(Kitco News) - Gold’s pullback from record highs may be short-lived, according to Florian Grummes, Managing Director of Midas Touch Consulting, who says sovereign accumulation and shifting global power dynamics are reinforcing the long-term bullish case for precious metals.
“Gold is being remonetized into the system,” said Grummes, referencing Azerbaijan’s recent purchase of nearly 19 tonnes of gold in Q1, bringing its total holdings to over 165 tonnes. “This trend is still in the first or second inning. I think this has a long way to run.”
Spot gold surged to an all-time high of $3,509 earlier this week before retreating below $3,300. Grummes described the decline as short-term profit-taking. “Gold is very overbought on all timeframes,” he said. “But I don’t think it’s a big, important short-term top. I would be surprised if gold comes much below $3,000. I think that’s probably already the worst case.”
Grummes reaffirmed his long-term price target. “I said $9,000 gold in my first Kitco interview, and I still stick to that.”
On trade policy, Grummes weighed in on President Donald Trump’s recent comments signaling softer rhetoric on China. Treasury Secretary Scott Bessent said this week there’s “an opportunity for a big deal,” and Trump posted to Truth Social, “He who has the gold makes the rules.”
Grummes said the Trump administration’s approach may reflect deeper structural shifts. “He’s trying to do something. If you take over an insolvent company and want to save that company, you have to take brutal steps.”
He also pointed to China’s growing gold strategy, including plans to internationalize the yuan through gold-backed contracts and the Shanghai Gold Exchange. “China is challenging the US dollar system,” said Grummes. “They need to gain trust. They will do it by using gold.”
Silver, meanwhile, rose over 3% on the day of the interview, with Grummes calling the move significant—but only a beginning. “Today was the first day where silver took over and showed signs of life on its own. That’s very important and I think that can continue dramatically over the next few weeks.”
Grummes projects silver could hit $40 to $50 by early summer. “Everything is on the table now,” he said. “I believe we are going to see prices around $40, maybe even $50. Silver is extremely undervalued.”
The gold/silver ratio, currently above 100, supports that view, according to Grummes. “It’s basically a joke,” he said. “We know that in the earth it’s 10 to 1. In production, it’s 7 to 1. Yet the market is trading above 100 to 1.”
Asked what could break silver through its $50 ceiling, Grummes said momentum could take over. “If the market really pushes to that number, it could just break through and run higher - towards maybe $90 to $100.”
Grummes also sees strong potential in mining stocks, calling the sector “ridiculously undervalued.” He cited First Mining Gold and Silver Tiger Metals as companies with “multi-million ounces in the ground” and potential for M&A. “They are literally printing huge amounts of cash on a daily basis.”
As for retail investors, Grummes said participation remains limited. “I haven’t seen lines and lines of people in front of gold dealers,” he noted. “That tells me this is not an important top.”
To watch the full Kitco News interview with Florian Grummes, including detailed analysis of gold, silver, mining stocks, and the shifting global monetary order, click the video above.