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 [Music] I'm Charlotte Mloud with investingnews.com and here today with me is Gary Wagner. He's executive producer at the goldfor.com and a frequent contributor to Kitco News. Thank you so much for being here. Great to have you. Thanks so much for having me. Great to see you again. Really good to be catching up with you. It's been some time since our last conversation. So, we've got a lot to go over when it comes to gold and silver. So, I thought we could start off with gold today because it's been on

such a record run, at least until last week when the tariff news kind of knocked the wind out of its sales. So, I'm seeing concern from investors about gold decline here because it's supposed to be a safe haven asset that people go to in these times of turmoil. So I thought we could start there and just check in with you on whether this is normal to see at least initially in this type of situation for gold. Absolutely. First of all, we have to define what normal is and this is certainly not what I consider normal. We

have an administration that is massively changing um our trade partners relationship with the introduction of tariffs. uh as recently as last week, he then did a revision to the initial tariffs which included China, Canada, and Mexico. Now, pretty much all countries are included. Um, from what I read, there was an island where only penguins exist, and that has a 10% tariff. Good luck collecting on that one. But in terms of normality, we are witnessing a time that has a lot of uncertainty and that is a

scenario or an environment I should say where gold really thrives when you consider and let's not look at the the decline that's been pretty severe but that started uh last week but we had gold run within $10 of $3,200. Now I am speaking about a futures pricing rather than spot because that's what sticks in my head. But irregardless we've had a incredible runup. So the fact that we saw three days in which we had a 50 plus dollar decline 80 and then 50 again. What we saw today in terms of a Japanese

candlestick is called a dogee. A dogee is a trading day or cycle, but for a daily chart, it is a a day in which you have a a decent relationship or spread between the high and the low, but the open and closing price are either exact or very very close together. So when you think about it, it's the only uh type of daily activity that would look the same on a bar chart as well as a candlestick chart because the open and close are so close together. The only diff there would be no differential because a bar

chart has a horizontal line on the left and on the right representing the open and close. So the fact that that occurred today after well what do we have 80 50 and 50 about $180 drop in three trading days. It also represented a 61.8% 8% correction um from the beginning of the rally and to a market technician that is a level that we consider deep but acceptable as a correction rather than a pivot from bullish to bearish or bearish to bullish. So the fact that we had a strong runup and it came down 61.8%

8% is to a market technician a signal that the upward trend that has been so prevalent this year and last year is still in play. Another thing that tells me there's a a high probability that we could find support at this level is that the low today matched the 50-day simple moving average, which is another tool that a market technician uses. Essentially, the 50-day moving average is our line in the sand. If prices are above that, we consider on a short-term basis a market to be bullish. So gold

remained bullish of course is below that on a short-term basis we look at that as a pivot to bearish. So, when you read that, uh, for example, commentary that says even though the market came down, there was no technical long-term damage. That's what they're referring to is the fact that even though we've seen a a pretty strong price correction in 3 days, $180, putting it into perspective in terms of the runup that happened before that, um, that's quite acceptable. Um Paul I think it was Paul Vulker that

said trees he made a comment that trees don't grow to the sky never have never will. He was commenting on interest rates but I think we can draw an analogy that a market that's running strongly to the upside there's going to be a point in which it corrects even though the fundamentals aren't 100% in tune with that. In other words, we've seen gold correct by close to 200 at a time when fundamentally you would expect to continue to rise. So what's responsible for that? One

thing that is clear is that when equities came under fire over the last now four days, liquidation happened across the board in multiple asset groups and classes. Gold was kind of like a a witness to that. And the massive liquidation that occurred was either to liquidate profitable positions to cover margin calls or just to get more into cash than they had been in terms of the position of the portfolio. So to me, it's not that unexpected and the amount of the decline uh is actually fairly calm

considering how much it's gone up. Okay, I think that context really helps to put what's happening to gold into perspective. And we'll come back and talk a little bit more about what's going to happen to the gold price moving forward. But before we go there, I want to ask you a little bit more about tariffs. So I know that this situation is in flux from day to day, from hour to hour. There's so much going on with the terrorists, but in your view, are we in a situation where we're heading perhaps

toward an all-out trade war or is this something that can deescalate? Think we're I mean we I believe we are already in a trade war with certain countries. Um whether or not I agree with them or not are irrelevant. I I have a a zero say in what happens in terms of uh policy by the administration. Um the key right now is we have to look at the the large trading partners that there I have some issue with particularly China. Uh we impose a 34% tariff with China. they came out and said, "Well, we're going to launch a

reciprocal, the equal tariff, 34 for 34%." Um, in other words, a chess move that was equally matched. And then comments came out um almost being a bully and and they said that, well, tariffs in China could go up to 54% if you add that to everything that's going on. It gets to be a severely high amount of import tax because that's what a tariff is. And the problem is, the key problem is that whether you're in China, Europe, Canada, Mexico, Mexico, or the United States, wherever you are, where these tariffs

are affecting products that you buy and products that your company might sell, it is the consumer that's going to bear the brunt of this action. So citizens in Canada, in the United States, in Mexico are going to see higher prices in Europe. Now Trump has spread the tariffs pretty much to any country we're importing goods for. Some of that is probably founded in an inequality in terms of way trade between those countries have been done for years. and he's trying to write things. On the other hand, what happened

last week where he added everyone uh to the mix. Let me just put it this way. It's above my pay grade. My concern is not the policy, but the net effect it will have on consumers that have a fixed income. and now their food costs have gone from 20% of their monthly income to 40 or 30, whatever that number is. One, the dust has not settled, so we don't know how strong that impact is. And two, and most importantly, we don't know how long these will last and if the motions that were set into play that go into

effect at midnight because it's Tuesday, excuse me, pretty much everywhere except Asia, um are going to be implemented at midnight Eastern Standard Time tonight. And so there's always going to be a fairly long lag between when they impose these taxes or levies and when the prices start to escalate in stores in the United States, Canada, Mexico, or Europe. So, we haven't really felt that pinch yet. It's kind of like looking out in the horizon and seeing very black clouds. You know that a storm is coming.

you just don't know how much rain you have and whether or not that rain will be so much that it causes problems or uh is water that's greatly needed to replenish the earth. So that's something we will know later. um we can only say that there is a storm approaching and we will gauge the the level of whether or not it's beneficial or whether or not it it hurts later on. As I said, it's above my pay grade, but we have to acknowledge that consumers need to kind of brace themselves. those that are on fixed

incomes, not I'm not addressing millionaires or billionaires, but those on fixed incomes where a 20% increase in the products that they find essential, specifically food, rent, lodging, if those things, how dramatically that will affect their daytoday life. I think definitely we'll see what's coming for consumers and the economy. Lots that is still to be to be seen really. I wonder so higher prices coming at the consumer level. What do you see happening in terms of the US economy? I

think that recession concerns have really been reignited this past week. Do you think that is is playing out? Well, how it plays out is one thing. your question as to whether or not that will have a a deep and profound impact on economic growth in the United States. Well, it kind of has to. Um the steps that are being taken will contract the uh GDP in the United States. It will in fact, I believe, affect GDP wherever there are imports or exports into the United States. We are such a large body of

consumers in the United States for goods all around the world that a change in the amount that is traded or imported or exported for that matter will have a profound impact on those on fixed incomes. And as I just said, we don't know how strong of an effect that will be. What we can say is there there is a storm coming. So we would expect GDP here to contract but also for GDP to contract anywhere where there's relevance in terms of um the country and how much goods they are exporting into

the United States. Canada for example is a large uh exporter of uh steel and different metal products here. Mexico agriculture. So depending on what's being imported and exported because it's reciprocal now because the countries where uh the American administration our administration is imposing a new tax are coming back with a reciprocal tariff. And again, the people that are affected the strongest by that are consumers in those respective countries, which are all of us. How do you think Powell and the Fed end

up reacting to what we have playing out here? Because we have, of course, Trump who would like to see interest rates come down. We have Powell who wants to take it day by day and see how it goes. What do you what do you see coming from the Fed at its next meeting and and perhaps beyond? Well, as far as the the Federal Reserve and their actions, their changes in monetary policy, to me, they're going to maintain their dual mandate as the utmost thing they follow to guide those decisions. So rather than saying what

decisions they'll make, their dual mandate is full employment and stable inflation. Their their target is usually around 2 to 3%. So as those change, if employment changes, if the um the rate of inflation changes, their primary tool in their toolbox is raising or lowering interest rates. Now the Fed is in a point in time in which they are what we call normalizing monetary policy which simply means they raised it. If you consider that prior to uh 2020 when the pandemic and all of that interest rates went from zero to well

over 5%. Now they're normalizing which is the desire to take those interest rates at which are elevated um if you can't say they're high or low because it's relative to other periods in time and reduce them or normalize them over time. What has changed was the expectation of how many rate cuts the Fed will implement this year and it's gone down. Now we're expecting one or two rate cuts as opposed to three. And so that means that interest rates will be cut by the Fed, all things being equal, but they

won't go down as much as we would have anticipated say back in December or January of this year or December of last year. So their decisions are still going to be guided by the exact same uh two questions, which is their dual mandate. is employment full in the US and does inflation need to is it um at an acceptable level and they'll base their monetary policy on the answers to those two questions and that will not change. Okay. So, they will they will stick to kind of what they're looking at all

along here. I want to I want to take a look over at the stock market as well before we get back over to what's going on with gold. So, okay, we've been talking about about how these heavy losses over the past few days, almost a week at this point. How do you see that playing out as well? I'm curious. Do we or should we prepare prepared for more pain here? Hm. I mean the equities worldwide are are a fickled asset in that the price of any company's shares are mitigated in terms of the net

change are mitigated by market sentiment. And market sentiment rarely if ever equals book value. Because if there was if if a price of a share was only determined by book value, there wouldn't be much up or down in that. It would only be as the book value changes. So, it's market sentiment. Um, I think that what we've seen in US equities is overzealous selling. I would expect that to decline as these tariffs go into place and we wait to see what the long-term effects are. But um because prices are guided by market

sentiment as market sentiment shifts and I would expect it to be less aggressive in the future than it was over the last couple of days. um we should see equity prices in terms of the price change um begin to contract. In other words, we won't see these big moves down as various corporations and the shares that they offer to the public um stabilize in terms of price. And I think that that's what we'll see going forward. I think that we've seen the worst of the damage um because it was

kind of a kneejerk reaction to potential changes in policies. Those were partially implemented at midnight. They will be fully implemented unless the administration changes their mind again and uh adds or or detracts from it. But I think that equity shares the decline, the pressure that they have been under should subside based on the fear factor uh and become more true to what what these companies produce and and the profitability of the individual companies rather than uh an overzealous attempt to control a rapidly

falling market as a whole. um if that makes any sense. I think we'll see that kind of uh the waves basically get smaller and be more manageable. Let's put it that way. It does make sense. I think it's important to look at that role of sentiment. I think it probably plays more of a a role than we might think of it sometimes. So, we we've got that context. Now, let's go back and take a look over at gold again. So, we got your initial impressions of what's going on with gold right now, and

it sounds like the outlook is is still positive despite what we've seen over the last week or so. So, if you look forward, say, into the next quarter or two, what are you looking at in terms of upside downside for for the gold price? Short-term noise is noise. long-term uh gold will have the same buying power that it's had for the last decade, the last century. Um gold in terms of its value doesn't really change all that much. when you look at gold in reference to conversion to a currency and what

that amount of currency will get you. And and what I mean to say by that is if you go back um a hundred years when gold a $20 bill versus a $20 gold piece had the same buying power. uh where that $20 would get you uh a good suit, a steak dinner, um a night at whatever the the the four or fivestar hotel is in the uh uh country that you're in. And over time, if we take it forward, that $20 bill will certainly not buy those same things same things it bought in the early um 1910 or something like that.

When it could buy a new suit, a weekend in New York or so, and a steak dinner, that $20 bill, you would be hardressed to get a couple of cups of coffee. It's just not going to have the same value. It's depreciated tremendously. However, that $20 gold piece, one ounce of pure gold, is now worth $3,000. So, if you take $3,000, can you do those same things? Can you buy a, you know, a nice suit, which is now maybe what 1,200,500 night at the plaza? I can only say for out here in Hawaii, a regular

fourstar hotel is going to be about 500 a night. And a good meal is going to be about $100 per individual. So an ounce of gold will buy the same thing it did a hundred years ago, but the fiat currency that you're converting it into has diminished greatly. And so I think that the buying power will will maintain in gold over the next decade, maybe century. It will have that same buying power. And I think the currency that you're converting it into, whether it's Canadian dollar, a euro or US

dollar, intrinsically has to be worth less unless that government is able to have fiscal responsibility, not increase their national debt. And I don't know of any country, the Switzerland possibly, but as a whole, uh, governments tend to spend more than they have in their coffers. And that's not something I sorry to say perceive will change in the near future. And so for that reason, gold will always maintain a very uh similar buying power to what it did a decade ago or 100 years ago. That currency intrinsically will

have less buying power 10 years from now than it does today. And I don't expect that to change in the next 10 years. I think that's a a good answer. Sometimes we get very concerned about what the gold price is doing and you have to remember that it's holding its value. So maybe maybe we talk a little bit more about the US dollar outlook under Trump. It sounds like maybe you you're not too hopeful about that given given the debt and everything. I know that Trump has all his efficiency

aspirations, but any any further thoughts there? All currencies by the nature of the fact that they're fiat, that they're not backed by an asset which has a solid intrinsic value, can't be more valuable next year. And when I talk about value again, I'm talking about buying power. What's happening is when we look at the the foreign currencies across board, whe Canadian dollar, Euro dollar, US dollar, because they're fiat and because governments tend to spend as a whole more than they take in and fiscal debt

tends to grow across the board almost in every country. the buying power of an individual currency is going to have less buying power. Now, when you compare that to the US dollar, the sad truth, and I didn't coin this term, but as far as foreign currencies go, it's a race to zero. um they're not becoming more valuable and they are not becoming more valuable buying power again because of the fact that the government's books have the ability to have more and more debt. If countries or

if individuals ran their household the way countries run their budget, it would not be sustainable. the banks wouldn't continue to give some a family money when they didn't have the ability to pay it back. But that's not the case on a a self-governing body or a government. They can do that. And because of that, um the endgame obviously is unknown, but it's not going to get better before it gets worse. And if there's ever a time when the realization is that you'd have to have

some sort of monetary restraints, that would have to come after a a tremendously bad economic event that forced the hand of that government rather than okay, we're going to do this. We're going to balance our books. We're going to have a sound fiscal money management. And until that happens, intrinsically the currencies are going to have less buying power a decade from now. So when you compare the dollar to the euro, the dollar to the Canadian dollar, the dollar to any other country,

they're all playing the same game, which is fiat currencies by their nature have uh a diminishing buying power over time and that's not going to change. Yes. Yes. So, of course, I think nobody wants to do a cleanup until they absolutely have to. So, I think that covers what's going on there. I'll let you go in just a moment, but before I do, I did want to check in on silver because it's a bit of an interesting case. It's got its monetary side and it's got its industrial side. So, I

think maybe it's a little bit harder to figure out how does silver respond in this interesting situation that we're in. So, do you have any thoughts on the outlook for silver? Well, the one thing when we look at silver and we compare it to gold, silver made an all-time record high of just around $50 years ago. We haven't seen it challenge those prices ever again. Whereas gold has made multiple new all-time record price highs and values, silver has been rangebound. You know, right now in a most optimistic scenario, it

will break above 35 and maybe go close to 40. But again, silver has been to 50. So when you compare these two metals, there is no comparison. Silver has been rangebound. It doesn't offer the same upside potential now and hopefully one day it will. That will come down to supply and demand because of the fact that silver is uh highly utilized in uh companies that produce technology and hardware in that technology that will control the price more than I think demand by consumers. And so until we see silver actually

break above say even $40, it's still going to be stuck in that tight trading range relative to gold prices which have moved up substantially. That would be my my one comment. Okay. So silver silver could frustrate us perhaps a little bit longer. Thanks for going into that one. All right. I'll I'll let you go unless you had any final thoughts that you would leave investors with right now. The one piece of advice that I have for all investors is regardless of what your uh your investment amount what you're

able to invest on a monthly or annual basis and how you invest it in terms of do you put it in stocks, bonds, where do you put this? Diversification is what most advisor, I would think all advisors recommend, but I highly recommend that you take a percentage of your investment dollars, regardless of your age, and you put it into gold or silver, but gold preferably. um because gold has historically proven to have stability in terms of buying power and for all of the reasons we spoke about during this

interview, I don't expect that to change. So whether you allocate 2% or 5% or 10% of your investment dollars, consider allocating a small percentage on a consistent basis uh into the precious metals because those seem to have the ability to hold their value a lot more than the currencies. You can make more money in stocks, but then you have to address the fact that you have to be good at stock selection. Um, but you don't really have a a difficult choice about investing in gold. Physical bullion trading is a

different matter altogether. But if you're buying it long-term, the value will either stay the same or go up. In the case of gold or silver, in the case of gold, based on recent performance, it has more upside potential than a lot of other investments and it does have safety. Um, so you can put it into a fixed income. Uh, you can put it into an interestbearing account, but gold is going to maintain a value over long periods of time that will offer you safety relative. There's still risk, but

safety and at the same time allow the investment within that precious metal the ability to at least hold its value. Okay, I think that's great advice to end on. I think it's really important for everybody to be considering that right now. So, thank you so much for coming on to go over what's happening in gold, silver, the markets. This is really helpful. Thanks so much for having me. Of course. And once again, I'm Charlotte Mloud with investingnews.com and this is Gary Wagner with the goldfor.com.

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