Gold tested its lowest level in more than two months before bouncing back. The immediate explanation is the jobs report, Fed hike bets, and higher yields. Ronnie Stöferle says the bigger issue is that gold is no longer just reacting to rates; his report argues gold is being slowly remonetized as bonds lose trust and central banks accumulate metal.

Gold tested the 20% setback zone from your report before bouncing around $4,300. Is this a historical parallel where gold drops early in geopolitical/oil shocks because yields rise, then recovers as debt/liquidity problems refocus? Or is the rate hike repricing doing more damage?

We are getting closer to a panic level. We shouldn't expect too much for gold for the next couple of weeks due to weak seasonality and a huge U-turn in interest rate expectations (from rate cuts to potential rate hikes). This correction is like climbing Mount Everest: you need to stop at base camp to rest and digest the 60% return gold had last year.

We will test the $4,000 round number, and you really want to be an aggressive buyer at those levels. This is a healthy mid-cycle correction, not the end of the bull market.

Your framing suggests the biggest mispricing is in money itself. Why is gold selling off on a rate headline? Is the market still treating gold like a commodity when it should be pricing it like money?

Correlations change. Gold is super liquid ($550 billion daily value traded). In panic mode, you sell where you have profits and the lowest bid-ask spread. This stress volatility is a major driver of the correction, similar to 2008-2009 when gold sold off during the Lehman crisis but laid the foundation for the next leg up.

The medium-term case to reach $8,900 assumes financial stress is followed by central banks flooding the system with liquidity. If the new Fed chair tightens into inflation, what is the weakest link? Treasury market liquidity, private credit, the consumer, the banking system, or political tolerance for higher interest costs?

The most important question is: is this a normal gold cycle or a remonetization cycle? If it's a remonetization cycle, I couldn't care less if gold is at $4,300 or $4,800; in monetary terms, it's still very cheap. We describe six vectors of remonetization: erosion of trust in central banks, fiat currencies, and the media. We are in the 'suddenly' stage of a reorganization of the monetary system.

Your report argues the next major buyer of gold could come from the roughly $140 trillion bond market. What would make a serious institutional investor take money out of government bonds and put it into gold, even with yields elevated?

The huge bear market in government bonds worldwide is a confirmation of our thesis. A mentor told me to 'scare your investors out of bonds.' The investable gold market is roughly $15 trillion, so a 2% reallocation from the $140 trillion bond market would be enormous. Institutional investors ask 'gold doesn't pay interest,' but gold was up 60% last year.

Is the clearest proof of remonetization central bank buying, gold-backed bonds, gold revaluation, tokenization, or Western investors treating gold as collateral again? Rank which matters most over the next 12 months.

It's a silent remonetization. Central banks buying like crazy (three years in a row over 1,000 tons, first quarter of this year over 250 tons again) is key. This started with the sanctions against Russia in 2022. Gold is the monetary Plan B for emerging market central banks.

China's central bank kept buying gold, but Shanghai retail buyers dropped sharply. What matters more: the price-sensitive household buyer or the strategic central bank buying?

Last year was the first year gold ETFs became an important driver on the demand side. In March, we saw 86 tons of outflows from Western gold ETFs (panic), but big purchases by Asian ETF buyers and solid physical demand in emerging markets. The center of the gold world has moved from the West to emerging markets.

Luke Groman's thought experiment: if gold were priced at $39,000/oz, China's $1.2 trillion trade surplus disappears. Is gold becoming the pressure valve for a trade system that politicians refuse to rebalance honestly?

Yes, if you want to balance trade, let gold go. Gold has been the arbiter for 5,000 years. The shadow gold price (backing the monetary base with gold) would easily be above $20,000 for the US alone. Politicians never talked about gold before; now Trump says 'welcome to the golden age,' Scott Bessent says his largest private investment is gold, and Kevin Warsh understands gold.

The sector is roughly 1% of the global equity market. Has the sector learned the lesson to stop talking like geologists and start explaining cash flow?

The sector did a really good job. I'm seeing pristine balance sheets and so much value. But the easy money has been made; now it's time to be active. In my gold fund, we have more than 50% cash, mostly in large-cap producers and royalty/streaming. We will aggressively allocate capital again once we see panic.

What would qualify as panic for you to deploy cash? Gold testing $4,000? Miners breaking? Sentiment washing out?

Timing a bottom is tough. We have a structured process: we have quality names we want to own, certain limits where we would buy, and we put in stink bids. The market wants to see the round number of $4,000 in gold. Seasonally, we usually see a bottom mid-June, then a bounce, then lows in late July/mid-August.

If the generalist finally comes in, does he buy the simplest story first (royalty companies and majors) or does the real torque still sit in developers and juniors?

Generalists need liquidity. For a large institutional player, there's no other way than buying into the liquid large caps. As the bull market progresses, risk appetite rises and there will be more liquidity in midcaps and smaller names, but that's not where the big capital is allocated first.

Your $4,800 target arrived early. When a long-term target hits years ahead of schedule, how do you separate validation from overheating?

The $4,800 target was our call in the 2020 report. We faced huge criticism. Now gold has become more mainstream, but we are not in the final crazy distribution phase. Our inflationary price target of $8,900 by 2030 represents a 14.5% CAGR, which is below the 19.7% CAGR we realized since this golden decade began. We are still right on track.

What are the three signals you would watch before adding exposure to gold and silver miners?

First, extreme levels of outflows from gold ETFs and mining ETFs (GDX, GDXJ, SILJ). Second, sentiment indices by Sentiment Trader showing more panic. Third, the Commitment of Traders report where I already see a pretty positive setup. Also, commentary on Twitter by large names saying 'the gold bubble has popped.'