Axel Merk

Axel Merk & TG Watkins - Macro vs Technicals: Gold, GDX, Oil, Copper, Critical Minerals, US Markets

• Top takeaway Merk is constructive on gold and miners and says he puts his money where his mouth is, describing himself as a substantial investor in mining equities and physical gold and arguing the market is still not pricing in sector margins with gold above $4,000
• Merk argues that under Kevin Warsh the Federal Reserve is trying to stay in its lane by exiting QE, interest on reserves, and mortgage-backed securities, so monetary policy can return to rates and credit rather than political credit allocation
• Merk says a Warsh-led Fed is unlikely to deliver a large hiking cycle even if it raises rates, which he views as compatible with gold sustaining levels above $4,000 against higher yields
• Merk frames dollar reserve erosion as a fragmentation story rather than replacement by another currency, and warns that tariffs impede the flow of currency as well as goods, raising US borrowing costs
• Merk places the current bull market past the first inning, with open financing windows and conservatively priced miners, but warns that a closing of that window would change the picture

Gold sits above $4,000 with rising yields — Merk argues this bull market still has room, with mining equities under-pricing margins at higher metal prices. Merk urges investors to weigh management teams over metal-price forecasts, calling capable operators the scarcest resource in the mining sector. Watkins expects GDX, gold, and silver to pull back toward their daily 50-day moving averages after the late-summer melt-up, with prior lows as possible targets. Oil breaking out near $100 raises inflation risk and complicates the Fed's path, putting pressure on equities broadly while favoring energy producers. Equal-weight S&P and Russell 2000 breaking down while mega-caps hold steady signals seasonal weakness into the midterms, per Watkins's breadth work.

Gold, Bonds and the Iran War Shock

• Top takeaway Merk argues the Iran war shock pushed real long-term yields higher — bonds sold off while long-term inflation expectations stayed unchanged — making bonds more competitive with gold as a store of purchasing power and pressuring the gold price.
• He emphasizes the war was priced as a shock rather than a structural change, which is why long-term inflation expectations did not move.
• In his view, gold competes with the purchasing power of the currency, so when the market prices in more relative long-run compensation from bonds, the price of gold goes down.
• He notes gold's reaction happened to be correlated with how equity markets responded to the same rate move.

Gold came under pressure after the Iran war shock as real long-term yields rose and bonds became more competitive stores of value. Merk notes markets priced the Iran war as a shock, not a structural change, leaving long-term inflation expectations unchanged. Gold competes with bonds as a store of purchasing power; when real yields rise, bonds become more competitive and gold weakens. The speaker notes the gold move happened to correlate with how equity markets reacted to the same shock.

Gold Price Warning: The Fed May Be Setting Up the Next Breakout

Axel Merk argues that Federal Reserve policy and persistent U.S. debt accumulation structurally support higher gold prices over the long term. Central banks continue diversifying reserves away from the U.S. dollar, providing sustained physical demand for gold regardless of Western monetary policy. Merk sees selective opportunities in junior gold miners today, noting silver faces near-term volatility but benefits from structural supply deficits driven by industrial demand.

SPECIAL REPORT: Was Kevin Warsh's Fed Debut A Hit? Or A Flop? | Axel Merk

• Top takeaway Axel Merk says he was lobbying for Kevin Warsh's appointment and is thrilled with the debut: he believes the first meeting achieved all of Warsh's goals, above all re-anchoring credibility on price stability.
• He endorses Warsh's end of forward guidance, arguing the Fed's constant jawboning deafened it to market signals and made it late by default, and that markets will now price policy off the data instead.
• He reads the market reaction as validation: short-term rates were repriced higher, but the long end of the yield curve fell overnight, which he takes as confirmation the market believes inflation will be brought down.
• He flags as a hugely underappreciated move that Warsh put the ample-reserves regime and the oversized balance sheet under review, arguing for a return to the pre-2008 scarce-reserves system and expecting an MBS-for-Treasuries swap with the Treasury at some point.
• He remains bullish precious metals because of fiscal deficits and an administration expected to double down on growth without restraint, conceding a credible hawkish Fed is a headwind all else equal; he trimmed his gold position somewhat when Warsh became the nominee but says he likely still holds more gold exposure than most listeners, and QE from Warsh would shock him.

New Fed chair Kevin Warsh used his first FOMC meeting to end forward guidance, shorten the statement, and stake everything on price stability. Markets read the meeting as hawkish and moved rate-hike odds up, yet long-term yields fell, which the guest calls proof the credibility mission landed. Warsh launched task forces to review the ample reserves regime, Fed minutes, dot plot, and balance sheet, an ambitious first-month overhaul of Fed operations. The guest argues a credible, inflation-focused Fed is a headwind for precious metals, but runaway fiscal deficits keep his own gold and silver exposure bullish. Warsh prioritizes price stability over full employment and would lean on the productivity boom, not market weakness, to justify eventual rate cuts.

The Federal Reserve Is Fracturing | Axel Merk

Record FOMC dissents reveal deep internal fractures, signaling the Fed is losing its unified voice on monetary policy direction. Incoming leadership transition creates policy friction as dissenters reject forward guidance language implying future rate cuts. Two interpretations emerge: Fed members asserting independence from Warsh or signaling early alignment with his anti-guidance philosophy.

SPECIAL REPORT: 'Deer In The Headlights' Fed Leaves Rates Unchanged | Axel Merk

Federal Reserve holds interest rates steady, signaling a cautious 'deer in the headlights' approach to current economic uncertainty. Portfolio manager Axel Merk provides immediate analysis on the FOMC statement and Jerome Powell's press conference implications. Discussion covers potential impacts on inflation trends and what the Fed's inaction means for future monetary policy direction.