Market Expert Debunks Gold "Collapse," Details Dollar's Strength, and Forecasts Melt-Up

Addressing recent headlines, the economist dismissed the notion of a "gold collapse," noting that the metal had already seen a "50 odd [percent] increase in... the last year." He characterized the sharp price drop from $4,300 to $4,000 as a "liquidity event."

This correction, he explained, was triggered by investors who had taken "hugely leveraged bets on gold" expecting the US dollar to weaken. When the dollar stabilized and strengthened, combined with lower liquidity and higher margin call costs, these investors were forced to sell.

Despite the volatility, the expert asserted that "the fundamentals of gold have not changed at all," citing:

He suggested that central banks globally are ready to "increase and accelerate their purchases" around the $4,000 level, aiming to increase their gold reserves up to 25-30% from the current 10-12%. For investors, a deeper correction to $3,200-$3,500 would present "the clearest buy on the planet."

The interview shifted to the surprising resilience of the U.S. dollar. The economist clarified that the dollar's strength is not due to its own inherent perfection, but rather the relative weakness of other fiat currencies.

The dollar's strength is "almost a tale of the... tallest short person." He attributes this strength to several factors:

The expert strongly pushed back against the widespread "dollar is dead" narrative, pointing to recent figures from the Bank of International Settlements, the IMF, and Swift, which "all show that the US dollar remains the world reserve currency." He framed the ongoing shift, where central banks buy more gold, not as a "de-dollarization" but as a "rebalancing of the asset base" away from all fiat currencies. The world is gradually losing confidence in fiat currencies as a concept, but "within those... fiat currencies, the US dollar remains king."

Discussing the ongoing APEC meeting and trade discussions, the economist expressed confidence in a forthcoming trade agreement between the U.S. and China. This is bolstered by the U.S. reaching significant trade deals with allies like Japan, which has "diminished" the United States’ dependency on Chinese rare earths. He believes the narrative of a "tariff tantrum has passed," and the world has realized that China cannot exist without trade relations with the U.S.

On the stock market, he rejected the notion that high valuations are unsustainable, arguing that the S&P 500 is simply "reflecting the destruction of the purchasing power of the currencies in which they're denominated." Furthermore, "earnings have been better," and the economy is doing well. The "overriding factor" driving risky assets is a massive global money supply increase of "more than 12% year to date."

Regarding market concentration, the expert acknowledged the dominance of a few companies, "the magnificent four", but viewed the weakness in the other 497 companies of the S&P 500 as a "great valuation opportunity" for prudent long-term investors.

Looking ahead, he forecasts a "significant move melt-up into the end of the year," driven by expected rate cuts from the Fed, strong earnings, and a debunking of earlier economic headwinds. He cautioned that the biggest risk for 2026 is whether inflation accelerates again due to the elevated money supply growth.

Touching on the expected 25 basis point cut from the Fed (a near certainty at the time of recording), the economist noted that while it directly helps levered investors, its most important impact is on the American consumer.

A 25 basis points cut in the reference rate means that families can actually receive mortgages... at a more sustainable and affordable rate.

The Fed remains about 100 basis points above the neutral rate, which he noted has historically destroyed a million jobs if maintained for a year. He expects further cuts as evidence suggests that tariffs are not the primary cause of inflation, and the base effect that inflated annualized inflation figures stop working.