Before I get into the metals, a quick recap of last Friday’s tape, because it explains a lot of the price action.
Market Update: Friday’s “Jobs Shock”
On Friday, the U.S. surprised markets with a headline jobs print that, on the face of it, looked strong: 172,000 jobs added in May , versus consensus around 80,000–85,000. Unemployment held at 4.3%, and prior months were revised higher.
Markets did not take this kindly.
- Equities sold off hard: Nasdaq dropped over 4%, and the S&P 500 fell more than 200 points, capping one of the worst weeks in over a year.
- Bond markets sold off: yields rose sharply. The 2-year yield jumped ~11 bps, as traders dumped the idea of near-term Fed cuts.
- The U.S. dollar caught a bid: DXY popped, as markets repriced toward “higher for longer” and even floated hike risk again.
- Precious metals were hit: gold sold off, and silver was smashed close to -8%.
This was classic cross-market liquidation: risk-off equities, yields up, dollar up, metals down.
The Part That Matters: What’s inside the jobs number
Now, I’ll say this carefully, as the market disdain for these numbers being factual is palpable, but the headline number is what moves markets. The composition matters for anyone who wants to understand the real economy.
A large chunk of the job gains were reported in:
- Leisure & Hospitality: +70,000
- Local Government: +55,000
- Health Care & Social Assistance: +47,000
And here’s the point: the last two categories don’t represent productive GDP growth in any way, markets simply pretend they do. They expand balance sheets and ongoing obligations, and they are not the kind of jobs that drive real productivity improvements or gross income into the economy, they are an anchor around the feet of the economy. Meanwhile, finance and banking shed jobs.
So yes, markets traded the headline.
But the underlying picture remains far more fragile than the narrative suggests.
Precious Metals
The thesis being thrown around right now is that higher U.S. interest rates, or even the threat of “higher for longer”, is somehow catastrophically negative for gold and precious metals. That line is usually delivered with great confidence, and almost zero homework: no chart work, no historical study, and no context.
Because the inconvenient fact is this: across multiple tightening cycles over the last ~56 years, gold has repeatedly rallied during periods of rising U.S. rates. The relationship is not the simplistic “rates up, gold down” meme people like to recycle blindly. Real rates, liquidity, debt dynamics, and confidence in the system matter far more.
And let’s not ignore the elephant in the room: the U.S. is in a full-fledged debt crisis of extraordinary proportions, alongside most of the developed world. We simply cannot afford meaningfully higher rates for long without something breaking. But apparently that’s now treated as a side note.
Which brings me to sentiment.
We’re now being told gold is dead money. The tourists and FOMO crowd have left the room. The momentum crowd has rotated into whatever was up 5 to 10 times last year, Nvidia, Palantir, Micron Technology and the rest of the “can’t lose” basket, it’s different this time (please if anyone says that to you run for the hills). And, in a delicious twist of irony, some of the very people who spent years warning that the system is beyond fragile are now dumping their insurance at the lows.
Gold didn’t crash. It did something far worse for a narrative: it got boring recently.
Silver
Let quickly try and visit reality again. The fact that silver has now broken free of a historically suppressed range that capped it for close to 50 years. While the entire commodity complex — and virtually every industrial metal, has been revalued over that period, silver was the odd one out: the only commodity with its head held under the water.
And here’s the part that matters for anyone with a memory longer than a trading week:
There is no precedent — none — for a commodity or any asset class breaking out of a 50-year base and then “finishing the bull market” in a handful of months. That is not how secular cycles behave. That is how they begin.
Meanwhile, the fundamentals continue to tighten:
- the demand curve is rising and broadening,
- the supply curve is deteriorating,
- and we are now moving into a sixth consecutive year of global supply-demand deficit.
My models continue to point to a fair value range of roughly US$500–US$700 per ounce. Levels I most assuredly expect (will get) to see over the next 5 years. Could we overshoot? Absolutely, markets overshoot both ways all the time. But the valuation framework is not a vibe. It’s maths. And maths doesn’t negotiate.
So ignore the noise. If anything, the market is handing us a true gift of lower prices , and it’s not even Christmas yet!
If we are lucky enough to revisit 55 to 60 US$, it will be the buy of the decade.
Disclaimer: This commentary is provided for informational purposes only and does not constitute financial advice or a solicitation to buy or sell any investment products. While every effort has been made to ensure accuracy, Indigo Precious Metals Group and Auctus Metal Portfolios accept no liability for any losses arising from reliance on the information contained herein. Clients should seek independent professional advice before making any investment decisions.