(Kitco News) - Gold prices have rocketed past $3,200 an ounce as geopolitical tensions, economic uncertainty, and aggressive trade policy from the U.S. push investors into safe-haven assets, according to David Erfle, founder of JuniorMinerJunky.com.
“Gold is starting to go parabolic,” Erfle told Kitco’s Senior Mining Editor and Anchor Paul Harris. “ The Trump 2.0 chaos and uncertainty … turned it into a margin call influence de-leveraging event. Trillions of dollars in market prices alternatively have been recently wiped off and then added back onto portfolios. And this has led to really high anxiety among investors and a move by some generalists to rotate some of that capital finally into the gold complex.”
Amid this volatility, the U.S. dollar index fell below 100 and long-dated Treasury yields surged. Erfle said that combination removed Treasuries as a traditional safety play and opened the door for gold’s outperformance. “The Fed can only control the short-term rates … With $9 trillion in bonds needing rollover and higher rates, this is a real conundrum,” he said.
The mining sector has responded swiftly. Newmont shares surged toward a key neckline of a multi-year bullish pattern, while sector bellwethers like Agnico Eagle outpaced peers. Meanwhile, Barrick Gold’s decision to rebrand as Barrick Mining – reflecting a pivot toward copper – was met with market skepticism. Erfle noted that Newmont is now nearing twice the market cap of Barrick.
Erfle also said China may be accelerating its de-dollarization plans. “After the new tariffs, China looks to be selling U.S. Treasuries to buy more gold. They used to be the biggest Treasury buyer. Now, they’re the biggest seller.”
Junior miners and gold stocks, once overlooked amid the AI and crypto frenzy, are beginning a long-awaited reversion. “The distraction is fading. Gold stocks are finally showing leverage to the gold price,” Erfle said.
Looking ahead, he maintains a cautious yet strategic stance. “I warned my subscribers coming into 2025. I positioned 30% in physical metals, 20% in cash, and 50% in undervalued gold stocks. So far, it’s working.”
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