(Kitco News) - Florian Grummes has raised his invested position from 50% to 80%. He is buying juniors, not producers. And he does not think gold sees a new high in 2026.
Florian Grummes went to bed with gold near $4,075. He woke to find it roughly $65 higher.
By Wednesday, he had done something he had avoided for half a year. He put money back to work.
"I've been taking a break basically for the last six months, and I think it's time to be really invested and be bullish again," Grummes told Kitco News.
The founder and managing director of Midas Touch Consulting, who has spent more than 25 years in financial markets, said he has lifted his allocation from 50% invested to 80% invested. He framed it as the end of a deliberate pause rather than a change of heart about the metal. He had been bullish the whole time. He simply had not been buying.
What changed was not gold. It was Japan.
On Aug. 3, Japan's Finance Ministry said it planned to use the Federal Reserve's FIMA repo facility for future currency interventions. The program is not new. It lets approved foreign central banks borrow dollars against their US Treasury holdings instead of selling them outright, and it is capped at $60 billion per institution. Treasury Secretary Scott Bessent said Washington would consider expanding it, calling the tool an important backstop.
Grummes read that as a policy decision dressed as a technical one.
"It's back to money printing," he said, comparing the direction of travel to the dollar swap lines extended during the rescue of Credit Suisse.
Not everyone gets there. The facility is collateralized, and the amount Tokyo can draw is limited by the Treasuries it holds. Analysts have argued that makes it unlikely to change the market's read on how far Japan can actually go.
Grummes is not persuaded that the distinction matters much. He also pointed to the late-July selloff in large-cap technology as a sign that stress was moving through the system rather than being absorbed by it. The Magnificent Seven shed roughly $797 billion in a single session on July 23, their worst day since April 2025, and remain down about $2 trillion from their late-May peak. The S&P 500 posted its first losing July since 2014.
The metals have since moved hard in the other direction.
Gold traded at $4,255 an ounce Wednesday afternoon, up 4.38% and within $11 of its session high of $4,266.10, according to Kitco's spot data. Silver was at $62.05, up 4.45%, after reaching $62.89. Platinum, which spent part of the session in the red, had turned higher at $1,734. Palladium was up 1.66%.
The gains held on a day when almost nothing else cooperated. The S&P 500 hovered near a record after a four-day rally that added $3.7 trillion in value, according to Bloomberg. Oil edged lower after Iran said it had reached an agreement with Oman on a proposed shipping route through the Strait of Hormuz. Minneapolis Federal Reserve President Neel Kashkari told CNBC the central bank should start raising rates now to deal with inflation he said remains too high.
None of that is supposed to be good for gold. Gold went up anyway.
Grummes had the move at his fingertips.
"Today the high was 4,265 already. On Monday we've seen the low at 4,020, so that's a $240 move in just two days," he said. By his reading, it was the highest gold had traded since the middle of June.
A target, and a ceiling
Here is where Grummes parts company with most of the sector.
He sees gold reaching $4,500 this summer, a level that sits close to the 200-day moving average near $4,490. Clear it, he said, and the next zone is $4,800 to $4,900. His silver figure is $70.
Then he stops.
"I don't see new all-time highs this year," Grummes said.
That is a long way below gold's record of $5,589.38, set Jan. 28, and it is an unusual thing for a bull to volunteer. He went further, saying he is not certain the correction's final low is behind the market.
He was candid about his own timing, too. Grummes said he had been early on his physical buying and had averaged into weakness rather than waiting for a bottom he could not see.
"I was a bit early at $4,400. I added at $4,100, and then now around $4,000," he said.
Buying the winners, not the bargains
The new money went into junior miners rather than established producers. Grummes disclosed positions in Silver Tiger Metals and First Mining Gold.
His screen inverts the usual instinct. Most investors go shopping in the wreckage. Grummes looks for companies that have already outrun the metal.
"Then you have the proof this stock is running up if gold moves higher," he said.
Track record, management and project quality come next, along with stops and sizing. He said he uses "stops and money management tools to make sure that a nice gain doesn't become a loser again."
The bigger reason for favoring juniors is a wave of consolidation he believes has not begun. Producers are generating serious cash even at $4,000 gold, and Grummes expects that money to find its way into acquisitions over the next one to three years.
"We haven't seen any crazy M&A activity yet," he said.
For investors sitting on junior positions down 30% to 60%, his advice was blunt: average down, if the position size lets you.
Platinum, and the shift east
Grummes holds platinum alongside gold and silver, and he thinks the current market is generous. He put the attractive zone below $2,000 and called $1,500 to $1,700 "great entry prices," noting how far the relationship has moved over his career.
"Back then you basically had to pay two ounces of gold for one ounce of platinum," he said.
His attention on the physical market has also drifted away from Singapore and toward Hong Kong and Shanghai, which he described as a developing counterweight to London and New York. He pointed to China's retreat from retail paper gold as evidence of where policy is steering demand. Several of the country's largest banks, among them ICBC, Postal Savings Bank, Ping An and China Construction Bank, stopped offering retail products linked to the Shanghai Gold Exchange after settlement on July 24. Physical buying, gold ETFs and institutional trading on the exchange were untouched.
Twenty-five years of watching screens has left him with one durable observation.
"Most of the music has been playing in the Asian sessions," he said. The Western hours, more often, are where the selling shows up.
What he will not touch
Grummes said he is staying away from short positions, which he called "the anger trade," along with semiconductors, artificial intelligence equities and speculative cryptocurrencies. The caution on chips has company: semiconductor stocks fell roughly 22% in July.
On bitcoin, trading near $64,000 on Wednesday, he said he believes the market is bottoming around $60,000.