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Gold's Next Big Move? Frank Holmes Weighs In

Fri, 31 Jul 2026 00:00:00 EST

Welcome to this week’s market wrap podcast, I’m Mike Gleason.

Coming up don’t miss another wonderful interview with Frank Holmes, CEO of U.S. Global Investors and the Executive Chairman of Hive Blockchain Technologies. After the precious metals have traded mostly sideways throughout much of July, Frank believes we’re about to see some real movement in the gold market and you’ll certainly want to hear which direction he believes it’ll be heading next over the upcoming couple of months.

Frank also weighs in on the new Fed chairman and what he’s expecting there with monetary policy and why he’s warning investors to take the rhetoric they’re spewing about fighting inflation with a grain of salt, and why he expects to see a return to money printing in the very near future from our friends at the Fed.

So, stick around and hear that and a whole lot more during this week’s exclusive Money Metals interview between Mike Maharrey and Frank Holmes of U.S. Global Investors, coming up after this week’s market update. And if you enjoy this material, please do us a favor and like and subscribe to this podcast wherever you consume this content.

The Federal Reserve wrapped up its latest policy meeting this week by doing... well... nothing. At least on the surface.

Officials voted to leave their benchmark interest rate unchanged, keeping it in a range of 3.5% to 3.75%. But if you look beyond the headline, this meeting may have been one of the most revealing we've seen in quite some time.

Three members of the Federal Open Market Committee broke ranks and voted for another rate hike. That's a remarkably public display of disagreement inside an institution that traditionally tries to project unity. Fed Chairman Kevin Warsh even described the debate as "a good family fight."

So why does that matter?

Because it tells us the Fed itself isn't convinced inflation has been beaten. If everyone believed inflation was under control, there wouldn't be a serious push for higher rates.

And that's the contradiction investors are wrestling with today.

The Fed continues to say it's committed to restoring price stability. But after months of elevated inflation, rising energy costs, and stubborn price pressures, policymakers once again chose to wait rather than act. The central bank is talking tough – but its actions remain cautious.

Meanwhile, everyday Americans continue paying the price. Housing remains expensive. Credit card rates are still painfully high. And one’s savings loses purchasing power every year inflation stays above target. Whether the Fed raises rates or not, consumers are already feeling the effects of years of loose monetary policy.

Markets are now looking ahead to the September meeting, where pressure for another rate hike appears to be building. But whether the Fed ultimately pulls the trigger may be less important than the larger issue.

The real question is whether central bankers still have the tools – and the political willingness – to preserve the purchasing power of the dollar after years of unprecedented money creation and ballooning federal debt.

That's exactly why precious metals continue to attract attention. Gold and silver don't depend on central bank promises. They don't require confidence in policymakers. Their value isn't based on faith in fiat currencies or political decisions made in Washington.

Turning to the price action this week in the metals, gold was in positive territory through Thursday but is off close to $60 here today, meaning the yellow metal is now down a slight 0.2% on the week to trade at $4,056 an ounce.

Same story with silver. The white metal was in the green as of yesterday’s close but is now off about 75 cents for the week or 1.3%, checking in at $58.18 as of this Friday late morning recording.

Turning to platinum, the industrial metal is showing a nice 3.3% gain this week to come in at $1,651. And finally, palladium – despite a near 3% drop today alone – is also in positive territory for the week, coming in at $1,295 an ounce and registering a 2.8% gain.

Bigger picture, many folks may not realize that gold has already delivered one of the strongest bull markets in modern history. Prices have climbed to record territory, central banks around the world continue buying at historic rates, and investors everywhere are asking the same question:

Has the move already happened... or is there still room to run?

One legendary investor believes we're only getting started.

John Paulson – the hedge fund manager who became famous for correctly predicting the collapse of the U.S. housing market before the 2008 financial crisis – says today's gold rally is still in its early stages.

That's a remarkable statement coming from someone who has built his career identifying major turning points in financial markets.

Paulson argues that the driving force behind gold isn't simply inflation or geopolitical uncertainty. It's something much bigger: a gradual loss of confidence in paper currencies.

For decades, investors largely accepted that central banks could manage economies while preserving the purchasing power of their paper-based money. But after years of quantitative easing, massive government deficits, repeated financial crises, and persistent inflation, more people are beginning to question that assumption.

If confidence in fiat money continues to erode, Paulson believes demand for gold has the potential to grow for years – not just months.

And he's hardly alone.

Central banks continue adding gold to their reserves. Nations are looking to diversify away from the U.S. dollar. Individual investors are increasingly viewing physical bullion not simply as a speculative investment, but as financial insurance.

Of course, no market moves in a straight line. Gold has experienced corrections before, and it almost certainly will again. But long-term bull markets are often interrupted by periods of consolidation that shake out impatient investors before the next leg higher.

The key question isn't whether gold will experience volatility. Every asset does.

The question is whether the underlying reasons people own gold are becoming stronger or weaker.

According to Paulson, they're becoming stronger.

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

Mike Maharrey: Greetings. I'm Mike Maharrey, and I'm joined today by Frank Holmes. Frank is the executive chairman of Hive Digital Technologies and the CEO and Chief Investment Officer at US Global Investors. He's a fine analyst to boot. How are you doing today, Frank?

Frank Holmes: Outstanding. Time to be buying these big corrections we've experienced.

Mike Maharrey: Well, you just kind of almost answered my very first question. The last time we actually spoke was in January, so it was right after the big correction, but before the war started. And of course, as people know, gold has basically been trading sideways for the last several months, kind of in a range between 4,000 and 4,500. And I've heard some people say, "Oh, the bull market's over. It's done." I've heard other people say no, we're just in the beginning. And so I'm curious as to where are you on the gold market right now? Bearish, bullish, in between?

Frank Holmes: Well, there's two things that drive gold, which I've characterized as being the love trade and the fear trade.

North Americans are focused on the fear element of money printing, wars, all this stuff. Interest rates, that impacts the fear trade. But really what's important this century, in particular this century, has been the rising GDP per capita by Asia to Middle East countries, and it's highly correlated to gold prices rising. And that is more important because 60% of gold demand is for love. Love for your family, protective portable wealth. I can wear the jewelry and if a crisis happens, I take off my 24-karat gold and I get out of the country. And this is not going away culturally throughout Asia. And I think that we have to really appreciate, and if you've not been to Asia, it's hard to really grasp this emotional attachment to protecting your family. They don't have normal insurance that we would have for our houses, et cetera, that we all think we take for granted.

And same thing with car insurance. It's always a big risk in a car accident when you're in many of these emerging countries. But what they do all have is insurance is gold. So now what does that put us? It means that every time we've had a big correction in gold, the real big sweeping demand that comes in is the love trade. It's 60%. The fear trade is going to continue to ratchet higher because of the money printing. And I guess the most important policy that I see for that is called MMT, modern monetary theory. The world's over $350 trillion now in money printing. Who gets victimized the most is the US. And that's been really well orchestrated by China trying to create a parallel funding system and their attack. And they've been brilliantly successful because of what they've done with their one belt, one road of lending to 75% of the UN countries.

So, 75% are somehow indebted to China. So, China comes along and says, "We want things done like Saudi Arabia, we're buying so much oil, we want to do it in our one currency." And they're accepting that, and then they immediately convert to US dollars. Prior to that, it was always traded off of US dollars. And that assault by Xi Jinping's infrastructure and the BRICS nations, that's impacted a sentiment negative on the dollar. And I've not seen any movement back from that. And I think that there's some other things in the digital space that investors have to be really aware of. And one of them that it impacts a Bitcoin short-term, but long-term more important is what's called the Clarity Act. And the Clarity Act was really to help usher in earning a yield on a money market fund, but earning a yield on a stable coin.

And it's not a security. As banks have deposits, they pay you interest, but it's not deemed to be a security, your savings and checking account. If you have a money market fund with a mutual fund that it is. So these are nuances, and banks have pushed back for that Clarity Act to go through by going with Elizabeth Warren and to do this attack. So, it's created this doubt and Bitcoin knocks down, but I think it's just temporary story because more significant is Japan. And Japan's significance is because they've had, prior to COVID, a zero cost of capital for 30 years and they've had nothing but deflation. And ever since COVID and supply lines being disrupted in the war in Iran, they're starting to see inflation. So they've been raising interest rates. Well, how does that relate to us in North America? There's been several times over the past 30 years that we've witnessed our stocks falling here.

And you go, "What happened?" And there's nothing in the news that says that. And then a week later you find out, oh, China, not China, but Japan reversed its lending. That is, it's called the carry trade. So we had many hedge funds institutions borrow zero cost, 10 basis points cost of capital, then convert it to US dollars to get US dollars paying 4% or dividend paying stocks or Bitcoin, whatever you want, they would speculate. And the greatest crisis of that happened in 97 when Japan don't want their money back. And all the Asian countries had put it in buildings. So they couldn't put an 80-story building on a barge from Kuala Lumpur and send it back for collateral to Japan. And so they all basically devalued their country's currencies to pay back to Japan. And so we had that. It took four years for a normal credit country credit crisis.

It takes four years to repair that damage. And that bought them in 2001. Russia defaulted in 98, and you can see how that impacted 2002. They sort of bottomed in their economy. And we've had these runs, and then we get these big credit crisis. Same thing with 2009. It took four years later before the global economy rebuilt its balance sheet and income statement. Japan has, of the G7 countries, if you look at the debt to GDP, it's the highest. It's the scariest. But it's also the most unique because of 30 years of zero money, what people don't realize is that the most of the debt in Japan is actually owned by their own federal reserve, something like almost 50%. And then their super pension fund and their insurance companies also were borrowing at zero cost of money and investing in US treasuries. And so they're one of the biggest owners of US Treasury because they're making three and a half to four and a half percent free carry.

Well, as rates are now rising in Japan, that's triggering that that spread is not so great and there's a repatriation going on of money unwinding. So, we are in that cycle. And the real first sign to see that is not just so we feel gold, as gold investors, but let's forget to put gold over on the side over here, has been AI and all the digital technology stocks, anything related really got crushed here. And you have to sit back and say, "Well, why is that?" Well, a lot of people here did not invest in Korea. Korea is dominated with companies like Samsung. Samsung makes chips. Samsung is very much cognizant of the AI boom that their stock market went up at the end of March. It was up 100% basically over the year. Now can you imagine the S&P up 100% in a year?

Mike Maharrey: Wow.

Frank Holmes: It's an incredible event. Now it's fallen 30%. So one has to ask what happened? Well, a lot of South Koreans were borrowing at zero cost of capital and then leveraging and buying technology stocks in Korea. All of a sudden there's a margin call and Japan wants that money back and you see those stocks get hit 30%. That impacts over here. But the story is, oh no, there's too much debt levels. Oracle's got debt problems, CoreWeave's got debt problems. And so this whole negative leveraged banking, they'll tell you the other part of the story is what Japan is doing. And I know from doing funding, we had a worry when Hive was doing a recent 200 and some odd million. We've raised this past quarter 250 million in zero coupon bonds. Well, we did them in two tranches. And each time you buy this derivative, well, the Japanese banks bid on that, but you have to worry over that weekend and that bidding process, because if the Japanese yen goes up and the currency yields go up at the same time, then all of a sudden you have to pay more for that structure you're creating.

And it's a big number because there's $500 billion in convertible debt hedge funds in New York and Chicago, and they're all boring at zero cost doing all these sort of arbitrage trading and it has an impact. Well, it also impacts gold. And gold was being leveraged. When gold and silver went through the roof earlier this year, some of these hedge funds were leveraged eight and 10 to one. And that margin call started with Japan. They're the ones that get unwound first and you could feel that pain. And so I think as investors, you have to be aware that the interest rates are rising here in the US, not because of the Federal Reserve, because of concern on China trying to hurt the dollar, creates a more expensive way for the US dollar, but Japan taking their money back. Now, if you go back to Japan, Mike, and you had any other country that was in Africa and Latin America that 200% of their GDP leveraged, you would say they're going to go bankrupt.

You're going to get Lebanon, you're going to have Zimbabwe, you're going to have basically Argentina. It's interesting to observe, but why not Japan? Because 50% of that debt is owned by them.

And most of that debt has been into US securities. So borrowed by Americans and the British in their hedge fund world and South Korea. So, this is going through, we've witnessed this first step of the unwind with Japan rates rising. I don't think it's over yet. And I think that that's another key factor we have to appreciate the inner market relationships that are around the world. And people only become silo thinking it's only in America. I go to Canada, it's only Canada. You go to the UK, it's only UK. No, they're all interrelated and there's a contagion that can be taking place and you don't know until it's too late.

That's what we're living through. What does it mean? I can tell you the AI boom is not over. It's got a lot legs to it. I've seen such creativity in funding the AI boom. Like last week or earlier this week, Meta, which is Facebook, was building a giga data facility in El Paso, Texas. A $14 billion spend, gigawatt of electricity, which is going to use 50,000 tons of copper. That's why copper's making new highs because of demand for data centers. Well, if the data centers and AI is in a bubble and it's all collapsing, then copper prices should be collapsing. It's not happening. Copper prices remain robust and strong are going to trade higher because this demand is not going away. Well, people attack Meta. There's too much leverage. What are you doing? And out of nowhere comes BlackRock. And BlackRock, people don't realize they get a lot of funding from sovereign funds.

Well, the biggest sovereign fund in the world is Norway, and they put money into their AI data center fund. And United Emirates and Saudi Arabia, they all put money into BlackRock. BlackRock then buys 80% of that data center, giga data center for $10 billion. It is incredible. Oh, you got a stress problem, Mike? Don't worry. I'll give you an asp for it. I'll just give you $10 billion and take away the bank debt problems you could have because we see something that's very much a super cycle. Gold is the same way. We are in a super cycle. We did go up unbelievable. I have not seen over this when I look at this rolling 20-day rotation and it's called an oscillator. And mathematically, something will only move X percent over 20 days and fall 20% before they revert back to the mean. So, things go over, bought, oversold.

And usually, it's only one standard deviation up and one standard deviation down. One standard deviation up, one standard deviation down. So you can have a chart looking like this long-term, but in it's all these moves.

So, then you have the 60-day rate of change, which is a longer horizon. And that's also very important for me as a fund manager because I rebalance every quarter. It has a bigger dollar move for gold or silver. So, what happened earlier this year, silver went up like six standard deviations, and it leveraged 10-to-one. Well, immediately the futures market comes in and says no more margin. We got to get the prices down. This is happening in every cycle. So they do everything and knock it down. But then gold all of a sudden starts going through its difficulty because rates were starting to rise in America. In the free market system, rates were rising. Japan rates are rising. And that combination will have also a correction in gold. So, gold went from up three standard deviations over 60-days rolling down to two. That's a five standard deviation move.

Frank Holmes: That's huge. And now it looks like it's coming off that bottom and it's down 1.6 standard deviations. Well, what does that mean to me as a money manager? It means that there's a 85% probability over the next 60 trading days gold will be up. That's just math. Nothing personal, no geopolitical commentary, just the math of how markets breathe. 20 days, they've bounced back to the mean, fallen again, bounce back, falling again. So, for the short-term trader, the 20-day is such an important indicator of sentiment as a sentiment so bearish. So anytime it falls two standard deviations, it means everyone is so fearful and margin calls and people are being forced out and blow your positions. And same thing as the opposite. Everyone's so bullish and excited, and then gold goes up. So, we are in a good sweet spot. And I was doing a sentiment analysis of the overall market this morning, and I run a quant model for that.

And basically I'll take a look at all these reports that are out there to read the headlines. And then I ask you to do from one to a hundred from greed to extreme fear. Where is the market? So it's something like it's 75% constructively bullish, 25% cautious. There's no fearfulness. You may read a few headlines and say it's all over and there's that fear. But when you look at it in a bigger picture, this has been a great buying opportunity.

Mike Maharrey: I love that you mentioned the dichotomy between the fear trade and the love trade. And it's interesting. I noticed something a couple of weeks ago when the World Gold Council put out its half-one data analysis. And the interesting thing is that if you just bought during the Asian trading hours, you would actually be up like 15%. And that kind of shows what you're saying, that the Asian markets are buying these dips, right?

Frank Holmes: Yes. Yeah. It comes on sale. And the most important indicator for you and I in that space is rising GDP per capita. It is the most predictive. If you look this century, China was first torque the most, and then India sort of catching up. But both countries have been a 45 degree angle. And if you have 40% of the world's population with a 45% degree angle of GDP per capita rising, that's a cultural affinity towards gold. That's pretty powerful.

Mike Maharrey: Yeah, very powerful. I've got kind of a question for you. This is a thing that I run through my head quite often. The mentality right now seems to be we have a federal reserve that at least in rhetoric is very hawkish on inflation, talking about holding interest rates higher. There's still speculation about interest rate hikes. I question whether that will come through when rubber meets the road given the propensity of central bankers, but let's just leave it at that for now. So, therefore we're talking about higher interest rates. We're seeing a bear market in bonds, which also seems to be pushing the long end of the yield curve higher. That is all typically understood to be bearish for gold. So, why shouldn't I be, if we're talking about a long-term bear market in bonds, if we're talking about longer rates over the long-term, why shouldn't I be bearish gold? What is the bull sentiment that we can find in what's going on with the monetary policy?

Frank Holmes: Well, the stress of China pushing 75% of the central banks to be long gold. And you've seen dollar used to be the most significant foreign reserve in those countries, and now it's being pushed to gold. So that's bullish for gold. It's bearish for the dollar. And so when I look at that, I come back to modern monetary theory that anytime a country has problems, they just will print the money. And the bigger that imbalance is, the more gold has gone up in that country's currency. So I think the wise thing is to have at least 10%, the golden rule in gold and silver. It's just wise. You buy car insurance, if you're going to drive a car, you have home insurance in case something goes wrong at home. Your portfolio should have some gold. But what happens a lot of time, Michael, is that I find you get these gold fanatics, but they don't own any gold.

They just hate the government. They use it as a proxy to be anti-the government. And I found the same thing in my journey into the Bitcoin crypto ecosystem, that those are the most ardent about Bitcoin really are much ardent against the governments. And so they're really not about investing in the innovation, investing in technology. I asked some of these time gold bugs, how much gold do you own? They own none. And what about gold jewelry? Don't you go buy gold jewelry, 24-karat gold jewelry? No. So, you have to separate and take those outlier people that are very vocal and dismiss that as who realizes the supply demand factors of gold coupled with what that demand is. And it's just a big asymmetric trade means there's a big imbalance between monitoring fiscal policies, the solutions, and we're not going to see that go away.

Mike Maharrey: Yeah, that's a really good point. I know some of those people who talk a lot about gold and don't have any. It's an interesting phenomenon. What do you make of Kevin Warsh? Do you think he's a different animal? Because the impression that he's trying to project is that I'm tough on inflation. I'm going to take down inflation no matter what. And he keeps saying that, he keeps emphasizing that. But I'm curious what you think. And obviously we're just speculating here. We can't really get into the man's head, but -

Frank Holmes: It's a good question. Yesterday I did an analysis of his notes and it's very streamlined. He's a lot less speculation in the nuances of how they use words. The master of all is green span. But when it comes to himself, he's much more matter of fact. You threw the ball and you got seven yards, that's all. You didn't get even seven. And you get no analysis beyond that.

And there's none of this opinions. Well, if you could have done this, you could have done that. You could have got 10 yards. There's not a could have. You got seven yards, and that's what it is. So I think when you look at how the editing of what's been done, he's much more matter of fact. And I like to look at the S&P two ways to look at the S&P. One is the equally weighted S&P is a much stronger indicator of the overall economy. And market cap weighted is really the stocks that have the biggest market cap are the strongest industries. That's why those industries and stocks are rising more than the rest of the market. So what we've seen is the Magnificent Seven taking on the chin from this whole thing of Japan. And we've seen the collateral technology out of South Korea. And it's just going through that sell-off process and the narrative is so often something that relates to our economy.

But I think there's a bigger picture that's going on, and that's where gold comes in. And I think that any investor that doesn't use these opportunities when things go down two star deviations to buy, then they really don't want to own gold. They just want to talk about it. I like to talk about it and own it.

Mike Maharrey: Yeah, same. Me too. But talking about Warsh, again, he kind of tries to project this tough guy image. Let's say we have another, let's not even go as far as a financial crisis of 2008, but let's say we have a pretty significant stock market crash and we start spiraling to a recession. Do you think that Warsh is going to basically revert to typical central bank thinking we've got to save the economy, we need the stimulus, we need the money printing? Or do you think he'll really try to hold the line on inflation as he seems to be wanting to project?

Frank Holmes: I think he will print the money to help the economy grow. I think that's some form of the modern monetary theory is going to stay. When a guy like he comes in, he doesn't fire everyone.

Mike Maharrey: True.

Frank Holmes: And he doesn't really bring that many singular lieutenants with him. He's given this tremendous respect to what he can and can't do, but he doesn't have this spirit. So when you deal with government agencies, there are so many entrenched long-term government executives and they feel safer jumping back on modern monetary theory for this past century. And you can see as modern monetary theory has been implemented, gold has been rising. Now the big story is what is China trying to push for more gold reserves, et cetera. I did this visual and it was showing you where gold would be based on the total credit out there of the US. What does it compare to other countries? And then I went and looked at what would happen if they had to make a better gold ratio. So, we have this largest gold holdings that if we went mark to market and the value of those to offset the sort of debt gold ratio, gold goes to almost 40-grand.

Mike Maharrey: Wow. Yeah.

Frank Holmes: So 40,000. So if you think it got a problem, okay, well you buy the US dollar, you're buying it at a discount because it has this gold. So if you don't want to believe me, then I'm going to go mark to market every quarter. And I think that that's something that the Chinese and what they've done now in their policies have taken away paper money because they're worried that banks would say, I sold you this IOU that I have to have the gold, but the bank never owned the gold. Then it goes bankrupt and there's crisis. So they say they only want physical gold. Well, I also think it's because Xi Jinping wants to be able to take away anyone's private property rights.

Mike Maharrey: Yeah. Yeah. I don't doubt that a bit. I really appreciate the fact that you have brought into the mix this more of a global view as opposed to the focus so we can get tunnel vision to. As you said, we're here in the United States and that's all that matters. So, I really appreciate that broader perspective. If folks want to follow Frank Holmes and avail themselves more of your knowledge, where can they do that? And if you'd like, you can also plug your companies and just give a quick overview of what you're doing there.

Frank Holmes: Well, I'm a quant originally, and I still have the discipline. So I came out with a thematic investment philosophy and process called Smart Beta 2.0. And it involves portfolio construction as much as stock picking. And it focuses on momentum in revenue and cashflow for gold mining companies to airlines companies, whatever the thematic product is. And Go Gold, GoAU, it's focused on 30% always in gold royalty companies because they have a superior model. But the other names have to have this top line and bottom line growth and momentum to show up in the portfolio. And that process is really interesting because you can look at this past quarter and the gold is down 14%. So what gold stocks are coming up with announcements that they're not down 14% because you would think their revenue should be aligned. If their production fell, their revenue would fall. If the production went up, then the revenue would rise.

And so the magic number for me always each quarter is, well, how much did gold and silver due? And therefore if gold went up 10% of a company's revenue didn't go up by 10%, there's something wrong.

If it went up 12% in revenue, that's good news. Gold fell 14%, but your revenue actually grew, that's phenomenal news because once gold turns on a quarterly basis, you will see money pile into it. That's a smart beta 2.0 thought process, and that's what we function with. And I've really enjoyed in these thematic products like I have. I wear many hats. So one of the things that hats I wear is, and it helps me, is called Sea. And it's an ETF, the New York Stock Exchange. And what I found was that 80% of all commodities are carried by cargo ships.

LNG, cargo chips basically. Then you ship the stuff over to Asia and you buy a Samsung refrigerator. Well, that big appliance comes back on a cargo ship. Cargo ship rates reprice every day based on weather, wool, More ships that are available. They've put new rules for what type of ships can go into what ports. There's less ships that can do that, so it gives pricing power. What I've found is that the cargo shipping is the best way for an investor to put their hands on the pulse. So, I've always recommended, I said put $1,000 into it. Robinhood, you can buy and you're going to know the global economy every day. So a year ago, Trump comes out with Liberation Day, the whole world falls five trillion and it comes right back and the S&P goes up 15% and sea goes up 30. Oh, what about the tariffs?

The whole world's coming to an end. The global economy's falling. It doesn't. This is telling you that they immediately reprice a mechanism. So, it gives you a global perspective. And I think things like that. And then the other one I talk about all the time is jets. So, if you're worried about what's happening in the retail consumer economy around the world, it's unbelievably robust. Airports are full, flight tickets aren't going down. You book a year out, there's no discount like there used to be. America used to, before COVID, clear two million people a day. It fell down to 85,000 in 2020, and then it came right back up to now three million.

So, when I was in Europe and you go to Asia, they're all packed wherever you are. So the global economy is not falling apart. And there's this negative narrative looking for a problem. And so they could take a hammer and hit that nail. There is no problem that way. Yes, there's imbalances, et cetera. So I find these two really help me understand the dynamics that it comes back to gold. And these two will help me understand consumer spending, consumer sentiment, and then take a look at where the appliances are going back and forth. So I remain really bullish. I share with you that the jets, even with prices are going up, oil prices that went down, then rate back up. Any drop again in the price of oil and settlement in Iran, it trades much higher. And the airlines trade at one-third of the S&P PE ratios.

The other part is that we've seen a big correction in the S&P market cap stocks because the Magnificent Seven overweight the valuation, so the technology's fallen. But S&P weighted is the economy is making new highs. So the world's not coming to an end. And the military spending is where the money's being raised now. So the deficit spending in Japan, the deficit in Germany, America, it's not going into just social welfare programs now. It's going into re-arming all of our military with AI.

And so when you look at those numbers, you're talking about $2.5 trillion is going to be going into that space. So that immediately gives me, I was trying to look for my other hat here for you to just get a chuckle over. Let me see here. And it's called War.

Yep. War ETF.

So, what is war? Well, they're going to print money and now it's going to go into technology and AI. And you can see those stocks, this stock is above its 50-day. It's been on a tear on the industry, cybersecurity because the Chinese keep trying to hack into our systems and steal any engineering they can. So I look at this doing well. I look at these other factors, and the reality is it's hot in Texas, cold in Alaska, and the government's going to print money. So make sure if you go to Alaska, you have a parka on. And if you're in Texas, put on your shorts and flip-flops. It's recognizing in a portfolio that you're pragmatic, that the money print is going to go on. And your job is to be ahead of that money printing, not to sit there and complain about it all the time.

Go and stay ahead of it with good smart solutions.

Mike Maharrey: Solutions. I love it. I love the optimism and I love the solution-oriented thinking. That's fantastic. Thank you. I appreciate you taking a little bit of time out of your day. It's always a pleasure to have you on. And like I said, I really do appreciate that global perspective that you bring to the table. So thank you so much for that. And I'm sure we'll have you back on again soon, and I hope you have a fantastic rest of your day.

Frank Holmes: All right. Have a wonderful summer.

Good stuff once again from Frank Holmes and we certainly appreciate his time as always. And that will do it for this week.

Be sure to check back next Friday for our next Weekly Market Wrap Podcast. Check out the Money Metals Midweek Memo podcast as well. To listen to any of our audio programs just go to https://www.moneymetals.com/podcasts";>MoneyMetals.com/podcasts or find them on places like Apple Podcasts, Google Podcasts, Spotify or wherever you listen to your favorite podcasts. And as a big help to us we would ask you to please like, subscribe, download and rate our podcasts. Doing so helps us extend the reach of this material.

Until next time, this has been Mike Gleason with https://www.moneymetals.com/";>Money Metals Exchange, thanks for listening and have a wonderful weekend everybody.

It's Raining Gold in Antarctica!

Fri, 31 Jul 2026 00:00:00 EST

If you want gold, you generally have to go to a place like https://www.moneymetals.com/buy/specials";>Money Metals and buy it. Or, if you’re adventurous, you could dig it out of the ground. Of course, mining gold is hard, expensive, dirty work. It's not for the faint of heart.

So, what if I were to tell you I know a place where gold is literally blowing out of the ground and raining from the sky?

There is such a place!

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But before you start packing your bags, I should tell you that it’s in Antarctica.

The Ross Sea is more of a deep bay in Antarctica, about 840 miles from the South Pole. In the Ross Sea, you’ll find Ross Island. And on Ross Island stands Mt. Erebus.

Mt. Erebus is an active volcano. It’s not so much erupting as bubbling. Inside the volcano sits a permanent lake of blazing, molten rock. This hot lava emits a lot of gases. Mixed with the steam bubbling out of Mt. Erebus are microscopic particles of crystalline gold.

Mt. Erebus has been belching gold for decades. In 1991, researchers estimated that the volcano spews around 80 grams (A little over 2.5 troy ounces) of microscopic gold dust into the sky every single day. That comes to about 900 ounces of gold every year. At today’s gold price, we’re talking about some $3.6 million worth of gold.

Good luck collecting it, though.

As I mentioned, the gold is microscopic. As it blows into the atmosphere, wind currents carry the particles as far as 1,000 kilometers from the volcano before it falls to the ground like a soft rain.

It’s not unusual to find gold in volcanic emissions. For instance, scientists have https://www.moneymetals.com/news/2025/06/20/the-earth-is-leaking-gold-004139";>detected gold around a volcano in Hawaii. However, Mt. Erebus is the only volcano known to spew high levels of crystalline gold into the air at this volume.

As https://www.yahoo.com/news/science/articles/worlds-southernmost-active-volcano-spewing-130000618.html"; target="_blank" rel="noopener">a Yahoo News article put it, it makes sense.

“A volcano is basically a hole in Earth's crust, through which molten material from deep below the ground seethes upward.”

There are thousands of miles of nearly impenetrable rock between the core and the Earth’s surface, known as the mantle. It extends from about 22 miles below the Earth’s surface and crust to the core. The boundary between Earth’s center and the mantle lies about 1,800 miles deep.

The Earth’s molten outer core holds about 99.9 percent of the planet’s gold and other precious metals. Scientists estimate there is as much as 1.6 quadrillion tonnes of gold locked up in the Earth’s center. That’s enough gold to coat the entire surface of the Earth with a 20-inch-thick layer of the yellow metal.

Unfortunately, it is impossible to mine the core; however, Mother Nature sometimes pushes some of that gold to the surface.

As hot as lava is, it can’t vaporize the yellow metal. The boiling point of pure gold is far hotter than volcanic temperatures. That means gold coming out of the Earth is generally in a liquid state. Scientists think gold hitches a ride to the surface in volatile chlorine- or sulfur-bearing compounds that exist in hot volcanic gases.

The crystalline structure of the gold blowing out of Mt. Erebus is unique. According to Yahoo News, “Under an electron microscope, the particles appeared as intricate, faceted, almost perfectly geometric crystals rather than irregular specks, some measuring up to about 60 micrometers across.”

One theory is that under the environmental conditions around Mt. Erebus, gold crystallizes out of these chlorine and sulfur compounds as the gases cool. However, these compounds typically only contain small amounts of gold, and it is unclear how the large crystals can form.

Another theory is that the gold gradually deposits in a crust on the surface of the lava lake before being blown aloft by rising gases.

As Yahoo News put it, “Something about Mount Erebus – whether it's the chemistry, the ambient temperature, the geology, or something else – appears to give it a unique ability to sprinkle the snow with gold dust like a mischievous pixie.”

I’d be OK with sending that mischievous pixie my way!

Paulson: We're Still in the Early Stages of a Gold Bull Market

Thu, 30 Jul 2026 00:00:00 EST

Remember the gold bull market of 2025?

According to billionaire hedge fund manager John Paulson, it’s still going on.

https://www.moneymetals.com/gold-price";>Gold peaked just over $5,500 an ounce in January, before sharply correcting. After a brief surge of safe-haven demand in the early days of the U.S.-Iran conflict, it has traded range-bound between $4,000 and $4,500 for the last few months.

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Some analysts say the sell-off was the end of the gold bull market; however, in https://youtu.be/gTOicU2plyk?si=CNsrIjJpENVA_786"; target="_blank" rel="noopener">an interview on CNBC, Paulson said the bull run is just getting started because the world is losing faith in fiat currencies – especially the dollar.

“I do think we’re in the beginnings or the early stages of a long-term bull market for gold."

Paulson famously won big in the early 2000s when he bet against subprime mortgages even as the mainstream insisted there was no problem in that sector. After the 2008 financial crisis, Paulson turned his attention to gold, arguing that unprecedented fiscal and monetary stimulus would ultimately weaken the dollar.

He was correct.

Based on the CPI, the dollar has lost about 35 percent of its value since 2008. And of course, https://www.moneymetals.com/news/2024/01/15/the-cpi-lie-price-inflation-is-even-worse-than-advertised-002930";>the CPI understates the reality of inflation. In that same period, the price of gold has nearly quadrupled.

Why?

Paulson said the world is losing faith in fiat money.

"As people lose faith in paper currencies, gold as an alternative will continue to grow.”

He went on to explain that this growing preference for gold over dollars is reflected in both central bank and investor demand.

“Gold is becoming the most apt reserve currency in the world, replacing fiat currencies. The demand from central banks, for instance, has continued to grow, as has the private sector.”

In fact, the European Central Bank confirmed earlier this year that gold has https://www.moneymetals.com/news/2026/06/02/ecb-confirms-gold-has-overtaken-treasuries-as-top-global-reserve-asset-004959";>passed Treasuries, becoming the world’s top reserve asset.

Last year was the fourth-largest expansion of central bank gold reserves on record, at 863 tonnes. That was down 21 percent year-on-year, but still well above the 2010-2021 annual average of 473 tonnes.

The all-time high was set in 2022 (1,136 tonnes). It was the highest level of net purchases on record, dating back to 1950, including since the suspension of dollar convertibility into gold in 1971.

Paulson said that given this https://www.moneymetals.com/news/2025/03/11/de-dollarization-gold-and-a-shift-to-a-multipolar-world-003898";>de-dollarization and the growing distrust of fiat currencies in general, the long-term trajectory for gold is up despite current headwinds.

"I think the trend of gold will continue to be on the upside."

We can also see worries about fiat currencies reflected in https://www.moneymetals.com/news/2026/07/18/the-ramifications-of-a-long-term-bond-bear-market-005079";>an increasingly bearish bond market. Despite rate cuts in 2024 and the Fed’s more recent reluctance to hike despite persistent inflation, yields on the long end of the curve continue to creep higher. This signals investor reluctance to loan more money to fiscally irresponsible governments.

As Reuters recently reported, “Inflation, heavy government borrowing, policy uncertainty and bouts of stocks and bonds falling in tandem have weakened bonds' role as a ballast, prompting some investors to look for more diversification.”

Paulson is not the only institutional investor bullish on gold. Last year, Morgan Stanley CIO Michael Wilson recommended https://www.moneymetals.com/news/2025/10/07/seismic-shift-morgan-stanley-recommends-602020-portfolio-with-20-allocated-to-gold-004389";>an aggressive portfolio rebalancing, suggesting investors should cut their bond allocation to 20 percent and swap half of the bond portfolio to gold to serve as a “more resilient” inflation hedge.

"Gold is now the anti-fragile asset to own, rather than Treasuries. High-quality equities and gold are the best hedges.”

Could China's Gold Reserves Surpass the U.S. Within Five Years?

Thu, 30 Jul 2026 00:00:00 EST

Could China’s gold reserves surpass the United States’?

On the surface, this seems like a tall order, but analysts at BMO Capital say it could happen in the next five years given China’s unreported gold buying.

The U.S. officially holds just over 8,133 tonnes of gold in its reserves. However, we don’t know for sure how much gold the U.S. really has because https://www.moneymetals.com/news/2026/07/24/looks-like-we-dont-need-to-worry-about-that-fort-knox-gold-audit-anymore-005090";>the government refuses to do a comprehensive audit.

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The Chinese officially have 2,346 tonnes of gold. However, China likely holds significantly more gold than it publicly admits.

Last year, Money Metals’ researcher Jan Nieuwenhuijs parsed the data and determined that https://www.moneymetals.com/news/2025/04/02/chinas-gold-reserves-going-through-the-roof-003956";>the Chinese central bank covertly bought 570 tonnes of gold in 2024.

The People's Bank of China only reported a 41-tonne increase in its gold reserves that year.

Mainstream analysts have finally started to catch on to this phenomenon. Late last year, the Financial Times ran a report on unreported Chinese gold buying. More recently, https://www.moneymetals.com/news/2026/07/25/goldman-sachs-picks-up-on-chinas-secret-gold-reserve-expansion-005095";>Goldman Sachs analysts estimated that China bought more than 48 tonnes of gold in May via the London over-the-counter (OTC) market. The People’s Bank of China only reported a 10-tonne increase to its gold reserves.

Given the lack of transparency, it’s impossible to say just how much gold the Chinese are sitting on. Nieuwenhuijs’s analysis of formal and informal sources indicated that as of the end of 2024, the People’s Bank of China was sitting on more than 5,000 tonnes of monetary gold – more than TWICE what they publicly admit.

If that’s true, then China isn’t trailing the U.S. in the gold department by nearly as much as official data would indicate.

Analysts at BMO Capital estimate the People’s Bank of China holds 5,200 tonnes of monetary gold. That represents about 13 percent of the total above-ground gold supply.

Given the accelerated pace of buying, China could surpass the U.S. in gold reserves in less than five years, according to BMO analysts.

“China has another ~5 years of buying at current rates for the PBoC to reach the USA's level of treasury reserves, but in total gold terms could surpass the U.S. much sooner.”

BMO analysts say this combination of aggressive central bank buying and Chinese investment demand will give China “more leverage in global pricing, enabled by its sheer scale of demand and growing futures and OTC market liquidity.”

As far as China’s broader strategy, BMO analysts say it’s difficult to determine the endgame.

“Unsurprisingly, China hasn't disclosed its ultimate gold accumulation targets. But given its stated ambitions for economic expansion and RMB internationalization, our view is that achieving the U.S.'s level of holdings is an absolute minimum target, implying another ~2,500-3,000 tonnes of purchases, achievable in two to five years depending on method. Yet aspirations are likely higher still given the need to establish RMB credibility globally, with ongoing acquisitions (~$18bn to date) of overseas assets a key pillar of its strategy.”

BMO analysts noted that U.S. gold reserves represent around 5 percent of the M2 money supply. For China to reach that ratio, it would need to accumulate around 18,000 tonnes of gold.

Along with its central bank gold reserve aspirations, BMO analysts noted China is positioning itself to become a bigger player in the global gold market. Earlier this month, Hong Kong launched https://www.moneymetals.com/news/2026/07/09/hong-kong-launches-gold-settlement-system-to-challenge-western-dominance-005050";>trial operations of its gold clearing and settlement system, putting the region in a position to challenge Western dominance of the global gold market.

A spokesperson said the government-owned clearing system will reportedly “mirror” the financial infrastructure used by the LBMA in London.

He said the company will offer “a comprehensive suite of services ranging from gold deposits and withdrawals to transaction settlements in the over-the-counter market in Hong Kong,” adding that a new gold price ticker – HAU – would be introduced to “ensure that Hong Kong gold prices are fully accessible to global market participants.”

BMO analysts said China hopes this initiative will attract more international gold trading activity and that it could shift more global gold pricing power from traditional Western centers toward China.

Interest Rates Unchanged After Fed Family Fight

Thu, 30 Jul 2026 00:00:00 EST

It appears a Kevin Warsh-led Federal Reserve will at least provide a bit of drama.

The Fed family fought, but it amounted to a lot of yelling and no punches thrown.

In what was anything but a foregone conclusion, the Fed elected to hold the federal funds rate steady at between 3.5 and 3.75 percent. However, the decision wasn’t unanimous. In what Warsh described as “a good family fight,” three committee members split from the 9-person majority to push for a quarter-point rate hike.

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In summary, the Federal Reserve is talking a lot about fighting inflation, but it isn't doing a lot to fight inflation.

Less Guidance, More Guessing

Warsh has indicated he will provide much less “forward guidance” than Jerome Powell. In other words, he doesn’t want the central bank to signal its intentions. So far, he has stuck to that commitment. There was genuine uncertainty in the market as to what the Fed would do. Some analysts even forecast a rate hike.

Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari and Dallas Fed head Lorie Logan all voted for a rate hike.

“I asked for a good family fight, and I got one,” Warsh said in his post-meeting press conference.

“Most of our discussion was on the big questions that matter to the conduct of monetary policy. We didn’t sort of hide from them. We weren’t scared of them. There was a lot more interaction between and among my colleagues. It was a real family fight.”

The https://www.federalreserve.gov/newsevents/pressreleases/monetary20260729a.htm"; target="_blank" rel="noopener">official FOMC statement did little to signal how the Fed plans to move forward. The first statement issued by the Warsh-led committee dropped from more than 300 words under Powell to just 130. At the time, Warsh said forward guidance was “not well suited for the current policy conjuncture.”

“It’s a bit shorter, a bit simpler and it dispenses with some older language,” Warsh said of the first statement of his regime. “That statement just gives you the facts, as best we can judge it.”

Other than information about the vote, the July FOMC statement was identical to June’s.

“As before, the policy statement conveys just the facts. It’s steering clear of forecasting, a choice we consider especially prudent at these uncertain times,” Warsh said. “Uncertainty, however, does not mean a lack of clarity.”

This new lack of transparency has already frustrated some Fed observers. Capital Economics analysts criticized Warsh’s “vague” responses, saying they “make forecasting the Fed’s next move even trickier than it already was.’'

Warsh doesn’t seem to care.

“I understand the desire for rolling forecasts and commentary from this committee, but for our part, we need to observe market reaction to developments direct and unfiltered. I want to stress, of course, that decisions by this committee matter a great deal, and where necessary and appropriate, we will not hesitate to act.”

Still Talking Tough on Inflation

While the Fed didn’t deliver any policy changes, Warsh continued to insist the Federal Reserve is committed to returning inflation to the mythical "2 percent target."

“You’ve heard this before, but we will deliver price stability.”

He emphasized that it won’t be a quick or easy fix.

“We have no magic wand. This isn’t something we’re going to be able to carry out in days or weeks.”

Warsh bristled at calling the Fed’s decision to hold rates steady “a pause.”

“I would characterize what we did as a review of the big hard questions, and I’d characterize it as a view of what our own homework is to try to resolve those questions in the period ahead.”

He went on to say that this is just the “beginning of the story,” not the end.

“We have begun a new chapter, and we understand that the five-plus years of inflation above target cannot be cured in nine weeks, or by a single month of modest price decreases. This Fed will not waver. Our credibility rests on performing our duties and delivering on our responsibilities.”

The Markets Have Their Doubts

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The markets don’t seem to put much faith in Warsh’s rhetoric. They are looking for action. Having gotten none, interest rates on the long end of the Treasury yield spiked yet again after the policy announcement.

The rate on the 10-year Treasury yield rose 5 basis points to 4.657 percent. Meanwhile, the 30-year Treasury bond yield surged 9 basis points to 5.193 percent.

This indicates that investors have little faith in the central bank’s willingness or ability to anchor price inflation at 2 percent. As a CNBC report put it, “We think you’re going to keep short-term policy rates in check, and it’s going to create a ton of inflation later.”

Some analysts believe we are in the early stages of https://www.moneymetals.com/news/2026/07/23/bond-market-regime-change-could-reshape-gold-investing-for-years-ahead-005085";>a secular bear market in bonds with higher yields on the long end of the curve no matter what the central bankers at the Fed do.

Over the last several weeks, Warsh has repeatedly said that “inflation is a choice.” FWDBOND chief economist Chris Rupkey said it appears to him the central bank is choosing inflation.

“If inflation is a choice, the Federal Reserve meeting today shows no sign of taking steps to bring it under control with its primary monetary tool, which is interest rates.”

This is indicative of https://www.moneymetals.com/news/2026/07/02/fed-chair-warshs-will-vs-economic-reality-005034";>rhetoric running face-first into reality. Warsh would undoubtedly love to drive price inflation back to 2 percent. But he must reckon with a massive https://www.moneymetals.com/news/2025/11/15/debt-black-hole-putting-increasing-stress-on-american-consumers-004483";>Debt Black Hole dominating the global economy. High levels of debt don’t play nicely with higher interest rates. The central bankers at the Fed are in https://www.moneymetals.com/news/2026/03/19/gold-the-federal-reserve-and-a-catch-22-004773";>a Catch-22, and it isn’t going to resolve any time soon.

Ultimately, the Fed will have to choose. It can tackle inflation and risk popping the debt bubble and toppling the economy, or it can try to keep the economy limping along by looser monetary policy.

It can’t do both.

Historically, when push comes to shove, central bankers pick inflation when the rubber meets the road.

The Federal Reserve Is Still Running Quantitative Easing

Underscoring the difficulties facing Warsh and Company, even as he talks tough about slaying inflation, his central bank continues to run modest quantitative easing operations (QE). This is indicated by the balance sheet, which is once again creeping upward.

When the Fed started hiking rates in 2023, it also began quantitative tightening (balance sheet reduction). The balance sheet hit its low at $6.54 trillion on December 1, 2025.

At the October 2025 meeting, the Fed announced it would end balance sheet reduction effective December 1. At the time, https://www.moneymetals.com/news/2025/11/01/is-the-fed-about-to-restart-quantitative-easing-004455";>I wondered out loud if the central bankers were about to restart QE.

Sure enough, they did.

At the December meeting, the FOMC announced it would purchase $40 million in Treasury Bills on Friday (Bills are short-term Treasuries that mature in one year or less). From that point, purchases will “remain elevated for a few months” before they are “significantly reduced.”

Since then, the balance sheet has grown to $6.75 trillion.

https://www.moneymetals.com/uploads/content/fed-balance-sheet-july-26.png"; width="700" height="554" class="mx-auto p-3" alt="" />

Of course, you will not hear any central banker or mainstream pundit utter the words "quantitative easing."

In fact, if pushed, they’ll almost certainly deny that they’re doing it. They’ll call it “reserve management,” or tell you they’re engaged in “technical operations” to keep the financial system’s plumbing moving.

However, an expansion of reserves is an expansion of reserves. You can call it QE. You can call it reserve management. You can call it tap dancing with unicorns.

In practice, the Fed is purchasing Treasury bills with money created out of thin air. This increases the money supply and puts downward pressure on Treasury rates. The balance sheet is growing; liquidity is increasing; risk asset bubbles are getting more air. This is exactly what QE does. So, call it what you want. If it walks like a duck...

By the way, https://www.moneymetals.com/news/2024/01/12/common-definition-of-inflation-you-hear-today-is-wrong-government-propaganda-002925";>it is also inflation – by definition.

So much for that commitment to fight inflation. Based on the central bank's actions, it appears Warsh & Company are more committed to keeping the debt bubble inflated and the economy limping along.

Fort Knox vs. China: The Global Gold Race Nobody Discusses

Thu, 30 Jul 2026 00:00:00 EST

The United States officially reports holding 8,133.5 metric tons of gold, equivalent to roughly 261.5 million troy ounces. According to government figures, approximately 147.3 million ounces are stored at Fort Knox, while the remainder is held at the Denver Mint, the West Point Bullion Depository, and the Federal Reserve Bank of New York.

On the surface, the question of how much gold America possesses appears settled. However, Money Metals Midweek Memo host Mike Maharrey argues that the more important question is whether those official figures have ever been independently verified through a comprehensive audit.

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The Case for a Full Fort Knox Audit

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During a recent interview on Fox News with Jesse Watters, Treasury Secretary Scott Bessent stated that Fort Knox's gold is "present and accounted for," explaining that members of his staff and the U.S. Treasurer have visited the facility. Maharrey contends that while such assurances may reassure some observers, they https://www.moneymetals.com/news/2026/07/24/looks-like-we-dont-need-to-worry-about-that-fort-knox-gold-audit-anymore-005090";>do not replace the need for an independent audit.

Drawing on his accounting background, Maharrey explains that audits exist to detect honest mistakes, verify records, and provide accountability. Virtually every business that manages valuable assets relies on regular external audits to ensure transparency and maintain public confidence.

He argues that any institution responsible for billions of dollars in assets should welcome independent verification rather than discourage it. In his view, resisting routine audits raises more questions than it answers.

Why the 1974 Inspection Doesn't Qualify as an Audit

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Government officials have often pointed to inspections conducted during the 1970s as evidence that America's gold reserves have already been examined. Maharrey argues that these events fall far short of accepted auditing standards.

In 1974, the Treasury opened only one of Fort Knox's 15 vault compartments to members of Congress and the media during what Maharrey characterizes as a https://youtu.be/JRZc7YEV8rU?si=F9vcUie6ZJFkIeAx"; target="_blank" rel="noopener">public relations event rather than a legitimate financial audit. Visitors observed stacks of gold bars and briefly handled some of the bullion, but no meaningful verification took place.

According to Maharrey, none of the bars were matched to serial numbers, weighed, assayed for purity, or reconciled against official inventory records. A true audit would require every bar to be counted, tested, documented, and independently verified before the results were released publicly.

Transparency Questions Continue Decades Later

Following the 1974 event, the Treasury conducted inventory procedures and installed tamper-evident seals on vault compartments. Maharrey argues these actions still did not meet accepted auditing practices.

He points to missing reports, the absence of publicly available assay records, incomplete transactional histories, and evidence that some vault seals have been broken and later replaced without new comprehensive audits. In his view, these shortcomings would not satisfy the standards expected of a https://www.moneymetals.com/silver-gold-storage";>professionally managed private bullion depository.

Rather than opposing an audit, Maharrey believes the government should embrace one. If the reported gold reserves are accurate, he argues, an independent examination would strengthen public confidence instead of undermining it.

Money Metals Emphasizes Independent Verification

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Maharrey contrasted the government's approach with the auditing procedures used at the Money Metals Depository in Eagle, Idaho.

According to Maharrey, the depository conducts both continuous internal audits and regular external audits performed by independent firms. Customer holdings are routinely verified, inventory is spot-checked, and clients may request an annual photograph of their segregated holdings to confirm that their precious metals remain securely stored.

He argues that transparency, accountability, and routine verification should be considered standard practice whenever valuable assets are entrusted to a storage facility.

Governments Continue Holding Gold Despite Fiat Currency

Although modern monetary systems are no longer backed by gold, Maharrey notes that governments continue maintaining substantial bullion reserves.

He argues that this creates an interesting contradiction. Public officials often emphasize that fiat currencies make large gold reserves unnecessary, yet central banks around the world continue accumulating physical bullion. According to Maharrey, their actions suggest that gold still plays an important strategic role within the global financial system.

China's Official Gold Holdings May Be Only Part of the Story

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China officially reports holding 2,346 metric tons of gold and has now increased its reported reserves for 21 consecutive months. In June, the People's Bank of China announced a 15-tonne increase following a 10-tonne purchase in May, representing a noticeable acceleration in official buying.

Maharrey argues that these official figures likely understate China's actual gold accumulation.

He cites research from Goldman Sachs estimating that China acquired more than 48 tonnes of gold through London's over-the-counter market during May alone, despite officially reporting only a 10-tonne increase. Goldman ultimately adopted a more conservative estimate, concluding that China has likely accumulated approximately 80 tonnes of gold during 2026 so far—roughly double its reported purchases.

Evidence Suggests China Holds Far More Gold

Additional research cited by Maharrey indicates China's actual reserves may be significantly larger than official disclosures suggest.

Money Metals researcher Jan Nieuwenhuijs previously estimated that China's central bank quietly acquired approximately 570 tonnes of gold during 2024 while officially reporting purchases of only 41 tonnes. His research suggests that, since the Ukraine war began, China has been acquiring roughly five times more gold than it reports to the International Monetary Fund. Based on multiple sources, he estimates China's monetary gold holdings could already exceed 5,000 tonnes.

The Financial Times later reported that China's undisclosed purchases could exceed ten times its official figures, highlighting the country's continued efforts to diversify reserves away from the U.S. dollar while supporting global gold demand.

China's Gold Strategy Has Been Building for Years

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Maharrey also referenced longtime analyst Jim Rickards, who argued more than a decade ago that China deliberately keeps large quantities of gold outside its officially reported central bank reserves.

Rickards wrote that after China announced a 604-tonne increase in 2015, much larger holdings remained under the control of the State Administration of Foreign Exchange (SAFE), with only gradual transfers appearing in official People's Bank of China reserve reports. Maharrey says this strategy allows China to satisfy international reporting requirements while concealing the true scale of its gold accumulation.

Recent analysis has even suggested that, if current trends continue, China could surpass the United States in total gold holdings within the next five years.

Central Banks Continue Diversifying Into Gold

According to https://www.moneymetals.com/news/2026/07/25/goldman-sachs-picks-up-on-chinas-secret-gold-reserve-expansion-005095";>Goldman Sachs, China's purchases are part of a broader multi-year trend among central banks worldwide.

The bank continues forecasting gold to reach $4,900 per troy ounce by the end of 2026, arguing that sustained central bank demand should provide long-term price support even if higher interest rates create short-term headwinds. Goldman also believes private investment demand could expand further if geopolitical risks continue increasing.

Maharrey notes that central banks have increasingly diversified reserves away from U.S. Treasuries and toward physical gold, reinforcing what he sees as gold's enduring role as a reserve asset.

Federal Reserve Policy Remains a Near-Term Headwind

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As the July Federal Open Market Committee meeting concluded, Maharrey observed that most investors expected Federal Reserve Chairman Kevin Warsh to leave interest rates unchanged, although some market participants had speculated about the possibility of another rate increase.

He argued that additional tightening could accelerate debt problems that have accumulated following years of quantitative easing, historically low interest rates, and nearly $5 trillion in pandemic-era monetary expansion.

While acknowledging that gold and silver prices may continue trading sideways in the near term, Maharrey believes the underlying monetary environment remains favorable for precious metals over the longer term.

Chinese Investors Continue Buying the Dip

Beyond central bank purchases, private Chinese demand has also strengthened.

https://www.moneymetals.com/news/2026/07/25/chinese-gold-imports-surged-to-2-year-high-in-june-005094";>China imported 173 tonnes of gold during the previous month, marking a two-year high. Maharrey cited Jinrui Futures analyst Zijie Wu, who said investors viewed recent price weakness as an attractive buying opportunity, while Chinese banks also increased purchases to utilize import quotas and replenish bullion inventories.

Maharrey concluded that regardless of near-term Federal Reserve policy, https://www.moneymetals.com/news/2026/07/28/inflation-pain-is-worse-than-the-cpi-indicates-005097";>inflation continues reducing the https://www.moneymetals.com/news/2026/07/28/with-bonds-struggling-investors-turning-to-tangible-assets-like-gold-005096";>purchasing power of fiat currencies over time. As central banks continue expanding their gold reserves and investors increasingly seek tangible assets, he argues that physical gold and silver remain important long-term stores of wealth.

Conspiracy Theory: How Much Gold Do the U.S. and China Really Have?

Wed, 29 Jul 2026 00:00:00 EST

Officially, the U.S. has far more gold than China.

But does it really?

In this week's Midweek Memo podcast, Mike Maharrey explains why there is reason to doubt this claim. In fact, we don't really know how much gold the U.S. or China holds. We have official claims, but the U.S. refuses to audit its reserves, so there could be far less than advertised. And it's evident China is accumulating gold faster than it claims.

Why this dichotomy? And what are the ramifications?

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Mike opens the show with a question: How much gold does the U.S. have?

"Simple question, right? We can just look it up.

"So, the US has 8,133.5 metric tons of gold. That’s roughly 261.5 million troy ounces. About half of that (147.3 million ounces according to the U.S. Mint) is stored at Fort Knox. The rest is spread out between the Denver Mint, the West Point Bullion Depository, and the Federal Reserve vault in New York.

"So, there ya go. Case closed. End of podcast. Or is it? I mean, that’s how much gold the government says it has. But we don’t really know, do we? Because for some reason, they absolutely do not want to do a proper audit.

"OK, so now, let’s do China. How much gold does China have? That should be pretty easy too.

"I looked it up. 2,346 tonnes.

"But can we trust the Chinese gold accounting any better than America’s?

"Yeah. No. It’s not so much that the Chinese haven’t done an official audit. I have no idea what their audit situation is. But I do know that it’s almost certain the Chinese have a lot more gold than they claim.

"So, to sum it up, the US may well have less gold than advertised, and China may have a lot more.

"I want to dig into this a little more deeply today."

Starting with U.S. gold reserves, Mike says he has good news.

"We don’t need to worry about that Fort Knox gold audit anymore. Treasury Secretary Scott Bessent assured us all the gold is there.

"There you have it. The fox guarding the henhouse says the hens are all accounted for.

"Case closed!

"Or maybe not."

Mike points out that despite Bessent's assurances, we don't really know because the government refuses to audit its gold reserves.

"Consider this: would you trust a bank that never conducted an external audit?"

You shouldn't.

Mike notes that audits serve several functions. They catch honest mistakes, and they hold those in control of an organization's financial dealings accountable and ensure they are operating above-board.

Despite the lack of a formal audit, the U.S. government insists the gold is all there and accounted for, and they claim they've audited it.

They have not.

However, in the 1970s, the government put on a made-for-TV spectacle in the name of an audit. They invited reporters and politicians to look inside Fort Knox and hold gold bars.

"So, yeah. That's not an audit. It's political propaganda. In a proper audit, every bar would be counted and inspected. Serial numbers would be matched to records. The gold would be assayed to verify its weight and purity. And the details of the audit would be published and available for public inspection. None of that has happened."

Since then, the government claims it conducted a multi-year process of opening and inventorying vault compartments and affixing new tamper-evident seals to the doors of each compartment upon completion. They call these audits. They are not.

Some reports have since gone missing, and there is no record of comprehensive assaying, weighing, or transactional history available to the public.

"Furthermore, there is evidence that seals on vault compartments have been broken over the years, bars have been moved for unknown reasons, and seals have been re-affixed without fresh auditing. Subsequent annual reviews of the schedules of compartment seals simply whitewash prior discrepancies. In sum, the U.S. Treasury's management of U.S. gold reserves is replete with audit "no-nos" that would never pass muster at a https://www.moneymetals.com/silver-gold-storage";>responsibly run private depository."

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Mike raises a question. If the government doesn't have anything to hide, why are people so resistant to an audit?

"Maybe it’s just me, but when somebody gets all upset when I suggest checking their work, I suspect their work might not be up to par."

Mike turns to the Chinese, noting that it has increased its official gold reserves for 21 straight months. But it appears they have accumulated far more gold than reported.

"Here’s the rub. While there is reason to believe the US might not have as much gold as it claims, the Chinese almost certainly have far more."

Some analysts have speculated that the Chinese are accumulating gold much faster than they claim for years. However, the mainstream has shown little interest in the story. Last year, Money Metals analyst Jan Nieuwenhuijs parsed the data and determined that https://www.moneymetals.com/news/2025/04/02/chinas-gold-reserves-going-through-the-roof-003956";>the Chinese central bank covertly bought 570 tonnes of gold in 2024. The People's Bank of China only reported a 41-tonne increase in its gold reserves that year.

Since then, a few mainstream players have taken notice. Last fall, the Financial Times reported on Chinese gold accumulation, and more recently, Goldman Sachs noted that China bought nearly five times more gold in May than it reported.

Mike notes that Goldman analysts said they expect central bank gold accumulation to provide a price floor for the yellow metal, even as gold continues to face downward price pressure due to https://www.moneymetals.com/news/2026/07/02/fed-chair-warshs-will-vs-economic-reality-005034";>a hawkish Federal Reserve.

Speaking of the Fed, Mike pointed out the July meeting was ongoing as he recorded the show. Most people expect the Fed to stand pat on interest rates, but a few analysts forecasted a rate hike.

"I’ll say this. If they do hike, I think it will hasten the debt crisis and an economic collapse. A global economy dominated by a debt black hole can’t operate in a higher interest rate environment. Anyway, that’s a topic for next week. In the meantime, I’m still near-term bearish. I think the gold and silver prices will continue to languish until the markets figure out that Warsh’s inflation war is more propaganda than actual war."

Mike wraps up the show noting that Chinese investors are also buying gold, with imports into China hitting a 2-year high last month. Jinrui Futures Company analyst Zijie Wu told Bloomberg investors buying the price dip were “an important driver of recent demand.”

"Might not be bad advice for American investors. Because remember, no matter how many hawkish words that pour out of Warsh’s mouth today, no matter what the Fed does in terms of monetary policy, we know one thing for certain. The dollar will be worth less a year from now than it is today. That’s by design. Stealing 2 percent of your purchasing power every year is the plan. That means you need to plan accordingly."

Mike ends with a call to action -- call 800-800-1865 and speak with a Money Metals' precious metals specialist today.

Articles Mentioned in the Show

https://www.moneymetals.com/news/2026/07/25/chinese-gold-imports-surged-to-2-year-high-in-june-005094";>Chinese Imports Surged to a 2-Year High in June

https://www.moneymetals.com/news/2026/07/02/fed-chair-warshs-will-vs-economic-reality-005034";>Fed Chair Warsh's Will vs. Economic Reality

Inflation Pain Is Worse Than the CPI Indicates, But You Already Knew That!

Tue, 28 Jul 2026 00:00:00 EST

We all intuitively know that prices are rising faster than the Consumer Price Index (CPI) indicates. We feel the pain every time we go to the grocery store or gas station. But just how much is price inflation impacting us here on Main Street?

I started pondering this question the other day when I ran across a graph tracking the price of a can of Campbell’s Tomato Soup since 1895.

https://www.moneymetals.com/uploads/content/campbells-soup-price.png"; width="600" height="383" class="mx-auto p-3" alt="" />

You’ll notice an interesting phenomenon. The cost of a can of soup remained relatively stable until around 1973, when it suddenly started to climb more rapidly.

And https://www.moneymetals.com/news/2024/06/28/what-in-the-world-happened-in-1971-003286";>what happened in the early 1970s?

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In 1971, President Richard Nixon severed the dollar's last connection with the gold standard, making it a purely free-floating fiat currency.

When he announced the closing of the gold window, Nixon said, “Let me lay to rest the bugaboo of what is called devaluation,” and promised, “Your dollar will be worth just as much as it is today.”

Well, Campbell’s begs to differ.

Since that fateful day, the U.S. government, supported by the Federal Reserve, has aggressively devalued the dollar by printing more and more of them. This would have been impossible with the monetary discipline imposed by a gold standard (which is exactly why Nixon did away with it).

According to the Consumer Price Index data released by the Bureau of Labor Statistics, the dollar has lost around 88 percent of its value since Nixon’s fateful decision. Meanwhile, the dollar value of gold has gone from $35 an ounce to about $4,000.

Of course, salaries have gone up as well, but inflationary boosts to income always lag behind prices, meaning this inflationary pressure is decimating the middle class and creating significant socio-economic shifts.

The Current Inflation Picture Is Much Worse Than Advertised

If you go shopping, you’re keenly aware of price inflation. Since January 2021, prices are up between 23.6 percent and 27.1 percent, depending on which metric you choose to use.

https://www.moneymetals.com/uploads/content/cpi-since-2021.png"; width="500" height="486" class="mx-auto p-3" alt="" />

According to https://www.moneymetals.com/news/2026/07/14/the-rest-of-the-inflation-story-005063";>the latest CPI data, price inflation ran at 3.5 percent over the last year. That’s well above the mythical 2 percent target.

This paints a pretty bleak inflation picture, but the situation is worse than these dreary government numbers suggest.

How can this be?

Because the CPI formula is constructed to understate price inflation.

In fact, the https://www.moneymetals.com/news/2024/01/15/the-cpi-lie-price-inflation-is-even-worse-than-advertised-002930";>government revised the CPI formula in the 1990s so that it understated the actual rise in prices even more.

However, the Bureau of Labor Statistics also collects and aggregates data on actual price increases. Using these numbers without all the formulaic manipulation and hedonic adjustments built into the process gives us a better sense of how much more we’re paying at the store.

I had an AI agent take 25 common items from the BLS data and calculate the price increase for that basket of goods over the last five years.

Based on this basket, price inflation is running at 29.3 percent.

https://www.moneymetals.com/uploads/content/everyday_price_index_item_changes.png"; width="700" height="579" class="mx-auto p-3" alt="" />

The largest price increases were on the following items.

Ground coffee: 105.4%
All-purpose flour: 52.8%
Ground chuck: 52.8%
White sugar: 50.8%
Long-grain rice: 40.0%

The only price on the list lower than five years ago was bacon.

The bottom line is price inflation is worse than they’re telling you. And they’re telling you it’s pretty bad.

There are all kinds of ways to slice and dice data. We can debate the minutiae, but the trend is undeniable. You’re losing purchasing power at a rapid rate. And no matter how much Fed Chairman Keven Warsh screams about tackling price inflation, nothing will change. Even if they do get it under control (and they can’t), they will continue to devalue the dollar by 2 percent per year as a matter of policy. That means you lose more than 10 percent of your purchasing power every five years.

That’s the plan.

Therefore, you need to plan accordingly. If you’re trying to save and preserve your wealth in dollars, you’re making a huge mistake. You need to save in sound money – gold and silver.

With a Struggling Bond Market and Persistent Inflation, Investors Are Turning to Tangible Assets Like Gold

Tue, 28 Jul 2026 00:00:00 EST

The bond market has been struggling for the last year-plus, with some analysts saying we’re in the early stages of https://www.moneymetals.com/news/2026/07/18/the-ramifications-of-a-long-term-bond-bear-market-005079";>a secular bear market. This has forced investors to reconsider the role of bonds in a balanced portfolio, with some pivoting to tangible assets with value – like gold.

Over the last couple of years, there has been persistent upward pressure on long-term bond yields. The 10-year Treasury spiked in 2022, rising from around 1.5 percent in late 2021 to a high of nearly 5 percent in the fall of 2023. Since then, yields have remained at those elevated levels despite the Fed cutting rates and geopolitical events that would have historically created significant safe-haven demand for Treasuries.

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Reuters recently reported that “inflation, heavy government borrowing, policy uncertainty and bouts of stocks and bonds falling in tandem have weakened bonds' role as a ballast, prompting some investors to look for more diversification.”

Osaic chief market strategist Phil Blancato told Reuters that bonds only work as insurance in a portfolio when inflation is low. He said the wealth management firm has cut its fixed-income ratio from the traditional 40 percent to 31 percent with a 6 percent allocation to commodities.

Inflation certainly isn’t low. It has run well above the mythical 2 percent target for years. And while the https://www.moneymetals.com/news/2026/07/16/cpi-cools-but-inflation-isnt-gone-the-story-behind-the-headlines-005070";>CPI had cooled in recent months, the oil shock due to the U.S.-Iran war has restoked price inflation worries.

More significantly, the money supply has been on the rise for over a year, and despite the hawkish talk about slaying inflation once and for all, the Federal Reserve is currently expanding its balance sheet with a modest https://youtu.be/ipaQAgOCJBk?si=ou_ydjjePJ2S6rlM"; target="_blank" rel="noopener">quantitative easing (QE) operation. This is inflation, https://www.moneymetals.com/news/2024/01/12/common-definition-of-inflation-you-hear-today-is-wrong-government-propaganda-002925";>by definition.

Last year, Morgan Stanley CIO Michael Wilson recommended https://www.moneymetals.com/news/2025/10/07/seismic-shift-morgan-stanley-recommends-602020-portfolio-with-20-allocated-to-gold-004389";>an even more aggressive portfolio rebalancing, suggesting investors should cut their bond allocation to 20 percent and swap half of the bond portfolio to gold to serve as a “more resilient” inflation hedge.

"Gold is now the anti-fragile asset to own, rather than Treasuries. High-quality equities and gold are the best hedges.”

Northern Trust analyst Grant Johnsey told Reuters that bond returns are eroded over the long-term by persistent inflation, a weakening currency, and bond supply outpacing demand.

"Many investors are worried that one or more of these variables will play out in the coming years. The issue with the bonds is that when you go out past five years, there are too many potential downside headwinds and not enough tailwinds behind it."

Johnsey’s observation underscores the fact that it is crucial to consider “real interest” rates when evaluating investment options. Conventional wisdom holds that higher inflation necessitates tighter monetary policy from central banks, meaning higher interest rates. Higher rates are considered a headwind for gold because it is a non-yielding asset. However, even as nominal interest rates rise, inflation suppresses the real 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 4.6 percent. That seems like a pretty good return. However, the CPI is running at 3.5 percent. That means the real interest rate on a 10-year Treasury is only 1.1 percent (4.6-3.5=1.1).

As the CPI increases, that real rate continues to fall.

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Sagard Wealth Management CIO Stephen Harvey called the current economic environment “pro-growth and pro-inflation” and emphasized that fiscal policy now matters more than monetary policy.

In other words, investors are paying less attention to what the Fed and other central banks may do with interest rates and more attention to the rampant borrowing and spending by the world’s governments – https://www.moneymetals.com/news/2026/07/16/us-government-runs-another-big-deficit-in-june-as-interest-expense-climbs-005073";>particularly the U.S. Given America’s fiscal malfeasance, many investors have become reluctant to lend Uncle Sam more money. This is one of the primary drags on the bond market.

Harvey said Sagard is moving investors away from developed-market fixed income assets (bonds) and into a “preservation bucket” that includes commodities, gold, real estate and infrastructure. He called fixed income “the inflation loser.”

Central banks are also spurning Treasuries and upping their gold reserves. Earlier this year, the European Central Bank confirmed that gold has https://www.moneymetals.com/news/2026/06/02/ecb-confirms-gold-has-overtaken-treasuries-as-top-global-reserve-asset-004959";>passed Treasuries to become the world’s top reserve asset.

The all-time high was set in 2022 (1,136 tonnes). It was the highest level of net purchases on record, dating back to 1950, including since the suspension of dollar convertibility into gold in 1971.

State Street global market strategist Jenn Bender told Reuters that "real assets, tangible assets valued for their intrinsic physical qualities," have gained appeal since the post-COVID inflation shock. She emphasized that the case continues to strengthen as "the bond outlook clouds and soaring equity markets appear vulnerable."

"The worry is that there is some downside risk in equities. Fixed income is not the place that people want to move their equity allocations over to. Basically, real assets is kind of where you end up."

Goldman Sachs Picks Up on China's Secret Gold Reserve Expansion

Sat, 25 Jul 2026 00:00:00 EST

Goldman Sachs has picked up on the fact that China is expanding its gold reserves far faster than the official data indicates.

This probably comes as a surprise if you only follow mainstream financial news. Goldman is one of the few major financial actors to report on this phenomenon, but we've known about it for a long time.

In a recent note, Goldman analysts estimated that China bought more than 48 tonnes of gold in May via the London over-the-counter (OTC) market. The People’s Bank of China only reported a 10-tonne increase to its gold reserves.

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In other words, it appears the Chinese increased their gold reserves by 4.8 times the officially reported amount in May.

Based on official numbers, the Chinese central bank added 40 tonnes of gold to its holdings in 2026. This includes a 15-tonne increase in June, the largest official monthly purchase in over two years.

Goldman applied a more conservative 2.0 times multiplier and estimated the Chinese have accumulated closer to 80 tonnes of gold so far this year. If we use the 4.8 times multiplier extrapolated from the May data, Chinese gold reserves have grown by 192 tonnes.

Based on Goldman’s nowcast tool, China bought 67 tonnes of gold per month on a three-month seasonally adjusted average through May.

Faster Than Advertised Expansion of Chinese Gold Reserves No Surprise

It may seem surprising that China is accumulating far more gold than they publicly admit, but it shouldn’t be. People who are paying attention have known this for a long time.

Nieuwenhuijs’s numbers dovetail with Goldman’s.

“Since the Ukraine war began, data show, China’s central bank has been buying roughly five times more gold than what it discloses to the International Monetary Fund (IMF).”

His analysis of formal and informal sources indicated that at the time, the People’s Bank of China was sitting on more than 5,000 tonnes of monetary gold – more than TWICE what the Chinese publicly admit.

The mainstream media has all but ignored this story for years. However, it is starting to see the light of day. Last November, https://financialpost.com/financial-times/chinas-secretive-gold-purchases-fuel-rally"; target="_blank" rel="noopener">the Financial Times of London reported on the secret expansion of its gold reserves.

“China’s unreported gold purchases could be more than 10 times its official figures as it quietly tries to diversify away from the United States dollar, say analysts, highlighting the increasingly opaque sources of demand behind bullion’s record-breaking rally.”

Now Goldman has joined the party.

However, this secretive Chinese gold accumulation dates back much further than the last three or four years. Analyst Jim Rickards speculated that Chinese gold reserves were far larger than reported in this article published https://mises.org/mises-wire/can-us-dollar-face-down-chinese-yuan"; target="_blank" rel="noopener">more than a decade ago.

“In mid-2015, China suddenly announced that its gold reserves had increased by 604 tonnes. The total rose from 1,054 tonnes to 1,658 tonnes. Since then, China has updated its gold reserve position monthly (in keeping with IMF criteria). All of these figures are misleading because China keeps several thousand tonnes of gold 'off the books' in a separate entity called the State Administration for Foreign Exchange (SAFE). Small amounts are transferred from SAFE to PBOC monthly, and that becomes the basis for the official reserve reports.”

Goldman noted that Chinese gold buying is part of a broader trend of central banks globally expanding reserves. Investing Live summed up the Goldman position.

“Goldman continues to frame elevated central bank accumulation as a multi-year structural trend tied to reserve diversification away from dollar assets, anchoring its $4,900 per troy ounce end-2026 price forecast. With private portfolio allocations to gold still low, the bank sees room for demand to broaden beyond central banks to private investors if geopolitical risks continue to build, keeping the medium-term price skew to the upside.”

Goldman analysts said they expect central bank gold accumulation to provide a price floor for the yellow metal, even as gold continues to face downward price pressure due to https://www.moneymetals.com/news/2026/07/02/fed-chair-warshs-will-vs-economic-reality-005034";>a hawkish Federal Reserve.