Skip to main content

Steve Hanke: Gold is Going to $6,000 as Inflation Comes Roaring Back

VRIC Media Jul 10, 2026

Summary

Hanke argues gold's long bull market is intact with prices peaking near $6,000, and central bank buying makes the pullback a buying opportunity.

Divisia M4 (broad money supply weighted by how spendable each component is) is growing 6.7% year over year — Hanke's signal inflation is re-accelerating.

The 10-year Treasury yield (5.1% in early July) tracks inflation the market expects, so Hanke expects yields higher and avoids long bonds.

Hanke sees a commodity price super cycle starting and advises pivoting portfolio weight out of bonds and into commodities.

His forthcoming book argues currency boards — local money fully backed by an anchor currency — beat central banks on stability.

Steve Hanke's takeaways

  • Top takeaway Hanke argues gold's long-term secular bull market is intact and he expects it to peak around $6,000, calling the pullback to roughly $4,200 (as of July 7, 2026) a good buying time because central bank demand, with China buying heavily, puts a floor under the dollar price.
  • He contends the inflation genie is out of the bottle: Divisia M4 money supply is growing about 6.7% year-over-year versus his 6% golden growth rate consistent with 2% inflation, with US CPI at 4.2% year-over-year (mid-2026) — more than double target.
  • He predicts interest rates will rise further because the market-set 10-year yield (about 5.1% on July 7, 2026) follows inflation, so he is bearish on bonds: he would hold bills near 5% but completely avoid the long end, where rising yields mean capital losses.
  • He argues a commodity price super cycle has begun and advises investors to pivot out of bonds and into commodities for the rest of 2026.
  • He warns US interest expense now absorbs about 22% of tax revenue and exceeds defense spending — citing Ferguson's law as a historical red flag for governments — while advocating dollar-based currency boards to expand the dollar system, with Venezuela (inflation around 450% per year) as a key candidate.

Kevin Warsh's takeaways

  • Top takeaway Hanke says Warsh, the newly installed Fed chairman, struck a hawkish tone in his only press conference so far, and that is how the market is reading him — at odds with the administration's push for lower interest rates.
  • Per Hanke, Warsh has signaled he wants to change the Fed's model and has set up a task force on shrinking the balance sheet, but he has not yet explicitly endorsed watching the money supply through the quantity theory of money.
  • Hanke cautions Warsh is only one vote on the Open Market Committee, so policy will not change radically or quickly, and says it remains unclear what monetary model Warsh actually has in mind.

Darrell Thomas's takeaways

  • Top takeaway The host observes that central bank gold buying has picked back up after earlier selling disruptions died down, supporting his view that official buying is putting a floor under the dollar gold price.
  • He frames the rate debate as two camps — interest rates going much higher versus much lower — and notes investors hoping for an official US gold revaluation around the 250th anniversary were disappointed.