Don’t run from opportunity.
Sometimes opportunities come disguised as reasons to run away.
Case in point: Today’s gold market.
If you own gold, you clearly feel the sting of the pointless war with Iran. Gold has fallen out of bed, down about 20% since the bombs started dropping.
Which is weird.
Because all of us who own gold own it because we expect gold to be a port in a storm such as war… an asset that holds its value, maybe even rises as global tension elevates.
And yet… gold falls?
Worse, on some days gold saw its worst decline since the 1980s??
What gives?
Well, I’m gonna tell you what gives, and I’m going to show you why it is an incredible buying opportunity.
First, the “what gives” portion of our show…
The dominant pressures are not purely based on geopolitics but are tied to a few interconnected factors:
- The US/Israel Tour of Persia.
The start of the war instigated one of the worst oil shocks since the 1970s.
In turn, that stoked inflation fears, which begat global investor expectations that central bankers will have to drive interest rates higher to grapple with higher costs that are already showing up in gasoline and fertilizer.
Gold doesn’t like higher interest rates because it is a no-interest asset. So higher rates on assets like the sovereign debt of the US and Europe make gold look limp by comparison.
- Stronger US dollar
The USD, which has been weakening for the past year, rallied in response to the bombing. That’s a function, partly, of US energy independence and the fact that oil is priced in dollars. So other countries have been racing to raise the dollars they need in order to buy oil that, literally overnight, shot up in price.
The dollar’s strength has little to do with a safe-haven play and far more to do with the dollar as an oil-based currency.
No matter, because a stronger dollar raises gold’s price in other currencies, which curbs demand. Moreover, it forces other countries to sell off assets to afford higher-priced oil. Easy to dump the asset that has performed the best in recent years—gold, which in the last four years alone was up 225% before the missiles started whizzing over Tehran.
- Liquidation and technical selling
Overleveraged speculators faced margin calls in a “dash for cash,” meaning they had to cover mounting losses by dumping other assets. As with the example above, selling highly appreciated gold is the easy and quick solution. Which explains why old ETFs saw billions in outflows… basically profit-taking after gold’s massive, years-long rally.
Though there are no facts yet here, there is some credible speculation among industry analysts that some Middle Eastern and emerging-market central banks—looking at you, Turkey—are tapping or swapping gold to defend their currencies amid the war’s volatility and higher oil prices.
Now, let’s move on to the most important part of today’s dispatch: The opportunities.
I’ve seen way too many jabberwockies on social media sites insisting that the 25-year-long gold rally is dead and gone.
Silly rabbits.
They’re missing the point of gold entirely.
Gold’s quintupling in price over the last quarter century had precisely zero to do with anything that’s happening today relative to war. And war doesn’t change the underlying story that’s propelling gold toward $10k—and likely beyond.
In fact, the war in Iran only strengthens that story.
And that story is exceedingly simple to explain: America has too much debt.
The world knows this. The world of gold buyers has been expecting this and reacting to this probability for years—decades, really.
Now we’re exactly where gold expected us to be: In an untenable situation, with America having accumulated more than $39 trillion in debt when it was just $5.7 trillion at the turn of the millennium.
Annual interest payments on the debt that were about $225 billion in 2000 are today going to top $1 trillion for fiscal 2026. If inflation does cause central banks to raise rates—specifically the Federal Reserve—then that $1 trillion is going to push noticeably higher.
Moreover, the war is putting America deeper into debt. The US is spending a reported $1 billion every day on bombing Iran. And both Prez DJT Trump and Secretary of (playing) War Pete Hegseth have announced they want another $200 billion from Congress (for a war that America has already won, according to Trump’s numerous instances, which is odd).
Anywho… at the very least, Congress will ultimately have to allocate lots of additional billions of dollars—probably $100 billion or more—to replenish depleted weaponry reserves.
Which is why there are opportunities here.
See, gold has not lost “safe-haven status.” It has simply served as a financial cushion in a moment of shock for those in quick need of cash.
But the macro dynamics remain unchanged: unhinged American spending.
When the war ends, the focus will shift away from oil prices and toward US financial accounts.
Is inflation driving the Fed to push up interest rates, and if so, how painful will that be on Uncle Sam’s debt-servicing costs? That’s good for gold because of already-existing-and-worsening fears of a dollar-based debt crisis to come, which higher debt-servicing costs would help exacerbate.
If inflation isn’t terribly problematic, then investors will begin positioning their portfolios for lower interest rates in America (per Trump’s demands) and the resumption of the long-term dollar downtrend… and that, too, is good for gold.
So we have an opportunity today to position ourselves for the obvious outcome… a substantial rebound in gold prices when the hostilities die away.
Use this moment to build or deepen your position in gold, either through basic gold bullion coins such as Canadian Maple Leafs or Chinese Gold Pandas (I saw them on sale recently at Apmex.com for just 2.6% over the spot price of gold, a good price).
Or if you’re more adventurous and can accept larger risks, snap up gold miners that are suddenly on deep sale. That’s where I’ve been a buyer of late in one of my retirement accounts. Just recently, I deepened my exposure to an Aussie junior miner I mentioned in my most recent Gold Masterclass.
Either way, gold’s response to the war is giving us a huge opportunity. Now is the time to buy gold, not the time to run away.
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