Gold Surge Isn’t Over (Uncut) 04-18-2025

Gold Surge Isn’t Over – Retail Investors Haven’t Even Stepped In | Rich Checkan

Welcome back, I’m Jeremy Safran. Global markets are facing major realignments and investors are watching closely for what comes next here. Now, the International Monetary Fund is warning that, quote, major geopolitical risk events including trade tensions can trigger large corrections in stock prices, potentially, of course, leading to extreme portfolio losses and even financial instability.

Now, in its latest upcoming Global Financial Stability Report, the IMF urges institutions to prepare for what it’s calling unexpected tail risks. And it also highlights a sharp rise in conflict-related economic shocks. And now, billionaire investor Ray Dalio is raising red flags in a recent appearance on NBC’s Meet the Press.

Here’s what he said about the recession. I think that right now we are at a decision-making point and very close to a recession. And I’m worried about something worse than a recession if this isn’t handled well.

A recession is two negative quarters of GDP. And whether it goes slightly there, we always have those things. We have something that’s much more profound.

We have a breaking down of the monetary order. We are going to change the monetary order because we cannot spend the amounts of money. So we have that problem.

And when we talk about the dollar and we talk about tariffs, we have that. We are having profound changes in our domestic order, how ruling is existing. And we’re having profound changes in the world order.

All right. Profound changes in the world order. You heard it.

Well, meanwhile, gold is soaring to record highs. And yet, according to my next guest, it still may be dirt cheap. A treasury market is normally as a safe haven, it’s seen, are continuing to sell off and global capital flows seem to be shifting away from traditional assets into real ones.

Joining me now is Rich Checkin, our friend, president and CEO of Asset Strategies International, to break down what’s really going on behind these headlines. Rich, welcome back. It’s good to be back.

Thanks for having me, Jeremy. OK, we’ve got plenty to get into here today, my friend. Let’s start with the IMF’s latest warning.

You heard it there on the intro. They say a heightened geopolitical risks, especially in trade tensions, could cause stock markets to crash, as we saw last week. And then, of course, spark systemic instability.

Do you think we’re already seeing signs of this kind of risk repricing in the markets? I mean, how significant is this moment? Well, I think there’s no question about it. We’re seeing it. You know, the equities markets here in the U.S. have been selling off as a result of the tariffs from President Trump.

Obviously, the markets don’t like uncertainty that triggers the volatility that we’re seeing right now. They are bouncing back and forth. But for the most point, I see a downtrend.

What’s a little even more concerning than the equities markets is the U.S. dollar amidst all this trade tariff talk and the concerns with retaliatory tariffs. I think China came in and said that, you know, the bottom line is we’re in this to the end and they’re prepared for battle. And then at some point they said, you know what? It doesn’t even make any sense to raise tariffs any higher because trade is done.

Nobody’s going to buy at these prices. So that’s not a good situation. I still think deep down that the ultimate goal is to push people to negotiation for better trade agreements.

But right now it just looks like a big mess. And as a result, the dollar is suffering. It’s dipped below 100 on the old index against major currencies.

And I think it’s hovering right about there as we speak. So not good news on the horizon for traditional assets, for sure. I mean, Rich, you saw that clip in the intro from Ray Dalio.

I mean, he’s worried about something worse than a recession. He warned that, of course, these tariffs, the rising debt, which we can’t really get away from. And then we’ve got this shift of unilateral world order.

You know, what are your concerns here? I mean, do you share that concern? Are we witnessing the early stage of that breakdown now? Well, you know, the bottom line is I don’t think there’s anything out there to replace the dollar as the world’s reserve currency anytime soon. OK, so if I think if you’re asking me, do I think the dollar is done as the reserve currency? I don’t. There’s nothing to replace it.

That being said, 36, 37 trillion dollars in debt is not manageable. And unfortunately, I don’t see an appetite on either side of the aisle to go ahead and do what is necessary, which is cut spending until they cut spending. We’re not we have no chance of getting rid of this debt.

And one of the big things they have to look at are the entitlements. Right. And nobody on either side of the aisle wants to touch those.

So that’s disconcerting for the dollar long term, short term, nothing to replace it. Long term, we’re working that direction. This is what’s behind, in my opinion, all the central bank gold buying that we’ve seen for 15 years, but really over the past three in earnest.

Yeah. And I mean, we see countries kind of adapting here live on the fly with some of this tariff conversation, too. I mean, how do you break down the global trade playing out in the long term here? I mean, what do you see in terms of global order? I mean, is this going to be changing as we continue to see these tariffs? Again, my hope is that the tariffs are temporary and it leads to negotiations, better trade deals.

If that happens, then everything is fine. We’ll recover from the short term hiccup. If this is the end game, this is not good.

You got to go toward like libertarian principles in the invisible hand. You know, markets can best determine prices, markets can best determine who does what, delivers what, et cetera. Governments, when they start dictating that, mess up markets.

You know, a world that is based on free trade is a much more thriving, successful going forward type world as opposed to one that’s just protectionist and closed in. Yeah. Yeah.

Well said. And I mean, we’ve seen definitely the equity markets, at least today, kind of stabilize a little bit there. Gold has hit new record highs again last week, this week, yet you argue it’s still dirt cheap.

Explain that. Why do you believe gold’s undervalued despite trading at all time highs? Well, you know, I get that a lot. You know, I just got back from a conference.

We were talking off air and, you know, everybody walks up to you and they say, you’re a gold dealer. Gold’s making, you know, what, 39 new all time highs last year, 16 to 20 so far this year. I lost track.

You know, you must be making money hand over fist. And the reality is, you know, central banks are the ones doing the buying and they don’t buy from me. They haven’t been calling me up to buy.

So I rely on retail investors and they are not buying. And there are some indicators out there that are very clear as to the fact that retail investors are not in this market. The first one is the gold silver ratio, right? And I think we have a chart of maybe a 20 year gold silver ratio to put up.

But if you take a look at this, you know, the magic number was always 80 to one. If we got to 80 to one or higher, it suggests we’re at the low point for prices for gold and silver. Gold and silver from that point should both move higher.

And silver in the end would outpace gold. And that number, the number of ounces of silver it takes to buy an ounce of gold would come down, right, to about 35 to 50. And that kind of signaled the top of the market or the end of the bull market, start of the next bear.

We’ve been 90 plus for a couple of years now. We hit as high as 127. We’re back up to 100.

I want to say over the past few days, we’ve seen 98.98 on the gold silver ratio. It’s just crazy that we’re at these levels. And you’ve got to ask yourself, why is that? Right.

Gold’s at new all time highs. It’s moving up. What’s not moving up? It’s silver.

And when retail investors get into the gold market, they buy both gold and silver. And that causes silver, a smaller capitalized market for the price to move quicker, higher than gold. And as a result, that number comes down.

But retail investors aren’t in this market. Central banks don’t buy silver. So that elevated gold silver ratio at these levels strongly suggests this is primarily central banks, maybe a little institutional buying.

And the retail investor is still on the sidelines. The second thing that kind of triggers it just from our business, we buy and sell precious metals. And when we’re talking to folks on the phone, we keep harping on the fact that the premiums, so the price above spot to buy fabricated coins and bars in gold and silver are at depressed levels.

I mean, these are the lowest levels I’ve seen in 30 years in this business. And they’re not coming up anytime soon. So, you know, the bottom line is if everybody, the retail investor, was clamoring into the market to buy coins and bars, do you think those premiums would be going down or going through the roof? Of course, they’d be going through the roof.

They’re not. They’re staying at depressed levels. OK, so I mean, central banks are, we’ll get into central banks even more because, of course, they’re still buying.

And we got some recent data out of China. It’s pretty fascinating, too. Retail investors still not buying.

I mean, what are the signs that we’re too, are they too early? I mean, when are they going to step in if they’re not doing it now? When are they going to do it? Yeah, I think, you know, it’s a commentary on how difficult it is for the middle class out there right now. I don’t think everybody like in Washington gets how bad off it is for people. They’re struggling to make ends meet.

Even well-heeled folks with good, good income are struggling paycheck to paycheck right now. We have clients come to us and they say, listen, I don’t want to sell my gold, but I have to. I got to pay down a credit card debt.

I mean, that’s not typical for a strong, healthy, you know, middle class with reserves. That’s a tough situation. Everything costs more than it did a year before, two years, three years.

And those those price increases have compounded. So the rate of inflation has come down. All right.

The rate of inflation, but inflation has not. I mean, it’s still at incredibly elevated levels and people are struggling day to day. So when when folks need the money, right, they go to what’s most liquid and primarily that’s gold and silver.

So they can’t tap into their home equity lines anymore because to do so would raise their interest rate considerably from what, 3 percent to about 8 percent. They’re not going to do that. They’ve maxed out their credit cards at, you know, 100 and what, 1.2 trillion dollars in credit card debt in the U.S. and the premium or the the rates that they’re paying on those are 20 plus.

They can’t do that anymore. So they’re selling liquid assets to pay their bills. And that’s not a healthy place.

Eventually that will come around. But people are going to realize that they need to put their money into something worthwhile, not fleeting. But right now I think they’re struggling to make ends meet.

Yeah, we continue to hear about that Main Street versus Wall Street narrative. I mean, we heard it last year. We’ve continued to hear it this year.

And while average investors are seeing their portfolios whipsawed by this volatility, Wall Street banks are cashing in. Big names like Goldman Sachs and Citigroup just posted strong Q1 profits, not because the economy is booming, but because these markets are in chaos and people are trading. I mean, they’re trading desks raked in billions as clients scramble to react to everything from tariffs to interest rates.

Essentially, the more people panic, the more banks profit here. What are your thoughts? There’s no question about that. The banks are definitely making the revenue on the brokerage fees, so they don’t really care if people are buying or selling.

In the long run, somebody’s going to run out of cash. So they’re going to be less trading, I guess, going on. The folks that are going to be well-stead going forward are the folks that are putting money into something real.

We’ve long seen the valuations on stocks at elevated levels. And there are strong companies that are producing things that we absolutely need, not just wants. They’re going to continue to do well in up and down markets, but you’re going to see a lot of other companies just bite the bullet here.

They’re not producing profitably. Their valuations are way higher than they ought to be. And eventually they’re going to be casualties in this market, in my opinion.

I’m not an equities expert. I’m a gold expert. Gold isn’t managed.

Gold does what it does. And it has done that for 5,000 years. I expect that to continue.

Yeah. And I mean, we saw it last week. I mean, equities kind of crashed there and gold and silver also sold off, but then quickly rebounded.

Talk a little bit about why that happens and give me your outlook on gold and silver this year. Yeah, fantastic. So we see this every time.

A lot of folks will call us up right after a big, you know, precipitous fall in the stock market and let’s say, wait a second. Gold is my wealth insurance. Why did it sell off, too? That’s not I need it to hold ground.

What they don’t realize is anytime you see a precipitous fall in the stock market and you got to understand there are a lot of leveraged accounts. So people have taken out loans to buy further bets in the stock market. And when the stock market collapses quickly, the underlying value of the assets fall below the loan value and it triggers a margin call.

The folks that lent the money say, listen, you’re backing it up with collateral that doesn’t meet the muster. So you need to pay us to bridge that gap. Where are they going to get that money? They’ve got to go to liquid assets.

The two most liquid on earth are probably gold and silver. So they sell off their gold and silver. We see them both fall with the market.

But within two to three days, weak tops in every case, you see gold and silver recover because people jump in that realize gold and silver should not be falling. They don’t have margin calls. They have the capital sitting ready and waiting and they’re jumping into a bargain basement prices for gold on sale, silver on sale.

We see it every time we saw it when AIG failed Bear Stearns, you name it during covid. Anytime you see a precipitous sell off in the stock market, gold and silver do initially. But if you have the ability, it’s a great opportunity to get the immediate return on your investment.

So margin call. And what do you think about the outlook? I mean, we’re hearing words about four thousand dollar gold, fifty dollar silver. What’s what’s real here? Yeah, as long as we don’t pay our bills as a government and then we inflate the money supply, you know, four thousand, five thousand, ten thousand dollar goes going to happen.

It’s just not going to happen tomorrow. You know, in this bull market, I’ve been saying this for a couple of years now. I think the ultimate goal is two to three times the previous bull market high.

Right. So previous bull market high was nineteen twenty one announced in September 2011. I think before it’s all said and done, we’re going to see somewhere between thirty eight hundred and fifty seven hundred dollar gold.

That’s a wide range, but that’s where I see it going to. I don’t think we’re going to get there this year, but you never know if this trade chaos is not temporary and it’s long lasting. We may get there this year.

I do think cooler heads are going to prevail and gold will probably somewhere, you know, around the four thousand dollar mark by the end of the year as as a high end silver. I think you’ve got to wait and be patient for silver in the short term. It’s going to be more volatile, pop up and down pretty quickly on news.

But in the end, as we get late stage bull market, I expect silver to finally move up and overtake gold in terms of percentage gains. And, you know, I’m not a chartist, but, you know, silver’s got a forty five, fifty year cup and handle formation that it has broken out of. And due to those parameters, a lot of technical analysts believe we’re going to see ninety to one hundred dollar silver.

I do think that is very possible. That’s that’s a 200 percent gain from where we have been for some time now. So I think by the end of this year, I think we’ll surpass the previous highs of fifty dollars an ounce.

I don’t know that we’ll get to that late stage level of 90 to 100. But, you know, I like silver for that reason, for profit play. I love gold always and everywhere for for wealth insurance.

Right. OK, so the time’s coming for silver. A lot of people will be happy to hear about that on this theme, though.

I have to ask you, because we’re seeing rare earth exports from China grind to a halt following a new export controls part of China’s retaliation against these Trump latest tariffs. How should investors interpret this escalation in the trade war? Is it more fuel for gold and silver here? I think it is, although I got to tell you, within the industry, it’s kind of confusing. You know, you hear from the White House that gold and silver are not targeted with tariffs.

They’re free of the tariffs. Yet you go to wholesalers and they’re saying, listen, you got to be safe. We’re confused about the imports coming in from other countries and we’re not sure how to handle them.

We’re erring on the side of safety and you may face tariffs. So buy American if you’re an American investor is what we’re being told. Don’t buy metal that has to move across borders.

So that’s very real. Again, I hope it’s short term. But gold and silver are your stability.

When everything gets chaotic out there in the equities markets with the dollar, with, you know, global crises, whether they be shooting wars or trade wars, gold’s going to respond. It’s a safe haven that benefits and steds investors well. That’s why it benefits during these times of crisis.

So nothing from the White House and nothing on these tariffs. I mean, we’ve been trying to dive into it, too. It seems like clarity is not quite there.

It is not there. Again, we’ve heard statements. I don’t know if it’s on X or what, you know, I don’t know if it’s official channels or public channels.

But the bottom line is we’re hearing that gold and silver are left out of the tariffs. But on the ground, I could tell you that anything coming into the U.S. is potentially subject. So that’s what we’re hearing from wholesalers as we go to buy.

So it’s very real. We’ve got to deal with that. Nobody wants to buy something with a 10, 50, 100 percent tariff.

That just makes it reasonable. It’s been fascinating. We’ve talked a little bit before about this new data we’re seeing.

The New World Gold Council showed that Chinese gold ETF inflows in just the first 11 days of April have already surpassed all of Q1 and even overtaken U.S. listed ETFs. What does this East-West divergence in gold buying tell us about where the smart money is moving here, Rich? Well, we’ve seen this for years. This is the movement of real wealth from West to East.

In the East, they fully appreciate gold in its role. They go there whenever there’s crisis. They go there for protection.

They go there for safety. They go there for real wealth. In the U.S., we chase stocks.

We look for the big return and the big payoff quickly. And we kind of lose sight of that long-term store of value that gold provides. I thought it was kind of interesting.

Look at those numbers. And I’ll probably misquote a few, but I’m going to be in the ballpark. I want to say they purchased 29 tons the first 11 days of April, and that surpasses like 23 and a half tons for the first three months of this year by the same buyers.

And it’s in excess of what the U.S. saw the first 11 days of this month, which is about just under 28 tons. So China ETFs have have surged past the U.S. and they’ve surged past first quarter by a huge margin. What was interesting to me is where those funds are coming from.

So if you’re going to be buying gold and inflows into ETFs, you’ve got to sell something first in order to raise the cash to do so. And everything I read tells me that what’s being sold in China are U.S. listed emerging emerging market funds. Right.

So so this is definitely an extension of the trade war. It’s people that don’t feel comfortable owning stocks in this environment. And they’re moving.

You know, they’re voting with their pocketbooks. They’re moving out of paper assets, absolutely into hard assets and gold. Interesting.

Interesting. I mean, we’ve been seeing it in the treasury market, too. We can kind of talk a little bit about that.

I mean, we know that these are usually a safe haven. But lately we’ve seen a sharp sell off with 10 year yield spiking to nearly 4.6 percent. And some have speculated that China may be dumping treasuries as retaliation.

I think Scott Besant confirmed yesterday or said that he was denying that claim. Now, others blame Japan’s insurers, hedge funds or bond vigilantes. And all of this is happening during a period of uncertainty here, Rich, as we’ve been talking about when Treasury should be rallying.

What’s your take on this sell off, especially with what you’re just talking about, you know, going towards some of those ETF outflows, too? I mean, does this signal a broader loss of confidence in the dollar itself or U.S. policy? You hit it on the head, Jeremy, and that’s what’s happening. And we’ve and we’ve seen this. It’s not just now.

This has been building for a few years. You go back and you look at the the total treasuries held by China, total treasuries held by Japan and others over the past few years. They have been selling off in favor of gold and a lot of that.

And it’s not just the major countries. Smaller countries are doing as well. I think one of the biggest buyers of gold as a central bank has been Poland.

You know, all these countries are doing it, even if they’re friendly to the U.S. because they feel that one, the U.S. dollar is a bad bet. It has been, especially with all the the uncertainty regarding tariffs, debts, et cetera. And the the the bad blood between Democrats and Republicans.

And I guess the lack of belief that that can be solved anytime soon. You know, it used to be where they had differing beliefs on both sides of the aisle, but they worked together and figured things out. And now they don’t talk to each other.

It’s like if you don’t subscribe to exactly what I say, you’re evil on the opposite side of the spectrum. And that’s not a healthy environment. And I think the world is kind of waking up to that.

I hope we we wake up ourselves and figure it out here in the U.S. because, you know, there’s too much at stake here to lose for individual wealth, for corporate wealth, for government wealth and well-being. And I do think we’re much better off working together. You know, if if if a certain market in a foreign country does something better and I do something here better, we can exchange goods and services and we’re all better off for it.

And that’s that’s what stops when you when you have trade barriers. That’s what stops when you turn in and forget all your friends outside. I’m not saying that we all have to hug arms and, you know, I’m for you and you’re for me.

You know, we could be for each other. But the best way for us all to get forward is to work together in our areas of specialty, in my opinion. And so, yeah, I think this is, you know, a little bit of it is the weaponization of the U.S. dollar, you know.

So obviously our enemies don’t take that very well, but our friends don’t take it well either. So they’ve been shifting to gold with their central bank reserves from dollars. There’s there’s fear about inflation.

There’s fear about the strength of the dollar going forward. And that’s it’s been the case. That’s why we saw three thousand tons of gold bought over the past three years.

A thousand tons each for the last three years by central banks. Forty to 60 percent more than the any high on any year of the previous 12, which were all net buying years for central banks. Forty to 60 percent higher for three years in a row.

Clearly, this is not a flash in the pan. This is a concerted effort to shore up their reserves. And right now they’re thinking the tier one asset gold is a better option than dollars.

And I don’t blame them. Yeah. In this conversation, I mean, we got to talk about the Fed because Treasury Secretary Scott Besson just revealed that the White House will begin interviewing new candidates to succeed Fed Chair Jerome Powell this fall.

Now, obviously, markets are already quite jittery over Fed policy, and Trump has publicly demanded that rates come down. How do you think these markets and gold will interpret this early move? I mean, I wonder, are markets, you know, are they starting to look forward? Are they pricing in what the new Fed chair would do? I don’t think they’re doing it just yet, but they may very well. Obviously, if they do replace Fed Chair Powell, the hopes is that we’ll see lower rates sooner than what they’re suggesting.

Now, I got to tell you, I would love to see lower rates. I think it’s better for business. But it’s also inflationary.

They need to see inflation come down. And it’s not. I mean, it came down a little.

I think the PPI numbers were a little lower. But you got to understand that even at two and a half to three percent inflation, you know, prices are still going up and it’s already tough on Americans. We talked about that earlier.

So I think the markets are going to react. They’re going to love that. But in the end, it’s going to be inflationary.

And the answer to that is, you know, the reason prices go up is because they expand the money supply to accommodate for that. Yeah. And finally here, as we continue to talk about it and as investors begin to enter the gold and silver markets, you’re talking a little bit about buyer beware, you know, this is are we at the top here? I mean, you’re talking about still some good price action on the gold front.

But what’s the biggest pitfalls people should avoid right now as they move into precious metals here, Rich? Now, it’s a great question. We’re actually seeing it. There’s stories out there about, you know, I want to say Walmart was selling fake bars and silver and other things.

So you’re going to see the scamsters. And I’m not saying Walmart’s a scamster. I’m sure they were taken by somebody.

But you’re going to see the scamsters come out because, again, retail investors are not in this marketplace. They’re the ones that the scammers go after. Right.

So when the retail investors start coming into this market and they’re not comfortable and they don’t understand it, they know they want to buy gold, but they don’t know how to do it. They don’t know who the trusted dealers are. That’s when you start having some of these issues.

I’ve said this before. I’ll just reiterate a couple of quick points to protect yourself. The first one is if you’re looking to buy precious metals from a dealer and the first question you want to ask is, when I’m ready to sell, will you buy it back? And if they don’t, run away.

Right. Because it’s the best business a dealer can do. I’m telling you, Jeremy, when I buy from a client and I sell to another client, I eliminate wholesaler in the middle.

So what I can do is I can pay my first client more than I normally could. I can sell it to my second client at less than I normally could. So they both win.

I get to make more money in the middle. Why wouldn’t you do that business as a dealer? And the answer is the only reason you won’t do it is because you’re charging way too much going in. So if they don’t buy back, no matter what they say about auctions, it’s all garbage.

What they’re really telling you by not buying back is they charged you way too much going in and they don’t want you to know it when they fix a price coming out. Okay. So that’s number one.

Two, modern issue collectibles, I’d be careful. You know, there are established collectibles, you know, early U.S. gold, world, ancient coins, et cetera, which have an absolutely developed collectible market. Don’t buy modern issue bullion on the promise that some sort of crazy narrative is going to come to pass and therefore increase the value of your metals.

I’ve seen people pay, you know, $7,200 for $2,500 worth of bullion on the belief that some story is going to play out. Don’t buy into that. You know, bullion is for bullion.

Established collectibles are for your numismatic portfolio, usually a smaller allocation. Another easy one. If you can’t shop it, don’t buy it.

Okay. So if one firm has something and nobody else on earth has it, chances are you cannot shop that price. You don’t know what’s reasonable and therefore you shouldn’t touch it.

And then the very last thing is, you know, shop trusted dealers. If you don’t know a trusted dealer, talk to friends who have bought precious metals. They will tell you who the trusted dealers are.

If you have advisors, financial planners, newsletters, you know, sources like Kitco, where you trust, you know, their judgment over the years and they have recommended dealers, go to them. They’re typically the people that will buy from source distributors, the folks that buy directly from the mints. You’re not going to get into trouble.

And, you know, when you’re shopping, you want to get the best price. However, price isn’t everything. Okay.

Knowing that your metal shows up every time you buy, knowing that your dollars show up every time you sell, that’s much more important than a couple of bucks on an ounce of gold, I could tell you. Yeah. Good advice.

I wish it was the same with stocks. They’d buy it back if they sold it to me. Rich Checkin, President and CEO of Asset Strategies International on these tips.

Thanks for this, my friend. Great to see you as always. Always great to see you.

And thanks for having me. Thanks, Rich. Appreciate it.

And thank you for watching. I’m Jeremy Safran. You can like, subscribe and stay with us for more market moving interviews right here on Kitco News.

We’ll see you next time.