Episode summary
The Fed's Next Move Could Trigger a Massive Gold Rally
Wealthion
· · 21 min · Guests: Trey Reik, Megan King Diaz
Summary
The guest argues that the gold bull market is not over and says the recent drop below $4,000 is more of a short-term probe than a breakdown. He says $4,000 is an important psychological and technical level, but believes it should hold; if it fails, he warns of a 2 to 3 month move toward $3,600. He points to the same three long-term supports he has emphasized before: anti-dollar sentiment, the U.S. deficit, and Fed credibility, which he says are still intact and intensifying.
He links gold’s weakness to a jump in 10-year and 30-year Treasury yields, followed by a sharp drop in the odds of an October Fed hike from 70% to roughly 10%. He says the Fed appears to be signaling caution because of liquidity and systemic fragilities in the Treasury market. In his view, the next major gold rally will come when investors realize the Fed is not going to get aggressively tough.
The guest also argues that gold is not a clean CPI inflation hedge, but rather a monetary inflation hedge and a liquidity asset. He says ETF holdings have stayed strong, that some capital may be rotating out of AI and growth names, and that gold miners’ relative resilience is a constructive sign for long-term investors.
Key takeaways
- The guest says gold’s bull market is still intact and expects $4,000 to hold, with $3,600 as the downside risk if support fails.
- He argues the catalyst for gold’s next move higher will be the market realizing the Fed will not deliver multiple aggressive hikes.
- He says rising Treasury yields and Fed caution reflect liquidity stress in the Treasury market, not just inflation data.
- The guest says gold is better understood as a monetary inflation and liquidity hedge than as a CPI inflation hedge.
- He sees the smaller decline in GDX versus bullion as a positive sign that long-term gold equity investors are still engaged.
Notable quotes
“I don't think the bull market's over. I think 4,000 will hold”
“if 4,000 doesn't hold in the short one, we're probably looking in my opinion at a, you know, 2 to 3 month flirt with, you know, 3600 or something like that”
“I personally don't think CPI inflation and gold have much to do with each other”
“I think it's definitely going to be Fed related”
“I firmly believe that gold's next move, which will be up, is when people recognize the Fed is not going to get tough”
How the episode opens
So, um, no, I don't think the bull market's over. I think 4,000 will hold. Uh, and I think once we get out of this sort of short-term knee-jerk, oil up, Fed's going to tighten, I think gold's going to scream.
Hey everyone, welcome to the Golds Show. My name is Megan King Diaz and today I'm lucky enough to once again be joined by Trey Reich. He is the chief economist here at GBI.
And Trey, we have a lot of questions for you today. Is the gold bull market over.
Well, nice to start with a bench clearer. Um, so I will admit that last week was a was a a tough week. I was disappointed um in how gold performed given everything that's happening around the globe.
Uh but it is what it is. Uh, I would point out that all of these longer term fundamentals, the, you know, the big three anti-doll sentiment, the US deficit and Fed credibility, they're 100% intact. And now we have just over the weekend, for example, in Brazil, uh, Bolsinaro lost an election that everybody expected him to win to a left wing candidate.
And there are some stocks in Brazil that are down 50% today. the entire market was down 25% earlier. I think it's down to about down 17.
And if anybody's reading the newspaper, France seems to be literally coming unhinged as we speak. and um lots of social unrest there, but their the oats, which are their 10-year uh bonds, their premium to German bonds is up to 177 bips, which is the highest since the European debt crisis. So for someone like myself, uh when you have these types of things going on, uh and yes, the Iran war seems to be getting trickier and trickier and um there is this while gold has never been in my opinion a huge and effective geopolitical hedge that I would choose.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- gold price outlook
- fed rate hikes
- federal debt and dollar
- treasury market instability
- gold mining stocks
Companies and tickers mentioned
- GBI
- GoldSilver
Watch the episode
Watch “The Fed's Next Move Could Trigger a Massive Gold Rally” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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