Guest Post by Peter Reagan

Your News to Know rounds up the most important stories about precious metals and the overall economy. This week, we’ll cover:

• MKS Pamp says gold has another $1,000 gain in the books
• Why the Strait of Hormuz blockade makes for exciting times in the gold market
• Mainstream media is now covering Venezuelan gold, but are they getting it right?

Gold’s next move isn’t about $200 – it’s about the bigger picture

MKS Pamp’s Nicky Shiels recently made an observation that struck me as more important than it might sound at first: She isn’t confident about gold’s next $200 move – but she is confident about the next $1,000.

That distinction matters.

Short-term price moves tend to dominate headlines. But the bigger story – the one that tends to shape outcomes for long-term savers – is structural. And right now, several structural forces are quietly aligning in gold’s favor.

One of those is supply.

There’s still a lingering perception that gold is abundant or easily mined. In reality, bringing a new mine online can take the better part of a decade. That means today’s supply is largely the result of decisions made years ago, under very different economic conditions.

At the same time, capital has flowed aggressively into technology and other sectors, leaving mining relatively underfunded. The result is a tightening supply pipeline – one that doesn’t show up in day-to-day commentary, but builds pressure over time. (This pressure is significantly more notable in silver, where we’re facing the eighth consecutive year of demand outstripping supply by 7-20%.)

We’ve also seen steady central bank demand. Remember, central bankers buy gold bullion as part of a strategy, often with little note of price. Historically, that kind of buying has signaled a desire for stability amid geopolitical or economic uncertainties. To put some numbers behind that broader trend: central banks added over 1,000 tons of gold for three consecutive years (2022-24), according to World Gold Council data. Last year came in just a bit below that at 863 tons.

I argue that kind of sustained demand isn’t speculative – it’s strategic. It’s deliberate and it’s price insensitive. “Price insensitive” is economics jargon for “the buyer will pay whatever price necessary.”

In other words, this may be one of the few times I’ve ever seen when demand is strengthening while supply simply can’t keep up.

Now, that doesn’t guarantee any specific price target, although a third-grader can tell you that combination drives prices up. This dynamic explain why longer-term expectations remain well-anchored, even when short-term volatility creates uncertainty about next week’s or next month’s gold price.

For everyday investors, the takeaway is straightforward: The forces that move gold over time – currency pressure, supply constraints, and institutional demand – tend to build slowly, then show up all at once.

Think about it: There’s a pattern behind this. Gold doesn’t typically rise in a smooth line during periods of stress. It tends to move in bursts, with volatility clusters around major events. In both the 2008 financial crisis and the 2020 pandemic shock, long stretches of relatively little price movement were followed by sharp, fast repricings over a matter of weeks or months. By the time volatility is obvious, much of the move is already underway.

That’s why diversification into physical gold shouldn’t be about guessing the next price move. It’s about recognizing the trend that’s already underway.

Gold tends to do the majority of its job before a crisis is obvious – not after.

Oil shocks don’t stay in oil markets

According to ABC, the U.S. is preparing to block Iranian oil exports following failed negotiations – an escalation that will likely ripple through the global energy supply.

Energy markets have already started reacting. Oil prices recently moved back toward the $90-per-barrel range amid renewed Middle East tensions, a level that historically begins to pressure transportation, food and manufacturing costs.

At first glance, it’s tempting to treat this as just another geopolitical flashpoint. But energy disruptions tend to behave differently from other supply disruptions.

Oil isn’t a niche commodity. It’s embedded in nearly everything we use – from transportation to food production (tractor fuel) to manufacturing (plastics). When energy costs rise, they don’t stay contained – they spread.

Energy price shocks act like a tax on the entire economy. A good rule of thumb (I think it originally comes from a Goldman Sachs analysis) states that a $10 increase in oil price:

• Adds ~0.2–0.3% to inflation
• And cuts GDP by ~0.2–0.3%

We’ve seen this pattern before. Energy shocks in the past have translated into broader price pressures, squeezing households in ways that aren’t always immediately obvious. We see “pain at the pump” first. Airline tickets get a lot more expensive. And then, over weeks and months, everything seems to cost more.

And that’s where gold enters the picture – not as a reaction to headlines, but as a response to what those headlines set in motion.

Sustained higher energy costs often mean more inflation. And persistent inflation, in turn, erodes purchasing power over time. Sometimes wages catch up, eventually. But not quickly. When inflation expectations become “entrenched,” meaning we anticipate more inflation for longer, investors take steps.

Very often, they turn to gold for its historic role as an inflation-resistant investment.

Understand, this doesn’t always produce a straight-line move in gold. In fact, there are periods where rising costs create liquidity pressures that temporarily push down gold price. (We saw one instance of this at the end of January.)

But zoom out, and the relationship becomes clearer: When the cost of essential inputs rises across the economy, our purchasing power declines. For families, this shows up in familiar ways – higher gas bills, more expensive groceries, and tighter monthly budgets.

The lesson isn’t that gold “must” rise because of any single event. It’s that systemic pressures – especially those tied to energy – tend to accumulate. And when they do, assets that aren’t tied directly to the debt-based financial system begin to stand out.

When gold decides who holds power

A recent ABC report revisits Venezuela’s long-running gold story – one that, in my view, illustrates something deeper than a simple resource dispute.

At its peak, Venezuela held billions of dollars’ worth of gold reserves, much of it stored overseas. (It may seem odd, but a significant portion of the world’s central bank gold reserves are physically secured in vaults in London and New York.) Disputes over access to that gold have dragged on for years, underscoring how physical reserves can become leverage when financial systems fracture.

At its core, the situation raises a fundamental question: Who controls a nation’s wealth when institutions break down? A question that, in my view, illustrates a deeper question….

In Venezuela’s case, gold reserves have become central to that question. Access to those reserves has influenced political legitimacy, international recognition, and the ability to maintain control.

That may sound distant from everyday life in the U.S., but the underlying principle is worth paying attention to.

Gold has a unique characteristic: It isn’t tied to any one government’s promise. Its value doesn’t come from a promise to pay. Its worth can’t be inflated away like currencies.

That’s precisely why gold becomes so important in moments of uncertainty.

Historically, we’ve seen similar dynamics play out in different forms. When confidence in governments weakens, tangible assets take on greater importance – not because they change, but because perceptions of stability itself change. It’s like a street vendor I saw once in Washington D.C. selling umbrellas. His sign displayed two prices: “Umbrellas: $10. When raining: $20.”

The Venezuela story is an extreme example. But it illustrates a broader lesson: In times of economic stress, control over real, physical assets really matters. When it’s raining, an umbrella costs twice as much as when the sky is clear.

For individuals, there’s a practical takeaway.

Diversifying a portion of savings into assets that exist outside the debt-based financial system offers a different kind of stability. Not perfect, not immune to volatility – but grounded in something more durable than a quarterly earnings statement or a growth forecast.

When separate problems start to look like symptoms of the same disease

Step back for a moment, and these three stories begin to look less like isolated events – and more like different expressions of the same underlying mechanism.

On one side, you have supply strain. Gold production isn’t keeping pace with long-term demand, while central banks continue to accumulate reserves and investor demand grows.

On another, you have energy shocks. Oil disruptions don’t stay contained – they move through the entire economy, raising costs in ways that are difficult to avoid.

And then there’s the question of control. Venezuela’s experience shows what can happen when access to assets becomes uncertain and tangible, physical assets become even more important.

Different stories, sure – but the same theme. Stability is becoming more fragile at the edges.

I’ve seen this pattern before, and it rarely announces itself all at once. It builds slowly – higher costs here, tighter supply there – until something forces people to reassess almost everything.

For most families, this doesn’t show up as a headline. It shows up as a budget that doesn’t stretch quite as far, or a growing sense that the rules are changing.

That’s why diversification isn’t about reacting to any one event. It’s about recognizing when multiple pressures are pointing in the same direction. And listen, physical gold isn’t the solution to every economic problem. But it is one of the very few assets that sits outside the debt-based financial system. That makes it more or less immune to many of the forces we’ve talked about – energy costs, supply chain disruptions and distrust of institutions.

And in times like these, gold can start to matter more than you might expect. That’s why we say, Better a year too early than a day too late.

As central banks continue unprecedented money creation, protecting your purchasing power becomes critical for retirement security. Physical gold IRAs offer a tax-advantaged solution, allowing you to hold tangible precious metals with intrinsic value independent of currency fluctuations. To learn more about how physical gold could help protect your retirement portfolio, click here to get your FREE info kit on Gold IRAs from Birch Gold Group.  And now introducing a Crypto IRA to capitalize on the fastest growing market in the world.