This is an audio transcript of the Unhedged podcast episode: ‘How does a gold rush end?’
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Katie Martin
Gold and silver have gone absolutely bananas, there’s really no other term for it. These precious metals have been on the up for some time with some really big gains in price over 2025, but at the start of this year, Kaboom! Proper old school, rip your face off rallies, there just seems to be no limit to these things.
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Silver is now trading well above a $100 an ounce. It jumped 12 per cent or so just on Monday and gold is well into the $5,000. If that all feels like too much, too fast to you, then I’m minded to agree, but at the same time, you stand in the way of this thing at your peril. Today on the show: are precious metals close to the top or are we just getting going?
This is Unhedged, the markets and finance podcast from the Financial Times and Pushkin. I’m Katie Martin, a markets columnist at the FT in very soggy London raining all the time. And I’m joined down the line from super chilly New York City by Mr Robert Armstrong off of the Unhedged newsletter. Rob this sounds bad, but what are you wearing?
Robert Armstrong
Well, it’s funny. I am wearing a jacket and tie, but I’m also wearing hiking boots.
Katie Martin
Nice.
Robert Armstrong
Because of the snow, which may sound like an awkward combination, were it not that had been made fashionable by one of the most fashionable men in the 20th century, Gianni Agnelli. Who famously wore hiking boots with a suit after he twisted his ankle skiing, and it became a fashionable thing to do because of that. So I’m just rocking that style today.
Katie Martin
So Rob, since you said in September last year that you were short gold, it has doubled in price. So listeners, when we say this show is not investment advice, we mean . . .
Robert Armstrong
Katie.
Katie Martin
. . . it is not investment advice.
Robert Armstrong
There are . . . we ought to put up a plaque in the FT offices to how wrong I have been about gold. There ought to be like an interactive exhibit of how incredibly incorrect I have been about this asset. So you know, I’m just . . . I don’t know. Sometimes you get things wrong. I got this one as wrong as you can possibly get something wrong. The thing Katie is like, it’s still a head scratcher for me. I still don’t quite get it, but I’m starting to get it. I mean, there are arguments that I find a bit more convincing.
Katie Martin
So let’s get stuck in and like, to a large extent, this is like a visual story. So if you’re listening, pull up a chart, right? Punch it into a search engine. Ask for like a gold chart, a silver chart, you will see what we’re talking about. So scores on the doors are as follows. Gold, had a good year last year it was up 65 per cent. That is a lot. So far this year it’s up another 16 per cent, one six, so it’s trading at about $5,100 an ounce. Silver, meanwhile, has been like really boring forever. It’s basically traded at $20 to $30 an ounce for like forever. In 2025, it added 150 per cent. So that’s like serious money. But so far in 2026 and January is not even out yet as we record this, it’s added another 50 per cent. It’s well over $100 an ounce. It’s about $111 an ounce last time I checked. This is not normal, Rob, to the extent that you are getting your head around this stuff, what do you think is going on here? Because you can paint your own adventure on to precious metals. What do you think is going on?
Robert Armstrong
Can I just say what I think it isn’t, Katie? As a way to start.
Katie Martin
That’s a good place to start.
Robert Armstrong
It is not debasement and debasement is not the lowest floor of your house. It is the idea that because governments are wildly indebted, they will ultimately be forced to print currency and devalue everything in order to get out of their debt problems. So you better own gold or silver or real estate or this or that.
The problem with the debasement thesis is that there is no sign of it in the bond market. And if we were in a global panic about bonds, I think you would see something in the bond or the currency markets, and I just don’t see it. I don’t think that the fall in the dollar is actually that big a deal in historical terms.
Market-based measures of future inflation are absolutely placid. Long bond yields are a little higher, but not much. You just don’t see it. And look, I acknowledge there’s a lot of people who say global central banks have basically given the bond market a huge shot of Novocaine, so it is basically unable to respond to anything and just sits there with its mouth hanging open. But still, I cannot believe that I would search high and low in the fixed income and currency markets and find no evidence of this debasement and yet gold triples or whatever. I just am not buying that.
Katie Martin
Yeah, this idea on very excitable bits of the internet that says that, you know, fiat currency is over, right? So like dollars and pounds and euros, and yen and all this sort of thing, like normal currencies are dying and they’re gonna be replaced by metals. I mean, OK, sure, whatever.
Robert Armstrong
I mean, we all know they’re gonna be replaced by bitcoin, Katie. Come on.
Katie Martin
Well, funny you should mention my favourite thing, bitcoin. Have you noticed like the whole thing for bitcoin bros and bitcoin girls for years has been, this is a dollar debasement trade. The dollar is over, what you need in your life is bitcoin. Do you know what bitcoin has done in the middle of this big kind of massive party that’s going on in gold and silver?
Robert Armstrong
I don’t know.
Katie Martin
That’s right, listeners. Nothing. It is going nowhere. So that’s just another poke in the eye for the whole debasement trade nonsense when it comes to bitcoin. But we have talked about this on the show before, right?
There is this urge, whether that’s among big central banks or big asset managers or reserve managers all around the world to hold something that’s not dollars for a variety of reasons. You know, there’s the dollars that got seized from Russia when it properly invaded Ukraine in 2022.
There’s, you know, more recently there’s all of the Trump stuff and there is all of this sort of attack on the independence of the Federal Reserve, the central bank, right? So there’s a bunch of reasons why you might not want to hold dollars. So there’s a lot of central banks out there saying: I’d actually quite like to hold more gold instead. Like, I’m not getting rid of all my dollars. I’m just buying more gold. And that pulls silver up with it too.
Robert Armstrong
Fine. But according to the . . . my good friends at the World Gold Council, and they are my good friends, I’m not being sarcastic about that. Between 2024 and 2025 global central bank purchases of gold, which were very high in 2024 and in the two years prior to that, fell by more than a third. And this actually makes tons of sense.
If you’re a central bank and you have like a value allocation to gold, you don’t have to buy any more of the stuff because the price keeps going up, right? You know what I mean? You just sit there and watch your gold reserves that you already have increase in value. Why would you buy, why would you drag more of this stuff into your vault or whatever? So, actually the latest run in gold, the, you know, over the last year or so, it’s quite hard to explain in terms of central bank buying.
Katie Martin
One of the things that goes some way to explaining this is the changing nature of safe havens, right? It’s the stuff that investors buy when they’re nervous about things.
Now, normally the dollar would do the lion’s share of that work in the financial system. So bad stuff happens, people buy dollars. People are getting more nervous about doing that for obvious reasons so what else do they buy? Now, the other normal safe havens, normal haven currencies are the Japanese yen, which is been doing actually really badly for a variety of other reasons. So that’s kind of out of the running. There’s the Swiss franc, which has gone absolutely to the moon and is problematic for the central bank there but it’s only so big. There’s only so many Swiss francs to go around.
So it does mean that some of that pressure gets forced into gold. And I think what’s happened here is you’ve got some of this grand theory about the role of the dollar in the financial system but what you’ve also got on top of that is a huge dollop of just outright naked speculation. There’s just a lot of people, whether that’s like hedge funds or other funds or individuals and retail investors, who cannot get enough of this stuff. They saw what happened to the price of gold last year and they’re saying, yes, please, I’ll have a bit of that.
So it’s almost like a situation where, normally, the idea is that gold goes up when something bad happens and people are nervous but right now, what you’ve got is gold and silver are going up based on fear and greed, which is like a really heady cocktail and it just means it is very difficult to see what stops it.
Robert Armstrong
I’d like to have one point of descent and one point of clarification to your . . . what you said, most of which 90 per cent of which I agree with but the point of descent is I’m not . . . you gesture towards a big flight from the dollar as a safe haven. I don’t believe that’s happening. I just wanna put that on the record. I see how you’re reading the data. I see the data also, we’re gonna have to disagree about that. That’s point number one.
Katie Martin
Fine.
Robert Armstrong
The clarification or the distinction I would like to make is between two kinds of fear. And I agree with you.
Gold is kind of like fear in physical form. I mean, but I think you should distinguish or we should distinguish between fear of inflation and fear of debasement, which I don’t think historically has a very strong relationship with gold. There are decades in which gold underperforms the money supply or the rate of inflation or all this stuff. It’s just a not a good inflation hedge.
But gold does really well when people just generally feel like hell about the state of the world in really miserable moments — like the 1970s or during the great financial crisis or during a stock market crash, gold does well. So the thesis I find more sympathetic about gold than the debasement thesis is the one you mentioned, which is speculation line go up.
We’re in a very speculative market. We’re in a very leveraged market. People will chase anything. But number two, I’m more sympathetic to the idea that people are just afraid right now. And when people are afraid about the state of the world, they buy gold.
Katie Martin
So I was talking to fund manager earlier about all this stuff and he was pointing out that like, again, if you call up one of these charts, a gold chart or a silver chart or on a screen in front of you, the line just hockey sticks higher, right? This isn’t like a smooth ascent. It just goes wee.
Robert Armstrong
It’s not even a hockey stick. It’s like a right angle. It’s like (Laughter) just . . .
Katie Martin
And what this chap was saying to me is, look, that sort of price action, those sorts of patterns on charts simply do not happen without a fair amount of leverage, which means that a lot of people out there, probably retail investors, you know, mom-and-pop investors and people like me and you are borrowing money to get themselves some exposure to gold and silver prices. That’s when you get like stuff going on that doesn’t feel very healthy.
So like, as I say on Monday, the silver price rocketed and then tanked and then rocketed again and ended up the day pretty much like where it started but at a certain point in the day, it was up 12 per cent in a day. My worry, I guess, is things that go up 12 per cent in a day cause accidents. It’s just never good to have that much volatility in anything. So I think there’s a lot of retail excitement and I think there’s a lot of leverage and I think there’s that. There are just lines on charts that make me go, ew, no, don’t mind.
Robert Armstrong
If you look at a 50-year chart, Katie, of gold and silver in inflation adjusted terms, so we’re just taking inflation out of it. There are historically big spikes in price, like the one we are seeing now. One around 1979-80, one around 2011.
And the thing is those past two incidents were horrendous times to buy gold and silver, you know? If you went anywhere near gold in 2011 and you held for any considerable amount of time, you got smoked similarly in the ’80s. So the chart is not very appetising to a kind of fuddy-duddy value person such as myself. It is scary.
Katie Martin
But what I’m finding in this sort of moment that we’ve got in gold and silver is that normally, my inbox fills up with very sensible people, very sort of bottomed up investment banks saying, whoa, there everyone, this is all getting out of hand. Let’s just, you know, take a bit of a bit of a time out here. Nuh, not this time, so just before I came down to the studio to record this, I got a note in from Citi, the big investment bank. They were saying they’ve upgraded their zero to three month-price forecast from a $100 an ounce to $150 an ounce.
Robert Armstrong
That’s chunky.
Katie Martin
So they think this thing that is chunky and they say, if you look at the sort of way that silver normally trades in relation to the price of gold, then if you go back to that sort of metric, that would take you to about $160, $170 an ounce or even up to $300 an ounce, which is what we had in 1979. So this is another thing that people keep saying to me, is that when this stuff moves, it moves like gold and silver prices can really shift because, you know, OK, silver has rather more of a kind of industrial use case than gold does.
But really, these things, when they’re trading just like precious metals then there’s not really many fundamentals that matter here, if you like. So when the price jumps, it can really jump and when it falls, it can really fall. And right now it’s really jumping.
Robert Armstrong
We should probably talk, Katie, about the industrial side of silver
demand . . .
Katie Martin
Well, yeah.
Robert Armstrong
. . . which is important here, right? So I’ve been reading this guy called Alexander Campbell this morning, who has a substack called campbellramble and he makes a very kind of a well-defined case that especially with solar demand, silver goes into solar panels.
That demand is increasing as more and more solar capacity gets built. At the same time, he makes this argument that the supply of silver is not that elastic, meaning, actually the price goes up. Not that much more silver comes out of the ground because most silver that comes out of the ground is a byproduct of looking for other metals like gold or whatever else, copper. You get some silver with that, so the supply doesn’t respond. So his argument is we have rigid supply, growing demand. Here we go, it is on, right? The price is gonna go bananas.
Katie Martin
Yep.
Robert Armstrong
As it already is.
Katie Martin
I find myself wondering, so as you say, like silver is really important in solar panels. I understand it’s really important in electric vehicles and in the big fancy computers that make AI tick, there’s gotta be a lot of companies out there that need to buy silver to make their widgets work that are really feeling the pain here. I just sort of wonder, you know, when we’re gonna see someone fall over or like hit the alarm and say, this is really hurting us.
Robert Armstrong
Campbell makes the point in his blog that the silver futures market is going bananas. So people are clearly, really scrambling for supply of that stuff. And I would guess that’s industrial users rather than speculative users being like, we gotta lock this stuff in now at whatever price. Because we got panels to make or we got cars to make, you know.
Katie Martin
Yeah, the other complicating factor there is that fairly soon we’re going to have a decision on whether silver gets taken in scope for new US rules on critical minerals. So there’s been quite a lot of stockpiling of silver, like industrial users getting hold of as much of this stuff in advance as they can and holding on to it because they think it’s gonna be painfully expensive in future.
What that does is it means there’s not that much silver kicking around as almost like a free float. So the amount that’s actually there and available for trading that people are willing to let go of and allow to be traded is quite small. And that again, that’s why I think silver is acting like a meme stock.
Do you remember that thing in 2021 when like GameStop went bananas? And there was a bunch of like trashy US stocks that had small free floats that just went absolutely postal. And people made loads of money, lost loads of money. It was a huge drama. Effectively, silver is trading like a meme stock now.
And I think that means, you know, if you’re listening to this and you’re thinking, oh, I’m going to put my life savings into silver, good luck with that, but you should be aware that when things go up really, really quickly, like a meme stock, they can come down really, really quickly as well, and the volatility can be really high.
And I wouldn’t mind betting that silver does end up like carry on pushing higher. But you’re gonna get some drawdowns, you’re gonna get some up and down action that could get painful if you’re buying at this point. Let’s talk about what can break the spell? What can make this turnaround? Because this is silly, right? What can stop the silly?
Robert Armstrong
I’m not sure it’s quite as silly as you think it is. It’s silly. but I’m . . . (Laughter) right? I mean, I think there is a speculative element here, but I think having been very wrong about this before, I’m coming around to the view that there has been some kind of regime change where in the case of gold, gold has a different place in portfolios than it did 10 years ago.
And in the case of silver, the supply demand dynamic might be a little different than it was 10 or 15 years ago. So, I just wanna put that out there, but what breaks the spell? Well, as we’ve written in the newsletter, as my colleague, Hakyung, wrote in the newsletter, an outbreak of political sanity. The risk is world peace and justice and happiness and holding hands and singing kumbaya. At which point we all sell our gold and just buy stocks like normal people.
Katie Martin
Let’s assume that’s not gonna happen. What, what? (Laughter)
Robert Armstrong
Come on now, Katie. Good things happen sometimes. Midterms, you know, maybe we get a deeply split government in the United States, at which point it’s impossible for America to screw anything more up, right? Globally?
Katie Martin
That’s ages though. That’s ages. You can get a lot more upside in gold and silver before then.
Robert Armstrong
Yeah, it is ages. Yeah, that is true. Anyway, world peace. World peace is risk number one to gold.
Katie Martin
So let’s assume world peace is not gonna happen. The other thing that might be slightly more likely a few people have mentioned to me is because you’ve got this element where at least a decent slice of what’s happening in gold and silver is about leveraged investment. It’s based on borrowed money. There’s a lot of retail money in there. If, for whatever reason we were to see a hit to the stock market, say stocks fell 10 per cent for, I don’t know, whatever reason, make up your reason.
There’s gonna be a lot of people who are kind of forced to sell out of their gold and silver positions to kind of make themselves whole again. But for now, I mean, I’m not gonna take anything away from the gold and silver bugs. They are having a party. They have . . .
Robert Armstrong
. . . been wrong. I’ve been wrong. I tip my hat to them. They are my daddy.
Katie Martin
God. (Laughter)
Robert Armstrong
Boston Sports fans will know that’s what that’s a reference to, but . . .
Katie Martin
OK.
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I don’t, so for that reason, I’m gonna say we’re gonna be back in just one sec with Long/Short.
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Okie doke. It’s time for Long/Short that part of the show where we go long a thing we love, or short a thing we hate. Rob, what you saying?
Robert Armstrong
I am long the New England Patriots, which is my American football team that has qualified for the Super Bowl, which you may know is a very important sporting contest we have here in America. And I’m especially long the fact that everyone else in the country outside of New England hates the Patriots, and I’m just basking in the rage of the rest of the country.
Katie Martin
Do you have, because you spent some time in the UK, is there an equivalent football team that like English football team that . . .
Robert Armstrong
I guess it would be, it would be probably Manchester United at that phase when it was just winning every trophy and the rest of the country was like, we’re sick of this.
Katie Martin
You might mean Man City, but OK.
Robert Armstrong
Yeah, yeah. I get, was it Man City that was just on like an endless streak of dominating everything and everyone just got heartily tired of it. Yeah.
Katie Martin
Oh right, so you are that person. Interesting. So I’m not sure, but I think I’m long the Melania movie. (Laughter) Like, so I gather like nobody’s going to see it, but I’m personally curious if it crosses into the so bad it’s good kind of part of the matrix because I love a bad movie. I have very low standards. I’m a very basic and bad person, but what I’d like to do is like watch it and come out thinking like lol and not thinking, I want to set fire to things and punch walls. But anyway, have you been to see it? [email protected], tell us how it is. If it’s so bad, it’s good. Then I’m there.
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Listeners, we will be back on Thursday. God alone knows where the gold and silver price will be by then. But listen up. Unhedged is produced by Jake Harper and edited by Brian Urstadt. Our executive producer is Jacob Goldstein. We had additional help from Topher Forhecz. Cheryl Brumley is the FT’s global head of audio. Special thanks to Laura Clarke, Alistair Mackie, Gretta Cohn and Natalie Sadler. FT premium subscribers can get the Unhedged newsletter for free and a 30-day free trial is available to everyone else. Just go to ft.com/unhedgedoffer.
I’m Katie Martin. Thanks for listening.
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