Why Gold Just Blew Past $5,100

Gold soars as the Dollar cracks

Well, that was quicker than expected.

I’m going to quote the (not-quite) famous Field Notes writer you know as El Jefe, circa early-July 2025:

“…the idea that gold’s best performance has already happened is fundamentally flawed because for that to be true, America would need to be actively reducing its debt and shrinking its annual debt-repayment costs.

Not happening.

So, gold goes much higher from here.

We will definitely see $5,000 per ounce, probably before the end of 2026.”

Maybe El Jefe just got lucky again, but January hasn’t even ended and gold has already cracked $5,100. In the last six months alone, gold is up more than 50%—a gargantuan number of terms of gold.

Moreover, as gold has surged, the dollar has fallen, pointing to two other truths that El Jefe regularly speaks:

1. Gold is the anti-dollar.

When the dollar is in fall-down mode, gold tends to go up… which we’ve certainly seen.

• The dollar is not a safe-have when the US is the epicenter of the crisis.

This chart explains those two plot points well:

Don’t worry about the data you can’t read. The only bits that are relevant are the pink line (US Dollar Index) and the blue line (price of gold).

Pretty much anytime the dollar goes down… gold goes up. And vice versa.

Moreover, “dollar down” is happening even as contemporary events say that “dollar up” should be our trend.

That’s history speaking.

We have massive unrest in Iran that could potentially topple a regime in a powder keg corner of the world. We had the US invade Venezuela and, at a point, threaten to possibly deploy the US military to forcibly take Greenland from a NATO ally.

In what I can only describe as deeply inside baseball financial mechanics, the Federal Reserve basically price-checked the dollar-yen currency conversion rate with the Bank of Japan (BoJ), leading to widespread belief that the US and Japan will soon intervene to keep the yen from escalating even more against the dollar.

You might recall that back in December I explained that the yen “carry trade” was dying as the BoJ set about normalizing interest rates after 40 years of failed financial engineering. As part of that, I noted that Japanese investors and savers were repatriating assets from all over the world, which was causing the yen to rise.

The Fed and the BoJ might want to intervene in that ascent to numb the pain on both sides of that currency pair. The dollar is getting slammed lower, but the rising yen is hurting Japanese exporting manufacturers.

In the normal world of, say, 2024 and before, the dollar would have been rising into this barrel of angst as investors docked their cash in a safe harbor.

But that once-safe harbor is now an unruly tempest.

For several years, El Jefe has been warning that this was coming.

Just too much bad juju happening across America’s social and political landscape these days, and too many growing worries about Uncle Sam’s rotting fiscal sitch. The world’s problems, large as they are, do not override investor fears about losing money as the dollar sinks.

I mean, why dive into the currency of a country facing so many problems?

So it is, then, that the greenback has booked a ticket south, while gold is racing north.

Sadly, this trend continues.

Nothing is changing at the fiscal level.

Politicians on one side of the aisle have recently been crowing about reducing the 2026 deficit by about $100 billion… but then Trump announced plans to spend $200 billion to buy mortgage-backed securities, and another $500 billion to buy more missiles and planes and other army men stuff.

So now the 2026 deficit that was supposed to come in between $1.6 trillion and $1.7 trillion will instead exceed $2 trillion (that includes tariff revenue, which is beginning to fade).

Nor is anything changing at the social and political level, and I’m just going to leave it at that.

Little wonder that the world sees America in a state of discord.

I asked Google’s AI (so maybe take this for what it’s worth) whether talk of civil war or secession efforts in America have ramped up in recent weeks or months, and this is what Uncle Google shared:

In January 2026, talk of civil war and secession in America has notably intensified, moving from the fringes of political discourse into academic warnings and mainstream public concern. This rhetoric is being fueled by high polarization and specific flashpoints related to the upcoming 2026 midterm elections.

I’ll save the specifics for another day; they’re definitely worthy of their own column.

But the world sees this, and it’s a big part of the reason for that chart above: Dollar down, gold up.

The dollar now represents global risk.

Gold has long represented global safety.

The trend continues. Stay tuned…