$5,000 Gold! $100 silver! Why?

A lot of people are asking what is driving gold and silver higher. Is it central bank gold buying? Is it geopolitical worries? Is it just a bubble?

In this week’s Midweek Memo podcast, host Mike Maharrey suggests that maybe people are asking the wrong question. Instead of asking what is driving gold and silver higher, ask, “Why?” He argues that the “whats” are the symptoms. We need to drill down to those whys – the causes. This week, Mike does just that!

He also reports on a big bank raising its gold price forecast – again.

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Mike opens the show, explaining that he just got home from a funeral and a snowstorm. He notes that the weather forecasters were struggling to get a bead on the storm.

“Weather forecasting is not unlike economic forecasting in that there are so many factors at play together.”

Given that gold has already pushed above $5,000 an ounce, Bank of America has already raised its 2026 gold price forecast.

“In October, Bank of America raised its 2026 gold price forecast to $5,000. Mission accomplished as of January 23. In fact, this morning gold is around $5,287 an ounce, and we have $114 silver. Now the big bank has upped its projection again, calling for $6,000 gold this year.”

Mike emphasized a statement by BoA analyst Michael Widmer, pointing out that bull markets don’t end just because the price gets high, adding that the bulls will fade when the fundamentals driving the market shift. Mike said that at this point, there is no reason to think https://www.moneymetals.com/news/2026/01/22/de-dollarization-alert-danish-pension-fund-dumps-us-treasuries-004630">that de-dollarization, https://www.moneymetals.com/news/2026/01/06/central-bank-gold-buying-momentum-continued-in-november-004592">central bank gold buying, https://www.moneymetals.com/news/2026/01/13/december-cpi-meets-expectations-but-there-are-better-ways-to-gauge-inflation-004609">inflation pressures, https://www.moneymetals.com/news/2025/12/18/the-fed-restarted-qe-without-saying-it-004555">Federal Reserve monetary easing, geopolitical tensions, and U.S. fiscal malfeasance will end any time soon.

Mike notes that now that gold has reached $5,000, more and more investors are starting to pay attention to the yellow metal. There is also growing mainstream sentiment that investors need to hold precious metals in their portfolios. Mike reminded listeners that Last fall, Morgan Stanley CIO Michael Wilson said investors should consider https://www.moneymetals.com/news/2025/10/07/seismic-shift-morgan-stanley-recommends-602020-portfolio-with-20-allocated-to-gold-004389">abandoning the traditional 60/40 equity/bond portfolio allocation and adopt a 60/20/20 distribution with 20 percent allocated to precious metals.

“On average, Western investors currently hold less than 1 percent of gold in their portfolios.”

Mike said he thinks this reflects human nature. We don’t tend to prepare for things ahead of time. He pointed out the panic that emptied store shelves in Kentucky before the snowstorm as evidence.

We’re seeing a similar phenomenon in the gold and silver markets. It’s become impossible to ignore them, and a lot of people are jumping in for the first time as more and more portfolio managers are incentivized to consider precious metals.

Mike recalls that just a few years ago, people calling for $5,000 gold were generally considered a little crazy. Today, they’re asking what in the world is driving metals higher.

“And of course, we can talk about a lot of dynamics. But maybe what isn’t the right question. Maybe we should ask why gold and silver are blasting through the roof.”

Mike recalls a health scare he had a couple of years ago.

“I started having chest palpitations. It was quite concerning, as you can imagine. I have an artificial heart valve, and one of the indicators that it’s wearing out is palpitations. I was freaking a bit, convinced the valve was giving out. Turns out, it was just anxiety and stress. It just goes to show that certain events can have wildly different causes. My heart palpitations weren’t telling me my valve was shot. They were telling me I needed to get a handle on stress in my life. So, what is this rapid increase in the price of gold and silver telling us?”

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Mike argues that by focusing purely on how much the price is going up, people are missing the bigger picture.

“A lot of people just assume it means gold and silver are getting more valuable. More people want it. And yeah, that’s part of the story. But there is something else going on, and I think it’s really important to sit back and think about what that really is.

“The answer is pretty simple. Fiat currency, especially the dollar, is collapsing. Gold and silver – real sound money are reflecting this collapse.”

Mike highlights a recent interview with Rick Rule to drive home this point.

“He made an interesting argument. He said this bull market is more than a couple of years old. He argues it’s been ongoing since the turn of the century, and he pinpoints the why. The rising price of gold reflects a long-term erosion in purchasing power driven by negative real interest rates and ever-expanding government debt.”

Rule pointed out that the bonds have gone into a bear market along the same timeline as the gold and silver bull markets. This reflects de-dollarization and a growing lack of demand for U.S. debt. This was overtly demonstrated by the recent Treasury divestment by a Danish pension fund.

“Many made the decisions out as a political move, but AkademikerPension said that wasn’t the case, citing concerns about the U.S. government’s fiscal malfeasance.”

Mike noted that last October, https://www.moneymetals.com/news/2025/10/23/in-the-blink-of-an-eye-the-national-debt-exceeds-38-trillion-004434">the national debt eclipsed $38 trillion, and despite record tariff revenue, the federal government https://www.moneymetals.com/news/2026/01/15/us-government-still-running-massive-deficit-despite-tariff-revenue-004614">continues to run large budget deficits.

Rule added another layer to the debt problem, emphasizing the $120 trillion present value of unfunded liabilities, including Social Security, Medicare/Medicaid, and federal pensions.

What’s the solution?

https://www.linkedin.com/pulse/debt-inflation-taxes-money-metals-oange/" target=”_blank” rel=”noopener”>The inflation tax.

“Rule said that too many investors get caught up in price instead of considering value. Instead of pricing gold in value, we should consider other things, such as healthcare, housing, and everyday goods, in terms of gold. He said, ‘If you thought about them in gold terms, you’ll decide that they’re very cheap.’

“He characterized the recent surge in gold as a ‘catch-up,’ noting that gold had failed to reflect the steady deterioration of fiat currencies for many years.”

Mike says he agrees with Rule’s assesment thet negative real interest rates, ongoing erosion in purchasing power, and years of underinvestment that now require renewed capital spending will continue to support gold, and that the dynamics driving precious metals higher reflect structural conditions, not a temporary trade.

Mike emphasises this is why you want to hold real money – gold and silver. You don’t want to save in dollars when the government is wrecking the currency. Mike notes that while many dealers are reporting low inventories, Money Metals has plenty of gold and silver in stock.

He wraps up the show with a call to action – get your gold and silver now. He recommends buying online if possible to avoid phone waits, but emphasizes that if you have questions, Money Metals’ precious metals specialists are there to take your call at 800-800-1865.