Precious Metals Outlook: The Only Constant in a Fast-changing World | Dirk Steinhoff: New Leadership, New Chapter for BFI Bullion | Lessons from Dubai | China’s JWR Collapse: A Cautionary Tale

Although the first quarter of the year hasn’t offered much ground for optimism, especially regarding the state of global cooperation and return to peaceful times, it did provide investors with a stern lesson on risk management in times of actual, global and severely elevated risk. Long-term precious metals investors were particularly rewarded for their patience, and will likely continue to to be, given the inflationary times that could lie ahead due to the energy shock that was trig¬gered by the ongoing war.

There is, however, a recurring misconception during geopo¬litical crises that gold should immediately “skyrocket” in real time. Gold is a forward-looking asset and it tends to price in risk before the crisis becomes obvious. That’s exactly what we saw this cycle. Gold reached record highs in the lead-up period, driven in large part by sustained central bank accumulation. According to World Gold Council data, central banks have been net buyers for over a decade, with purchases accelerating significantly in 2022–2024, marking some of the highest annual inflows on record. In other words, the move already happened when positioning mattered the most.

What we’re seeing now is gold fulfilling its core function. When stress actually hits, institutions don’t chase the price higher, they use the gold they accumulated. Turkey is a clear example of this: it recently sold substantial amounts of gold reserves to stabilize its currency and support domestic liquidity. That is precisely the role gold is designed to play in a crisis environment. After a strong pre-crisis rally, consolidation and sideways price action are to be expected, as they build the base for the next leg up. For investors already holding gold, this is confirmation that it’s behaving exactly as intended. For those without exposure, this period presents the window of opportunity to build one.

Dive into the first article of the BFI Bullion Digger below.

Precious Metals Outlook: The Only Constant in a Fast-Changing World

If the past few years have taught investors anything, it is that the old playbook no longer applies. Markets that once moved relatively predictably in response to certain events or broader trends now seem to have decoupled from geopolitical flare-ups, policy shifts, and financial or economic stresses. From the outside, especially from the perspective of an ordinary working person with bills and taxes to pay, stock markets appear divorced from reality. This is particularly problematic at a time when real-world events are spreading uncertainty at a scale we haven’t seen in a very long time.

Parallel realities

Over the last decade, but especially over the last few years, this decoupling between the real economy and the picture that stock markets paint has become increasingly pronounced. This is most evident in the US, where the “Everything rally” that we recently wrote about hasn’t been fazed by what’s been going on in the background since the covid crisis recovery (that a lot of ordinary Americans still haven’t recovered from). Real inflation never really went away, household debt reached a record $18.8 trillion in Q4 2025, driven by rising mortgage, credit card, and auto loan balances, while corporate America continues the mass layoffs that started last year into 2026. Meanwhile, searches on Google for the phrase “can’t sell house” have surged to levels higher than the 2008 financial crisis and the covid crisis.

There are few reasons why the stock market seems to be completely unbothered about any of these developments. Mainly, it is because major indices are now heavily dominated by tech giants and asset-light multinationals. There is little representation of heavy industry, energy-intensive manufacturing and domestically focused firms in the index composition these days, which means the picture they paint is heavily skewed and not as reflective of the broader economy as they used to be. This is why geopolitical conflict, even the dramatic events following the outbreak of the US/Israel - Iran war, barely seem to register, but AI news can send stocks tumbling or surging. Another reason is that decades of aggressive monetary intervention by central banks have caused investors to anticipate artificial support anytime there is any sense of real risk, which created a clear moral hazard and hobbled the ability of markets to price risk accurately.

This poses a problem for long-term investors seeking to protect their wealth, in a period when uncertainty rises but outcomes remain unclear. It is far from surprising that capital has been steadily migrating toward real assets, especially those perceived as politically neutral and resilient. It is why demand for gold and silver has been rising over the last two years and why it is bound to continue.

Geopolitical risks abound

The defining geopolitical feature of the current cycle, or what appears to be the “new normal”, is not one single crisis, but the simultaneous accumulation of multiple flashpoints. The Russia-Ukraine war continues to grind on after more than 4 years, tensions in the Middle East remain elevated, with the Gaza conflict recently replaced by a much broader war. Following the strike on Tehran by Israel and the US and the killing of Supreme Leader Khameini, Iran has responded by targeting Tel Aviv, the UAE, Bahrain, Kuwait, Qatar, Saudi Arabia, Oman, Jordan, Iraq and Cyprus. The situation rapidly escalated and with it, global uncertainty, as hopes of a swift resolution evaporated after repeated failed negotiation attempts.

While the lives that have already been lost to this conflict remain the heaviest toll, there has been a lot of indirect damage inflicted around the world. The closure of the Strait of Hormuz, which has triggered an unprecedented energy shock that has impacted every economy on the face of the earth. Europe, already vulnerable even before the war, has seen thousands of gas stations running dry across the continent, tens of thousands of flights cancelled as carriers struggle with jet fuel shortages, while the EU is urging people to restrict travel and work from home. Asia is in an even worse position because of its heavy reliance on Middle East fuel. The use of oil and gas amounts to about 4% of GDP, almost double that of Europe, according to the IMF and there are broad and justified fears that if the conflict continues it could trigger not just price rises but also shortages in oil-related chemicals and eventually food.

In the US, people are also feeling “pain at the pump”, but the Hormuz crisis has impacted more than just fuel prices. The Middle East is critical to the global fertilizer trade too, with 35% of urea, coming through the region and roughly 20% of the phosphate trade from Saudi Arabia. The US imports about 25% of its total fertilizer, which means that American farmers are now under severe pressure. Fertilizer prices had already been elevated since the Russia-Ukraine war broke out, but they have nearly doubled since the strait of Hormuz closed.

At the same time, the US-China strategic competition is also intensifying across trade, technology, and military domains. The current war on Iran is fanning the flames too, as almost all of Iran’s oil exports (and over half of Venezuela’s, the regime of which the US successfully changed recently by arresting former President Maduro) went to China. This comes on top of the US imposed tariffs and expanded export controls on semiconductors and advanced tech to restrict China’s access to cutting‑edge technology. At this point, it is all but impossible to predict when or how any of the ongoing conflicts will end, or whether we might see further escalations leading to an even broader conflict.

Real economic pressures

As mentioned above, the real economy is showing serious signs of strain and this is not likely to be reversed anytime soon. The boogeyman of AI still looms large and it is causing a lot of firms to rethink their need for human workers. In late February, Fintech company Block (formerly Square), announced layoffs of roughly 4,000 employees (about 40% of its workforce), citing efficiency gains from AI tools, while Amazon slashed about 16,000 corporate roles, in its second round of mass layoffs since last October and UPS is planning to eliminate up to 30,000 positions in 2026. Whether AI is currently advanced and reliable enough to replace humans on this scale remains to be seen, but the important thing is that companies are already using it as a reason behind the mass job cuts.

The AI transition is a shock that ordinary households are not ready to absorb, as so many of them are already struggling. Delinquency rates on loans ranging from mortgages to credit cards rose to 4.8% of all outstanding US household debt in the fourth quarter of 2025, the highest level in almost a decade. Total bankruptcy filings rose by 11% by the end of 2025, with non-business (individual) filings driving much of that increase. The most worrying part if that there is clear evidence of a widening "K-shaped" divergence that is leaving lower- and middle-income Americans behind. In a recent survey published by Marketwatch, nearly 47% of respondents said affordability has worsened somewhat or a lot over the past year, with consumers pointing to grocery prices, insurance, prescription drug prices, rent, and saving to buy a home as their top challenges. The share of households with no money left after bills rose to 48 %. In a January survey by Primerica  49 % of middle‑income families said their main financial goal is simply keeping up with costs rather than building wealth and 59 % expect the economy to worsen next year.

Over in Europe, the situation is equally, if not more, worrying. The European Banking Authority’s December 2025 risk report shows pressures on fiscal conditions, with rising public borrowing and higher risk premiums on government bonds as markets react to geopolitical uncertainty and slow growth. Unemployment, slow wage growth and frustration with government policies in some parts of Europe are feeding social and political pressures, contributing to the widespread protests and strikes we’ve been seeing especially in sectors like agriculture and public services.

“Perceived” inflation, as ECB officials like to call the real cost-of-living experience of citizens, is also persistently higher than the core inflation metric that the central bank prefers to use (which excludes energy and food). Europeans are facing a clear housing crisis too: since 2010, average house sale prices in the EU have risen by 55.4% and rents by 26.7%, outpacing income growth for many groups. In the UK, unemployment rates have surpassed Italy in January, and youth unemployment specifically is surging, with the jobless rate among ages 16–24 at 16.1 % in late  2025, higher than during the pandemic peak. This growing strain and the widening gap between the “haves” and the “have nots” is bound to have policy implications. Fiscal largesse and stimuli could soon return, as well as monetary policy support, and with them, another wave of inflation, which would in turn trigger yet another round of demand for real, inflation-proof assets.

Public debt, monetary policy and fiat flight

One of the most important medium-term supports for precious metals is the sheer scale of global sovereign debt. Public debt levels across the US, Europe, and Japan are now materially higher than during previous cycles. In the US, interest on the $39 trillion national debt has tripled since 2020, and it is already costing taxpayers more than defense and Medicaid, according to a February analysis by the Committee for a Responsible Federal Budget (CRFB). This puts central bankers in a catch-22 situation: keeping rates higher stresses fiscal sustainability and cutting rates risks reigniting inflation.

Gold, in particular, tends to benefit in environments where investors begin to question the long-term credibility of fiat purchasing power. The “debasement trade”, as it has been dubbed by the financial press, has been one of the main drivers of the yellow metal’s extraordinary performance, especially over the last year. There is also the slow, but persistent, de-dollarization trend to consider. Countries such as China, India, and Russia continue to seek ways to diversify away from the dollar and reduce exposure to US-centric financial systems.

Justified bullishness

Overall, there is little reason to believe that the above mentioned forces that are driving investors toward precious metals are about to reverse in the foreseeable future. The geopolitical landscape is becoming substantially more volatile, global trade is increasingly facing disruption threats, and energy markets remain exposed to sudden shocks. At the same time, the real economy is showing mounting signs of strain, with households struggling under rising debt burdens and businesses already transitioning to an uncertain AI-dominated future. To deal with the all these challenges, policymakers are likely to respond the same way they always do, with the same tools that helped create the current systemic vulnerabilities in the first place, i.e. more fiscal expansion and loose monetary policy.

It is also important to bear in mind that, over the last year, gold and silver once again proved loud and clear that they deserve their reputation as the safest of safe havens in uncertain times, as both metals delivered extraordinarily strong performances while many traditional hedges struggled to keep pace. After the recent remarkable rally, a consolidation phase is to be expected and it is necessary to prepare for the next leg up, but it also offers an opportunity to investors to build or increase their positions before prices continue on their upward trajectory.

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