Our friend Vince Lanci of GoldFix sat down with Michelle Makori of Miles Franklin Media and laid out why the recent sharp selloff in gold and silver does not change his long term view. In two to five years we will be talking about gold at a price of $10,000 and inflation of 10 percent. He sees cracks in credit markets, potential Treasury instability, and the eventual bursting of the AI bubble forcing the Federal Reserve to reverse course even as inflation accelerates. The result is that five years from now we will see inflation of 9 or 10 percent and an economy growing at 6 or 7 percent.
Lanci attributes the current weakness to seasonal liquidation, CTA selling on fading momentum, and a market that had become overcrowded long after the prior rally. He is not waiting for a perfect bottom. I am looking to allocate between 10 and 25 percent of my current cash liquidity to buying silver and gold. His levels are clear. Silver is between $43 and $48, and gold is between $3500 and $3800. If the market does not go lower he expects to become less patient as the seasonal buying window approaches. Eight times out of ten the market rises between Thanksgiving and February.
China’s strategy remains central to his outlook. China has not abandoned the BRICS group but they are hedging their bets by partnering with Hong Kong and by transferring tons and tons of gold to Hong Kong. Hong Kong has now become a rival bullion center to the West. The center of gravity of gold and the gold supply chain are moving eastward. Lanci also discussed the implications of LME metal tokens tied to Hong Kong’s plans. Tokenization does not suppress prices. It ultimately enhances physical delivery and price discovery as more metal flows east.
The biggest risk gold investors face is not higher rates or a stronger dollar. The biggest risk is that gold will again become a boring asset or an asset that does not follow the path of its true price if the world starts living in peace and harmony again. Lanci does not believe that will happen. We are in the midst of what you want to call a cold war 2.0. The world is falling apart and moving toward decentralization. Everyone must build their own supply chains.
This view lines up with the framework Lanci outlined on his viral SilverTrade Insider appearance in late September when he discussed the slaughter in the bond market.
At that time he noted that precious metals got slammed with the bonds and that this was the tell rather than the tragedy. He emphasized that the collateral war matters more than any currency war and that silver sits in the sweet spot as physical ownership becomes the decisive factor.
Vince’s Miles Franklin interview simply expands that same thesis.
Lower prices now are an opportunity to deploy capital ahead of the next leg higher once the seasonal bid returns and the structural forces reassert themselves.
