemic-lockdowns-likely-worse-than-data-suggests-004968";>analyze price inflation since the pandemic lockdowns. Based on the CPI, prices are up about 26 percent. The Reality Index reveals the increase is closer to 50 percent.

This reveals the ugly truth about the Fed’s inflation tracking schemes. They aren’t interested in an honest inflation narrative. They want you to think everything is fine. They can’t make it fine, so they just move the goalposts.

Bullish for Gold: Spiking Inflation Could Send Real Yields Lower No Matter What the Fed Does

Tue, 09 Jun 2026 00:00:00 EST

Nominal interest rates are rising, putting significant price pressure on gold and silver. However, with price inflation heating up, it’s possible the real rates could fall, a bullish setup for precious metals.

The rapid rise in oil prices https://www.moneymetals.com/news/2026/05/12/no-matter-how-you-slice-the-data-it-come-up-inflation-004912";>juiced CPI to the highest level since May 2023. This increasing inflation pressure has turned market sentiment away from monetary easing toward tightening. The FedWatch Tool reflects a 50-50 chance of an interest rate hike by this fall.

This is the primary dynamic driving gold and silver prices lower. Because they are non-yielding assets, a higher interest rate environment is considered a negative for precious metals.

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However, Wisdom Tree’s head of commodities and macroeconomic research, Nitesh Shah, said he thinks the markets might be getting ahead of themselves because they are not factoring in real interest rates. And he believes real rates could drop even as nominal rates rise due to a rapid increase in price inflation.

"There's a lot of potential for real rates to go down, especially if the Fed is holding still and inflation is rising."

What is the “real” interest rate?

In simplest terms, the real interest rate is the stated rate you see on the news, adjusted for price inflation. To calculate the real interest rate, you take the quoted nominal rate and subtract CPI. This tells you how much your investment will yield in real purchasing power over time.

For example, the 10-year Treasury bond is currently yielding just over 4.5 percent. That seems like a pretty good return. However, the https://www.moneymetals.com/news/2026/05/12/no-matter-how-you-slice-the-data-it-come-up-inflation-004912";>CPI is running at 3.8 percent. That means the real interest rate on a 10-year Treasury is only 0.7 percent (4.5-3.8=0.7).

That’s hardly a reason to spurn gold (or silver).

A Catch-22

Shah hinted that https://www.moneymetals.com/news/2026/06/02/under-the-fed-tightrope-all-roads-lead-to-gold-004958";>the Federal Reserve is in a Catch-22. He pointed out that the Fed isn’t in a position to cut rates right now, even if the economy starts to show signs of cracking.

"Right now, the data doesn't really allow for rate cuts because inflation is rising. Cutting rates in this environment would be disastrous from a credibility standpoint."

However, there is https://www.moneymetals.com/podcasts/2025/11/12/the-debt-black-hole-004473";>a giant Debt Black Hole looming in the economy. Debt-riddled economies don’t function very well in a higher interest rate environment. That means the central bank’s ability to hike may be limited.

"Gold prices are as elevated as they are right now because markets are worried about the sustainability of debt," Shah said.

The debt situation isn’t going to change for the better any time soon.

And if the debt bubble pops, tipping the economy into a recession, that would create another bullish scenario for gold.

"If you do start seeing economic deceleration, that's another reason for gold prices to rally," Shah said. "Gold tends to do well in recessionary scenarios. It is a very strong defensive asset."

Not to mention the fact that the central bank would almost certainly cut rates in this scenario – inflation or no inflation.

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Shah noted that if the Fed simply held rates at the current level, a rapid inflation spike would put downward pressure on real rates. And he said he thinks the markets are underestimating the potential for “inflation surprises” moving forward. In fact, he said he thinks inflation is becoming entrenched.

"I think we're stuck with high prices.”

He’s right.

Inflation is the plan. The central bank will have to continue leaning into loose monetary policy to accommodate the federal government’s borrowing and spending. Even with inflation heating up, the Fed is running https://youtu.be/ipaQAgOCJBk?si=pcsJeJrOufvI7wLN"; target="_blank" rel="noopener">quantitative easing operations to ease pressure on the Treasury market.

Shah said he thinks the correction in gold since the beginning of the year and the relentless downward price pressure are temporary.

"I think we're sitting on a bargain in gold right now."

Ex-CIA Officer Reportedly Created Fake Spy Program to Siphon Hundreds of Gold Bars

Mon, 08 Jun 2026 00:00:00 EST

The ex-CIA official who was arrested last month after being found with some https://www.moneymetals.com/news/2026/05/28/40-million-in-govt-black-budget-gold-seized-from-ex-cia-officers-home-004944";>$40 million in gold bars reportedly siphoned that loot from the government by creating a fake spy program.

The ex-officer, David Rush, fabricated a “special access program” (SAP), which the https://www.washingtonpost.com/national-security/2026/06/05/cia-officer-accused-stealing-gold-bars-created-fake-black-box-spy-program/"; target="_blank" rel="noopener">Washington Post described as a “black box” for the nation’s most secret intelligence operations. Rush’s phony program reportedly had to do with “continuity of government”—how to keep the government running during a https://www.moneymetals.com/news/2026/06/04/rfk-jrs-daughter-in-law-is-tied-to-the-cia-gold-scandal-004967";>nuclear attack or other major disaster.

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“Even intelligence personnel with the highest security clearance cannot access an individual SAP, as they are known, without specific authorization,” the Post reported Friday, citing anonymous sources.

According to the Post, Rush “read in,” or initiated, two colleagues into the highly secretive sham program.

“He persuaded one of them to transfer millions of dollars to the program via a government contract that was also fraudulent,” the Post said.

Further details about Rush’s fake spy program are still not public.

“It remains unclear, for example, how Rush could single-handedly create a ‘black box’ for a fictional spy program without sign-off from his superiors. It is also unclear whether the two colleagues Rush brought into the fake program knew it was fraudulent,” the Post said.

Rush, who faces one count of stealing public funds, was ordered to remain in custody on Friday after a detention hearing. Part of the hearing was held in secret due to the top-secret information being discussed.

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Rush was first put under federal investigation due to him allegedly lying on his job resume—he allegedly obtained $77,000 in military leave by falsely claiming to be in the Navy, even though he was discharged in 2015.

As the FBI’s investigation into Rush progressed, agents found that he allegedly made several requests to the government to obtain a “significant quantity” of foreign currency, as well as tens of millions of dollars in gold bars, for “work-related expenses” from last November to March.

“During the search, FBI agents seized approximately 303 gold bars, each of which weighs approximately one kilogram,” https://www.scribd.com/document/1044034039/David-Rush-Gold-Complaint"; target="_blank" rel="noopener">court records say. “Based on the current price of gold, the estimated value of the gold exceeds $40 million.”

Silver Falls to Key Price Support Level as Bargain Hunters Swoop In

Mon, 08 Jun 2026 00:00:00 EST

Retail bargain hunters stepped in significantly over the past few days as gold and silver markets suffered their sharpest setback in several months last week.

The selloff was driven less by any deterioration in precious metals fundamentals and more by a rapid repricing of interest-rate expectations following stronger-than-anticipated U.S. economic data.

https://www.moneymetals.com/uploads/content/silver-spot-chart-260608-md.png"; width="360" height="226" alt="Silver Spot Chart (June 6, 2026)" loading="lazy" />

Silver is testing its 200-day moving average, a key price support level.

Gold declined nearly 5% for the week, while silver plunged almost 9%, extending a correction that has gathered momentum since reaching multi-month highs earlier this quarter. Silver once again demonstrated its more volatile nature, amplifying gold's downside move and causing the gold-to-silver ratio to widen significantly.

The primary catalyst was the May U.S. employment report. Non-farm payrolls increased by 139,000 jobs, surpassing expectations, while the unemployment rate held steady at 4.2%. The data reinforced the perception that the labor market remains resilient despite mounting concerns over slowing economic growth, which reduced expectations for near-term Federal Reserve rate cuts.

That shift pushed Treasury yields and real interest rates higher while boosting the U.S. dollar. Since precious metals compete with interest-bearing assets for investor capital, rising real yields tend to create headwinds for both gold and silver.

The payrolls report effectively removed a portion of the safe-haven premium that had accumulated in recent weeks and triggered widespread liquidation among leveraged futures traders.

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Geopolitical risks offered little support. Ongoing hostilities in the Middle East and elevated energy prices failed to generate meaningful safe-haven buying. Instead, investors focused on the inflationary implications of higher oil prices and the possibility that sticky inflation could force the Federal Reserve to keep policy restrictive for longer.

From a technical perspective, the damage was significant. Gold broke below both its 20-week and 40-week moving averages while momentum indicators deteriorated.

Silver's chart also weakened substantially, although the metal remains near important longer-term support levels and has not yet confirmed the same degree of structural breakdown seen in gold.

Despite the sharp decline in paper markets, physical demand remains relatively healthy.

Buyers in North America and Asia have stepped in to take advantage of lower prices.

Meanwhile, silver continues to benefit from strong long-term industrial demand tied to electrification, solar installations, grid upgrades, and data-center expansion.

Premiums on coins, bars, and rounds remain at the lowest point seen since last year.

ETF Gold Flows Flipped Modestly Negative in May

Sun, 07 Jun 2026 00:00:00 EST

Gold flows into ETFs reflected the range-bound gold price and were relatively flat in May. As the World Gold Council framed it, flows shifted “from a flood to a trickle.”

“Global gold-backed ETF investors remained largely sidelined in May as range-bound gold prices and renewed appetite for risk assets limited demand.”

Globally, ETF holdings fell by 16.2 tonnes. Europe was the only region to report positive flows.

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At the end of May, ETFs globally held 4,121 tonnes of gold, slightly below the record high of $4,176 reached on Feb. 26 this year.

In dollar terms, global ETFs shed a modest $2 billion. Net outflows dropped total assets under management (AUM) by the gold-backed fund to $604 billion, a 2 percent decline.

North American ETFs reported an 8.5-tonne decrease in gold holdings, valued at $1.1 billion.

North American ETF flows have been muted since the March drawdown. According to the World Gold Council, this suggests “investors have moved to the sidelines while awaiting a clearer catalyst.”

“Beyond price action, the opportunity cost of holding gold has also risen amid U.S. dollar strength, higher rates, and adjusted expectations for the future path of U.S. rates. Inflation concerns linked to the U.S.-Iran conflict have added to uncertainty around the rate outlook, with some market commentators suggesting the Fed may need to remain restrictive for longer.”

As I have noted, https://www.moneymetals.com/news/2026/05/22/two-things-mainstream-pundits-get-wrong-in-their-current-gold-narrative-004934";>this mainstream narrative seems to be ignoring the Debt Black Hole. It’s not going to be as easy to keep rates restrictive as some analysts seem to think.

World Gold Council analysts pointed out that tech ETFs have pushed gold ETFs aside in North American markets.

Europe was a different story. Gold-backed funds in the EU reported a 1.2-tonne increase in gold holdings, valued at $334 million last month.

Positive flows in the UK and Germany offset weakness in other European countries.

According to the World Gold Council, safe-haven demand supported by political uncertainty and concerns about the government’s fiscal situation drove gold ETF investment in the UK last month.

“At the same time, the second half of the month saw lower Gilt yields – helped by softer inflation and falling oil prices – which reduced the opportunity cost of holding gold and encouraged local ETF demand.”

There were similar dynamics in play in Germany. Lower oil prices drove optimism that the ECB will not hike interest rates.

Asian funds shed 8.8 tonnes of gold valued at $1.2 billion. It was the first decline in Asian ETF gold holdings since last August.

China drove outflows with a stronger yuan and weaker local gold prices, coupled with optimism about equities, weighing on gold.

Indian funds also reported modest outflows, ending a 12-month streak of gold accumulation. The majority of May’s outflows happened after the Indian government https://www.moneymetals.com/news/2026/05/13/india-hikes-gold-and-silver-import-duties-to-support-rupee-004917";>hiked the gold import tariff.

Gold holdings by funds in other regions, including Australia and Africa, were virtually unchanged. Outflows from Australia offset inflows from countries including South Africa.

ETFs are a convenient way for investors to play the gold market, but https://www.moneymetals.com/news/2024/03/08/paper-gold-vs-real-gold-its-important-to-know-the-difference-003038";>owning ETF shares is not the same as holding physical gold.

ETFs are relatively liquid. You can buy or sell an ETF with a couple of mouse clicks. You don’t have to worry about transporting or storing metal. In a nutshell, it allows investors to play the gold market without buying full ounces of metal at the spot price.

Since you are just buying a number in a computer, you can easily trade your ETF shares for another stock or cash whenever you want, even multiple times on the same day. Many speculative investors take advantage of this liquidity.

But while a gold ETF is a convenient way to play the price of gold on the market, you don’t possess any gold. You have paper. And you don’t know for sure that the fund has all the gold either, especially when it sees inflows. In such a scenario, there have been difficulties or delays in obtaining physical metal.

Trading Volumes

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Gold trading volumes increased by 3 percent month-on-month in May to $243 billion per day. Volume remains about 15 percent above the 2025 average. According to the World Gold Council, this signals ample gold market liquidity, despite gold’s recent range-bound performance.

Exchange-traded activity increased 6 percent to $175 billion per day. According to the World Gold Council, “This modest improvement was driven by higher COMEX activity but partially offset by a decline in Shanghai Futures Exchange volumes.”

Over-the-counter volumes inched higher by 1 percent to $243 billion per day. OTC activity is well above last year’s average of $180 billion per day.

There was a marginal 2.5 percent reduction in COMEX longs last month. Meanwhile, managed money positions increased in three of the four weeks in May. According to the World Gold Council, “Positioning continues to hover in neutral territory as investors await a clear near-term catalyst, while the long-term fundamental story remains intact.”

Metals Focus: Gold Bull Market Still Has Legs

Sun, 07 Jun 2026 00:00:00 EST

Metals Focus has released its Gold Focus 2026 report. It includes comprehensive historical supply and demand data for 2017-25 and its 2026 forecast.

Despite the recent selling pressure in the gold market, that 2026 forecast remains bullish.

Looking Back

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Investment inflows drove gold to the strongest gain in decades in 2025. The yellow metal’s price rose 44 percent last year and topped $4,500 for the first time late in the year. It was the best year for gold since 1979.

“Central to this rally were exceptionally strong investment inflows, driven by the new U.S. administration’s marked divergence from established norms on trade and domestic and foreign policy, alongside its continued loose fiscal stance. Pressure on the U.S. dollar, coupled with concerns over its future role as a de facto reserve currency, also supported prices.”

Physical gold investment rose by 16 percent to a 12-year high, reflecting bullish price expectations and heightened economic and geopolitical uncertainty. China (+28 percent) and India (+17 percent) led the surge in physical gold investment.

Concerns about the dollar drove central bank gold buying, another key dynamic supporting the gold bull market.

Many countries are worried about https://www.moneymetals.com/news/2024/02/29/could-weaponization-of-the-dollar-as-a-foreign-policy-billy-club-accelerate-de-dollarization-003013";>the weaponization of the dollar and the rapidly deteriorating fiscal situation in the U.S. This has driven a modest https://www.moneymetals.com/news/2025/03/11/de-dollarization-gold-and-a-shift-to-a-multipolar-world-003898";>de-dollarization trend as these countries seek to minimize their dependence on the greenback.

The pace of central bank purchases moderated in 2025 but remained far above the recent historical average. Official net full-year buying came in at 863.3 tonnes. That was down 21 percent year-on-year, charting the lowest level since 2021.

However, while central bank gold purchases declined last year, they remained well above the 2010-2021 annual average of 473 tonnes.

To put that into context, central bank gold reserves increased by an average of just 473 tonnes annually between 2010 and 2021.

Strong investment demand and central bank buying mitigated a sharp drop in jewelry sales due to higher prices. Jewelry demand fell by 18 percent to a five-year low of 1,542 tonnes.

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Despite higher gold prices, supply remained constrained last year.

Mine production rose by a modest 2 percent, supported by ramp-ups, project expansions, and stronger artisanal and small-scale mining. While the increase in gold production was small in percentage terms, it did set a record at

Meanwhile, recycling increased by a similar 2.8 percent but remained well below its 2012 peak.

Looking Ahead

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The gold rally continued into the first weeks of 2026, with gold cracking $5,000 and approaching $5,500 before https://www.moneymetals.com/news/2026/01/31/some-thoughts-on-the-gold-and-silver-sell-off-004652";>a sharp correction in late January.

Just a few weeks later, the U.S. and Israel launched a war on Iran, shaking up markets and putting further downward pressure on gold. The yellow metal has been rangebound between around $4,300 and $4,800, but there has been steady downward pressure.

According to https://www.moneymetals.com/news/2026/05/22/two-things-mainstream-pundits-get-wrong-in-their-current-gold-narrative-004934";>the mainstream narrative, the Federal Reserve will have to keep interest rates higher for longer, or possibly raise rates, to deal with the price inflation driven by rising oil prices. Higher rates are considered a headwind for gold, a non-yielding asset.

However, Metals Focus remains bullish. Its analysts say they expect the bull run to resume in the second half of the year, once uncertainty surrounding the war is resolved.

“This view is premised on the assumption that the economic and political costs of a prolonged conflict will likely drive a relatively swift resolution, limiting the risk of a sustained oil crisis. While inflationary pressures are expected to persist, the consultancy does not subscribe to the growing consensus that U.S. rate hikes are likely over the next 12 months, as policymakers may tolerate higher inflation to avoid an economic slowdown.”

Metals Focus analysts are hinting at https://www.moneymetals.com/news/2026/03/19/gold-the-federal-reserve-and-a-catch-22-004773";>the Catch-22 the Fed finds itself in.

The central bankers at the Federal Reserve face a tough choice. They can either keep monetary policy tight – holding rates higher for longer or even raising rates – to tamp down price inflation, or they can ease monetary policy to take pressure off this debt-riddled bubble economy.

They can’t do both.

While the mainstream consensus seems to be that the Fed will keep rates higher, they seem to be ignoring https://www.moneymetals.com/podcasts/2025/11/12/the-debt-black-hole-004473";>the Debt Black Hole. If they do hike rates, they must know it will put additional strain on an economy buried in debt. Credit to Metals Focus analysts who seem to understand this conundrum and realize maintaining a higher interest rate environment isn’t the slam dunk many in the mainstream seem to think.

Metals Focus analysts said that despite the noise in the markets created by war headlines, the fundamentals that drove gold higher last year remain firmly in place.

“Crucially, the drivers from 2025 remain intact: ongoing U.S. policy uncertainty, persistent concerns about the dollar’s long-term outlook, elevated geopolitical risks, and stretched equity valuations. Together, these factors reinforce gold’s role as a safe haven and portfolio diversifier.”

Markets Are Treating the Iran Conflict as a Shock, Not a Structural Change

Sat, 06 Jun 2026 00:00:00 EST

In a wide-ranging conversation on the Money Metals Podcast, host Mike Maharrey sat down with Axel Merk, founder, president, and chief investment officer of Merk Investments, to discuss how investors should interpret the ongoing conflict involving Iran, what is driving gold prices, and why maintaining a disciplined investment process matters more than reacting to headlines.

Merk also shared his views on government debt, market psychology, and the importance of understanding how markets actually function.

(Interview Starts Around 5:27 Mark)

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Why Gold Hasn't Reacted the Way Many Investors Expected

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The discussion opened with the recent escalation in the Middle East following U.S. military action against Iran. While many investors have viewed the conflict as a major catalyst for precious metals, Merk argued that markets are currently treating the situation as a temporary shock rather than a lasting structural change.

According to Merk, this distinction is critical because it affects how bond markets, inflation expectations, and ultimately gold prices respond. He explained that although bonds have sold off amid fears surrounding the conflict, long-term inflation expectations have remained relatively stable. As a result, real interest rates have moved higher, https://www.moneymetals.com/news/2026/05/30/kai-hoffmann-golds-bull-market-remains-intact-004951";>creating a headwind for gold.

Merk emphasized that gold ultimately competes against the long-term purchasing power of currencies. Because markets still largely believe the Federal Reserve retains the ability to control inflation over time, long-term inflation expectations have not dramatically shifted. That confidence, in turn, has helped support higher real interest rates, which https://www.moneymetals.com/news/2026/05/28/golds-higher-for-longer-narrative-may-be-missing-the-bigger-picture-004942";>can weigh on gold prices even during periods of geopolitical uncertainty.

He also noted that after briefly decoupling from real interest rates during 2024, gold has recently resumed its traditional relationship with those rates. While some observers have suggested gold may be losing its safe-haven status, Merk argued that current price action is better explained by standard market mechanics than by any https://www.moneymetals.com/news/2026/05/22/two-things-mainstream-pundits-get-wrong-in-their-current-gold-narrative-004934";>fundamental change in gold's role.

Long-Term Precious Metals Investors Remain Buyers

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Despite short-term volatility, Merk said one encouraging sign is that https://www.moneymetals.com/news/2026/05/14/the-dollar-is-shrinking-and-gold-could-explode-higher-004915";>long-term precious metals investors continue to exhibit a net buying bias. His firm manages more than $4 billion in precious metals assets, giving him a unique perspective on investor behavior.

According to Merk, the willingness of long-term investors to continue accumulating precious metals supports the view that markets see the https://www.moneymetals.com/news/2025/08/07/iran-using-gold-to-support-its-economy-in-the-midst-of-sanctions-004249";>Iran conflict as a temporary disruption rather than a transformational geopolitical event. While he stopped short of declaring those investors correct, he believes their actions are consistent with the broader market narrative.

He also pointed out that many investors entered the current environment heavily leveraged after an extended period of optimism. When unexpected shocks occur, leveraged investors often reduce risk quickly, creating additional selling pressure that can temporarily suppress gold prices.

When Does a Shock Become a Structural Change?

Maharrey asked an important question: At what point does a temporary geopolitical shock evolve into a lasting structural problem for markets? Merk's answer focused on the remarkable adaptability of market systems.

Drawing on examples from energy markets, he explained that markets naturally price in some degree of normalization over time. Whether dealing with oil supply disruptions, interest rate shocks, or geopolitical conflicts, investors generally assume conditions will eventually stabilize.

Even in a scenario where Iran gained greater control over shipping routes or imposed fees on vessels moving through the Strait of Hormuz, Merk argued that global markets would adapt. Producers, consumers, and governments would find alternative solutions through infrastructure investments, transportation changes, or energy diversification.

For Merk, the greater threat comes not from the conflict itself but from policy responses. Historically, governments have often reacted to supply shocks with interventions such as price controls, stimulus spending, or trade restrictions. Those actions can create longer-lasting distortions and potentially transform a temporary disruption into a structural economic problem.

The Importance of Having an Investment Process

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One of Merk's strongest messages centered on investment discipline. He argued that the most important thing an investor can possess is not a perfect strategy, but a consistent process.

In his view, investors should avoid making dramatic portfolio changes based on individual headlines, market commentary, or even conversations like the one he was having on the podcast. Instead, new information should be used to challenge assumptions, stress-test existing positions, and refine decision-making frameworks.

Merk highlighted an important distinction between professional investors and retail investors. Professionals often describe their actions as "risk management," while retail investors may think of similar behavior as "panic." In reality, both groups frequently reduce exposure when volatility rises and risks exceed their original expectations.

He stressed the value of periodic portfolio rebalancing during good times, noting that investors who fail to rebalance often become overexposed to risk assets. When markets decline sharply, they may find themselves facing losses far larger than they can comfortably tolerate.

A Simple Test for Excessive Risk

Merk offered a practical rule of thumb for determining whether an investor is taking too much risk: sleep quality. If market positions are causing anxiety, restlessness, or constant monitoring of prices, the portfolio may be larger or riskier than appropriate.

He also emphasized the importance of controlling personal expenses. Investors who consistently spend less than they earn possess greater flexibility and can generally withstand more market volatility. In uncertain times, he suggested that maintaining healthy personal finances may be one of the most effective forms of risk management available.

Understanding Why Markets Price Assets the Way They Do

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Maharrey raised the idea that investors often believe markets are "wrong." Merk agreed that skepticism can be healthy, but he cautioned that investors must understand why markets are behaving the way they are before betting against consensus views.

He encouraged investors to approach markets with humility. While opportunities certainly exist when prices diverge from fundamentals, investors should first assume markets may have valid reasons for their pricing decisions. Only after conducting significant research should they commit capital based on a contrarian view.

Merk also argued that some market segments have become less efficient because of the rise of passive investing. During years of quantitative easing and broadly rising asset prices, active management lost favor. As a result, certain specialized sectors—including mining and precious metals—may offer greater opportunities for investors willing to do the necessary research.

He emphasized that successful investing in niche markets requires understanding details that many participants overlook. As an example, he noted that the commonly quoted gold price represents a London bullion market price for a specific type of gold bar located in London. During periods of market stress, prices for gold in other locations or forms may diverge significantly.

Why Debt Matters Even When Markets Ignore It

The conversation eventually turned to federal debt and its relationship with interest rates. While many investors focus on central bank policy, Maharrey noted that debt levels often receive less attention.

Merk acknowledged that government debt is critically important but explained that debt levels do not produce simple trading signals. Unlike cash-flow variables that can directly affect markets in the short term, debt tends to influence economic conditions gradually over time.

Referencing economist Friedrich Hayek, Merk noted that excessive government debt can undermine the independence of monetary policy. However, he cautioned that investors have been warning about debt problems for decades. The challenge lies not in identifying the problem but in determining when and how it will influence markets.

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Rather than expecting a dramatic financial reset, Merk believes governments and societies typically adapt gradually. Inflation erodes purchasing power, households adjust, labor participation changes, and political pressures evolve. The result is usually a long period of increasing instability rather than a single defining moment of reckoning.

Hayek's “The Constitution of Liberty” Offers Timely Lessons

When asked what he was reading, Merk highlighted Friedrich Hayek's classic work, The Constitution of Liberty. Although he first read the book roughly a dozen years ago, he said it feels even more relevant today.

One theme that particularly resonated with him is Hayek's argument that liberty requires clear rules and shared societal values. Merk suggested that in an increasingly polarized political environment, Hayek's observations offer valuable insights into the balance between freedom, governance, and social cohesion.

As the interview concluded, Merk encouraged listeners to follow his work through https://www.merkinvestments.com/"; target="_blank" rel="noopener">Merk Investments and his account https://x.com/AxelMerk"; target="_blank" rel="noopener">on X, where he regularly shares market commentary and investment insights.

Gold & Silver Get Hammered as Fed Fears Return

Fri, 05 Jun 2026 00:00:00 EST

Welcome to this week’s Market Wrap Podcast, I’m Stefan Gleason.

Coming up in a moment, we will be joined by Axel Merk, president of Merk Investments and a frequent commentator in the financial news media and here on our Money Metals podcast.

Merk offers a different take on the recent gold correction, arguing that markets are treating the Iran conflict as a temporary shock rather than a lasting structural change.

Merk also tackles the bigger picture—government debt, monetary policy, and gold's long-term outlook.

So, stick around for another tremendously insightful conversation with Axel Merk, coming up after this week's market update.

And as a reminder please download, like, rate and subscribe to this podcast wherever you consume this content.

Gold and silver are ending the week under significant pressure after a surprisingly strong U.S. jobs report fueled expectations that the Federal Reserve may keep interest rates elevated for longer than previously anticipated.

The major market-moving event came Friday morning when the Labor Department reported that the U.S. economy added approximately 172,000 jobs in May, nearly double economists' expectations. The unemployment rate remained relatively stable while wage growth continued to show resilience.

The stronger-than-expected employment data immediately pushed Treasury yields higher and strengthened the U.S. dollar as traders reduced expectations for near-term Federal Reserve rate cuts. In fact, some market participants are now questioning whether the Fed will be able to cut rates at all this year if inflation remains stubbornly above target.

That shift in interest-rate expectations appears to be the primary catalyst behind today's sharp correction in both gold and silver.

The jobs report landed just one day after several Federal Reserve officials reinforced a cautious stance on monetary policy.

Kansas City Federal Reserve President Jeffrey Schmid said policymakers currently face a choice between remaining patient or potentially tightening policy further if inflation fails to move convincingly back toward the Fed's target. Meanwhile, San Francisco Fed President Mary Daly emphasized that future policy decisions will depend on incoming economic data, while noting that monetary policy remains in a good position to respond as conditions evolve.

Taken together, the message from policymakers is clear: the Federal Reserve is growing a bit worried about the inflation it has caused.

Meanwhile, geopolitical tensions continue to provide an important backdrop for precious metals markets.

Hopes for a broader diplomatic breakthrough between the United States and Iran faded this week after Iran-backed Hezbollah rejected a new ceasefire proposal in Lebanon. Israel also signaled it would not withdraw forces from the region, complicating efforts by the Trump administration to reduce tensions and pursue broader negotiations with Tehran.

Ordinarily, escalating geopolitical risks would provide support for safe-haven assets such as gold. However, for now, the market's focus remains squarely on interest rates, inflation, and the strength of the U.S. economy.

From a technical perspective, both gold and silver had already been showing signs of weakness before Friday's selloff accelerated downside pressure.

While prices have largely moved sideways in recent sessions, today's decline reinforces a mildly bearish short-term outlook.

Gold remains within a broader trading range, with support near $4,365 and resistance around $4,600. Traders will be watching closely to see whether today's selling pressure produces a decisive breakdown below support levels or simply extends the ongoing consolidation phase.

Silver tells a similar story.

The white metal continues to struggle with a lack of bullish momentum.

In the near term, stronger economic data and a more hawkish interest-rate outlook may continue to create headwinds for precious metals.

Despite recent price action, the larger fundamental drivers supporting gold and silver remain in place. Inflation continues to run above the Federal Reserve's target. Federal deficits and national debt continue growing at historic rates. Central banks around the world remain major buyers of gold. And geopolitical tensions show little sign of disappearing.

What changed this week was the market's expectation for how soon the Federal Reserve might begin easing monetary policy.

For long-term investors, corrections driven by shifting Fed expectations have often proven temporary, while the structural forces supporting precious metals have persisted.

Checking in on the specifics here: gold is currently trading at $4,372 an ounce, declining 4% since last Friday. Silver has moved down 7% over the past week, checking in at $69.77 as of this Friday late morning recording.

Platinum is down 5% to trade at $1,831 an ounce and palladium is off 6% to come in at $1,282.

Well now, without further delay, let’s get right to our exclusive interview.

Mike Maharrey: Greetings, I'm Mike Maharrey and I am joined once again today by Axel Merk. Axel is the founder, president and chief investment officer of Merck Investments. He's a great analyst, and honestly, you're one of my favorite people to talk to. Axel, how you doing today?

Axel Merk: Good, good. Since my speech is sensitive, I immediately have to say that you calling me great is not an endorsement of any of my financial acumen. So, just so everybody knows that when I talk, I have a regulator behind my neck breathing down.

Mike Maharrey: Well, and let's be honest, that humility is probably not necessarily a bad thing in this day and age.

Axel Merk: I have enough gray hair to be humble.

Mike Maharrey: Yeah. The older we get, I think, especially in this realm of investing and the economy and finance, I think the older you get, the more you realize how little you actually know. And again, I think that's kind of a healthy attitude to have. We'll leave folks with that disclaimer, but always good to know. So the last time we were together was actually about eight days before the US launched this attack on Iran. So we've had a monumental shift since the last time that I was able to speak to you. So what I'd really like to do to kick off is just kind get your sense of how you are looking at the precious metals markets in the context of this war. We were kind of in a bull market. We'd had a big correction leading up to the conflict, but now basically everything seems to be war headline driven.

So, kind of how are you reading the tea leaves here?

Axel Merk: Sure. No, that's fantastic. And let me try not to be too technical, but I think there are a few important things to say that I don't hear many others talk about. And so let me dive into them. The primary one I think that people miss is that the market is pricing what's happening Iran as a shock, not as a structural change. And that becomes relevant when you look at various aspects in the market. Most notably, as many people have noticed, is whenever the fear about the war is flying up, bonds are selling off. But because it is only pricing as a shock rather than as a structural change, real interest rates, long real interest rates in the market are moving higher because inflation expectations in the long run haven't changed. Now, I've probably lost half your audience by now, but the reason I say that is ultimately what gold is competing against is the purchasing power of the currency in the long run.

And clearly nobody has a clue about what the purchasing power of the currency will be in 10 years, but what happens in the microstructure of the market matters for prices in the short term. And so when bonds are selling off but those long-term inflation indicators are not budging, the market says real interest rates are higher and all else equal that makes gold less attractive. And so the price of gold has been reacting to changes in real interest rates and that happens to be correlated with the S&P 500. And I phrase it that way because some people say, "Oh, gold is lost, that safe haven status has this and this and this." Well, the safe haven status, one aspect of that is coming from is when there's a crisis, a typical crisis, there's a perception that the Federal Reserve is going to cut rates and so then you want to be in gold whereas this one is a supply shock.

And as policymakers were reminded the hard way, just cutting rates and reaction is probably not the right thing to do. And that doesn't mean there won't be an intervention by policymakers because the politically attractive solution is normally economically counterproductive. But in the short term, the dynamics that we are seeing is that even though last year gold decoupled from real rates that correlation has come back in. And then so I can't emphasize this enough how important this is because this is just the market doing its thing. There is nothing too unique about it. And obviously depending on how this works out over time, well, we'll have to see. Now the other aspect I should mention that's not particularly news to most people is obviously heading into this, there was a lot of optimism, which means that people were levered and that means in a shark people de- lever, and that was another headwind to the price of gold.

At the other end of the spectrum, as you know, and many of your audience know, we manage a good little over four billion in the precious metal space. And so we have, I think, a decent insight to some investor behavior. And the one thing I've seen is that long-term investors are net bias throughout this, which reconfirms this notion that this is more of a shock rather than a structural change. I'm not going to speak to whether these long-term investors are right or wrong, but I do think it is consistent, at least with how I have convinced myself of how to read the Iran war in the context of precious metals.

Mike Maharrey: Yeah, I think that's a really solid analysis. And it's interesting that you say that a lot of the long-term investors still seem to be in that buying mood. And I guess the next question ... Well, I kind of have two questions. Let me think about which one I want to ask first. Let me just ask you this first. At what point does the war drawing out turn from a shock into more of a structural problem? I mean, can you kind of put your finger on what that is? It's so hard to read right now because I mean, today we're on the path to peace tomorrow we may be bombing again. So, it's still really difficult to determine what the trajectory of the war is, but is there a point that it becomes more of a structural problem and not just a shock?

Axel Merk: Yes. So, before I do that, let me add one more thing to the thing I previously said, because I'm pretty sure that half your audience is still scratching their head via talking about long-term inflation expectations. Long-term inflation expectations are a measure of the confidence that the market has in the Fed's ability to manage inflation in the long run. And as many of this audience may think the Fed can't do that, the market as a whole does believe the Fed controls the bazooka. They can control inflation and so forth. Obviously with debts going up, fiscal deficits going up, there are all kinds of things we can discuss, but the market believes there's confidence. So, that's part of the reason why these measures are important. Now to your question, it's an excellent question and I don't think there's an easy answer. Again, I think one thing that's important is to understand the microstructure of these markets.

Neither you or I are active oil traders. At least I believe you're not an active oil trader.

Mike Maharrey: I'm not.

Axel Merk: And I do like to remind people that we once had negative oil prices and people were scratching their head as to why that is happening. People talk about the spreads in these markets. Well, have they noticed that the delivery specifications of Brent and West Texas are different. In West Texas, you deliver to Cushings (Chushing hub in Oklahoma) and for Brent, you deliver to the ship and the delivery time after the first notice date is several weeks. And so that's one of the reasons why you don't look at contracts that are aligned. There are things in there. And so similarly as these microstructures, the nature of these markets is that they quote unquote normalize in the long run. The same happens, by the way, in the Federal Reserve. If we're in an extreme interest rate environment, extremely high or extremely low, the market will always price in some sort of normalization in the medium term.

And that doesn't mean they're right. The market is right, but that just happens based in these markets. And so there will always be this element that this is a shark modern structural change, so that's one answer. The other one is, of course, the other answer I'd like to give or one of the other answers I'd like to give is let's think about what it means that will go to a more permanent state in Iran. Ultimately, as far as equity markets is concerned, is that there's enough energy there. Well, we're not quite as dependent on the energy as we used to be. Clearly Asia and Europe is much more dependent than the US is. Energy prices are set on a global stage. Let's assume for a moment the scenario that Iran prevails and will charge a fee for every ship transferring a million bucks, two million bucks.

Well, that's a dollar or two a barrel and odds are that at least part of that will need to be absorbed by the local producers because the price is set at the global stage. Now, if that were the case, we can talk about the geopolitical implications that the US has weakened, that they allowed Iran to have done that, but as far as the global machinery is concerned, there will be a day after. And so the question then really becomes, well, what does it mean to move on? Now, obviously if the blockade and the straight Hamoud lasts forever, if that is the permanence you're talking about, well, we'll figure out different ways of getting the oil out. I mean, there are thousands of truck shipping fertilizers. They're thinking about building a pipeline. It's a fantastic incentive to build another nuclear power plant or build more windmills if that's what you're into.

So, the market will adjust to whatever it is that will be given. And so there is no such thing really as permanence. We'll figure out something along the way. Quite frankly, I've been surprised that Israel hasn't done more bombing things in Iran because they're probably not happy. They're clearly not happy based on the communication coming out of the White House.

We will somehow come to the next day, one day after the other, there's always a tomorrow. And so this structural change can happen if we have a more severe interference by policymakers. And what I mean with that is typically in a supply shock we had the check sent in the pandemic in the 70s we had price controls. And so if you have an intervention that is so severe that it really disrupts markets in different ways, then we can talk about the structure of change. If populism rises so much as a result, it can happen. If we limit other trade and say, "Oh, this is all unfair what's happening, and therefore we have to do this, or look at these bad oil companies making so much money now of this," those sort of things are, I think, what we have to watch for. If it's just the next tweet coming out of the White House, that might keep us wondering and our head scratching, but in many ways that's mostly noise.

Mike Maharrey: Yeah, that's a really great point. I really, really like the way that you sum that up and it does go to show, right? Markets are extremely resilient. I think much more so sometimes than we think. We'll see a thing happen, think, "Oh my gosh, end of the world." And somehow the market's managed to figure out a way, especially if governments will get out of the way and let it happen. So, you called it noise. I think that's a great term for it. How does the average person out there that maybe isn't watching every single headline, but how do you look through that noise and kind of move forward? I feel like a lot of people right now are just kind of sitting on the sidelines and waiting, and maybe that is the best strategy. But in your head, how do you cut through the headline noise and focus on, okay, here's the fundamentals, here's what we're looking at as we move forward.

Axel Merk: I may have mentioned this on your program, but my view is the most important thing for investors is to have a process. It does not need to be a good process, have a process. And what I mean with that is precisely that you don't change your positioning based on every headline. Don't change your positioning based on our conversation, for goodness sake. I mean the value I think we can add is to get people out of their comfort zone to get them thinking about their portfolio to investments in slightly different ways, stress tested with the process that they have. But for goodness sake, don't sell everything and do something else because the latest person has said something. And my initial position is usually, oh, the market is right. And if I disagree with it, I need to do some digging as to why I believe the market has it wrong. And if I convince myself, well, then I can take a position in that. But one of the things just on a high level is that we talk about professional investors, they do risk management. Retail investors panic. The dirty secret is it's the same thing because the risk management of the professional means they take down leverage and the joking aside is when we invest based on a certain risk profile

And when volatility goes up, we are more exposed to risk than we had signed up for. And so we got to trim something back. And it's one of the reasons why in good times it is helpful to rebalance one's portfolio so that when the bad times come, you're not as surprised. Similarly, one of the things I have said is that in the spring of 2009, people may recall it was the low of the markets and some people said, "Hey, just like there's always people. Hey, you got to invest in the markets, you double down on the stock portfolio." I believe for the most part that was utterly irresponsible. And the reason I say that is most people in the run up to 2008 did not rebalance. And so they were overexposed in risk assets. Now they lost a dramatic amount in the downturn, which means they lost more than they could afford to.

That is not the time to double down on the risk. That's like going to the casino and having a doubling down strategy.

You can do that if you have a discretionary budget, which we can have some play money and see, "Hey, maybe you're lucky and the odds are going to play in your favor and more often than not, you're probably going to win on that. " But the challenge is that if you take more risk than you can afford to take, it can end badly. And so the best thing is that one takes precaution that ahead of time ... Now, if you're in an environment where just anything happens, well, people will take different choices. And the one measure I have, by the way, for risk, if you have too much risk is whether you can sleep at night with the sort of positioning that you have. Yeah, we're joking, but I'm actually very serious.

Mike Maharrey: No, that's a good ... Yeah.

Axel Merk: If you are restless because, oh my God, I don't know. And that can be gold mining or that can be the S&P 500 or whatever it is that one invests in. If you are restless because of what you have and you have to check the codes every five seconds, maybe you want to trim that down. And then the other end of that equation or the other side of it is if you have your expenditures in check, you can afford to take more risk. If you're spending less than you're making, it doesn't really matter what happens to your investments. And I'm oversimplifying here, of course, but you are able to take much, much more risk. And so if your expenses are under control, that's probably the best thing that you can do in a time of severe uncertainty.

Mike Maharrey: Yeah, that's fantastic. Something you said just prick something in my mind. I'm going to run this past you and see how you react to it. You mentioned the fact that if you think the markets are wrong, then you kind of have to do the research and that makes sense to me. Here's what I thought in my head though I'm just arrogant enough that I often think the markets are wrong because I tend to not be a mainstream kind of thinker. That being said, if I think the market's wrong, that's not really relevant because the market's still going to do what it's going to do, right? Wrong in my head or not. And I think sometimes we maybe need to check that arrogance and just because we think something's wrong doesn't necessarily mean the market's going to react in the quote unquote right way. Does that make sense?

Axel Merk: Yes. So let me give you several answers on that. First of all, you can take the rate value approach. Rate variability is a meritocracy so you check yourself. If you're wrong all the time, take note of that and listen to yourself a little bit less. And if you're right all the time, it's okay to have a little bit more courage. The second answer is it makes a big difference whether you have a positive or negative alpha trade and at the risk of sounding not too technical, let's say you believe that the bond market is going to rally and you buy bonds, then you're going to make money if bonds rally. And if they stay steady, then you're still going to get the yield. And if they go down, well, you've got some interest rate risk. But if you believe that bonds are going to go down and do short bonds, you've got to bet the timing right because you constantly have to fight, you have to pay the interest all the time if you're shorting bonds.

And so, if you like to invest in green energy because it's the next big thing and size spread, but you are in a QE environment where quote unquote everything goes up, it doesn't really matter what you buy. And so all these things become more important when the markets are a little bit rougher, but more broadly as to when one believes that the market is wrong, I'm also by nature, having been in the markets for many, many decades by now, I always like to question as what is happening, but at the same time, it helps to be somewhat humble to say, all right, market probably has a point as to why they're pricing in, what they're pricing in, and now I see the opportunity. But it's also, again, important to understand the market. If you take our sector, the mining sector, ETFs don't provide funding to junior mining companies.

Active management was rooted out during the many years of QE. Active managers is kind of a rare species these days. And so why would you give money to an active manager when quote unquote everything goes up? And so we're an environment where the expertise in some segments of the market is just not there, which of course then provides more opportunities. And so one thing I tell people is that if you want to invest, the more arcana market is, the more specialized the market is. Don't expect to make money just with a push of a button, roll up your sleeves and get to know it. I remember it was 25 years ago a friend of mine, oh, you want to invest in these emerging markets? Yeah. Well, roll up your sleeves and go there. Don't just buy it on the screen, but get on the ground, do your homework.

Now, of course, there are people who believe in technical analysis and that's great. I'm going back to have a process and if that's your process, that's fine. And if you're happy with that process, that's fine. But if you think that the market is quote unquote wrong, a technical analyst will not say a market is wrong, but if you think that the market is wrong, do your homework and stick to your knitting. And I'm just mentioning the negative oil prices the same in the precious metals market. People were concerned about distortions without the terrace and I think we've talked about it here on your show that you've got to understand what are the limitations of the Bank of England, of the liquidity providers in London, of Comex, how does this all work? And if you don't know the details, you just throw out one thing here, how many in your audience know what the price of gold is?

And I'm not talking about the price you see quoted on Bloomberg, but what does that represent? The price of gold you commonly hear quoted is the price of a London bar in London as quoted by a bullion dealer in London. And that matters in times of stress because the gold in another country, different types of gold might have a different price point. And so those things matter. And so if you think something is wrong, do your homework and try to understand, well, why is the market pricing this differently?

Mike Maharrey: Yeah. A good example of that is the last time I was reading about the price in India, gold is selling it at a bit of a discount in India due to the recent implementation of tariffs over there. So yeah, you make a very good point. I want to hit one other kind of big thing before I let you go. We've talked a lot about interest rates and that seems to be kind of the driving topic in the precious metals world in terms of the gold pricing. And you mentioned the fact that every time we get the negative war news, people assume that interest rates are going to rise, that's bad for gold. One of the things though that seems to be missing and I don't hear as much talk about is debt and interest rates and debts, of course, those two things are important. They impact each other.

Why is it there more attention being paid to the debt in terms of the interest rate discussion?

Axel Merk: Because we're talking about balance sheet versus cashflow, and balance sheet doesn't affect prices in the short term. That's a fancy way of saying is that the absolute level of debt of course matters, but you will not find any model that links that to just about anything. And that doesn't mean it's not important, but having a model that will give you a buy signal or this or that based on the level of the debt I don't think you can find. In addition to that, of course, when it comes to federal debt, governments can change the rules of the game along the way. That of course is a separate issue, but the debt level is important. It matters. It was already Hayek that said that you cannot have independent monetary policy when government has too much debt, and he's absolutely right on that, of course. But those things are creeping up on you and putting your finger on that, that tomorrow that's going to have that impact.

I mean, if you look at pictures to gold bugs in the 80s, they'd already said there's too much government debt and look at where we are today. And of course, hey, price of gold is 4,500 bucks rather than down there where it was back then. And so the markets will do the thing along the way. And if you're patient and early, there are some amazing opportunities there.

It is just as there is always a tomorrow in the Straight of Hormuz, we just don't know what it looks like. There's always a tomorrow in the world of finance and society adjusts. We have people who are in the late 60s and they're working and they are proud members contributing to society. Most households have dual incomes these days and they're proud of it. Whereas people used to think, "Oh my God, my wife has to work to make ends meet." And society adjusts and say, as we are eroding the purchasing power of the currency, we'll deal with it one way or another. And there, yes, this is what the market says. I happen to believe that, well, I'd rather have a little bit of financial independence and so I'm going to prepare for what's to come, but there will always be ... And by the way, part of the reason I mentioned that is a lot of folks in the gold community think about a great reset that's going to come at some point.

No, it's not going to come. There's going to be more and more unstable dynamics that's going to come and populism is going to rise. When things go wrong with government finances, we see all kinds of things. But usually the thing you don't see is everybody's saying, "Okay, we messed up. Let's do a reset and let's live with our means starting tomorrow." That's usually not what happens

Mike Maharrey: Yeah, I agree with that. Okay. I've got one more just fun question to get you out. What are you reading lately, if anything?

Axel Merk: Well, actually I mentioned Hayek because I'm just rereading “The Constitution of Liberty” by Hayek and I said how timely. I had read it about a dozen years ago and it is so much more timely than it was then. Of course it was timely back then as well, but there are so many nuggets in there that are so applicable to today's world. And one of the things I had been scratching my head around is I'm a pragmatist in many ways. I have my views, but I also think, all right, yep, this is what reality is like. And Malay, for example, is kind of on the radical side as far as libertarians is concerned. And I've been wondering, well, I have always come from this idea that you got to have rules and you got to have visibility on the rules and within that framework you can have liberty.

And it was very refreshing to read that, not only does Hayek say that as much, but he says in order to have liberty, you need to have common values, you cannot regulate everything. And so there's lots of little tidbits that in today's society where everybody is so polarized, I think it would be worthwhile for everybody to read that again. So yes, that's a pitch for people to pick that up and read that again, the

Constitution of Liberty.

Mike Maharrey: I saw you post on X about that with the rulemaking. I thought that was interesting. Excellent. All right. So, where can folks follow what you do? I just mentioned you're on X. Where else would you like to send people?

Axel Merk: I'm X – @AxelMerk. MerckInvestments.com is our website mentioned we manage a good four billion in precious metals. We got two products in that realm, exchange products. I can't discuss them yet in more detail, but you can find more on the website. We have a newsletter, everyone that you can sign up for at the website. And then of course with you in a few months again to catch up on the latest and greatest.

Mike Maharrey: Absolutely. I will always be looking forward to that. I love talking to you. I like the kind of philosophical bent that you bring to the conversation. Every time we talk, I go away with my head churning and I'm sure that's going to be the case today as well. So I appreciate that. I always enjoy it and really appreciate you taking the time. I know you're a busy man, so I thank you for carving a little time out of your day to hang out with me. So we'll get you back on again here in the next few months and until then we'll journey on.

Axel Merk: Thank you and be safe in those markets.

Mike Maharrey: Absolutely. Thank you.

Sound Money and the Myth of Militarism

Fri, 05 Jun 2026 00:00:00 EST

One of the most common mistaken arguments against a return to sound money is that the dollar’s international dominance supposedly depends upon American military supremacy.

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According to this view, the United States cannot seriously consider restoring monetary discipline – whether through embracing the classical gold standard or gold convertibility, anything that would put a limit on monetary expansion – because the dollar’s role as the global reserve currency ultimately rests upon Washington’s ability to project overwhelming force abroad. Aircraft carriers, overseas bases, and the Pentagon’s vast security architecture, we are told, are what truly “back” the dollar.

The implication is clear enough: if the United States were to retreat from perpetual military supremacy or return to a genuinely sound monetary standard, the dollar would lose its privileged position in global trade and finance.

Yet historically, this argument holds little water as examples to the contrary abound.

Indeed, many of the world’s most trusted international currencies were not backed primarily by military coercion. Rather, they were currencies trusted because they emerged from societies with reputations for monetary stability, institutional reliability, commercial integrity, and fiscal restraint.

This history strongly suggests that if advocates of dollar dominance truly wish to preserve international confidence in the currency over the long term, they should have far less to fear from a return to sound money than from the fiscal and monetary consequences of endless empire.

Take the https://www.moneymetals.com/austrian-4-ducat/83";>Venetian ducat. First minted in 1284, the ducat became one of the most widely accepted trade currencies in the https://en.wikipedia.org/wiki/Ducat"; target="_blank" rel="noopener">Mediterranean world for centuries. Merchants from North Africa to the Levant trusted it because Venice maintained the coin’s weight and purity with remarkable consistency.

The ducat’s reputation rested not upon overwhelming military domination, but upon credibility. Venice was certainly an important regional maritime power, but it was never remotely comparable to the great territorial empires surrounding it. What made the ducat valuable was that merchants believed Venetian authorities would refrain from debasing it.

The same was true of the https://www.moneymetals.com/netherlands-gold-10-guilders-1947-ounce-gold-content-coin/1200";>Dutch guilder during the 17th century.

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The Dutch Republic possessed formidable commercial and naval strength, but it was hardly a universal military hegemon. Surrounded by larger continental rivals, the Dutch nevertheless became the financial center of Europe because of the institutional reliability of Dutch commerce and https://en.wikipedia.org/wiki/Dutch_guilder"; target="_blank" rel="noopener">the credibility of the Bank of Amsterdam.

Merchants and investors trusted Dutch financial institutions because they operated within a comparatively stable legal and monetary environment.

https://www.soundmoneydefense.org/news/2024/06/18/want-reliable-money-stop-trusting-central-bankers-000550"; target="_blank" rel="noopener">Trust, not coercion, was the essential ingredient.

To be sure, geopolitical influence can reinforce a currency’s position at the margins. Great powers often enjoy advantages in trade networks, diplomatic reach, and financial infrastructure. But this is very different from claiming that reserve currency status is fundamentally produced by military coercion. The distinction matters.

After all, if military power alone created trusted money, history would look very different. The Mongol Empire, Qing Empire, Napoleonic France, and the Soviet Union all wielded immense military power. None produced enduring international reserve currencies comparable to the Venetian ducat, Dutch guilder, British pound, or American dollar.

Empires are expensive. Military supremacy requires enormous expenditures, sprawling bureaucracies, foreign commitments, and ultimately vast quantities of debt.

Over time, states facing the fiscal pressures of imperial maintenance inevitably resort to debasement, https://www.moneymetals.com/news/2026/05/12/no-matter-how-you-slice-the-data-it-come-up-inflation-004912";>inflation, and financial repression.

The Bretton Woods system did not collapse because the United States lacked military supremacy. It collapsed because Washington’s fiscal and monetary commitments became increasingly incompatible with gold convertibility.

Lyndon Johnson’s “guns and butter” policies – simultaneously financing expansive welfare programs and the Vietnam War – accelerated the inflationary pressures that ultimately forced Richard Nixon to sever the dollar’s remaining https://www.moneymetals.com/guides/shell-game-how-americas-money-devolved-from-gold-to-fiat";>link to gold in 1971.

Ironically, then, military supremacy may pose as much danger to monetary stability as protection for it.

This is where many contemporary defenders of the dollar inadvertently reveal more than they intend.

When analysts argue that the dollar depends fundamentally upon American military dominance, they are implicitly conceding that the currency no longer rests primarily upon monetary soundness or fiscal restraint.

Instead, they suggest the system depends upon geopolitical leverage, network effects, and the absence of viable alternatives.

But none of this proves that military supremacy is what fundamentally creates monetary trust.

In fact, one could argue the opposite: the long-term danger to the dollar lies precisely in the fiscal and monetary consequences of maintaining a global military empire. Endless wars, ballooning deficits, rising interest payments, and continual monetary expansion threaten confidence far more directly than a hypothetical reduction in overseas military commitments.

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From the sound money perspective, this dynamic is hardly accidental. Permanent militarization and fiat monetary expansion are deeply intertwined.

The modern warfare state depends upon elastic money because hard monetary constraints limit the state’s ability to finance continuous intervention abroad. https://www.soundmoneydefense.org/sound-money-explained"; target="_blank" rel="noopener">Sound money disciplines the empire precisely because it constrains the state’s ability to finance perpetual military expansion through inflation and debt monetization.

That constraint is not a weakness of sound money. Historically speaking, it has often been one of its greatest strengths.

This is precisely why advocates of sound money are so often told that monetary restraint is unrealistic in a world “requiring” American global supremacy. The argument is less an economic observation than a tacit admission that the current international order depends upon perpetual deficits, continual debt expansion, and monetary flexibility incompatible with genuine fiscal discipline.

And no number of aircraft carriers can indefinitely substitute for sound money’s reliability and stability.

What's the Stanley Cup Worth?

Fri, 05 Jun 2026 00:00:00 EST

The Stanley Cup is the greatest trophy in the world.

It’s also one of the most valuable. It’s made of silver – and a lot of it.

The Stanley Cup Finals kicked off this week. The Las Vegas Knights are battling the Carolina Hurricanes for https://www.moneymetals.com/buy/silver/rounds/nhl-silver-rounds";>the NHL championship.

Now, you might be thinking, what’s so great about the Stanley Cup?

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Well, in the first place, it’s a hockey trophy. Hockey is the greatest sport. So, the Cup gets a certain amount of cred just by virtue of association.

It’s also one of the most difficult trophies to earn. The Stanley Cup champion must win four seven-game series. That means the winner could play as many as 28 playoff games before hoisting the Cup.

And have you watched an https://www.moneymetals.com/buy/silver/rounds/nhl-silver-rounds";>NHL playoff game?

It’s not for the meek.

Once the series is over, the team will reveal injuries. I can almost guarantee you will learn that somebody played with a broken bone, and you’ll think – no way.

I’ll give you an example. In 2023, Las Vegas Golden Knights captain Mark Stone broke his wrist in the first period of game five of the Cup final. He played the rest of the game and scored three goals. As a reward, he got to hoist the heavy silver trophy over his head -- with that broken wrist.

Now, you might be thinking, 'You’re wrong, Mike!' Hockey is dumb.

You’re entitled to your opinion. But be warned – I will fight you on this. And I am a hockey player.

Regardless, the Stanley Cup is a beautiful trophy.

Ask any hockey player, and they'll tell you that the Cup is priceless. Winning a championship and being immortalized on the iconic trophy is the ultimate dream of every kid who laces up the skates and picks up a hockey stick.

The Stanley Cup is the only trophy that includes the names of every player who won it.

The names are etched into the rings on the bottom 2/3 of the Cup. Obviously, the trophy will grow ridiculously tall if they keep all the rings attached, so the bottom one is removed once the top one is full. The old rings are kept at the Hockey Hall of Fame in Toronto. Nevertheless, nobody will ever forget that Erwin Murph Chamberlain won the 1946 Cup with the Montreal Canadiens. It’s chiseled right into the silver.

But you might be wondering what the cup itself is worth. As it turns out, that's pretty hard to pin down. But we know it's valuable enough to have its own bodyguard. Phil Pritchard serves as the “Keeper of the Cup.” He and his cohorts travel everywhere with the trophy to make sure it stays safe.

As far as the monetary value goes, the best estimate is that it's worth about $650,000. But that figure was basically pulled out of thin air. After all, how do you value sentiment and history?

However, the Cup is valuable in and of itself. As I already mentioned, it’s made from silver.

The Cup on top is pure silver, and the base is formed from a silver-nickel alloy. It weighs in at 34.5 pounds. https://www.moneymetals.com/buy/silver/rounds/nhl-silver-rounds";>The NHL has not released the percentage of nickel in the Cup, but the best guess is that the melt value of the silver is between $25,000 and $30,000 at the current price.

It’s also notable that the Cup is worth twice as much this year as it was last, given https://www.moneymetals.com/buy/silver";>the incredible rise in the silver price.

Compare that with the https://www.moneymetals.com/buy/silver/rounds/nhl-silver-rounds";>NFL’s ultimate prize.

The Lombardi is fabricated out of sterling silver, an alloy of silver containing 92.5 percent by weight of silver and 7.5 percent by weight of other metals (alloy), usually copper.

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The Lombardi Trophy measures 20.75 inches high and weighs seven pounds (3,175 grams). That means the silver metal melt value of the trophy would be around $7,700.

To put that into perspective, when the Philadelphia Eagles hoisted the Lombardi in 2025, the melt value was just over $2,990.

By the way, the Stanley Cup is the fourth-most expensive trophy in sports.

You might be wondering which trophy in the sporting world is worth the most. Well, to win that, you have to play soccer.

The FIFA World Cup trophy is formed from solid 18-karat gold weighing over 11 pounds. The melt https://www.moneymetals.com/gold-price";>value of the gold itself comes in at well over $100,000, but the estimated value of the trophy is over $20 million.

Who wouldn't want to get their hands on over $23,000 in silver or over $100 grand in gold? Of course, if you don't play hockey or soccer, you're out of luck. But as I already mentioned, there are easier ways to get silver or gold. You don't even have to break your wrist to do it!

Just call 1-800-800-1865 and talk to a Money Metals' precious metals specialist!