Doug McIntyre and Lee Jackson discuss the recent surge in gold prices, which have climbed toward $4,000 per ounce after years of steady gains. Lee explains that gold’s rise is being fueled by investors seeking alternatives to an overheated stock market and by heavy buying from central banks, particularly China, amid widespread global debt. He notes that supply limitations and high mining costs are also driving prices upward, and that gold mining companies have recently outperformed even the AI tech rally.
Some analysts believe prices could eventually reach $7,000, though Lee considers $5,000 a more realistic near-term target. Doug points out that if markets start to decline sharply, investors will likely move their money into safer assets such as gold and mining stocks. Doug cautions that the current market shows signs similar to past bubbles, and discusses whether this all could be a prelude to a major collapse.
Doug McIntyre: Lee, gold’s going crazy. So, two questions. Why is it going crazy and does it get going crazier?
Lee Jackson: I think it will, you know, it’s straightened up near 4,000 bucks. It’s had a huge run over the last two or three years, and one of the biggest reasons, of course, it’s, it’s your typical hedge against a big market crash. And we’re closing in Doug on three years of 20% gains. The NASDAQ’s up 17%, even after a 20% pullback. So we’re closing and there’s a lot of people that are just like, “I gotta have some other asset. I have to have some other asset.” But the interesting thing is, and China has all but said that they’re buying as much as they can get a hand on big, major central banks because of the huge debt that’s all across the world in, you know, emerging markets and, and the, the western, uh, markets. Gold has been, there’re being constant central bank buying constant, you know, and, and it, and there’s no signs that it’s gonna abate at all because, you know, I mean, there’s x amount of supply and you have to get more in terms of just liquid gold bars. You gotta mine more. And you know, it’s an expensive process. But the miners, the miners, I wrote a post on this. The miners that have over the last two or three years have even outdone the AI related stock rally for, for tech stocks, which seems almost impossible to believe. But there’s a guy in, down in San Antonio at US Global Investors named Frank Holmes, and I’ve known this guy for a long time. He’s been the proverbial gold bug. I mean, I’ve known this guy since I was a. Uh, institutional sales guy at, at Lehman Brothers, and, and I used to go down there and call on him and, and he was like, Lee gold’s, gold’s gonna go to 5,000. And at the time it was probably, I don’t know, a thousand or 1200 and he pounded the table on this. So he thinks it’s go going to 7,000. And he also thinks silver can have a huge run and which it already has. But, again, same thing. Demand. And the, the difference for the miners is that a lot of those miners, the big ones, Agnico Eagle, you know, Barrick, you know, the companies like that. They also mine copper, silver, you know, other items that are used in industry. So I, I think it could go higher. Does it go to 7,000? That’s a long way from 4,000. That’s another 75%. But I, I think it’s possible it has more legs.
Doug McIntyre: Well, it could end up also being part of a flight to safety. Because this market can’t run like this forever. So if people start to get really nervous, if the market starts to sell off, if you see it down 20% and people are really sweating that it might go down more, there will start to be a flight to safety, you know, across a whole several asset classes. So is gold gonna go to 7,000? I don’t think so. But is it, could it be up from here? I think it could.
Lee Jackson: Oh, absolutely. I think five thousand’s definitely in the cards in the next couple of years. That’s what Goldman Sachs thinks. You know, the, the interesting thing about all of this is. You know, for years. I mean, our friend Warren Buffet has no gold. He doesn’t think it’s a tradable or useful asset. And I’m like, okay, well, and I get it, you know, because we, we’ve never, you know, in the 15 years that we’ve written about it at 24/7, we’ve never said, well, you better go load the boat on gold. But what we did always maintain is you need to keep 5%, 6%, 7%, something like that as a hedge. And you know, then you have a commodity in there. And so I think you’re right. If things start to get dicey, people will run to the gold or the miners because a, they pay a dividend. And if you try to go to T-bills, I mean, those T-bill yields, 12 months ago and and longer were great, but now they’re not that great anymore and those yields have all come down. So it’ll be interesting to see where the safe harbor is if things do get nasty, which I will guarantee you, Paul Tudor Jones is right about this. He said it can go higher. But we’re gonna get a blow off top, and then we’re gonna have another sell off like we did probably earlier this year that’s 20%.
Doug McIntyre: Yeah, I, that would not show it. It has to look, I understand people who are maybe 30 years old or something like that. I gotta tell you something. This has the look of a market. I’ve seen this, 4, 5, 6 times in my lifetime, this a classic prelude to a major collapse.
Lee Jackson: It really is. It really is. Now, it’s interesting. In this article I saw with Paul Tudor Jones, he didn’t liken it as much to the .com collapse because he said, you know, a lot of these companies that have been involved, the Mag seven companies, they make money. But, but still, it’s just, it all the, all the forward multiples have just been pushed so hard that at some point somebody’s gotta come in and, and sell and something like you, like you were alluding to. Something always happens. Something will happen that’ll kick it off and, and you know, nobody wants to be the last one to shut the door.
Doug McIntyre: No, nobody does.
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