원문 보기
Ladies and gentlemen, I want to start with a question that I think is on the minds of every gold and silver investor right now. You bought gold, watched the geopolitical chaos, followed the plan, did everything right, and your gold stack, your gold ETF, your silver position is in the red circle. The price of silver fell 13%, 14%, and more than 46% below its January high.
And bonds in the Middle East are still falling, and central banks are still buying gold at double the historical average price. And the national debt just exceeded 39 trillion. So I want to ask you directly, do you understand why this is happening? Not a superficial explanation , but the mechanism itself.
Because if you don't, you will make the wrong decision at the wrong time. And this decision will cost you the most important deal of the next 5 years. I have been studying how gold and silver prices move during geopolitical crises for over 40 years. And what I'm going to show you today is not an idea, but a mechanical sequence that has been repeated after every major oil shock since 1973, without exception, every time.
And once you see it clearly, you won't be able to forget it. And once you see what always happens next, the part that almost no one talks about now, you'll understand why I use the word " unthinkable." By the end of this, you will understand the exact mechanism that causes the price of gold to fall during war.
The historical record of what gold and silver do after this drop, going back 50 years; the four-phase recovery pattern I have observed after every oil shock in my career; and why the structural pattern in 2026 is more extreme than anything I've seen in any previous cycle, meaning that what comes next will be bigger than anything we've seen before.
Subscribe now. Let me start with the mechanism, because until you understand that, nothing else here makes sense. Here's a question that most financial media outlets refuse to answer clearly. Why does gold fall during war? This seems completely the opposite. Gold is supposed to be a safe haven, a financial bomb shelter, the thing you buy when the world is on fire.
So why did the price of gold fall from 5.4 when Iran closed the Strait of Hormuz on March 4th and bombs started falling on the Middle East? The answer is mechanical sequence. Write it down because you understand it. You will recognize it every time it appears, and it will never catch you by surprise again.
Step one: a geopolitical event causes an oil shock. The Iran war has driven the price of Brent crude oil down from just above $75 to $11.12 per barrel in 3 weeks. This is one of the largest power outages in 50 years. Step two: a surge in oil prices raises inflation expectations. Not actual inflation right away, but expectations.
And expectations are as important to financial markets as reality. When traders believe inflation is approaching, they immediately factor it into the price. Step three : Inflation expectations prevent the Federal Reserve from cutting rates. The Fed has signaled the possibility of lowering rates. The oil shock put an end to this conversation.
Fed funds futures now show virtually no likelihood of a cut until at least the end of 2026 . Step four: If the Fed fails to lower rates, bond yields will remain high or rise. The 10-year Treasury yield is currently at four. This is the level at which a risk-free U.S. Treasury bond, backed by the full faith and credit of the United States, earns you 4.39% per annum with no credit risk, no volatility, no holding costs, zero.
Step five: When the bond yield is 4.39%, the opportunity cost of holding gold, which yields nothing, increases significantly. Institutional capital does the calculations. Some of it is converted from gold to Treasury bonds. Step six: At the same time, global investors seeking safety buy U.S. Treasury bonds.
This demand for dollar-denominated assets strengthens the dollar. The dollar index rose above 100. A stronger dollar mechanically depresses the price of gold in dollars , since gold is priced in dollars. And when dollars are worth more, it takes fewer dollars to buy an ounce. Three headwinds strike simultaneously.
All three are caused by the same oil shock, which by all conventional wisdom should be bullish for gold. That's why your gold is red while the world burns. And that's why it's always been red for a period during every major geopolitical oil shock over the last 50 years. But here the story changes completely, because this mechanical suppression does not last long.
I watched it get resolved the same way every time . And I want to show you historical data not as a promise, because past performance is no guarantee of anything, but because this pattern is so consistent and structurally sound that ignoring it would be the most expensive mistake you could make. OPEC cuts production, imposes embargo on the United States.
The price of oil falls from $3 to $12, which is four times more. Gold first falls, then rises 150% over the next 2 years . If you look at the entire 1970-1980 period, the full arc of the oil inflation disaster that began with Nixon scrapping the gold standard, gold went up 2,300, not some 2,300%. The Iranian revolution, the fall of the Shah, the collapse of oil production, oil prices reaching levels that seemed unthinkable at the time.
Gold doesn't change anything immediately. Then, over the next 12 months, the price of gold increases by 89%. Then, next year, another 10%. The Gulf War, Iraq's invasion of Kuwait, a sharp rise in oil prices, gold jumping about 10% in a few weeks, energy and defense stocks outperforming everything. After September 11, world markets are collapsing, panic is everywhere.
And then gold begins a ten-year bull run from $250 an ounce, which was its price at the time, all the way up to a thousand. This is a 660 % movement in 10 years. Russia invades Ukraine, gold breaks $2,000 for the first time , new all-time highs. Every major oil shock over the past 50 years has been accompanied by a significant surge in the price of gold.
Not because of luck, not because of coincidence, but because of a mechanism that temporarily suppresses gold during a shock. Higher yields, stronger dollar, forced institutional selling is finally changing. And when things change, the structural arguments in favor of gold reassert themselves with full force.
Here's what I need you to understand about 2026 specifically, because what sets this moment apart from all previous cycles is not war. These are the structural conditions she found herself in . In 1973, the state debt was approximately $500 billion. Today it is 39 trillion. This is not a bigger version of the same thing .
This is a fundamentally different fiscal reality. In 1973, central banks sold gold. Today, central banks are expected to buy approximately 755 tons of gold for 23 consecutive years, buying over 1,000 tons, and then continue to buy more. This is not diversification. This is a strategic repositioning on a level the gold market has never seen.
In 1973, there was no shortage of silver supply. The silver market is experiencing a period where industrial consumption continues to outpace mine supply, leading to a fifth consecutive year of market deficit. Five consecutive years of excess demand. Five years of inventory reduction. Five years of structural imbalance that is not resolving itself because the supply of silver from mines is largely a byproduct of other metals.
You can't just decide to produce more silver in response to a price signal in 1970. Today, silver is used in every solar panel, every electric car, every artificial intelligence data center, every defense system, every semiconductor. The industrial demand base on which the price of silver is based today is structurally larger, structurally less elastic, and structurally less substitutable than anything that existed in any previous cycle.
In 1973, the Federal Reserve under Paul Volcker set interest rates at 20% to combat inflation caused by the oil shock. This reaction, however brutal , broke the inflationary cycle. Today, the Federal Reserve pays $1.3 trillion in interest annually on $39 trillion in debt . It cannot raise rates to 20.
The arithmetic does not allow it, which means that the oil shock from the Iran war is embedded in an inflationary environment that cannot be solved by the same mechanism that solved the 1970s version . Each structural condition is more extreme. Each structural driver is more powerful. And the mechanical suppression that currently holds gold at 46 and 12, when JP Morgan's year-end target is $6,300, when Wells Fargo's target is $6,300, when UBS's target is $6,200 by September , is temporary.
This gap between where gold is today and where the most experienced institutional forecasters say it is going is unthinkable, that's what I'm talking about. Now let me walk you through the four-phase recovery framework, because understanding which phase we are in now changes everything about what you should do with this information.
Phase one, the panic phase. This is usually the first one to four weeks of geopolitical shock. Oil is skyrocketing , gold is skyrocketing at first , then plummeting as the mechanical sequence I described takes effect. The financial media is covering the events around the clock with dramatic music and red graphics designed to maximize your anxiety.
Most retail investors do one of two things. They panic, selling at the bottom of the initial drop, or they panic, buying gold at the absolute peak of the initial surge. Both options are usually wrong . What do institutions do in the first phase? They are patiently watching. They've seen this before.
They don't do anything dramatic. They are positioning carefully while retail is either running for the exits or chasing the leap. Phase two, the absorption phase. Usually, after two or three months, the initial panic subsides. The fear index, the VIX, is down slightly and gold is retreating from its initial surge, sometimes significantly.
Silver is falling more, by 15-20% or more. This is where the largest number of individual investors make the most expensive decision. They look at their portfolio, see red, read a headline that gold has failed or failed to become a safe haven, and sell. In my 40 years of watching the markets, I have seen this happen after every major crisis, and in each case it was the worst possible time to sell.
Not because I'm always right about what's coming next, but because phase two is almost always a bottom, and selling at the bottom is how investors lock in losses rather than participate in the recovery. Phase three, the structural proposal phase. Typically, from the fourth to the eighteenth month, the broad market begins to stabilize.
The panicked institutional selling that depressed gold in phases one and two is wearing itself out . Structural buyers, central bankers buying regardless of short-term price, institutional investors reorienting themselves towards real assets, retail investors finally feeling comfortable enough to re-enter the market, are starting to accumulate assets.
Gold is finding demand again, but not the panic demand of the first phase, but structural demand, supported by the forces I described. Central bank buying , silver supply shortage , debt dynamics that make money supply depreciation inevitable. Mining companies are starting to use leverage due to rising gold prices.
Energy infrastructure stocks are rising as oil supply disruptions are factored into the medium term. And most retail investors are sitting on the sidelines, having sold out in phase two, too scared to re- enter the market. They watch gold reach new highs and tell themselves they will wait for a pullback.
The rollback may never come. The fourth phase, new historical highs, usually from the 12th month, sometimes lasting two to three years. This is what historical data shows. After each major oil shock of 1979-1980, new historical highs. After September 11, the historical high held for a decade. After 2022, new historical highs.
The mechanism is always the same. The oil shock embeds inflation. Inflation forces the Fed to keep rates elevated longer than the economy can comfortably sustain. Ultimately, debt arithmetic, the cost of servicing 39 trillion at 4-5% overloads the mandate to combat inflation. Rates are falling, the dollar is weakening, the three headwinds I described are simultaneously reversing, and gold is responding to all three tailwinds simultaneously.
I want to be honest about where I think we are right now. Based on the timeline of the Iran war and the price dynamics I am observing, I believe we are somewhere in the transition between the second and third phases. There was panic selling. Forced institutional liquidation due to margin challenges has largely exhausted itself.
Structural buyers, central banks, long-term institutional allocators, physical gold buyers in Asia are starting to accumulate at current levels. Ed Yardney, although he lowered his forecast for the end of 2026 from $6,000 per ounce, remains at $10,000 by the end of the decade. This is not a " bubble" forecast.
This is a debt cycle forecast. Now I want to turn to what I think is the most important insight I can give you about silver itself, because the history of silver in this cycle is different from the history of gold. And it differs in a way that most investors don't fully understand . Gold led the initial phase of the trend, responding to sovereign and monetary drivers.
While silver initially lagged before responding with a delayed but high-speed move, this dynamic, where silver often lags behind gold's initial breakout but moves with greater intensity, creates a natural expansion and contraction of the ratio. In the 1979 cycle, silver didn't just follow gold, it outperformed gold three times.
Gold has risen by about 276% since the Iranian revolution to 19. Silver has risen from about $5 to $50 , a 10-fold increase. The reason why silver is both a monetary and industrial metal. During a crisis, monetary properties drive the initial movement, but as the crisis embeds itself into the economic system, the properties add a second engine that gold does not have.
In 2026, this second engine will be more powerful than any previous cycle. Solar panel installations around the world require silver as a conductor, and this demand is not affected by price at current levels, as the cost of silver is only a fraction of the total cost of the system. The production of electric vehicles requires 60 to 80 g of silver per vehicle compared to 15-20 g in a conventional car.
Artificial intelligence data center cooling systems, defense electronics , satellite communications—they all require silver, and none of them can easily replace other materials without significantly degrading performance. And there are also supply restrictions. The market is experiencing a period where industrial consumption continues to outpace mining supply , leading to the fifth consecutive year of market deficit.
The elasticity of supply remains low because most silver is mined as a by-product, meaning that production levels are often dictated by the economics of copper, lead or zinc rather than silver market trends. Five consecutive years of deficit, no supply response. The industrial demand base is growing in applications where silver has no viable substitute.
And China, which controls approximately 60% of the world's silver processing capacity, has restricted the export of silver as a strategic material. When the monetary rate returns to silver, which, according to the historical model, will happen in the third phase, industrial demand, which has been growing continuously throughout the crisis period, will add to it, not subtract from it.
It is this combination that creates the characteristic tendency for silver to lag behind gold on the path of growth, and then sharply exceed it. Let me close with two indicators that I personally watch to determine when the transition from phase two to phase three will fully occur. The first is the US dollar index, which is currently above 99 due to a surge in demand for the petrodollar caused by the oil shock.
When DXY falls below around 97, the main mechanical headwind for gold prices will diminish. This will happen when oil stabilizes, when alternative supply routes through Saudi pipelines and the Maradi bypass infrastructure absorb enough of the Hormuz region disruptions to reduce the extraordinary demand for the dollar created by the oil shock.
The second is the yield on 10-year Treasury bonds, which is currently 4.39. When it falls below 3.5%, the opportunity cost argument against holding gold weakens to the point that institutional rotation out of Treasuries back into gold becomes mechanically advantageous. This will happen when the Federal Reserve starts cutting rates, which will happen when the arithmetic of the $39 trillion debt at 4-5% makes it impossible to continue without causing a fiscal crisis that will be more serious than the inflation risk we are trying to prevent.
These two indicators will tell you when the mechanical suppression is exhausted. Military news–no. Daily oil news headlines–no. 24- hour financial media cycle–no. Watch the dollar. Keep an eye on profitability. Everything else is noise. Wells Fargo Investment Institute raised its gold price target for the end of 2026 to $600 per ounce, compared to JP Morgan's four-year forecast of $6,300 by the end of the year.
UBS raised its price target to $6,200 by September 20. This is not what retail investors want. These are the research departments of institutions that manage more capital than any other organization on Earth. They are not releasing these targets because they believe that the mechanical suppression currently in place is permanent.
They are releasing them because they believe it is temporary, and because they have conducted a structural analysis of central bank purchases , supply shortages , debt dynamics, and the trajectory of rates that shows them that the temporary suppression will eventually wear off . There are two types of investors watching this right now.
The first type sees gold fall from $595 to $4,612 and concludes that the trade is complete.
Comments 0