What’s Really Driving the Surge in Gold and Silver

By Victor Sperandeo with the Curmudgeon

Introduction:

On Friday, Gold (March COMEX futures) closed at $5,001.10 while Silver (March COMEX futures) settled at $103.26 — a remarkable level that demands analysis of both the drivers and implications behind this surge in the precious metals. Gold and Silver are in one of the most powerful and sustained bull markets in their history, with no meaningful correction since September 2023.

The most recent upside momentum was sparked by rhetoric and statements from global leaders at the World Economic Forum (WEF) in Davos, intensifying already positive investor sentiment toward hard assets. Much more below.

Full Disclosure: Victor is a long-term investor in both gold and silver. However, he and the Curmudgeon caution others against relying on overly promotional commentary from bullion dealers or online gold advocates. Such sources often offer one-sided bullish forecasts without addressing risk or valuation discipline — no different from stock-promotion chatter on financial media or speculative hype from cryptocurrency promoters. Please ignore those perma-bull clarion calls.

Impressive Charts:

…………………………………………………………………………….

Market Assessment:

In the near term, equities and precious metals markets appear overextended. A correction in both seems plausible this quarter, driven by economic softness and potential monetary policy re-calibration by the Federal Reserve which is not expected to lower the Federal Funds rate at next week’s FOMC meeting.

While price momentum is strong, I believe the current precious metals rally is not fundamentally economic in nature, but primarily political. Global governments continue to expand their balance sheets through money creation — not purely for growth or stabilization, but often to preserve political power. Programs framed as “modest” inflation targeting or stimulus serve a dual purpose: 1.] sustaining short-term economic activity and 2.] gradually eroding public savings through inflation to reduce real debt burdens.

The confiscation of over $300 billion in Russian reserves following U.S. sanctions was a profound geopolitical signal — a warning to other nations that sovereign assets, when held in Western institutions, are no longer safe from political intervention. Also, the U.S intervention in Venezuela has tested the dollar’s “safe haven” status.

These events fundamentally undermined confidence in dollar-denominated reserves and accelerated the diversification away from U.S. Treasuries. The consequence has been an ongoing monetary realignment, with countries and private investors seeking assets beyond the reach of centralized power — assets such as gold, which serves not only as an inflation hedge but also as a store of value in times of political instability.

Central Bank Buying of Gold:

Historically, net sellers of bullion, central banks transitioned to persistent net buyers of gold in 2010 as the Global Financial Crisis necessitated a strategic re-evaluation of systemic risk. This trend accelerated sharply in 2022 following Russia’s invasion of Ukraine and the subsequent sanctions against Russia. Emerging market central banks and the Peoples Bank of China are aggressively diversifying away from U.S. dollar denominated assets into hard assets like gold and real estate to mitigate geopolitical and seizure risks. Concurrently, institutions like the National Bank of Poland are leveraging gold's role as a Tier-1 reserve asset to bolster currency stability and offset the credit risks inherent in sovereign debt holdings.

As of late 2024 and into 2025, gold makes up roughly 20% of total global central bank reserves, a significant increase from prior years, surpassing the euro to become the world's second-largest reserve asset after the U.S. dollar, driven by geopolitical uncertainty and diversification away from fiat currencies. This share is up from about 10% in the 2010s, with emerging economies leading the trend.

2026 WEF Take Aways:

At the 2026 WEF Conference, remarks by Mark Carney, former Bank of England Governor and now Prime Minister of Canada, further shook perceptions of the so-called “rules-based international order.” His acknowledgment that this framework was “partially false” confirmed what many already suspected -- that much of the postwar economic narrative has served political and institutional self-preservation. This revelation, amplified by independent commentators, underscores a growing realization that economic governance increasingly prioritizes control and continuity over transparency and truth to enable world leaders to retain power.

A quote from the evil Nazi politician Joseph Goebbels comes to mind here:

“If you tell a lie big enough and keep repeating it, people will eventually come to believe it.”

Sadly, this is now the premise of all government’s slogans based on what they want the common person to believe. It is a playbook to dominate and control the people, which makes them into “serfs.”

Notably, the WEF’s virtual abandonment of “Global Warming” language in its agenda signals a strategic pivot among political and financial elites. The narrative emphasis is shifting — possibly toward economic control mechanisms and digital governance — suggesting that the true “big lie” Carney referenced may relate less to environmental policy itself, and more to how global governance redefines the balance of financial power under emergent systems.

Conclusions:

Victor suspects the WEF examples cited above will act as axioms FOR ALL GOVERNMENT EDICTS including its AGENCIES (e.g. the Fed), that try to enslave and control people with made-up agendas. That makes them not only liars, but the enemies of liberty!

The Curmudgeon calls attention to January’s Elliott Wave Theorist, where Robert Prechter notes that while the Dow Jones Industrial average (DJI) made a new all-time high in December 2025, it concurrently made a 12-year low in real money terms (e.g. gold). The chart below depicts the DJI/Gold ratio from 1999 and its 7-year bear market. Incredibly, the DJI/Gold ratio has fallen by half since Sept 2018 while the nominal DJI has doubled over the same period.

…………………………………………………………………………………….

End Quote:

Elton John is one of the greatest singer-song writers of all time. With lyrics written by song writing team partner Bernie Taupin, the song is about liberty of wild Mustang horses. It’s titled, “Live Like Horses.” Here’s the ending:

“Someday, we'll live like horses. Free reign from your old iron fences. There's more ways than one to regain your senses. Break out the stalls and we'll live like horses Someday.”

………………………………………………………………………………

Wishing you good health, success, and good luck. Till next time………………………………………………………………………….

The Curmudgeon
ajwdct@gmail.com

Follow the Curmudgeon on Twitter @ajwdct247

Curmudgeon is a retired investment professional. He has been involved in financial markets since 1968 (yes, he cut his teeth on the 1968-1974 bear market), became an SEC Registered Investment Advisor in 1995, and received the Chartered Financial Analyst designation from AIMR (now CFA Institute) in 1996. He managed hedged equity and alternative (non-correlated) investment accounts for clients from 1992-2005.

Victor Sperandeo is a historian, economist and financial innovator who has re-invented himself and the companies he's owned (since 1971) to profit in the ever-changing and arcane world of markets, economies, and government policies. Victor started his Wall Street career in 1966 and began trading for a living in 1968. As President and CEO of Alpha Financial Technologies LLC, Sperandeo oversees the firm's research and development platform, which is used to create innovative solutions for different futures markets, risk parameters and other factors.

Readers are PROHIBITED from duplicating, copying, or reproducing article(s) written by The Curmudgeon and Victor Sperandeo without providing the URL of the original posted article(s).