GOLD $5000 - what next?

The market loves round number milestones.  Gold $5000 is just that.  It's getting a lot of media attention now and everyone's wondering - what's next?

You can look at the gold price through many historical lenses - price to S and P shares - price to federal debt, price to total debt.  All these stories show gold is not really at historically high levels since the massive US debt bubble is outpacing the price of gold and stoking the value of equities as well as hard assets.

You can view the gold price through technical lenses (RSI, stochastics, commitment of trader reports etc) and conclude that gold is quite overbought after all, it has rallied over 60 percent in one year.  Surely we're in for a steep correction?

But really, to understand the gold trade you have to understand a fundemental shift in global markets that has taken place over the last few years.  And this shift involves gold's return from  being traded as a commodity ever since the monetary gold standard was broken back in 1971,  back to being a monetary metal as it had been from about 6000 BCE to 1971 AD.

How do we know sgold has been transformed back into a monetary metal?

For one thing the central banks of the world = especially China, Russia, Eastern Europe, South East Asia, Central Asia - and the BRIC nations are telling us this.

But if you want harder proof - since it is very hard to accurately gauge central bank buying - you need only look at the STAND FOR DELIVERY statistics available at all western gold exchanges.

At the Comex - Every single contract month in 2025 set delivery records. February (an inactive month) saw 15,500 contracts delivered—unprecedented for a non-traditional delivery month. April delivered 18,200. June hit 21,800. October’s active contract exploded to 58,061 contracts ($23.5 billion notional) through October 22 alone. December, while final data awaits publication, appears to have cleared approximately 27,000 contracts—surpassing December 2024’s then-record 25,642.

This shows that even as the gold price shot higher, the appetite for physical bullion of the largest, wealthiest buyers in world grew ever greater.  Real gold bullion is being accumulated by Central Banks, Hedge Funds, Sovereign Wealth Funds, and Billionaire Concierge vaults.  And the stand for delivery contracts make it impossible for the traditional bullion banks to control the gold price by dominating the paper trade as they have done for the last 50 years.

Now the reason for this transformation is not widely understood.  But it is clear.  It is sometimes called tbe debasement trade.  This means that as the debts of all nations soar the respective governments compete in inflating the value of the debt away making all fiat currencies worth less and less vis a vis real things.  Such as gold.  And this debt is compounding and increasing at an alarming rate.  In fact such an alarming rate that the world's wealthy are now responding by shifting their own reserves from paper to gold.

This is also called the Sell America Trade - because the predominant debt in the world is dollar denominated.  And our government is intensifying its spending needs through global conflict just as it is weaponizing the currency itself through confiscations, tarrifs, sanctions - and outright theft (such as the seizing of Russian treasuries and Iraqui oil profits held at the Fed.)  Thus all central banks are seeking to move away from dollar denominated debt to the only other Basel Tier 1 Reserve Asset: GOLD.

So as gold hits $5000 per ounce what could reverse these trends?

I can't see anything.

That doesn't mean gold goes straight up from here.

But it also doesn't mean there is any good reason it shouldn't over time, other than the recency bias of looking back to see how it traded for 50 years as a pure commodity.