Gold’s bull market is just heating up, here’s what comes next…
In this deeply insightful interview, Incrementum’s Ronnie Stoeferle joins Trey Reik to share highlights from his just-released In Gold We Trust 2025 report: The Big Long. Ronnie explains why gold is no longer a contrarian bet but a strategic response to the collapse of trust in fiat currencies, central banks, and political leadership.
Now in the second phase of its secular bull market, “around the 6th inning,” as Ronnie puts it, gold could be heading toward $4,800 or even $10,000. He breaks down the case for both “safe haven gold” (physical, long-term) and “performance gold” (silver, mining stocks, commodities, Bitcoin), and why the real upside may lie in the under-owned parts of the trade.
You’ll also hear how central banks are not just buying gold, but repatriating it. And how a quiet remonetization of gold may be underway, laying the groundwork for a future monetary reset.
Key Topics:
- The three phases of every bull market, and where gold is now
- Why gold is no longer a fringe asset
- Safe haven vs. performance gold: What’s the difference?
- Repatriation, audits & the return of physical gold demand
- Why institutions and family offices are massively underweight
- Gold vs. bonds, not stocks, as the true macro hedge
- Could the dollar be headed for a controlled devaluation?
- What the shadow gold price reveals about where we’re going
Download Ronnie’s In Gold We Trust 2025 report for free: https://ingoldwetrust.report
Learn more about Incrementum AG: https://incrementum.li
Volatility got you concerned? Get a free portfolio review with Wealthion’s endorsed financial advisors at https://bit.ly/4dKhGdH
Hard Assets Alliance – The Best Way to Invest in Gold and Silver: https://www.hardassetsalliance.com/?aff=WTH
Ronnie Stoeferle 0:00
Our main takeaway of this year’s report is basically gold is not a contrarian investment anymore, but we’re far away from, you know, the end of this cycle. So we’re somewhere like in the second half of this cycle. You’re a big baseball fan, obviously. So in baseball terms, it would probably be like fifth, sixth, sixth inning.
Trey Reik 0:29
Greetings and welcome to our wealthion show. My name is Trey Reich of Bristol Gold Group, and we’re here today with Ronnie sturfola of incrementum, AG, an asset manager based in all places of Sean Lichtenstein and Ronnie is known at the firm for overseeing portfolio management and research activities, but around the world, he is best known for his annual stewardship of a truly behemoth undertaking, incrementum, annual publication of what really is the industry Bible, annual report in the gold trade, known as in gold we trust, if I have it correct, this is the 19th year of this endeavor, and It continues to get larger, more comprehensive and more overwhelming on each year, the 2025 edition was just published on May 15, and all I can say is, there’s simply nothing like it in scale or depth. So Ronnie, I hope you’ve had a few good nights of sleep since publication, and thanks for taking the time to be with us today.
Ronnie Stoeferle 1:42
Thanks, trade. Yeah, I had some sleep. It’s getting better, but I’m kind of in the Federal Reserve, would say, in the tapering mode now.
Trey Reik 1:57
Well, there are many aspects to the report that I think wealthy on viewers would find interesting. It’s absolutely chock full of analysis, narratives, charts, raw data and etc. It’s also available, I believe, in four languages, including Japanese, but most notably, the folks that run incrementum have chosen to make this report available to everyone free of charge. So it’s almost like a massive community service effort conducted by incrementum on an annual basis for the benefit of the gold community. So Ronnie, how can wealthion Viewers obtain their free copy of the report we’re going to discuss.
Ronnie Stoeferle 2:45
Well, just have a look at in gold. We trust dot report. You can download the report totally free of charge. You don’t even have to register for for our services. Just download the report. I’m kind of aware that not everybody is keen on reading 440 pages about gold. So there’s also a compact version, which is still 40 pages. There’s a video that summarizes this year’s report. There’s a slide deck which also summarizes, you know, the best charts of this year’s report. So just have a look at in gold. We trust dot
Trey Reik 3:27
report perfect. And last year’s title was the new gold playbook. This year’s title is the big long sort of referring to The Big Short Movie that everybody knows about, etc, etc, and how that played out over time, but from your perspective, not to put you on the spot from the very beginning, but how would you compare the two? In other words, anybody who read last year’s 440 page report, why should they read this year’s
Ronnie Stoeferle 4:01
Good question. Trey, I think this new gold playbook that we described last year that basically made the case for gold being more and more of a emerging markets topic, that the center of the gold world is not in the US and Europe anymore, but rather in China, in India, in the Arabic world. I think that has played out pretty well with, you know, demand, not only from central banks, but also private investor demand in emerging markets being really pretty robust. But then, on the other hand, what we forecasted last year was that at some point the Western financial investor will start allocating in gold again. I think this has played out last year. Let’s not forget the largest purchases from Central Bank. Was made by a European country, by Poland, actually. And we’ve also seen that this trend of outflows from from gold ETFs has reversed last year, so we’re seeing more demand coming from, from from the US, also from Europe. But I would say, like the majority of investors that I’m talking to when I say, Well, we’re still still excited about gold, and now perhaps it would be time to allocate more capital in what we call performance, gold being silver mining stocks, also, to some degree, commodities. Most of them.
Trey Reik 5:43
You brought up a topic I was going to ask you about later, but it’s very intriguing, so let’s cover it now. You talk about two parts of gold, one being the safe haven gold, yes, safe
Trey Reik 5:57
haven gold and performance one is performance
Ronnie Stoeferle 6:01
goal. Yeah, exactly. So we made that distinction because Trey, I think that when it comes to mining stocks, for example, my my view has always been that it’s a it’s a super interesting and also very challenging asset class. I lost lots of hair actually over the last couple of years, navigating the markets of mining stocks and also junior mining stocks and and our view is that it is not a long only asset class. You really have to understand the cycle. You have to understand where we are in that cycle. So that’s why we came up with this distinction between performance gold, which has to be managed on a very, very active way, and then what we call Safe Haven gold, which is basically the Don’t stare at the price chart every day. It is something really for the for the long game, ideally you inherited to your kids or to your grandchildren. And for this safe haven, gold, I think it’s important that you care about counterparty risk. So you obviously want to have physical gold, you want to store it in a safe jurisdiction, perhaps outside of the banking the banking system. But this distinction between physical safe haven, gold and performance gold is really important. And I would say, like the the one of the key takeaways of this year’s report is is actually referring to The Big Short this, this, this fabulous movie that I watched, obviously, again in preparation for this year’s report. It was like, you know, those, those contrarian and kind of shrewd investors like Michael berry that in 2005 2006 already kind of realized, okay, something is completely wrong in this system. And now we’re seeing something similar, and I would say, in the monetary system. And now I can tell you trade that there’s like, people that really couldn’t care less about our monetary system, about inflation, about, you know, monetary history that now approach me a little bit like, you know, perhaps, like 2007 or even 2008 in The Big Short when many people kind of woke up and realized, okay, the you know, what is hitting the fan. So that reminded me very much of this current setup, where, for example, like, you know, we are openly talking about a revaluation of us gold reserves. We are now talking about auditing Fort Knox, all those things that were kind of a big topic within the gold bar community, they are now becoming mainstream. So our main takeaway of this year’s report is basically, gold is not a contrarian investment anymore, but we’re far away from, you know, the end of this cycle. So we’re somewhere like in the second half of this cycle. You’re a big baseball fan, obviously. So in baseball terms, it would probably be like fifth, sixth, sixth inning, something like that. But now is the time where performance gold should be should be focused on, so mining stocks and especially silver.
Trey Reik 9:42
So that’s what I was going to ask you, that the components of performance gold are mining stocks and silver,
Ronnie Stoeferle 9:50
yes, to some degree, also commodities, which is probably even more. Bigger underweight by the institutional asset management community, but also Bitcoin. And I know that this causes quite a lot of discussion, especially in the gold gold community, but our take has always been that that both gold and Bitcoin should be in a well diversified, let’s say hard, hard asset or sound money portfolio. So we actually run two funds that combine gold with Bitcoin, and the results are staggering. So performance gold for us is primarily silver and mining stocks, but also, to some degree, commodities, as well as Bitcoin
Trey Reik 10:43
got it. And we’re going to throw up a chart here on one of your charts, on the three secular gold bull markets. And you like to talk about the three different phases of a bull market. And I think you’re saying we are in the second phase of the current bull market. Do you want to elaborate a little bit on your bull market rationale? So?
Ronnie Stoeferle 11:07
So when I was still working in the bank trade, my boss approached me and said, you know, you have to get, like, a certification. You should do the CFA. And I said, I don’t know that’s really, that’s really demanding, and that’s not, you know, something that I really enjoy. So I propose doing the CMT, which is the chartered market technician, which is the the CFA, basically, for technical analysis of market analysis. And I really enjoyed that, that education and doing that program, and one of the main, let’s say, foundations of technical analysis is the so called Dao theory. And the DAO theory says that every every bull market, every big trend, has three different stages. The first stage is the accumulation phase, where sentiment is extremely negative, where everybody is bearish, where if you say I’m buying this or that at a cocktail party, people will ridicule you because it’s just so contrarian. The second stage, which is the longest one, is the so called public participation phase. This is the phase where, basically the mainstream wakes up, banks start covering that asset, raising their forecast, where the media picks up on that idea. And this is the longest and the broadest phase of the bull market. And then the third stage is obviously the mania phase. That’s the distribution phase, where those investors that you know did those contrarian investments early on, they start selling to, you know, what is called dump money, or, you know, those momentum chases, and my take is traded. We’re somewhere in the middle of this public participation phase. So gold is not a contrarian investment anymore, like, you know, in the year 2020 where, when we published our in gold, we trust report back then, and we said our price target for the end of this decade is 4800 US dollars. You know, people said, No, Are they crazy? What are they drinking? What are they smoking? So we’re not there. We are now in a stage where, you know, everybody is kind of feeling comfortable being bullish on gold. So when you go to a cocktail party and say, you know, I like gold, people say, Yeah, you know, I also like gold. I bought some recently. I’m getting interested in mining stocks, let’s say Newmont, orgnico or Barrick. But people don’t ask you yet for the hottest silver Junior miner, for example. So we’re not there yet. That’s going to happen in this in this final stage. So from my point of view, this, this phase of the bull market will be more and more driven by by Western investors. And a friend of mine said that actually, you know, the Western financial investor basically completely missed out on that trend, and the majority of people say, Well, now it’s already too late to buy gold again. It’s already too expensive. So we’re kind of climbing this wall of worry. And that makes me pretty confident that, you know, we’re not at the end of this, of this trend. And if you have a look at this chart where we compare the current bull market to previous bull markets, you can see that in the 1970s for example, we had 209 all time highs. In the 2000s we had 106 all time highs. And now, so far, we had. 76 all time highs. So clearly, we’re, we’re now in a in the trending phase where there’s also, you know, more CTAs coming in, more, you know, let’s, let’s say momentum chasers. And I, and I think that this current consolidation is a very, very important and a very healthy one. But from my point of view, we’re not in this, in this mania stage that’s going to happen sooner or later. And I would clearly see that we should hit our our long term price target at least, which is 4800 US dollars over the course of this, of this third and final stage of the bull market. So
Trey Reik 15:47
I had planned to sort of hit technicals last but since you brought up you in the report, cover several very compelling technical because I really think technical is a secondary thing. But since we’re talking about it, you mentioned the optics model and the Midas touch gold model and the gold Dow to gold ratio. Could you just give us a brief synopsis on where those three stand?
Ronnie Stoeferle 16:17
Yeah, well, the optics, which is done by by sentiment trader. I think that’s that’s very, very interesting, that we are already seeing kind of extremely bearish sentiment when it comes to mining stocks and also to silver and pretty much of a neutral setup when it comes to gold itself, which is telling me, okay, we’ve seen We’ve seen a consolidation. Were
Trey Reik 16:48
they higher before? Were they higher and they come down? Or they just,
Ronnie Stoeferle 16:55
no, no, they were obviously higher. So they were like in euphoria mode. But the fact that it’s cooling off so quickly is a very encouraging sign. So that kind of confirms my view that the market has lost confidence in gold pretty quickly, which is something that you normally don’t see at the end of every of a trend. The minus touch model by by my friend Florian groomers, it went to a somewhat bearish signal quite recently, which also confirms my view that we shouldn’t expect too much from gold over the next couple of weeks. So usually, the seasonals are not very favorable, favorable for gold. I can tell you, trade that every year, we published a report around mid May, and you know the date when we basically hit the send button. It’s, it’s, it’s always gold. Is always trending down. It’s always in the in the in the reds. It’s always correcting so and people say, Well, you just published 400 pages about gold, and gold is selling off. You must be like the poorest market timer ever. But this is always, usually where we’re making a bottom around July, July, August. So, so don’t expect too much from gold at these levels. And let’s not forget, you know, we’re up 23 24% year to date. That’s a massive move. That’s a massive move within a very short time frame. So we have to digest that move like, you know, running up a hill. Sometimes, you know you have to slow down. You have to catch your breath again, and that’s what we are doing at the moment. I think
Trey Reik 18:49
so you brought up the year to date performance, and by the way, that feeling that you were mentioned that whenever you publish the report, you may be confusing postpartum depression with no, I’m just kidding. You know, once you do a big report like this, it’s always tough to exhale. But anyway, looking at at Gold’s performance last year, you know the S and P at the beginning of last year, nobody thought stocks were going to go up. We were going to have a recession. 2024 the Bloomberg strategist poll in December of 23 was the most bearish it had been in 25 years. And then, of course, we had 25.2% performance, or something like that, for the s, p. And of course, by the end of the year, the same strategists were more bullish about 25 than they had been since COVID So that’s just the way the world works in equity land. But throughout that whole thing, gold was up 27% outperforming stocks last year and this year, that infamous one minute on April 22 where gold traded at 35 107 cents, which I have on my wall in the office, lasted, you know, about 15 minutes, but at that moment, we were up 33% for the year, which is, I don’t think anyone in the gold trade community or on Wall Street would have expected that in, you know, five weeks. So the question becomes, there are all these. For decades, you and I have followed fundamental trends like eroding fed credibility, anti dollar sentiment, de dollarization, the US debt levels and deficit. But obviously some of them are hitting these seminal inflection points where they really matter. So if you were going to sort of stack them up, what, what would you rank as, as your fundamental reasons why gold has done so spectacularly well so far this year and is likely to continue
Ronnie Stoeferle 21:00
well? I think first of all, it’s, it’s a loss of trust in in the US, in the US leadership. That’s, that’s, that’s obviously something that I’m experiencing firsthand over here in Europe, and I think it’s pretty similar in in Asia as well. So that’s one thing. And I think the the best confirmation of that is, if you remember Liberation Day, well, there was quite some panic in equity markets. And what you usually would expect is the US dollar, you know, trading, trading stronger, trading up. And also, you know this, you know, more flows into into US Treasuries, but we saw exactly the opposite. So the US Dollar was actually down. Yields went up. So, so. So, I think that was another sign for this paradigm shift that we’re seeing. There’s lots of capital leaving the United States now going into Europe. The German DAX index, for example, is one of the best performing equity markets globally. And I think that you know, for the US dollar now we’re seeing, I think Bank of America had that recently, being being being bearish on the US dollars is quite a consensus trade. So I would expect the US dollar to bounce back a bit, but, but a weak US dollar is actually that’s kind of the found one of the foundations of my my my thesis for for gold going forward. Now, I think trade that one of the things that really astonishes me is the fact that you know, over the last couple of weeks, I think, like mid February the market was, was discounting four to five rate cuts by the Federal Reserve. Now we are at one. Usually we would have expected gold to, you know, face like big, big headwinds in such a scenario. But actually, you know, gold was, was not really affected by that. And therefore, I think that this, this bull market, is really standing on a very, very strong foundation, which is, as I’ve mentioned, this loss of trust in the US leadership then on this, on the second hand, I don’t think that actually equities are kind of the enemy of gold. It’s rather bonds. And obviously bonds are like far bigger asset class than equities. And if you have a look at you know, the yields in Japan, but also in over here in Europe, if you have a look at US Treasury yields, you can see that this foundation of every institutional portfolio is now really being questioned, and I think that’s that’s really a strong case for gold being kind of the the anti bond. Then we’re seeing still very, very strong demand from China. We all know that the People’s Bank of China owns significantly more gold than they officially announced, but it’s also private demand that is still, it seems it’s very price insensitive. And then I would say one very important trigger going forward, and we have a big chapter on that, and we also feature a conversation that I had with Luke Roman and Louis and gov. Is, of course, this whole topic about, you know, Mar a Lago accord, how will the US kind of redesign our monetary system to deal with. The driven dilemma is some sort of a big currency reform. Is it going to happen? And, I mean, Scott Besant, he said, you know, he knows that something like this is going to happen. He said he wants to be part of that solution, or of that of that development. And she also said
Trey Reik 25:24
here, which is your firm’s view of structural dollar decline being part of the Trump agenda, so folks at home can see your point, but go continue.
Ronnie Stoeferle 25:35
Yeah, so, and Scott Bess said, you know, people, people called him a gold bug, and he was, you know, he was working for Soros. He’s, he’s good friends with Stan Druckenmiller, probably the greatest trader of the last couple of decades. So, so I think he clearly understand what’s going on and what has to be done and, and therefore, I would say that that, you know, weaker dollar structural decline is something that we will see over the next couple of quarters, probably. So I would be on a relative basis, I would be even though, even though, based on the fundamentals, it sounds crazy, but I think the Yen has has room to go many Asian currencies and even the Euro probably will, will do pretty well versus the US dollar, because the world wants and the world needs a weaker US dollar. Now the big question is, if such a, let’s say a controlled devaluation, if that’s really gonna gonna work. So So we write in the report, it’s like asking for warm ice lollies or, you know, trying to square the economic circle. That’s that’s obviously something risky. But you know, if you have a look at the dollar chart, we haven’t seen anything yet. So if we go back to levels where, for example, 2011 where we also saw the peak of the last big gold bull market at 1900 the US Dollar Index was trading at 75 so that would still be roughly 25% 25 percentage points down. So I think that’s that’s going to happen. I think that’s also one of the reasons why Donald Trump is now, you know, trying to make concessions and trying to, you know, warm up the world for this development. And again, a Mar a Lago accord. It’s not a question of if, but rather of when it’s going to happen. And of course, we can talk about the details at length. We talk about, for example, gold back bonds. Judy Shelton is has come up with that idea. There’s this, this very important paper by Stephen Mirren. There’s, there’s great papers by by Michael McNair about that topic. It’s a very complex topic, but I think this will really become kind of Center Stage over the next couple of months,
Trey Reik 28:25
you mentioned the Triffin dilemma, which briefly for viewers, is the dilemma that no individual country can forever issue the reserve currency for the whole world, because it will lead to artificial external demand and a structural current account deficit, which is unsustainable. That’s what you’re referring to. Yeah. So, right.
Ronnie Stoeferle 28:51
So Triffin said basically that the world needs a steady supply of the reserve currency for trade, for investment and also for reserves. But then, on the on the other hand, you also need that national stability. So, so, so the US issuing the reserve currency must maintain fiscal discipline and monetary discipline to to kind of preserve confidence in its currency. So, so this is kind of the dilemma that we’re in. And, you know, there’s like, there’s a couple of solutions for that. Keynes talked about the banker at Bretton Woods, actually. And My take is that we would need a neutral reserve currency that is, obviously, that is, as I said, neutral, but it’s it also has to be highly liquid. It has to be traded 24/7, with a tight spread. It has to be accepted all over the globe. And. And, you know, I don’t think that the Chinese yuan really fits that criteria. I’m not sure about Bitcoin, but I think that gold would work pretty, pretty well. So, so you perhaps we’re seeing some sort of a silent re monetization of gold currently, and the fact Trey that the US has imported 2000 tons of gold over the last couple of months. That kind of confirms that view.
Trey Reik 30:27
So what I was going to ask this is a perfect play, do you believe? And I don’t. I think, I don’t think there’s many of us, but I think I believe. And do you believe that gold will other than foreign exchange reserves, you know, play a role in the evolving monetary system.
Ronnie Stoeferle 30:48
I think it always has played a major role, but it was, it wasn’t something that central bankers were very keen talking about. I think Bernanke said its goal is just a tradition. I once talked to, to a very renowned central banker and and I will never forget that that conversation. And he said, Mr. Stiffer, there’s one thing that central bankers don’t like. And he made a big pause, transparency. So, so I think you know the fact that you know gold is still by far the most important reserve of basically every central bank globally. The IMF holds more than 3000 tons of gold, all those emerging market countries that are doing so well from an economic point of view, that, have you know, high real rates where capital is flowing into those countries, They are increasing their their their their gold holdings. On the other hand, we’re seeing that, for example, the Euro system. So the central banks in the in the European are in the in the Eurozone. They’re they’re actually, they’re valuing their gold mark to market, and not like the US at 42 which gave them actually all those losses that they had to that they had to live with over the last couple of years, they were pretty well compensated by the surge of of gold recently. So it actually for the for the Swiss National Bank, for example, which is kind of being run like a Fed hedge fund these days. Actually their gold holdings of, I think, more than 1000 tons, actually made up for, for mode of most of the losses that they’ve made. So I think this, this silent re monetization is is happening. I think it’s getting a little little louder and, and that’s not a, you know, that’s, that’s really a global trend. And if you, if you connect the dots globally, I think it’s, I think that gold will play a major, major role going forward. And I think, you know, if that’s, that’s going to happen, I think people will say, well, I should have bought more gold when it was trading at 3200 it was just dirt
Trey Reik 33:29
cheap, right? You mentioned the Swiss and the money that they made on their gold holdings. It’s incredible to remember that they sold 1200 tons in that late 90s periods. I mean, England gets all the attention for that 300 ton sale right at the end, but the Swiss were sellers for a decade, and it remember that was just in looking back, what an incredible, incredibly bad decision that was
Ronnie Stoeferle 33:59
absolutely, absolutely. I mean, on a per capita basis, the Swiss still has, I think, the largest amount of gold. But you know, the opportunity costs of selling that gold, they’re way normal. And we had it also in my home country, Austria, where just to basically come up with a with a balanced budget, in one year, they’ve been selling more than 200 tons of gold. And you know, the opportunity costs are enormous, and trade 111, thing that I forgot before is, you know, talking about the new monetary system, it’s not only the gold purchases by central banks, it’s also the repatriation trend of gold, that is, I think, very, very important. It basically started in 2011 and since then, more than 2000 I think 300 tons of gold were being repatriated. So basically brought back home from London, from New York to PO. Poland to Austria, to Germany. And that’s really a big international trend. And also, you know, seeking physical audits full sovereign custody now in the US. You know, it was a big topic a couple of weeks ago. Now it kind of Trump forgot about that, or perhaps not. But, you know, auditing for Knox, that was like a really big topic quite recently, so I think those are all signs that gold is really coming back, let’s say center stage of the of the next monetary system. And
Trey Reik 35:37
to show how a partial cover clause could work if you work through the math with me, if we took the Fed $6.7 trillion balance sheet and we assumed a 25% cover clause for all central banks, that would mean that the Treasury’s 260 1 million ounces of gold that’s held on the Fed’s balance sheet would have To be valued at about 6400 an ounce. So my point in bringing up this math is even for very, very, very large balance sheets, like the fed with gold in the 3000s you know, a move to 6000 wouldn’t necessarily cause a revolution or social unrest or something. We’re, we’re in that realm where it’s, it’s pretty thinkable,
Ronnie Stoeferle 36:23
exactly, and you know, we’re, we’re, we are, again, discussing this, this so called Shadow gold price that we talked about previously, in other in gold, We trust reports, and obviously, from I would say, on a monetary if you, if you have a monetary view on gold like we have, you always have to consider the fact that that m2 is growing roughly by by by 7% I think Since the year 1900 actually, that that that m2 growth was fairly muted over the last couple of years, and that kind of confirms my view that gold is already kind of smelling that something’s gonna gonna happen like my friend Larry Lippard, he wrote the book called The Big print. So the big print could be one of the reasons for the big long in gold. But again, from a from a monetary point of view, I think gold is very, very cheap. So we come up with historic gold coverage ratios of 25% of 40% and then also various different monetary aggregates, like Central Bank, narrow, narrow money supply. But also we have your 300
Trey Reik 37:49
chart on historic money base, exactly,
Ronnie Stoeferle 37:53
so, so, so that’s and then we arrive, if we, if we just, you know, reach, like long term averages, we’re talking about significantly higher prices, and also, you know, usually big trends, they don’t end at the long term averages, but at the extremes. So we can easily come up with, with prices between eight to 10,000 US dollars, based on those historical comparisons, if there is, like some sort of a monetary of, a gold backing of our monetary aggregates, again, and usually, you know that goes hand in hand with, let’s say, falling confidence, falling trust in the system. And obviously, I mean, it’s, it’s no coincidence that our report is in gold we trust and back, back then, 19 years ago, when, when I came up with the first in gold we trust report, to be honest, I didn’t understand the importance of trust, not not only when it comes to money, but you know, when it comes to business, when it comes to our society, when it comes to the media, when it comes to science, trust is really something that that glues us together, and this erosion of trust that we’ve seen over the last couple of years is something that is actually pretty, pretty worrisome. And I think, you know, the less trust people have in in our system, the more trust they will, will, will put on gold, because it’s something that you know has delivered, has has held its How do you say its expectations, or its its characteristics over the last, not only centuries, but but, but also over the last 5000 years, or whatever? So I. So that’s basically, it’s the it’s the inverse of the trust in our monetary system.
Trey Reik 40:05
So on a micro level that we in June have the Basel three accord taking effect, and I have read treatments of the fact that part of the reason for gold’s recent strength could be that gold is being reclassified from a tier three to a tier one asset, and its reserve requirements will go way down, and it will also make gold far more attractive in a physical form than a derivative form, and that may be why we’ve had a lot of the flushing out of COMEX and paper gold type positions as you move around out there. Have you come in to contact with that? Or do you think that’s overthinking a bit,
Ronnie Stoeferle 40:49
to be honest, Trey, I think that many people mix up this, this HQ, la with tier one and tier three capital I talked to to many bankers, and, you know, Basil at Bazel three, physical gold is tier one, while paper gold is tier three, basically. So the system is kind of, the system itself is rewarding metal over over, let’s say meta data. But then, on the other hand, you know, talking to bankers, I have to say they couldn’t care less about gold. So, so if you, if you’re like talking to a treasurer in a big bank, if you’re talking to people on the trading desks. Gold for them is still something, you know, that that, that that has risen, obviously, but, but they don’t care about it, yeah, so, so I think that that, let’s say we in the gold world. We think that, you know, everybody’s is waking up in the morning and just staring at the gold chart. And that’s, that’s like the most important thing, but, but then, you know, somebody, somebody told me that there’s actually more people in the United States that believe that Elvis is still alive than people that actually own any physical gold. And I think that’s, that’s a pretty good, that’s a pretty good way to describe that. So, you know, I think that we make a little bit too much out of, out of this basil three that that I don’t really see, I’m playing out in the real world, but you know, if it’s going to happen, so be it, yeah, I’d be happy about it. Terrific.
Trey Reik 42:46
So I’ve got a couple of sort of random questions, as we’ve used up a lot of your time, but one of them is in the in the report, you talk about different methods to start to approach the concept of calculating, you know, an appropriate intrinsic value for gold. Can you just give us a brief, you know, brush stroke on which methods you have found the most compelling?
Ronnie Stoeferle 43:17
Well, you know, I’m not only from Austria, but I also adhere to the Austrian School of Economics. So, so value is something highly subjective. There is no intrinsic value from, from my point of view, what’s, what’s the value of, of a Van Gogh or a Picasso painting? It’s, it’s actually what, what people are willing to pay, what’s the price of, you know, let’s say this declining marginal utility after a long hike. You know, the first beer is excellent, but the marginal value of the fifth beer is obviously far lower. So I always have a somewhat hard time saying, you know, just based on our model, this is the fair value of gold. It’s just, and this, you know, that’s, that’s, that’s a fascination that I still have for the topic of gold, that actually, if you really want to understand or if you try to understand gold, you have to understand everything. You have to understand geopolitics. You have to understand inflation, opportunity costs, equity markets, where interest rates going. So, so it’s a highly, highly complex thing, based on our incrementum gold price model, which is a very simplistic model. It’s basically has some sort of a trust factor. So how, how high is trust in, let’s say, the monetary backing of the US dollar, and how high is the growth of m2 based on that, our base case is still 4800 US dollars by the end of this decade. Again, we. Said that in 2020 people thought we’re crazy. We stick to that price target. If there’s a second wave of inflation happening, and I cannot rule that out, actually, then our model says we can go up to 8900 US dollars by the end of this decade. So that basically says, Well, gold isn’t very cheap anymore, but still, there’s, I would say there’s some asymmetry, because I don’t see any, I don’t see too much selling pressure for the time being. And and therefore, I would say, like we talked about at the beginning. Now in this next stage of the bull market, now it’s really time to consider those performance gold assets, because let’s face it, Silver has been a disappointment. We’re now seeing the fifth year in a row where we’re actually demand is higher than supply. We haven’t seen any investment demand really kicking in, mining stocks. Trey, I mean, you know everything about that. They were a big disappointment last year. This year, they’ve done they’ve done better, but they haven’t shown this. This, let’s say three to one leverage on gold so far so. So I would say that the the more more appealing for us as asset managers, more appealing risk reward ratios are actually in those, those performance gold asset classes that haven’t that. Haven’t done so well, but it’s always like gold going first, and then with a slight delay, there’s silver mining stocks, commodities following gold, and then they’re starting to outperform gold. And so that would be my take going forward. And let’s face it, you know, if you’re at the cocktail party back again. And you say, I like gold, but I even more like silver, and even more like mining stocks. People will say, mining stocks, come on, they’ve been such a big disappointment. So that’s definitely more contrarian than gold at the
Trey Reik 47:17
moment, still. And just rounding out this thought for where we are in the cycle. I really enjoyed your chart, sort of a pie chart. We’ll put up on the asset disperse, dispersal at family offices, where things are invested, and the percentage that gold represents. Can you just talk a little bit about how small the gold allocations are? Yeah,
Ronnie Stoeferle 47:45
so, so trade that was, that’s one of my favorite visuals of this year’s report. That’s, that’s based on UBS data, and that’s for international family offices, where, at the end of 2023 they had gold allocation, gold and precious metals of just 1% um, which is, you know, the same league like infrastructure and and art. So, so is there some potential coming from the institutional side, definitely. And I can tell you that in one of our funds, there was one small Swiss pension fund actually starting to allocate capital. So it’s, it’s slowly starting and and therefore, if we come back to The Big Short, I think it’s, it’s probably like 2007 we’re also like, usually, let’s say that the bigger an institution, the more bureaucratic, and the longer it takes for them, you know, to make any decision. And we’re seeing now for some smaller institutional players, some small family offices, but also pension funds. They’re now, you know, they’re asking us, yeah, this gold thing, and also mining stocks, that’s something that we’re kind of considering. And I think this is really the potential for gold going forward, those market participants that are heavily underweight gold not allocated in mining stocks at all, even though they’re, you know, they’ve got the best balance sheets that I’ve ever seen. You know, there are free cash flow monsters. They’ve been paying down their debt. They’re increasing their dividends. They’re, they’re they’re buying back their stock. They’re really in a very, very healthy shape, but nobody’s allocated yet. So I think that’s that’s really the future demand will come from those institutional players that aren’t allocated at all. Terrific.
Trey Reik 49:54
And for our US viewers, there are some fairly significant. Hurdles to getting involved in your products directly, while the in gold, we trust report is out there for everyone to appreciate, for the rest of the world, from Canadian through Europe and around the world, what’s the best way for individual investors to get in touch with incrementum? Well,
Ronnie Stoeferle 50:21
yeah, Trey, it’s, it’s interesting that you know everyone on this planet, yeah, from from from New Zealand to to Greenland, although we don’t know what’s going to happen to Greenland. So that’s perhaps not the best example, but everybody on this planet can buy our funds, but US citizens and US residents, but for everybody else, just have a look at our webpage, incrementum.li we’re an asset manager based in Liechtenstein, from my point of view, one of the best jurisdictions within Europe, not a member of the European Union. We’ve got the Swiss franc as our currency. It’s a very small country, one out of five countries on this planet, without any debt, without any government debt. So just have a look at our webpage, incrementum.ni, we’re heavily focused, I would say, in the real asset space, so commodities, gold, but also Bitcoin. That’s that’s in our DNA value investing. We do not only offer investment funds, but also private wealth management services. So just have a look at our web page, incrementum.li, or in from the United States, then, then perhaps in gold we trust dot report, because the next time I enter the US, I want to be safe and not be delivered to Guantanamo right away. So better play it safe.
Trey Reik 51:58
Excellent. Well, thank you very much for your generous commitment of time, and even more, for your dedication to the in gold we trust franchise, which we really appreciate out here in the gold community. So thanks very much, Ronnie. We look forward to checking up with you in a few months or so.
Ronnie Stoeferle 52:18
Thank you very much, Trey. It’s been a pleasure, and yeah, same, same. To you. Thanks for for everything, everything that you do for the community. I really appreciate it, and I’m a subscriber of your services as well. So thank you very much. Thank you.
