Key Concepts
- Bull Market in Precious Metals: A sustained period of rising prices for gold and silver, currently experiencing significant momentum.
- Shadow Gold Price: A valuation of gold based on debt levels and growth, suggesting gold is currently undervalued in monetary terms.
- Love Trade: The increasing physical demand for gold from China, India, and the Arabic world, driven by cultural affinity and wealth preservation.
- De-dollarization: The trend of countries reducing their reliance on the US dollar, potentially increasing demand for gold as an alternative reserve asset.
- 60/40 Portfolio Rebalancing: Adjusting traditional investment portfolios (60% stocks, 40% bonds) to include precious metals and other assets to mitigate risk and enhance returns.
- Brownfield Expansion: Investing in existing mining operations to increase production and efficiency.
- Gold Ski Pass Ratio: A comparative metric illustrating gold’s purchasing power by relating its price to the cost of a ski pass.
Precious Metals Market Update & Future Outlook – Ronald Peter Stürfley Interview
Introduction
This discussion, conducted at the 2026 Vancouver Resource Investment Conference, features Ronald Peter Stürfley, Managing Partner of Incrementum and publisher of the In Gold We Trust report, with Paul Harris of Kitco Mining. The conversation centers on the current state of the precious metals market, particularly gold and silver, and provides insights into potential future developments. Gold is currently trading at $5,000 per ounce, with silver at $100 per ounce, representing significant gains.
Current Market Dynamics & Silver’s Surge
Stürfley acknowledges the rapid price increases, stating he wouldn’t be “taking a big victory lap” despite Incrementum forecasting a bull market in gold since 2020. He specifically notes the surprising speed of silver’s rise to triple-digit prices, attributing it to “enormous amount of momentum” and “buyers with deep pockets” consistently absorbing corrections. He emphasizes that the market is currently in a bull market, not a bubble, and anticipates continued “interesting” developments in the coming months.
Evolving Price Outlook & the “Big Long” Report
The discussion references Incrementum’s “Big Long” report, which predicted higher prices than currently observed. Stürfley explains that while momentum has been faster than anticipated, a 15-20% correction (equivalent to $1,000) is likely at some point. However, he frames this as a normal market fluctuation within a larger trend. He poses the question of whether this is a typical cycle or the beginning of a fundamental revaluation of gold.
Gold Valuation: Monetary vs. Commodity Perspective
Stürfley highlights a key distinction in gold valuation: when compared to commodities (especially oil), gold is relatively expensive. However, when assessed in monetary terms, using the “shadow gold price” (comparing gold to debt levels), it appears inexpensive and even undervalued. This suggests a potential for further appreciation driven by de-dollarization and a return to some form of gold backing for currencies. He specifically points to the possibility of gold-backed US Treasury bonds, noting that ideas previously considered unrealistic (like those proposed by Trudy Shelton) are now becoming increasingly plausible, particularly with the approaching 250th anniversary of the United States on July 4th.
The “Love Trade” & Demand Drivers
A crucial foundation of the current bull market, according to Stürfley, is the “love trade” – the strong physical demand for gold from China, India, and the Arabic world, accounting for over two-thirds of total demand. He also notes the significant purchases by central banks (roughly 1,000 tons annually since the sanctions against Russia in 2022) and the recent (starting in 2024) entry of Western financial investors into the gold market. He anticipates future demand from Western financial investors will increasingly come from the fixed income sector, potentially mirroring the 30-40% gold allocation seen in the 1970s.
Cyclicality & the Debt Challenge
Addressing the cyclical nature of markets, Stürfley acknowledges the possibility of a correction but argues that the current situation may be different due to unprecedented debt levels. He states that raising interest rates to levels seen in the 1970s (20% by Paul Volcker) is now “pretty much impossible” due to the sheer volume of government and private debt. He describes the debt situation as a “cartoon with a dad standing in front of a big mountain with his two kids,” highlighting the burden being passed on to future generations. He predicts a combination of financial repression and structurally higher inflation rates as the likely outcome, driving continued demand for gold.
US Future & Investor Sentiment
When asked about the future of the United States, Stürfley expresses optimism that it will celebrate its 250th birthday, despite acknowledging the challenges. He notes a shift in investor mindset, with those from countries accustomed to currency instability (Turkey, India) naturally incorporating gold into their portfolios as an inflation hedge. He points to a Bank of America chart illustrating “lost decades” for the traditional 60/40 portfolio, beginning in 2022.
The New 60/40 Portfolio & Mining Stock Strategy
Incrementum has developed a “new 60/40 portfolio” incorporating precious metals, mining stocks, commodities, and Bitcoin, which has outperformed the traditional 60/40 portfolio by 25 percentage points since 2024. Stürfley emphasizes that mining stocks are not a “buy and hold” asset class, requiring active management. Their benchmark is gold itself, aiming for outperformance. He believes junior mining stocks will eventually outperform large-cap producers later in the bull market, as risk appetite increases. He notes that outside of the “gold bubble,” broader investor awareness of the high gold price remains limited.
Investment Strategy & M&A Activity
Stürfley advises against chasing the market and suggests taking profits and hedging positions. He favors brownfield expansion (investing in existing mines) and highlights deals like Jonathan Olsson’s Hemlo deal as positive examples. He cautions against excessive dividend payouts from mining companies, arguing that the volatility of mining stocks outweighs the potential yield. He anticipates increased M&A activity later in the cycle, potentially including “crazy” and “useless” deals driven by management pressure.
The Next In Gold We Trust Report
The 20th edition of the In Gold We Trust report, due for release on May 20th, will focus on the next 20 years, exploring the long-term outlook for gold and its role in a changing global landscape. Stürfley emphasizes the complexity of analyzing gold, considering geopolitical factors, de-dollarization, inflation, and bond prices.
Conclusion
The interview paints a bullish picture for precious metals, driven by a confluence of factors including strong physical demand, central bank purchases, Western investor interest, and concerns about debt levels and inflation. While acknowledging the potential for corrections, Stürfley believes the current bull market has strong foundations and could continue for an extended period, potentially leading to a fundamental revaluation of gold’s role in the global monetary system. He advocates for a proactive and selective investment approach, focusing on active management of mining stocks and a long-term perspective.
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