The Gold Crash Is Hiding Something Bigger… Prepare Now | Jim Rickards

0:00 No commodity goes to the moon without a 50% drawdown along the way. And if you're not prepared for that, you're in the wrong market cuz that's how that's how commodities trade, and that's how gold trades. >> Gold has suffered one of its sharpest declines in years, and many investors are now wondering whether the historic rally is finally over. But Jim Rickards believes this correction may be part of a much larger cycle. He explains what triggered the selling, why falling prices don't necessarily mean gold's fundamentals have weakened, and why the next major move could also pull silver significantly higher. The following interview excerpts have been edited and condensed for clarity. Full credit and the original interview are linked in the description.

0:46 >> Let's start with the facts. That's always a good place to start. So, gold peaked at the end of January 2026 around $5,355 an ounce. Some people that was that was a closing price on the COMEX. Some people pick a higher intraday price. That's fine. They're different different tickers, but that's about where it was. So, you had close at 5,400 an ounce for a round number, if you like. It then went down in just a little over 6 months to $4,000 an ounce. It was a little actually there was a three handle there for a little bit. It ticked down to around 3950 or whatever, but about $4,000 an ounce maybe. I mean, obviously it moves around. It could be 4,100 today. Um So, that is a

1:32 that is well over a 20% decline. That is a full Pardon me, that's a full-scale bear market if you want to use that expression. So, the question is, okay, was the 5355 that peak? Was that you know, was that a bubble? Is this the end of gold? Should I get out? Is it going to go down more, etc. or uh is where we are kind of finding a floor, a good entry point, if you don't have a full gold allocation or if you want more, or is this a good place to get in? And the answer is yes, it is a good place to get in. I definitely recommend that. Now, having said that, let me offer a little explanation behind that because I don't want to just, you know, kind of throw that out there. Um First of all,

2:18 the the fundamentals have not changed. Central banks are still net buyers. Market uncertainty is still huge because of the war in Iran and the war in Ukraine and other factors. Inflation is still a concern. And there are a couple other drivers, but the mining output is still flat. I'm not saying I'm not saying mining output is declining or it's peak gold, but it's been flat for 7 years. So, when you have flat output and increasing demand from central banks, and that by itself is a recipe for for higher prices. So, so and that has not changed. So, so what happened? Well, the one big thing that happened is that is the war in Iran. And you know, the the war in Iran started at

3:03 the end of February, gold peaked around the end of January, but you know, you can kind of kind of see it coming. But here's here's the basic dynamic. So, oil prices went from about $60 a barrel to 110 or 120 dollars a barrel depending on whether you're looking at Brent or WTI. Wet cargoes, like forget the you know, cuz Brent is is a futures contract that settles about 2 months forward. A wet cargo, you know, a tanker full of oil, you want there's there's a market in that or you know, the some of the brokers in it. You want a a vessel full of oil, you say, I want this oil at my refinery in 10 days. I want to actually buy the cargo. You can do that. That was up to 140, 150 dollars a barrel, which was not reflected in the futures price. That was, like I said, that's the spot

3:48 price of physical. So, that's how bad things got. Now, I don't have to recite all the statistics for what comes out of the Persian Gulf. I think most people know them, but 20% of the world's oil supply, 20% of liquid natural gas, higher percentages of things like sulfur. People are like, "What the heck is sulfur? Well, what do you use it for?" Sulfur is a precursor chemical in just about every important chemical process you can think of. So, you start shutting down major chemical companies. And nitrates, what are they for? Fertilizer. Feeds the world. Billion people could starve if they don't get fertilizer in planting season. Helium, what is that for? You know, party balloons. Well, yeah, but it's also indispensable to semiconductor production. You literally would shut down semiconductor fabs if you don't have helium. So, and more. Aluminum and

4:35 and other inputs and refined product, also gasoline. So, what is coming out of the Persian Gulf is basically the lifeblood of the global economy, if you will. Now, um uh but everything I just mentioned, oil, natural gas, refined product, gasoline, etc. It's all priced in dollars. So, when you increase the price to that extent, you know, 50 to 100% and it's in dollars, you need more dollars. Where you going to get the dollars? Well, you sell gold to get the dollars to buy the oil. You know, you might like the gold and must people selling gold don't the big hands or strong hands anyway, they don't hate gold, but they need the dollars to buy oil to keep the lights on. So, that is a very simple explanation for why gold started to go down. If you look at an oil chart and a

5:21 gold chart, you'll see they're inversely correlated over the last 6 months. So, >> Rickard's central argument is that gold didn't initially fall because investors suddenly lost confidence in it. As energy prices surged, countries and large institutions needed additional dollars to purchase oil and other essential commodities. Selling gold became one way to obtain that liquidity. In other words, the decline may have begun as a scramble for dollars, not as a rejection of gold's long-term role. >> So the beginning of the decline was not that people hate gold, it's that they were selling gold to get dollars to buy the oil. Okay, so now once that begins, what happens? Well, you've got leverage traders. They hit stop losses. So they got they've got to close out their

6:08 positions. So they're selling more gold on the futures market to cut their losses. That puts more downward pressure. And then here come the commodity trading advisors. They're just trend followers. They don't care if it's soybeans or gold. They're like, "Hey, I'm going to jump on the bandwagon." So they start selling gold because it's going down. And then you hit more stop losses. So it feeds on itself. So it's a very very easy to explain dynamic. So you need a a trigger, which was sell gold to get dollars to buy oil, but then everything else just almost happens automatically like you know, start a small avalanche and next thing you know, the whole mountain's collapsing. So we are where we are now. What does that mean for the future? Well, about um let me see. Oh, it was a while ago. A good about 14

6:53 years ago. I was in the Dominican Republic and I was talking to Jim Rogers. Now Jim is you know, probably the greatest commodities trader in history. He's legendary co-founder of the Quantum Fund with George Soros. And at the time, I'm sorry, a little little it was a little bit later than that. It was around 2014, but gold gold peaked at $1,900 an ounce in August 2011. It bottomed at 1050 $1,050 an ounce in December 2015. So you had a four plus year bear market. And I was talking to Jim kind of in the middle of that decline. And I just said, you know, we were having drinks down in Costa Rica. I

7:38 said, "Jim, what do you think?" He said, uh he said, "Well, I own gold, I'm not selling. Uh, I'm you know, just going to sit tight." Uh, but then he said something I'll never forget. He said, "No commodity goes to the moon without a 50% drawdown along the way. And if you're not prepared for that, you're in the wrong market, cuz that's how that's how commodities trade, and that's how gold trades." Well, I said, "Okay." I So, I took that, and I said, "Cuz you got to pick a base if you're going to do percentage increase and decline." So, I took a base of $250 an ounce in uh December 1999. That was the the end of the long bear market from January 1980 to 1999. I said, "$250 an ounce." So, I took $250 an ounce

8:25 up to $1,900 an ounce. That was August 2011. I took half of that, subtracted it from the peak to get the bottom according to Jim Rogers, and I came out with 1070, and it bottomed to 1050. I mean, he was like right on the money. But But he told me this in advance before it happened. So, I saw I was like, "Okay. Nice going, Mr. Rogers. You You got it right." But it was a 50% drawdown, and then it turned around, and then it went up to over $5,000 an ounce just a couple months ago. Now, in fractal mathematics, there's something called scale invariance. And what that means is that if I give you a one-week chart of the stock market, and I give you a 10-year chart of the stock market, and I take away the dates, and just show you the the charts, they look the same. Meaning, patterns repeat themselves at

9:12 different scales, different indices, different time frames, but the pattern repeats. So, let's take Jim Rogers' rule, which was spot on, and apply it to today. Well, we got to pick a base. I picked uh I think around 1850, which is a few years ago, up to 5355. So, there's my base. Here's my peak. Take half the difference, subtract it, comes out around $3,600 an ounce. Now, I'm not saying gold's going to go to $3,600 an ounce, but seeing it go to $3,900 an ounce and now around 4,000, like, yeah, that's that's how it goes and if you don't like it, you know, you're you're in the wrong place. But but what it also means is that we're at the bottom of that cycle, at or near the bottom of

9:57 that cycle and we're paused for as Jim Rogers put it, going to the moon. So, I'm standing by my $10,000 an ounce forecast, you know, like this year, you know, sometime in 2027. Uh we'll see is the exact timing, but uh you know, kind of intermediate term forecast. But that would be completely consistent with a drawdown and then a major bounce back as Jim Rogers described as the data supports. So, yeah, this is a very good entry point. >> This is where ordinary selling can become a much larger market event. Once prices begin falling, leverage traders hit stop losses, trend following funds join the move, and additional selling reinforces the decline. But Rickards argues that deep corrections have repeatedly occurred inside much larger

10:44 commodity bull markets. His forecast is extremely bullish and far from guaranteed. But his broader message is more important. A severe drawdown does not automatically mean the long-term cycle has ended. >> So, if you could talk a little bit about silver and mining stocks, you know, people usually, if they want some leverage on gold, they look at silver and mining stocks. Would you expect during this this next next run gold-to-silver ratio to narrow, to get narrower? And if you look at mining stocks, Jim, I mean, with the current um with the current commodity prices, they look very comfortable. We have seen some financial reports come out recently and they're gushing cash right now. Do you find them attractive as well? >> Yes, I'll talk about silver briefly. I

11:30 don't I By the way, I also I don't go but I sell and silver. I don't spend as much time analyzing silver as I do gold for two reasons. Number one, silver is a little more complicated cuz it is a precious metal and it responds to the trends we've been talking about, but it's also an industrial input. A big one in terms of, you know, catalytic converters and electronics and and a lot else. So, if you're trying to analyze silver, you have to look at both and you can be in a world where they're both going up, precious metals are rallying and the demand is enormous or one's up and one's down or vice versa or they're both down. So, it's just a little more complicated in that sense. Although, I will say that I silver follows gold with a lag. So, if gold performs the way I just described and I believe it will, then silver's going to do just fine whether it gets to

12:17 $150 or $200 an ounce, we'll see. I don't focus on the ratio too much. I look at percentage gains in the individual asset class. Um the the the ratio is almost a relic from the late 19th century when the Western silver miners lobbied Washington for 16 to 1 ratio, but it was just it was just political graft and trying to prop up the silver industry. It doesn't really mean very much, but but the the fundamentals do and so uh if gold performs the way I described, which I expect, and I would then go then silver will be along for the ride and we'll see silver making its way up to $200 an ounce. Um but the industrial side of it is also there. I mean, we all know what's going on in electronics and we we we may see individual failures of some of these

13:03 hyperscalers and data center builders as companies, but uh but AI and electronics and that build is not going away. Uh so, silver will be it will be uh very much in demand. >> Rickards ultimately sees gold as the leader and silver as the asset that could follow with a delay. Silver carries additional industrial risk, so its path may be more volatile. But if gold resumes its longer-term advance while demand from electronics, data centers, and artificial intelligence continues growing, silver could benefit from both sides of the market. The final takeaway is simple. Volatility can shake out investors, but it doesn't necessarily invalidate the underlying trend. Do you believe this correction is creating an opportunity, or is the

13:49 precious metals rally already over?