Don’t Watch Interest Rates Too Closely – Watch the Debt Bomb Instead!

More than 20 countries currently suffer from debt over 100% of their GDP but this is particularly problematic in the six rich nations listed below. Japan leads the pack and China’s unofficial debt may match Japan’s. In Europe, France’s debt is rising to Italian levels. As a result, they can’t meet public demands for more benefits, so there have been violent riots plaguing that once-proud nation. France now has the highest level of public spending, accounting for 57.3% of GDP, but that’s apparently not enough for the rioters.

There Are No Magic Formulas - Like Price Ratios - to Calculate Gold’s “Fair” Price

Ever since the OPEC oil embargo of late 1973 helped spark massive inflation and economic stagnation (dubbed “stagflation” at the time), there have been countless theories about calculating the fair value of gold in terms of the rise and fall of the oil price, published as the “gold-to-oil” ratio.

This joined the long-established “gold/silver” ratio, which dates back to America’s original Coinage Act of 1792, when the ratio was set at 15 ounces of silver being equivalent to one ounce of gold. The Coinage Act of 1834 then raised the ratio to 16:1 by reducing the gold content of U.S. Gold Eagles coins by about 6%. For most of the century from 1834 to 1934, the official gold price was $20.67, while silver was valued at $1.29, a 16:1 ratio which clearly favored Western silver mining interests, as opposed to the East Coast “gold bug” banking interests. More voters could afford a silver dollar than a Double Eagle, which generated the ‘Cross of Gold’ speech.

Silver Is A Solid Buy Based on Its Strong Fundamentals

The attack on silver makes no sense, as the global silver market has been in deep deficit since 2021, six years running (including the 2026 trend, so far). Before 2021, silver markets were mostly in balance, with slight supply surpluses in most years, topped by a 65-million-ounce surplus in 2016. That’s when silver ranged from $13 to $20 per ounce, but since then, there have been huge silver price deficits each year.

Analysts at The Annual LBMA Global Metals Conference Predict $5,000 Gold and $95 Silver

To date, the press keeps citing its mistaken belief that “gold offers no interest income, therefore gold’s value will decline as interest rates rise.” That consensus was challenged at this week’s meeting of the London Bullion Market Association’s Global Precious Metals Conference, held in Italy, October 4-6.

These experts are finally recognizing the clear record of history, since our federal budget deficits and interest rates are rising sharply together, while gold holds firm over $4,000 per ounce. Gold remains strong, even though interest rates are approaching 5.3% – a 25-year high last set in April 2002 – when gold traded for barely $300 per ounce and seemed to be in long-term hibernation after peaking in 1980.

Very soon, we will see the Treasury report on the fiscal 2026 deficit: FY26 ended this week (on September 30) and the red ink likely exceeded $2 trillion, despite a strong economy. It’s a sign of far too much spending, a condition likely to continue with campaign promises this election year. 

In the long run, these deficits will lead to a weaker dollar and stronger gold prices in the future.

Saxo Bank’s Ole Hansen Explains the Gold Market Better than Most

Ole Hansen, Head of Commodity Strategy at Denmark’s Saxo Bank, has been a clear-headed gold analyst for decades. He sees it potentially reaching $6,000 per ounce in 2027, if “structural drivers” remain intact. In his latest posts, he said, “US 10-year real yields hit their highest level in more than 20 years,” at 2.63%, a 0.76-point increase since the start of the year, “while total gold-backed ETF holdings continued to recover following a drop in H1 [the first half of] 2026.”

Gold Falls Slightly But Rebounds After the Fed’s Interest Rate Decision

At 2:00 pm (EDT) on Wednesday, the Fed’s Open Market Committee (FOMC) meeting results were announced. Going into the meeting, the betting markets predicted a 90% chance of a 0.25% Fed Funds rate increase. True to expectations, Federal Reserve Chair Kevin Warsh held a press conference to announce the unanimous vote of the entire 12-person board to raise rates by 0.25%, but Chairman Warsh spoke mostly about the strong economy – thereby pleasing President Donald Trump, who nominated him earlier this year.

August Month-End Market Summary (and 2026 to Date)

Precious Metals enjoyed a strong Renaissance in August, although they tailed off toward the end of the month. Still, we saw 15% August gains in silver and about +9% in gold and platinum.  The stock market also rose, but at a slower pace, between 1% (Dow and Russell) to +4% (Nasdaq).  Year-to-date, the major stock indexes are all above 10% annual gains, while only gold has managed a slim 2026 gain...

HIDDEN PITFALL: “PAY-TO-PLAY” MARKETING PRACTICES

One of the biggest problems in the precious metals IRA sector is “Pay-to-Play” websites, where companies pay to be boosted in online search results that recommend “the best” companies. The people behind the online lists aren’t truly recommending the “best” company for a precious metals IRA; they are recommending the companies that pay them money for advertising. Even the disclaimers state words to that effect.

Gold, Silver Up Double-Digit Percentages For August

Gold is up 10% so far in August and silver is up 13.5%. It appears silver finally set a firm new floor above $60 and is trading up to $65 this week, while the S&P 500 is up only 3.2%, NASDAQ is up 4.2% and the Dow is up 2.5%. It also appears that GOLD has set a new floor of $4,000 per ounce and it began moving off that base over the past week.