Newsletter · 2026-10-08 · Ashutosh Agarwal

Gold Trades $840 Above Fair Value as Analysts Debate the Debasement Premium - Gold & the Debasement Trade - Week of October 8, 2026

Gold & the Debasement Trade for the week ending Thursday, October 8, 2026. Podcast synthesis on a model that puts gold's debasement premium at about $840, the split between guests who see that premium as too high and those who see it as too low, and a week of deal-making among gold miners and royalty companies.

Gold & the Debasement Trade

Week of October 8, 2026: Gold Trades $840 Above Fair Value as Analysts Debate the Debasement Premium

Gold & the Debasement Trade, weekly. Issue of Thursday, October 8, 2026. Covers podcasts published October 1–8.

This week a precious-metals researcher put a price on the debasement story.

Nicky Shiels runs research at MKS PAMP, one of the world's big gold refiners and traders. On The David Lin Report (Oct 1) she walked through a simple model. It explains gold's price using only the two things that drove it for 50 years: the "real" interest rate on a 10-year Treasury (the yield after inflation) and the strength of the dollar. Feed in today's numbers and the model says gold should be worth about $3,200. Gold was trading around $4,100.

The gap, about $840, is what she calls the "debasement or fiat premium." It is the extra amount people pay because they think governments will keep printing money to handle their debts.

"Gold is still sitting at an $840 premium above fair value. But that $840 is still, on a local level, during a Trump era, still on the lows."

So this week's argument comes down to one question. Is that premium a bubble about to shrink, or a floor that is still too low? Shiels holds both views at once. If real yields rise another half a percentage point, she says, "I think gold is down another five hundred dollars." But she thinks markets are wrongly pricing in a long run of rate hikes, and she still expects gold to beat both the dollar and bonds over time.

Most of the week's podcasts lined up on one side of her question or the other.

What actually happened this week

Gold went sideways with some bumps. The miners did better than the metal for once, while silver and platinum lagged.

Market data: FactSet closing prices.

Here is the path. On Friday Oct 2, the September jobs report missed badly: 29,000 jobs added against 89,000 expected, unemployment up to 4.2%, and August revised down by 29,000. That was summarised on Discover Crypto (Oct 2). Gold jumped. Then bonds sold off anyway and gold "went along for the ride," as Peter Schiff put it on The Peter Schiff Show (Oct 3). He had gold up $40–50 on the jobs news before it faded to close the week near $4,140, up about a fifth of a percent. GDX was down only 0.1%.

The low came Wednesday Oct 7, when the 10-year yield touched 5.36% and gold hit $4,067. It bounced to $4,134 by Thursday's close.

Last week the miners fell two to three times as hard as gold. This week the big, high-quality names went the other way. Agnico, Newmont, Franco-Nevada and Wheaton all rose while gold fell. Juniors and silver miners still lagged. One week is not a trend, but after last week's slide it is worth noting.

The "premium is too high" camp

Brent Johnson: the dollar can still go a lot higher, but he bought gold on Wednesday

Brent Johnson of Santiago Capital is best known for his "dollar milkshake" theory. The idea is that in a global debt crisis, money rushes into the dollar rather than out of it. He came on MacroVoices #553 (Oct 8) the day the dollar index closed above 102.

His explanation for the dollar's strength:

• The new Fed Chair, Kevin Warsh, raised rates when markets expected cuts, "to establish at least some credibility early on."
• There is nowhere else to go. Europe has "a war raging on its border, very little economic growth, and a political union without a fiscal union." China's market is mostly closed.
• Possibly, AI-driven growth means investors "need to get paid more to sit in bonds."

On gold, he was clear about the downside: "If we go to 110 on the dollar index, I think gold probably goes lower, maybe to the $3,700 range." Gold is sitting at a support level, and "if it breaks that support, then it could fall another 10%."

Then he added this:

"Just yesterday I bought some gold for a client... I actually think the gold is going to make a fairly big move in the next few weeks. I think it probably goes higher."

He pointed to a "golden cross" on the chart: the 50-day average price crossed above the 100-day average, which traders read as a sign of turning momentum. "Yesterday" was Oct 7, which turned out to be the week's low.

He also said: "For 25 of the 26 years, I've been hearing that the Fed is out of bullets. And my point to people is that they have a lot more bullets than you can possibly imagine."

Jim Rickards: "the debasement trade is a total false narrative" (and $10,000 gold anyway)

Jim Rickards made the strongest case against the popular story on Bitcoin Magazine's BMTV (Oct 2):

"The BRICS are going to have a new currency. The Chinese are going to have a gold-backed yuan. Sovereign wealth funds and banks are dumping US treasuries... That is a total false narrative. None of those things are true."

His argument: gold is down "over 20%" since January, and the euro, yen and yuan are all falling. That is "a king dollar period," not a debased dollar. When central banks sell Treasuries, "they're not dumping them because they don't like them... The reason they're selling them is they need cash": a dollar shortage, not a rush away from the dollar. He blames gold's slide from January to August on oil: oil is priced in dollars, so when it spiked, countries "sold gold, got dollars to pay for the oil."

Even so, he expects $10,000 gold, possibly by mid-2027. His reasons: mine output has been flat at roughly 4,600 tonnes a year for seven years, central banks have been net buyers since 2010, and every extra $1,000 is a smaller percentage move. "When you go from $9,000 to $10,000, it's only an 11% increase." So the leading skeptic of the debasement story is still a gold bull. He just has different reasons.

Chris Vermeulen: the charts say $3,600, maybe $3,100

On Sprott Money News (Oct 6), technical analyst Chris Vermeulen said gold is in a "stage 3 topping phase," a stretch where "the story is always the strongest" while momentum fades. His key level is about $3,900: "If it just breaks and closes below it for a day or two... I think we're going to slide down to 3,600." His charts point "potentially all the way down to $3,100."

His comparison is 2011–2013, when gold fell 45% and took about 13 years to make real gains again. He is choosing stocks and Bitcoin for now. He still thinks "long-term precious metals are going to go to the moon," and would treat a drop as "an amazing opportunity."

Dana Lyons of the Lyons Share is in the same camp for the short term. On The KE Report (Oct 1) he was hedged in silver, expected SLV to fall about 10% into the upper $40s, and expected GLD to test around $350. He still calls it "digestion" of January's blow-off top and stays in "the bullish long-term precious metals bull camp."

Jesse Felder: gold stays under pressure until the Fed has hiked 1.5–2 points

Jesse Felder of The Felder Report gave the clearest story about rates on Wealthion (Oct 5). Gold peaked in January–February, when markets expected rate cuts. Now the market is waking up to "a sustained rate hike cycle," which "is going to keep a lid on the gold price." His guess is that the bottom comes "after that 150 or 200 basis points of rate hikes" (1.5–2 percentage points), when gold "will sniff out" a Fed U-turn. His most bullish scenario: "If the Fed is forced to come in, even in an inflationary episode, and try and restore calm in the bond market, that would literally be... the ideal scenario for gold bulls."

The "premium is too low" camp

Lyn Alden: the bond market, not the Fed, is now in charge

Lyn Alden appeared twice. On The David Lin Report (Oct 5) she explained fiscal dominance, meaning government debt is so large that the central bank loses its freedom of action. With US interest costs "well over $1 trillion a year," she called the deficit "a leaky bucket that's just going to keep spilling out." She does not expect a sudden collapse ("they're not going to have failed bond auctions this year"). She expects "emerging market characteristics in what is otherwise a developed economy": inflation that stays above target, a boxed-in central bank, and "record high stock prices and near record low consumer sentiment."

She also explained yield curve control, where the central bank promises to buy any bond whose yield rises above a set level. The US last did it in World War II, when "we had 19% inflation... nearly 0% short-term rates... 2.5% 10-year." She noted the Fed is already, quietly, growing its balance sheet while inflation is above target: "very slow and they're only buying on the shorter end."

On BMTV (Oct 5) she repeated her well-known line, "nothing stops this train." With debt over 100% of GDP and rates no longer falling, a country that controls its own currency defaults "primarily through purchasing power rather than nominally": it pays you back in dollars that buy less. Her advice is to own scarce assets, gold and Bitcoin.

Axel Merk: "a slight tightening bias" is fine for gold

Axel Merk runs Merk Investments, a precious-metals manager. On ITM Trading (Oct 5) he said he had met Warsh and was "very honored to be one of the folks that he got input from," but "we did not discuss gold." His reading of Warsh: "a hawk at heart," but not a man with a "sledgehammer." Merk had expected a December hike rather than October and was "baffled that the market priced in a huge rate hike in October." He described Warsh as "not a fan of QE," the Fed's bond-buying programmes.

"We are not in a Powell type of 2022 environment where we really got to crush inflation... Can gold do well in that environment? Absolutely. That said, if you look at real interest rates further out at 10-year, we're at 2.95 in real rates. That's pretty darn high."

He also explained why gold and oil have moved apart since the Iran war began. An oil shock on its own is "a negative for gold" because it slows growth. Gold did well in the 1970s "not because of the oil shock" but because of "the reaction of policymakers that was highly inflationary."

Felix Prehn: why gold falls when the debt crisis starts

Economist and former banker Felix Nikolas Prehn devoted an episode (Oct 7) to the question many gold holders are asking: the bond market is cracking, so why is gold going the wrong way? His three mechanical reasons:

1. The dollar. Higher-for-longer rates lift the dollar, which raises the cost of gold for everyone outside the US.
2. A crowded trade. "Gold is up more than 60% in a year. Silver is up still over 100%... Almost everybody who wants in is basically in."
3. Forced selling. Exchanges raise margin requirements (the cash traders must post), which forces leveraged holders to sell. That trips automatic stop-loss orders, which causes more selling. "It's a cascade."

He points to history: gold fell in 1973–74 and in 2008 before tripling once the money printing started. His long-run framing: "In 1990, an average income could buy 75 ounces of gold. Today, that same average income buys 21 ounces." (His show also sells a paid programme. Keep that in mind.)

A portfolio manager named Rupert added a related point on Wealthion (Oct 5): "Gold is everybody's piggy bank for a rainy day. And there's been quite a lot of rainy day action this year." Outside Chinese central-bank buying and Chinese and Indian households, the big holders have been sellers since late February. In his view these are "people that need to sell stuff to pay bills," not value investors giving up. He keeps a core gold position and sees it "much higher... over the balance of the decade."

Tavi Costa: building a mining portfolio for a 5–10 year theme

Tavi Costa was on Palisades Gold Radio (Oct 8). He is building a new firm, Azuria, around a few big themes, with mining first. His ideal mining company would have cash-producing mines, solid development projects, and bold exploration. No company does all three, because boards still remember 2011, when the industry earned a reputation as "capital bleeders." So he wants to build that mix as a portfolio.

His valuation point: "gold and silver names are really cheap... a lot cheaper than copper names," with better margins. Silver companies stand out. Many hold net cash of 15–20% of their market value, enough to buy back a large share of their stock or fund takeovers. He also floated an idea, with a clear caveat. He suspects the US Treasury may already be buying gold in the market, "but that's just, you know, I don't have data to prove that."

The Treasury, Judy Shelton, and a gold-backed bond

On ITM Trading (Oct 8), Taylor Kenney covered news that Judy Shelton, a long-time advocate of a bigger role for gold, has joined the Treasury as a counselor to Secretary Scott Bessent. (Merk's host mentioned it too.) Shelton's best-known idea is not a return to the gold standard. It is a "Treasury Trust bond": a long bond, say 50 years, that at maturity pays either its dollar value or a fixed amount of gold. The goal is to borrow more cheaply by protecting lenders against debasement. This is ITM's interpretation, and ITM sells gold. No such bond has been proposed officially.

The rest of the chorus

• Peter Schiff (Oct 3, Oct 7) said that when the president talks about inflation paying down the debt, it is effectively a "sell signal" for bondholders. He thinks gold will eventually trade like it did in the 1970s, rising alongside bond yields. Gold "still below 4,200," silver "just barely above $60... we're near support. This is the time to buy." (Schiff runs a gold dealer.)
• The Big Short crew on RiskReversal (Oct 2). Guy Adami said gold has struggled "solely on the back of yields being higher" and will "really flourish" if bonds keep eroding. He called the Netherlands' gold repatriation "a telling sign," after France earlier this year and Germany years ago. Porter Collins: "We're running 5% fiscal deficits as far as the eye can see. We're going to have to print the money."
• Porter Stansberry on The Competent Investor (Oct 6): "Gold's price isn't really going up. What's going down is the value of the dollar." He says long bonds are "down 60 plus percent" in five years and calls bonds "uninvestable."
• Tony Greer on Mining Stock Daily (Oct 5) sits in the middle. Gold gave back its breakout above $4,500 and all its moving averages, "and that plain sucks." But it "is retaining value," and he is "not afraid to buy the pullback to 4K again for a trading position." The trigger he is waiting for: when Bessent or Warsh draw "a line in the sand" on bond yields, "gold is going to go."
• Brien Lundin on The KE Report (Oct 3) says trading algorithms have gone back to the old rule: "higher real yields means press the sell gold button." He thinks the dip "has kind of bottomed out" and calls the rise in bond yields "a sign of the kinds of troubles ahead that gold is the perfect hedge against."

Central banks and de-dollarization: steady, not dramatic

• Shiels (MKS PAMP) said Chinese and other Asian central banks are "really kind of backstopping gold around $4,000," with "just consistent allocations" from ETFs. She also noted that ETF inflows have been "super, super steady and rising into this higher yield environment."
• Kai Hoffmann on Sprott Money News (Oct 2) questioned the Netherlands' gold move as partly "virtue signaling," since some of the gold is going to the UK, not home. His co-host retold the 1971 story, credited to Prehn: the Dutch asked to swap $250 million for US gold, Paul Volcker was sent to talk them out of it, and a month later Nixon closed the gold window. Hoffmann's three things to watch: the Fed's hiking cycle, the US midterms in November, and US–China talks.
• For balance, Goldman Sachs' Jim O'Neill, who coined "BRIC," said on The Sound of Economics (Oct 7) that payments between BRICS countries without the dollar are now "quite feasible" with new technology. Bruegel's Alicia García-Herrero added that the 2024 Kazan summit's de-dollarization tools "didn't fully develop" because members worried about depending on China's currency. In short: payment systems are moving, but no shared BRICS currency is coming.

Miners: deal season, from the operators

This week's best miner material came from people who run, finance or buy mining companies. Most of it came out of two industry conferences, Beaver Creek and Mining Forum Americas.

The big one: Gold Fields wants Northern Star

Money of Mine (Oct 3) laid out the timeline:

• Gold Fields made a private offer around Sept 13–14: 0.3125 Gold Fields shares plus A$7.25 cash per Northern Star share, about A$27 a share and A$38.7 billion for the company.
• Northern Star's board shut down talks around Sept 24–25. Bloomberg reported the bid the next day, and the hosts think the leak was a deliberate pressure tactic.
• Gold Fields CEO Mike Fraser's pitch: a combined Western Australian hub producing 2.4 million ounces, with "92% of Northern Star's Australian reserves... within 100 kilometers of Goldfields processing infrastructure," and US$4–5 billion in claimed synergies (savings from combining).
• The catch: 73% of the price is paid in Gold Fields shares. If Gold Fields stock falls, the offer is worth less. Gold Fields' failed bid for Yamana fell apart that way, and that collapse let Agnico and Pan American step in.
• The pressure: activist fund Elliott is a big Northern Star shareholder, the chair is on the way out, and a new CEO just started.

Olive Resource Capital's Sam Palaz and Derek Macpherson said on Company Interviews (Oct 6) that they are buying Northern Star. They see it as a company coming out of a heavy spending cycle (the Super Pit expansion and Hemi). They called Gold Fields' approach opportunistic.

Fewer targets, and competition from ETFs

The Olive pair made two other points worth knowing:

• Artemis buying Vista Gold for US$427 million works out to about $40 per ounce for roughly 10 million low-grade ounces, against about $400 an ounce in the last big takeover (G2). It also takes Artemis off the list of likely targets, which "revalidates" that there are "fewer and fewer potential takeout candidates" of quality.
• Big miners now compete with ETFs, not just with each other. A large investor who wants gold exposure can buy GLD, GDX or GDXJ "and not take individual stock risk." The result: "multiples have come down, especially for gold companies." On Agnico's conference pitch: "basically the summary... was, we're the best at what we do... And to be fair to Agnico, they are." They noted Agnico runs two of only about six or seven production centres in the world that make a million ounces a year.

Beaver Creek itself was packed. Olive said organisers set up meeting rooms in tents, and Lundin described hotel bars "three, five deep." Lundin added: "I did not get that, you know, hair standing up in the back of your neck kind of tingling that a contrarian... gets when the market gets that enthusiastic." Junior-stock investor Erik Wetterling, on The KE Report (Oct 6), called juniors "spring-loaded." In thinly traded stocks, "it might be one person, basically, that's dictating the sentiment."

Newmont keeps selling non-core assets

StrikePoint Gold CEO Mike Allen explained on The KE Report (Oct 8) how his company, worth about $10 million before the deal, bought Newmont's Northumberland project in Nevada. The price is US$70 million up front plus later payments tied to results, funded by a C$190 million share sale led by Canaccord. The resource is 2.86 million gold-equivalent ounces indicated plus 1.57 million inferred. Allen says the geology resembles Betze-Post, a 32-million-ounce deposit at Goldstrike. The project was last studied in 2007, "in a much different gold price environment."

Royalty and streaming companies kept writing cheques

A royalty gives its owner a cut of a mine's revenue. A stream gives the right to buy part of a mine's output at a fixed low price. Both are usually paid for with an upfront sum.

• Franco-Nevada, part 1 (Cobre Panamá). Last week FNV fell 9.3%. The Canadian Investor (Oct 1) covered the news. A Panama government commission recommended an orderly closure of First Quantum's Cobre Panamá copper mine, which once produced about 1.5% of the world's copper. Franco-Nevada holds a stream on the mine. FNV fell as much as 10% before recovering to about -5% on the day, while First Quantum fell 31%. The hosts (both FNV shareholders) noted Cobre was about 20% of Franco's EBITDA (earnings before interest, taxes, depreciation and amortization) three years ago. They also said Franco's gold-equivalent sales are already nearly back to pre-closure levels, around 400,000 ounces. FNV rose 2.0% this week.
• Franco-Nevada, part 2 (Kenorland). Per Mining Stock Daily (Oct 6), Franco bought 10 million shares of Kenorland Minerals for $22.2 million, a 12.42% stake. Kenorland holds a 4% royalty on a Quebec project with an inferred resource of 2.5 million ounces at 4.5 grams per tonne.
• Elemental Royalty CEO Fred Bell on The KE Report (Oct 7) explained a US$290 million purchase of five streams and royalties from Orion Mine Finance:
  • a 50% silver stream at i-80 Gold's Ruby Hill complex in Nevada (on the first 1.3 million ounces, then 10% with no cap);
  • a 5% gold stream on Mansa Resources' Karusa mine in Guinea, which produces about 90,000–100,000 ounces a year;
  • a 2.5% royalty on Silverco's Mexican mine, whose updated study doubled planned output. Bell says that roughly doubles the royalty to about $4 million a year.
• Empress Royalty paid $62 million up front, financed by the seller Appian, for a stream on the Tongon mine in Ivory Coast (Company Interviews, Oct 2).
• Wheaton Precious is contributing $175 million to Silvercorp's El Domo mine in Ecuador ($284 million total capital cost), per Silvercorp president Lon Shaver on Company Interviews (Oct 2). Shaver said most conference attendees treated the recent pullback "as a re-entry point" and think the mining cycle is in its "early to mid stages."

Silver: stuck in a range

Silver fell 3% to about $59, three times gold's drop. Two long-time silver voices disagreed on how far it could go.

• David Morgan of The Morgan Report on Michael Campbell's Money Talks (Oct 2): "My buying zone for everybody is $60 or lower." Silver should trade between $60 and $70 into year-end, and "I still think it could get to 50 again" (a retest of the old breakout level). He reported a striking detail: US coin dealers are now buying back silver at "$8 or $9" below spot, so retail buyers are moving to ETFs like SLV. He holds more in large, blue-chip miners, and his "favorite silver stock" is up about 22 times since the bull market began at around $5 silver, against roughly 12 times for the metal.
• Clive Maughan on Money Metals (Oct 2) pointed to a 45-year "cup and handle" chart pattern. Silver broke out of it to $120 and is now falling back to retest it. "Anywhere between, say, 50 and 60, it's a very strong buy." He sees gold support at $3,900–3,950.
• Shiels added that silver is "trading very much as a gold proxy" right now, and that prices above about $75 cause industrial users to start switching to other metals.

Platinum and palladium: down 4.5%

PPLT and PALL each fell about 4.5% this week, the worst of the group. The PGM (platinum-group metals) voice was Greg Ferron, CEO of explorer PTX Metals, on Commodity Culture (Oct 8, sponsored by PTX). He is bullish because supply is concentrated in "two jurisdictions, South Africa, Russia," and hybrid cars still need platinum and palladium. He also admitted "I'm not an expert on the PGE market."

What to watch

• The bond market's "line in the sand." Greer, Felder and Lyn Alden all describe the same trigger. If Washington steps in to cap long-term yields, they expect gold to move. The 10-year hit 5.36% on Wednesday, Oct 7.
• Fed meeting, Oct 28. Merk expected a December hike, not October. Johnson thinks Warsh is establishing credibility. The New Orleans Investment Conference also runs Oct 28–31.
• The $3,900–4,000 zone. Vermeulen's breakdown level, Maughan's support, Greer's buy level, and the area Shiels says Asian central banks are defending.
• Northern Star. Whether Gold Fields raises its bid, or someone else bids.
• Q3 miner earnings start later this month. This will be the first real test of whether this week's outperformance by the big miners holds up.