Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason.
Coming up don’t miss our exclusive interview with Axel Merk of Merk Investments.
Money Metals’ Mike Maharrey and Axel breakdown the Trump effect and how the second Trump administration is likely to sway markets, especially precious metals. Axel also highlights the broader global instability he’s seeing and the rise of populism as factors that could boost demand for gold as a safe haven asset.
Axel and Mike also discuss the importance of rebalancing one's portfolio in order to account for the potential fluidity of your investment risk tolerance.
So, make sure you stick around for another fantastic Money Metals interview with well-known market insider, Axel Merk, coming up after this week’s market update.
Silver, and especially gold, are having a relatively strong week -- boosted by a government report on Wednesday that suggested consumer price inflation is moderating.
That news reduced worries on Wall Street that the Federal Reserve will halt its interest rate cutting plans... and we know how important cheap money is to this crowd! The stock market rallied on the news as well.
As of this Friday midday recording gold checks in at $2,725 an ounce, good for a weekly advance of 0.8%. Meanwhile, silver is essentially unchanged for the week to come in at $30.60 an ounce. Platinum is down 2.5% commands $957. And finally, palladium is up a slight 0.3% to come in at $987.
The reality, though, inflation is still very much a problem -- at least if you ask the average American who is seeing his cost of living shoot up month after month, and year after year.
Meanwhile, even though many feel strongly that Trump should get highly aggressive in trade negotiations, including imposing sweeping tariffs, such an approach does seem likely to fuel the inflation fire.
It's unknown whether Trump's tariffs will only target finished goods... or certain countries... but a fear of tariffs on raw materials, including gold and silver, has certainly been creating a lot of drama behind the scenes in the gold and silver market over the past few weeks.
We have reported on this before, but it remains the most likely catalyst for swings and even a short squeeze event in gold and/or silver.
If Trump slaps a tariff of, say, 10% on precious metals coming into the U.S., that would have a dramatic impact. 10% on silver would amount to $3 per ounce!
As a result of this worry, the price of gold and silver – as traded on the New York futures market – has risen sharply above the prices for the same metals seen simultaneously in other markets across the globe.
In silver, for example, the spread between London spot and New York futures has recently reached as high as $1 per ounce!
This spread has also created a big incentive for parties all over the world to get their gold and silver into the U.S. before any tariffs are imposed.
Traders are buying metal in London, simultaneously selling in the NY futures market (and pocketing a tidy profit), withdrawing the metal from London vaults, and transporting the metal to the U.S. to deliver onto the exchange to close out the futures position.
This dynamic is having the effect of draining London vaults of gold and silver at an unusually fast rate – and at some point, these lower levels of vaulted metal in London could create price dislocations in that major market too.
Those who have short positions in the New York market are in the process of getting squeezed, especially if they are having trouble getting their hands on physical metal to deliver into their short positions. Or get it into the right form.
You can be sure we'll continue to watch this situation closely and report on any big developments.
Meanwhile, we've been rolling out a number of great product specials at Money Metals. In particular, we've slashed premiums on newly minted 10 oz and kilo silver bars -- plus 1 oz and 1 gram gold bars. We're talking about roughly a 50% reduction in premiums. So, if you're in the market to pick up some precious metals, visit MoneyMetals.com and look for the special notice at the top of the home page.
Remember, also, that we make a two-way market. Money Metals will happily buy your gold and silver items -- and we pay you handsomely in comparison to others.
Well now, without further delay, let’s get right to our exclusive interview with Axel Merk.

Mike Maharrey: Greetings. I'm Mike Maharrey, a reporter and analyst here at Money Metals, and I am very pleased to have Axel Merk with me here today. Axel is the president and chief investment officer of Merk Investments and a well-respected macro analyst and I'm really excited to talk to you today. How are you doing?
Axel Merk: Always good when I talk with you, Michael.
Mike Maharrey: Well, I appreciate that. That's very kind of you to say. So the last time we spoke, I looked it up, it was actually last spring, so it was I think in March. And since then a lot has changed. We've got a new president about to take office. We're going to have Trump 2.0, and I'm curious of how the transition to the Trump administration has changed your outlook on the precious metals markets, if it has at all.
Axel Merk: Well, the first is I've added a very precious asset to my investment portfolio, probably not considered a precious metal, which is popcorn. I've been loading up on popcorn to just sit back and enjoy. If you're not confused by everything that's happening, then you haven't been paying attention. It's kind of one of these times where having a process, it doesn't need to be a good process, but having a process to investment is so relevant because you get news every day and you should be excused for changing your mind every day.
So with that said, and I try not to say too many things that you've heard from everybody else, but it's pretty clear that this administration is about deregulation. It doesn't mean regulation is going to go away, but everything else being equal, that provides a higher growth potential, which means higher real rates, which would actually be a headwind to the price of gold on the other end of the spectrum. On the mining side, deregulation might make it easier to get permitting, so it might be good for the mining space in the us but don't kid yourself. There's still going to be regulations, even if the new ones are different. By the way, in Canada, there's also going to be a change and presumably also easier to get things done on the mining side, it's always been a favor jurisdiction. On the cost side of things as far as the government costs are concerned, and that's why I referenced the popcorn.
The big coha is being made about this department of government efficiency, and by all means I wish them the best of luck, and I actually think they can get more done than similar initiatives that have happened in the past. That said, politicians think about the next election, not about government efficiency. But probably there has to be a lot done with executive orders. But what is not on the agenda, which is I think most relevant to the gold investor, is fiscal sustainability. There will be lip service to it, but entitlement reform is not on the block. The tax cuts from Trump 1.0 need to be “renewed.” He's already been giving gifts left and right. My guess is something will get passed, but my guess is also that this is not going to bring fiscal discipline back on the table with the narrow majority. And so if you go take it back to the gold space, there are different types of gold investors. One of them, one type of gold investor, is the one concerned about the purchasing power of the dollar. And of course, the rest of the world is a mess and the dollar itself has been strengthening, but that doesn't make the dollar purchasing power any better necessarily. And so those investors are still there, and we see amongst others we see that group continue to be a buyer.
Mike Maharrey: Yeah, I think that's all very good points. I think if you look back to the first Trump administration, I've always said that he's kind of a wild card. He's very pragmatic in the way that he approaches things. I don't think he's really an ideologue in any real sense, but you can go back and look at his first term. And that's one thing that was pretty consistent was the deregulation in so much as the president can do that. And like you said, you're never going to have no regulations. That's not a thing in the world of politics. But I think that's a really good observation.
Axel Merk: One difference to Trump 1.0 is -- where in Trump 1.0, I think Trump was a wild card. I would go as far, and I recently said that in a podcast that he might actually be the anchors of stability in the world right now coming up. And I am reluctant to say that because his Tweet storms will probably be with us. But just think about what's happening in France. Italy, Germany has an election in February. Popular sentiment is on the rise, not just in the us everywhere. And the differences in the US we've always had a bit of a rougher and tumble politics. We've learned how to work with that in the rest of the world. Some governments will fail, will collapse, there's going to be much more. And one of the things, and one reason why price of gold I think has gone well is I historically don't like to invest in gold because of geopolitical risk because usually the market's used to these things. But we have moved to, I think, away from the stability we have since World War II, and what's happening in Ukraine or Gaza are just symptoms of a new period. And so of course it doesn't mean price of gold will always go up, but I think it's relevant context as people think about their investments going forward.
Mike Maharrey: Yeah, absolutely. That brings me to another question because here in the United States we tend to be very US-centric. It's kind of in our nature, right? I'm curious, as for you, I know that you look at things more on a larger global scale. What are some things outside of the United States, maybe one or two big factors that you see on the horizon, either in Europe or Asia, Africa, that you think may have a significant impact on the precious metals markets that Americans may not have on their radar?
Axel Merk: I can give you a few answers. So first of all, for context, we manage about 1.6 billion in gold and gold mining. And so we have a significant mining portfolio. And of course there is always geopolitical risk in gold mining, including in the US and I just mentioned some nuances being different in the US and Canada potentially. West Africa used to be a decent place to invest in, gotten less stable. Latin America appears to be coming a little bit better, so there's always going to be some of that. And so those sort of geopolitical risk I think are not going to change greatly. It doesn't mean you can't have a collapse in some African country or whatever it may be. The other though, the big thing that's changing, is that the major developed mature countries have some significant challenges. Take Germany, I mentioned an election, one of the party leaders in the conservative mainstream party was advocating that they should be striving for 2% growth and then giving a nuanced account of how they're going to lower taxes by a tiny bit each year for the next four years should they be in power.
And I just watched this stuff and scratch my head, the folks who want change are not going to vote that, they're going to vote for the populace and that want to rip things apart. And Europe is drowning in bureaucracy amongst many, many challenges. And they're not facing this. I just listened to an interview of Mark Andreesen and he said that Trump is bringing democracy back by talking to people directly, pipeline, giving their input directly. And you may like of this Trump, but that's kind of what populism is. You talk directly to the public, whereas the European Union is somewhat proud. And I say that having talked to some bureaucrats there that they are above the phrase so to speak, but people don't like that. And so it's a big sea change overall. Everything that we've seen about social media and all that, the power is with the people that is highly, highly disruptive. Neil Ferguson, an economic historian, he wrote a book, the Square and the Tower, maybe it's called The Tower and The Square talks about how hierarchical societies fumble when they are disruptive forces. And this was written before the pandemic, but he writes about how the era that we are in right now may be similar to the invention of the printing press,
Axel Merk: It was just so disruptive that suddenly the public could have access to these things
That governments that were weak just top of left and right. And I'm not saying that's going to happen tomorrow, but those are the sort of forces that we deal with. And at the same time, we have aging populations, super expensive, and I mentioned geopolitical risks, governments, military spending has to go up. And so if I look at all that, I'm quite okay having a bit of gold in my pocket here because it's the purchasing power that will be suffering. And, of course, as purchasing power is suffering, people don't realize what is happening to them, but they're not satisfied, they're unhappy. And that is expressed by voting again for populace, both on the left and on the right. There's very little loyalty by voters by the way. They can switch from left to right and in one election cycle. And so that's going to make for less stable policy. And we are fortunate in the US that our institutions are quite strong and can handle that. And there is a core belief that hey, that if we just go back to the basics of the Constitution, we'll be all right. Plenty of people are going to scream that, oh my God, what are we doing?
But the system as a whole is going to stay intact more easily than in other countries. And so I'm quite concerned, we haven't even talked about China. The Chinese are noodling around with the real estate bust that they're facing and they keep giving this miniature stimuli, you can now get a discount buying your Chinese mobile phone. Oh, great. But that's not fixing the issues and they want social stability. Whether that can persist is anybody's guess. And then before I hand it back to you, the one thing just to keep in mind is whatever we are prognosticating here, history shows that what actually drives the market may ultimately be something else. So the unknown-unknown is really what's going to drive the market Historically, that tends to be more of a shock than an upside shock.
Mike Maharrey: And that's a good point. I mean I think that from an investment standpoint, you always need to have some level of preparedness in your portfolio. There's always risk maybe more or less at certain periods. But I said this the other day on one of my social media sites, I said, you don't know what you don't know and you kind of have to operate in that paradigm.
Axel Merk: Yes. Well, my speech is censored so I'm not allowed to say what investors need to have, but what they might want to consider is what I have to say. What happens is that people tend to be passive. And so in recent years the stock market has done well, which means they're over allocated to risk relative to their risk profile. And what people should do is when things go well then to rebalance their portfolio.
Most people don't do that. And so, at some point, when we have a significant bear market, they're going to lose more than they're comfortable with and that's when bad decision making happens and people lose sleep. And the one investment advice I can give is that you might want to have an allocation that you're comfortable with. And we talk a lot about precious metals. I mean, people need to be aware that this space is volatile, right? I mean, it's considered a defensive investment. Price of gold tends to have volatility similar to the equity market, but it can surge gold minus, especially the juniors, can be dramatically more volatile. And so people need to be comfortable with that, including that it can happen on a downside. And, at the same time, if you are heading to a less stable world, I think one of the better things people can do is invest in themselves, making sure that their expenses are in order, reducing their debt, all of that helps them to be calmer when something happens to their portfolio that they don't like.
Mike Maharrey: That's a really, really, good point. I appreciate that. You mentioned a few minutes ago real interest rates. Are you at all surprised that gold, the price has held up as well as it has given the fact that we've seen a pretty strong upside to yields, treasury yields, especially on the long end of that curve. Does that surprise you at all?
Axel Merk: Well, it's noteworthy, that's for sure. Right? There would've been plenty of reasons for the price of gold to go down and it has not gone down. And what I do as an analyst at heart, I try to understand why that is the case. It could be foreign central bank buying because we've weaponized the dollar. It could be investors being very concerned about the purchasing power of the dollar. It could be other reasons. We always say that the gold isn't correlated. Price of gold isn't correlated to anything. The price of gold, the correlations, they morph in and out. And then so to equity, some the positive correlated, some that negatively correlated, sometimes not correlated, but to real interest rates, longer term real interest rates, it historically is correlated. And before getting too technical, some people of course say, well, why on earth do you worry about long-term real interest rates? Nobody knows what inflation will be in 10 years from now. The reason why that's relevant is because the market says it's relevant. These longer term rates are not a prediction of what a rate will be relative to A CPI that you might like or not like. It is an expression of confidence in the Federal Reserve.
And so the nuances matter in how that will play out. And of course, one of the things that has happened, as you may recall the Federal Reserve in December throughout the book saying, oh, we are data driven. No, they're emotions driven. They said, “Trump got elected, we got to do something.” And so the market says, okay, this debating club now has a bias that's being a little tighter. And so that's being priced in. Maybe the market is pricing in that they will go back to being a little bit calmer and see what's actually going to happen.
I mean, it's always good to read the tea leaf. Ultimately, yes, the price of gold has held up. And by the way, I'm on the record of being an insider buyer in a gold mining space. And so I happen to agree that the gold miners are on a relative basis given how far the price of gold has moved up a good value. But none of that doesn't mean that tomorrow the price of gold doesn't suddenly plunge because it's waking up, “oh my God, oh my God, real rates are too high.” The price of gold should go lower, and then everybody will jump in and explain why. Of course, that had to be the case. So I am a long-term investor in gold and I look at it, I listen to people who are our investors of why they're buying. We certainly see that there's been a lot of attention to the space. And again, it comes down to that. I see similarities to past episodes, but our fiscal situation is much worse. And we know from Europe and other countries that the way you address these fiscal issues is by kicking the can down the road.
And I have very little doubt that's going to be any different here. Of course, I don't know, but that's… that's my assessment.
Mike Maharrey: Yeah, that's the favorite pastime of most politicians kick the can down the road because you made the point earlier, they are very short-term oriented, right? They're looking to the next election cycle. And so I think it's difficult just by the nature of the game, for politicians to look 10 years down the road and worry about things that we might do now that might be painful, that would help 10 years down the road. They don't want to inflict the pain because they know that the voters will punish him for it.
Axel Merk: And quite relevant in that context is Trump is a lame duck from day one.
And so I have no doubt he'll get a bunch of stuff done with executive order, but it's not going to be as easy sailing as some enthusiasts are suggesting. Now, that said, the enthusiasm does make a difference. If you look at consumer sentiment numbers, Republicans in particular, they're all in misery when a Democrat is in power and they're all enthusiastic when a Republican is in power, and guess what? Not really much has changed, but the attitude and enthusiasm makes a difference. When people say that now is time to invest, they will invest. Even if not much has changed on the ground, I don't think one should belittle that. So all this PR machinery and Trump is a fabulous PR man, makes a difference. People are willing to invest. And even if at the end of the day when presidents look back at their four-year term, they often said, well, we pushed the needle a little bit. But there are some presidents in history that had major, major impact. I mean, Wilson and FDR come to mind as some examples that have done a lot of harm in the process. I was going to say two of my least favorites, yes, yes. That have long-term implications, but sometimes we are caught up in the moment… and yeah, I'll just leave it at that…. I don't want to get too political.
Mike Maharrey: Right, right. No, I totally understand. We got a CPI report today, and from what I'm reading, I think most of the markets and the analysts seem to be pretty sanguine about it. I kind of looked at it and thought to myself ehhh, the price inflation situation right now, I would describe it as sticky, but I feel like that the mainstream sentiment again is pretty optimistic. Do you think that the Fed has this inflation issue under control or not?
Axel Merk: No, they don't. And I'm not suggesting that tomorrow's inflation is going to blow up in our face, but they don't have it in control because they don't have a strategy. And that was, everybody noticed that I think in the December FOMC meeting, the challenge, and I think we talked about it last time, we spoke nine months ago. So once inflation is high, it is not a linear process. And the problem with that is that you can't just say, okay, today's inflation numbers are okay, so we can lower interest rates by 0.25%. There is just the cause and effect is missing. And so instead I politely called the FOMC Debating Club. That's what it ends up being. Now, the reason we pay attention to the debating club is because they control the bazooka and they set the what's by regulation, the risk-free price, so to speak. And so it's relevant what they do and they will wing it, but that's what it is and that's not very helpful.
And the reason why the Fed is so important, they set the anchor of the risk-free rate and then that gets priced… priced out along the curve to longer term rates. Obviously when they manipulate that in one way or the other, they're taking their own gauges away. But the less clarity there is on that, the more the uncertainty has to be priced into the market, and that ultimately means less economic growth. It also ultimately can mean higher inflation. And that's why one of the key reasons why I'm so critical to the fundamental approach that the Fed has and that they haven't engaged in any soul-searching based on the major screw-up they had in missing this inflation. But we can sit here and lament about the Fed all day and long. They control the bazooka and I, we only have a tiny microphone here, so we have to deal with it. At the same time. If they're not voices, maybe one of these days there will be more meaningful reform.
Mike Maharrey: Yeah, I feel like right now they're walking this tightrope and they're almost in a catch-22 because, on the one hand, we've got so much debt in the economy, there's so many maladjustments and things that we kind of produced with, I mean really two decades of easy money when you really, other than the last year and a half or so, notwithstanding. And so there's all this debt, and so in that sense, we understand why there's this passion to lower interest rates. We had Trump just the other day saying, we need interest rates to be lower. And then, on the other hand, we've had this price inflation problem. So they're trying to balance these two things and they're kind of mutually exclusive, and I don't think that they're going to fall off one way or the other. I think at some point, and that'll be interesting to see how that plays out.
Axel Merk: You get away with mediocre monetary policy when the fiscal site is in order, but it is even, you cannot pursue sound monetary policy when the fiscal site is not in order. So I don't envy them for the job that they have. The best thing they could do is just all resign and say, “we’re going to replace the system that we have, that we use something that's more rules-based driven rather than having a debating club decide on things,” providing a formula of how interest rates are set, take the politics out of it because they have introduced a lot of politics with how they've acted and how they communicate and whatnot. Trying to do it right for everybody. You cannot make it right for everybody, but ultimately, yes, if the fiscal side is not in order, I mean just like there are a lot of folks, presumably also in your audience that would like to go back to a gold standard, well, that's beautiful, but you can't have a gold standard if there's no fiscal discipline, and what are the odds of that happening?!
Mike Maharrey: Right. Well, on the flip side of that too, the governments in general, they don't want a gold standard because it by nature, that fiscal discipline, and I say all the time I say that the Federal Reserve is the engine that drives one of the biggest governments that we've ever seen in the history of the world. If it wasn't for the Federal Reserve and their ability to create money and put their thumb on the bond market, I don't think that the US government could borrow and spin to the extent that it does. So there's kind of this, I don't know the word I wanted to say incestuous, I don't think that's necessarily the right word, but there's this relationship between the Fed and the government that is symbiotic. That's the word I'm looking for!
Axel Merk: You say a few things and some of which I disagree. So let me unpack that a little bit. So first of all, the bond market, the government has a big factor in the bond market, but ultimately, if the market were to lose confidence, then we're just sipping from a straw on the ocean on the government side, and so the market could overwhelm things… Beyond that, the Federal Reserve, they will try to do the right thing, but again, the market will overwhelm them. The long-term rates, in particular, they will be driven by supply and demand in the markets. Ultimately, it is the bond market that can impose discipline, but I don't think it is the pulling of the strings so to speak. Now, clearly QE and whatnot has an influence, but one of the reasons I looked at these longer term rates is because it's a reflection of the confidence that the market has.
Mike Maharrey: That makes sense. And I guess probably I'm looking back, so you think about the quantitative easing and the money creation that happened during the pandemic kind of enabled the government to get away with some of the borrowing spending. But I do agree with you that in the bigger picture, ultimately the market can impose that same discipline.
Axel Merk: Yeah, no, absolutely. And the market is, of course, the Federal Reserve will have to facilitate somewhat. If the government and the Fed are not aligned, It can create challenges. And by the way, just as I said, the Fed needs to be rules-based, so that's more predictable if there's credible interference, right? It's one thing for Trump to issue a Tweet that says, “Hey, we want rates to be lower,”
Mike Maharrey: Right?
Axel Merk: If there's credible interference, it actually raises borrowing costs because the cheapest policy is one where the chair just goes out and says a few words and the market is moving. But if there's a bombardment, a torpedoing, that is effective, then they might actually have to do things that is far more powerful. And so this Fed independence is very valuable. That's why these folks are fighting for it. That said, of course, that comes with a lot of responsibility and if they're turning the Federal Reserve into a political body, then of course they're going to get more political interference, but they only have themselves to blame.
Mike Maharrey: Right, right. Absolutely. Alright, I'm going to get you out on this one and you can give me kind of a quick answer. Looking at the miners over the last year or so, they’ve kind of lagged. If you look at the price of gold, we haven't seen the bullishness in the miners quite to the extent that we've seen it in physical. Do you think that the miners are going to start to play catch-up in 2025? Are you bullish for the mining sector as we move forward?
Axel Merk: Well, we are mostly on the developer side on the development space for the miners. The major producers, they've underinvested, which means that they have actually great balance sheets right now, and I'm not giving any specific investment advice here, but that means they have less of a leverage to the price of gold and they're playing catch up by investing in these mega projects that are very difficult to execute on time and on budget. And so their earnings haven't been satisfying. On top of that, investors have been burned many times. Now we see on the smaller side that we try to focus on mining teams that take more bite-sized projects that have executed on time and budget in the past. Of course, there will always be some operational issues and there's no guarantee that all of them will succeed, but that's where we see the value creation has been, and several of them have actually outperformed the price of gold. Now, that said, I would agree with you that these valuations are somewhat depressed, even though they have done quite okay compared to the price of gold. And it's one of the reasons why I'm on the record being an insider buyer in that space.
Mike Maharrey: Well, excellent! So where can folks go to find out more about you follow your, I know you're on X. Where would you send people to find out about what you're doing in all of your work?
Axel Merk: I still call it Twitter. Yes, @AxelMerk is my handle on Twitter. The reason I mentioned that is because that's really the most up to date information. I can't talk about products there. Our corporate website is merkinvestments.com. That gives you then a link to some of our product websites as well. And you can learn what we do more in the gold and gold mining space. We have a newsletter that's really the best place to sign up so you can stay informed and don't miss anything. And of course with you the next time that I'm a guest on your program.
Mike Maharrey: Well, that will definitely happen because I very much appreciate your insights and enjoy talking to you very much. And I appreciate you taking time out of your busy day to hang out with me for a little bit. And with that, I will let you get on with your day. I know you're out on the West Coast, so you're just getting started. I'm ready to go have lunch. But again, thank you so much for taking the time and we will get you on again soon.
Axel Merk: Have a great day.
Another good interview there, and we always love getting the insights of Axel Merk. He certainly has a great handle on these markets, and you just heard why he is so well respected in financial circles.
Well, that will do it for this week. Be sure to check back next Friday for our next Weekly Market Wrap Podcast. And remember to tune in as well to the Money Metals Midweek Memo, hosted by Mike Maharrey. To visit any of our audio programs you can find them on Apple Podcast, Spotify, other podcast platforms, or simply by going to MoneyMetals.com/podcasts.
Until next time, this has been Mike Gleason with Money Metals Exchange, thanks for listening and have a great weekend everybody.

About the Author
Mike Gleason is a Director with Money Metals Exchange, a precious metals dealer recently named "Best in the USA" by an independent global ratings group. Gleason is a hard money advocate and a strong proponent of personal liberty, limited government and the Austrian School of Economics. A graduate of the University of Florida, Gleason has extensive experience in management, sales and logistics as well as precious metals investing. He also puts his longtime broadcasting background to good use, hosting a weekly precious metals podcast since 2011, a program listened to by tens of thousands each week.