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 [Music] I'm Charlotte Mloud with investingnews.com and here today with me is Will Rind, CEO of Granite Shares. Thank you so much for being here. Great to have you as always. Thanks, Charlotte. Good to be back. Thank you for having me. Really good to be speaking with you. Definitely, we have so much to go over when it comes to gold and the markets in general. So, let's let's start with gold because it's been a pretty interesting week where we saw gold really take a hit when all the

tariff announcements started going on. Now, it's bounced back pretty strongly. I think as we speak, it's either at or near all-time highs once again. So, let's let's talk about what's going on there. I'm wondering what investors can take away from that fall in gold, but then the the pretty quick rebound that we've seen. No, absolutely. So, um, we just actually touched a new all-time high. So, you know, again, very timely to be talking about gold, but I think that the

backdrop um to what's been happening is that the one thing that we've probably been missing from the gold conversation, at least over the last sort of 12 to 24 months or so, where gold has been steadily climbing in price, you know, first obviously through $2,000, then $25,000 and then to $3,000 and beyond was this fear premium uh as I like to call it. So in other words, the the fear that would really ultimately motivate investors to get out of equities, to get out of other assets and buy gold. And I think we really had

that for the first time, you know, starting this year just with the with the correction, if you want to call it that. Um but you know the much more serious nature of the last few days um with the ratcheting up of the of the tariff talk uh and specifically then the uh rise in not just the 10-year uh yield but the long bond as well which was causing uh some significant stresses in the market. So I think big sort of fear premium baked in. Investors really for the first time I think in some time started to worry about you know the

return of their capital as opposed to the return on their capital and that's typically the time you see people most motivated to buy gold. Definitely it feels like we've got fear alive in the markets for people. So, do you see that as something that will stay with us for some time as this turmoil continues or is is fear-driven moves are they something that typically happen and then they they fade away? Well, typically they they do fade away like everything um there's, you know, a there's always a seriousness

um and a and a different, you know, phasing to whatever panic or crisis is out there. And you know these things do typically tend to abate after some time. But I think what certainly has gotten people worried today is that um we had that huge you know relief rally. You might even call it a short squeeze yesterday after the tariffs were effectively put on hold for 90 days with the exception of clearly China. But I think that investors start to realize that perhaps, you know, some of the damage has been done and that again

we're still in a trade war situation with at least as as far as it pertains to the US, you know, the largest um trading partner which is China. So I think from that perspective um you know there's still some uncertainty out there. Um certainly this is not over yet and I think fears of the combination of rising prices through tariffs and slowing economic growth um fearing this sort of stagnation stagflation narrative I think let's talk a little bit more about the tariffs since that's kind of

central to everything that's going on here. What is your sense of what the endgame is with tariffs? We've seen a lot of flip-flopping back and forth and as you mentioned that's been causing so much uncertainty. What do you think is is Trump's goal? I mean, look, that is the key question um in all of this and it's really difficult to give a coherent answer on that because I think we've heard different things which you know they're not always um or indeed they're sometimes directly contradictory with

one another. So, you know, you might hear narratives such as lowering the deficit, um, which is a different thing to saying, you know, creating a level playing field for trade, which also could be a different thing as saying we want to maximize revenue um, from tariffs and abolish the IRS. So, there's a bunch of different things that have been thrown out there. Um and I think the one thing that has been said um that seems to be at the core of it is this idea of trying to rebalance I think some

of the manufacturing and in other words bring some manufacturing jobs or create more manufacturing jobs in the US particularly perhaps those types of manufacturing jobs that have been lost to lower cost destinations such as China and things over the last you know 20 20 plus years. Um but I mean going back to the your original question that is the seinal question of this whole tariff debate which is what is the end goal here? Well thank you for taking a stab at it. I know because there are so many

different possible motivations floating around, it's it's hard to give a straight answer, but I think I think you covered a lot of the different things that are going on. So, I know with the terrorists, one of the big concerns is inflation, and I'm curious to get your your thoughts on the outlook for inflation as we head forward because I've heard a number of different perspectives on on that as well. Yeah. So I I think this is this is also another confusing subject um because when when a tariff is

implemented it's a assuming there are not more tariffs that follow in other words escalatory tariffs that it's a one-off adjustment of the 10% for example what it does is you have a 10% price adjustment to the upside. So clearly that is inflationary, but that is a one-time price hike or price increase. That in of itself um is not the same thing necessarily as saying, you know, you have rising inflation in the economy. In other words, you have inflation that's increasing at a certain

rate uh every year. But of course, the act of a of a price hike in of itself is inflationary. I think the the sort of the the bit that confuses people is that you know typically what comes with price hikes is a slowdown in economic growth and that's typically because you get demand destruction. In other words, if the price for you know vehicles or appliances or whatever it may be rises and rises beyond a certain point um consumer behavior is affected. If consumer behavior is affected, that means that consumers slow down their

purchases or even just delay their purchases that creates this you know demand destruction which is reduced demand for the goods and therefore that ends up impacting economic growth. It's a slowdown goes to recessionary and then of course in that environment tariffs are actually deflationary um because they spark ultimately a recession. So it can be sort of inflationary at first but then ultimately lead to disinflation or outright deflation and if there's a recession. Okay. I think that helps me

understand. So it's not exactly one or the other. It can be one thing at first then progressing into into something else. Very interesting. So maybe we talk a little bit more about that slowdown and into a possible recession. I know that's back on everybody's minds right now after maybe we had sort of put it out of our minds that we might be heading to a recession. So what is your view? Is that what's coming for the US at this point? I I don't see it right now because again I think now some

people will say that yesterday the big rally I'm talking about of one of the biggest rallies when the pause was announced the 90-day pause was announced uh in the market that we've seen for for some time. Some people might say that was um you know a short squeeze and certainly I think that is a part of it but I do think that um the tariffs are all coming from the US administration. This whole conversation is about the US administrations and and particularly obviously the president himself. So, as

we saw yesterday, one tweet that started with, you know, to paraphrase something like it's time to buy, um, ended up 90 minutes later with a pause in the tariffs and an absolute, you know, rip, uh, in terms of the market rally. So, you know, one person can stop this and one person can turn around and say, you know what, we're actually going in a different direction, which is effectively what happened yesterday with the nightday pause. So in in that sense, you know, we we have to sort of remind

ourselves that we did go from a situation where the market was sort of firing on all cylinders, different uh recessionary indicators that people look at um you know, none of those were flashing red at all. Um and now we're in a very different environment caused again by this administration. So I remain hopeful that uh at least in the short term that something like yesterday can obviously change and for sentiment will change very quickly. We saw people you know rushing to buy you a huge eagerness to to buy the market. Now

there is again a timeline to that or or there's there's a lagging effect there where the longer this goes on the more that you know people start to lose confidence. Um and you know whether it's confidence in the administration themselves whether it's confidence in this being the right strategy whether it's just you know confidence from business leaders from CEOs etc about really planning the next forget about 5 years um of growth the next 12 months in terms of guidance earnings you know

supply chain management etc. So there there comes a point and it's already there you know you saw at least I think it was Delta Airlines um talking about you know removing guidance from the earnings call due to uncertainty that this starts to snowball into this knock-on effect of ultimately I think it's about confidence and if people don't feel like they have you know confidence that there's going to be a job for them in 6 months time whether they're going to be able to you know

spend the money or justify spending the money to go on vacation whether whe they can do that renovation, whatever it may be. Um, you know, that's when things start to slow down and you have a problem. I think that's a really good overview and it's quite interesting to see how markets are really turning on on a tweet at this point and I want to ask you about the Fed as well and what the Fed may do from this point because we're having these very quick moves based on tweets and and other things that are

going on whereas the Fed of course is very quite slowm moving and methodical and they want to think about what they're doing. So curious what you think the path forward there might be as we head toward the next meeting and and further into the year. Well, that was a um a plot twist to say the least um in the sense that you know the Fed started this easing cycle um which everyone's well aware of and started the pathway from tightening interest rates to lowering interest rates and I think you know with

different sort of everyone had their view on how fast that would be and how quick that would be but I think nobody really envisioned that at the same time the Fed the Fed was cutting interest rates rates that we'd actually have an increase in interest rates in the market particularly, you know, in the 10-year bond and the the longerdated bonds. So, that was a conundrum to say the least. Um, and you know, the the president has been calling for the Fed to cut rates. But you know it's very difficult to do

that when you're seeing what's evidently you know stresses in the bond market where you have this extraordinary environment where you know the bond yields are going up and so in that particular environment where you know people are obviously selling treasuries or selling bonds bond yields are going up um and officially on the other side you know the Fed's talking about cutting interest rates you know you're in a very very difficult situation. I think that's that's definitely true.

So, we'll have to keep an eye on what's going on with the Fed. I want to I want to go back to gold as well. So, we've we've covered, I think, the tariff angle pretty well, and you mentioned how it's the fear component that's helping to drive gold right now, but of course, there's so many other factors at play for gold at the moment. What other key points are you watching at this time for gold? Look, I think the two most important ones at the moment are, you know, the

fear premium that we talked about, but the other one is the global money supply. And if you look at a chart um that tracks the global money supply versus the price of gold, you'll see that the two um really move or have moved, you know, very much in concert with one another. And you know it's easy to to think about what that means and that is that as the global supply of paper money increases then the value of gold increases. But perhaps another way to think of it which is sometimes more

intuitive is it it's maybe sometimes not necessarily the price of gold is going up. It's the value of paper currencies is going down. And so that's really um you know and a sort of sometimes more insightful way to look at it. But for all we're talking about, you know, here in the US, a reduction of the deficit, we're talking about Doge and all of these other sort of, you know, potentially well um intention projects. The fact is that global M2, i.e. money supply is still increasing and that is

correlating with the increasing rise in the gold price. And so we've seen, you know, the the the effects of that in terms of short-term like the weakness or the dollar um you know declining which obviously is part of the story that helps gold. But I think the bigger picture to me is this idea that you know the paper money supply keeps increasing against gold. Um it's not necessarily about gold prices rising. It's about the value of paper currencies falling um in relation to gold. And of course add in

that fear premium on top of that and that motivates investors to get out of whatever assets it is and into gold. Right. I think that big picture view is is definitely important. And I know I know you just said that it's about the purchasing power more than the price of gold. But I will I will ask you about your thoughts on the price of gold in 2025 even though we should you know turn it around and think about it in the other direction. Yeah. Yeah. So if you look again go back to the the M2 um example actually if you

look at something called the M2 ratio which is the the money supply you know divided by the price of gold that is a particularly scary chart. Um now obviously if history's any guide then when the ratio is high that typically means that gold is overvalued and when the ratio is low typically means that gold is undervalued. And actually, if you look at it right now, we're somewhat, I would say, below the the median. In other words, we're closer to gold being, you know, undervalued rather

than overvalued at a time when we've just talked about gold hitting a new all-time high. So, it's a very interesting ratio to look at and obviously has been instructive in the past when you look at previous either gold peaks or gold troughs. Okay. And I think I can probably guess the answer here, but everything is sounding really quite positive for gold from what you're saying based on many of your conversations that I've had. Is there any bearish scenario for gold at this point that could possibly play

out? I mean, there's there look there are always bearish scenarios. We can concoct, you know, a number of different situations which would be negative for gold. Um, however, you know, you really we're talking about a situation where I think the the fear premium gets removed. So, how would that happen? As we kind of alluded to, would have to be um this new whatever whatever we end up with with the tariff regime, whether it's some kind of new economic order or whether it's just an abandonment of um tariffs

or whether it's tariffs just like in the first Trump presidency, albeit um a fairly modest or or level that the market can manage. Um and then once you remove the fear premium it would have to I think have you know M2 money supply ultimately going in the opposite direction other words you know a tightening um around the world of money supply which it's difficult to really see see that scenario kind of at the moment the way that governments around the world are acting given the levels of debt that

it's outstanding. So, you know, there's always a bearish scenario um that you can you can concoct. I think the likelihood of that happening at the moment seems to be slim. Yes. Yeah. I know that gets into a little bit maybe too speculative of territory, but I think it's it's always interesting to take a look at the other angle. So, so thank you for going into that. And you know, we're talking about this this fear that's driving gold. I think the other maybe the other half of that is with to

do with the US stock market. So, a lot of turmoil there, a lot of fear as well, I think, driving what people are doing. So, how do you see that that playing out? Are we just going to see maybe a continued shift away from equities toward gold and precious metals or or any further thoughts there? Well, we we we definitely have been seeing increased allocations to gold. So, if you look at gold ETF flows, then people are definitely, you know, allocating money to gold ETFs and to gold more broadly. So, that that is definitely something

that has been going on. Now again I come back to the point about stocks which is you know we've seen people buying dips consistently since the beginning of the year. So this is to this point I still believe largely um the the conviction of investors is that this could all stop just like it did yesterday with one tweet, one announcement. This could this could all kind of go away. the the longer it doesn't again that's when the issues come. So you know you're you're testing people's faith,

people's belief and the longer this goes on the chances that um a people you know lose faith but b really starts to impact the economy and then you have a problem. So I I think people are prepared to to give the president give the administration the benefit of the doubt at the moment and that they're prepared to to view this as really a buying opportunity more broadly. However, um it won't last forever. There will come a point where, you know, people say, "Look, there has to be a change." Um

that started yesterday. We'll see how that uh how that ultimately, you know, manifests itself. I think you're right. you know, there's only there's only so much people can take of the the back and forth. So, watch that to see how it plays out. Before I let you go, I also want to touch a little bit on silver. I think silver is is pretty interesting right now because it's got that precious monetary angle that maybe tells us it should be doing well and then it's got the industrial side where people are

worrying about recession and how that could weigh on the price. So, what's what's your outlook for silver in 2025? Well, I I think as you've seen with the price, you know, there's been um you know, a rally in the price sort of fairly recently, which I think, you know, means that you know, in in a world where people are looking for alternatives, then silver is clearly one of those and so it's benefited. I think, you know, the the recession part is not really a concern right now to me, but if

we were to go into a slowdown, you know, if this growth scare um that we're sort of seeing right now really become something more than that, then I think the industrial properties of silver, you know, play out much more and it becomes more of that, you know, the asset that sells off um in a recession. But for right now, I think it's it's trading more in line with the gold price um from a correlation perspective. In other words, in an environment where gold prices are rising, then silver tends to

do do so as well. Okay. I think that makes a lot of sense. We need a little bit more time to perhaps see what's going to be going on with silver. So, I'll I'll put it back to you one more time before I let you go. any final thoughts you would leave investors with maybe on the note of what investors should be doing right now as we've been talking about people are really looking for places of safety it seems like so any any final advice or thoughts you know I think um you know I I do

think that the the tariff situation will get resolved I mean clearly the the market spoke in my mind yesterday and that was the check and balance that was really needed um to avert you disaster in the market with it's a bit technical, but um you had the 10-year and the the yields going up and that was largely as a result of um something called the basis trade um which is a very popular trade that hedge funds um and other people have which is a hugely leveraged bet on on interest rates and you know

that started to break down. We also you know had news whether it was true or not the large sovereign um that was also selling treasuries. So, you know, there there are definitely warning signs there, but I do think that that this can go away quite quickly. Now, again, the long the longer it goes on, you know, how much does it then confidence? How much does that become self-fulfilling? Um, and growth slows down uh therefore leading to uh recessionary type conditions. And we know that, you know, a lot of the major banks and things have

increased their their their odds on a recession this week, uh, this year, sorry. But, you know, I think I I think we're still in a good place. It's just a lot of volatility around this sort of horse trading of tariffs. Um, but clearly people are starting to diversify. Um, and that's something that started at the beginning of the year, you know, with uh the correction that we saw in markets and the uncertainty around tariffs. And I think that will continue for as long as um we have this

lack of clarity. But if we if we do start to to really go into a recession, then you know except expect that to accelerate in terms of people buying gold, people buying you know short-term treasuries, other sort of um diversifiers typically that you see in this kind of environment. That makes complete sense to me. So I think you've given us quite a bit to to think about. Thank you very much for going through gold and the markets and a little bit of silver. This was really good. Thank you so much. Of course. And once again, I'm

Charlotte Mloud with investingnews.com and this is Will Rind of Granite Shares. Thank you for watching. If you like this video, make sure you hit the like button and subscribe to our channel. We'd also love to hear your thoughts, so leave us a comment below. [Music]