Blain’s Morning Porridge Oct 22^nd 2025 – As long as there is instability and uncertainty there will be the Yellow Metal

“Let every nation know, whether it wishes us well or ill, that we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe to assure the survival and the success of liberty..”

Gold Prices stumbled earlier this week. It is a bursting bubble? Nope. Markets will remain uncertain – while the world’s geopolitical polarity is shifting Gold remains the safe-haven play. That shift is being accelerated by events as the stability that fuelled the last 80 years of growth is undermined by bad politics and division.

Much of the Financial Commentariat was determined to bury Gold yesterday – hailing the 6% price tumble as the start of an inevitable rout, a sign of a massively over-bought bubble bursting, and (inevitably) there was a shout from the crypto-crypt in the dank basement about its time as a safe-haven being over.. Whateva…

It was a correction, and suggests the Gold market might have got ahead of itself. Watch what the 200 day moving average does, or read the headlines, but ask yourself: did anything really change? Nope.

6% moves up and down are not uncommon across markets these days. There are some very clever teenage stock pickers who understand the complexities of current tech, know what the jargon and letter-salad of initials actually mean, and opine with such confidence on the golden future of AI abundance. They are probably somewhat frustrated the world’s oldest asset has been getting all the headlines recently… How very dare the Yellow Metal think it can still dominate markets!

But the reality remains… we live in increasingly uncertain times. Although Indian farmers may already have bought their daughters all the gold bangles they will need for the coming wedding season, and Chinese investors are worried about new margin requirements on gold investments… the World is not getting any more secure.

It is certainly becoming more polarised – not just in politics, but in terms of how market analysts are reading the tea leaves. We know Central Banks now hold more gold in value than they do US Dollars – which is a sure sign of something fundamental happening…. (And if you don’t know what… then may I humbly suggest you get off the bench and actually buy a very reasonably priced £10 per month Morning Porridge subscription.)

In times of uncertainty and fear, folk turn to gold. Why did WW2 Airmen sew gold sovereigns into the flight jackets, Pyrates bury Treasure chests of golden doubloons on desert islands ahead of battles, and Egyptian kings surround themselves in gold…? Because they had a natural understanding of the value of gold. A sovereign (and the promise of more) would encourage a peasant to aid an escape, a chest of buried gold was probably a safer pension pot than the ones Rachel Reeves has her eyes upon, and the Pharaohs expected to pay their way through the afterlife.

Trying doing any of these things with your bitcoin wallet when push comes to shove….

If China stops buying gold – and 90 tonnes of the yellow stuff shows it’s been a critical factor in demand for the last year – then gold prices will rationalise, but not necessarily fall. A Chinese stop will contain the upside pressures.

Gold critics believe Gold needs positive upside momentum to just stand still. Because it doesn’t pay interest or dividends, the only reasons to buy it are as a store of value and for its appreciation. If it’s not appreciating, then bank accounts are nearly as safe and pay a couple of points interest.

But as long as the world remains uncertain, then gold will keep rising as more and more people wonder where its going. The reality is global uncertainty continues to escalate.

Will China invade Taiwan? Will we see more Tech outages like the one that shut down AWS on Monday? Will populism in Europe crush growth and trigger inflation? Will the AI bubble pop and unleash contagion? Will private debt trigger GFC 2?

But, to be blunt… Donald Trump deserves much of the credit for Gold’s surge. He has accelerated a fundamental Geopolitical Shift, putting the USA on course for hegemonic change. Every 2 Kondratieff cycles (each of 52-60 years) the world changes and a new empire replaces the last. Come in America – your time is up. Such times are often marked by conflict and instability.

Tariffs may not have created the immediate inflationary impulse many market observers expected, or the global economic shutdown some predicted, but they have changed outlooks and perceptions. The burgeoning US Deficit remains a massive concern for investors. The likelihood the US dollar continues to devalue (a Trump policy) is widely accepted. There are fewer reasons to hold US Treasuries today.  And he has effectively broken the system of alliances than once supported US Hegemony. US Business sentiment and gold are closely correlated – according to the excellent Torsten Slock of Apollo – and its little surprise US Business sentiment is not positive at present. (If you were the head of Boeing – ask who is going to buy your planes in 10 years time?)

Many trade and market watchers believe the dollars position as the defacto global currency can no longer be taken for granted. That appears to be happening as nations deal in Russian oil in domestic currencies, and China focuses on its new trade rails with South-East Asia and the Middle East – ultimately these go to Europe. They will not be dollar dependent.

In a world where the terms of trade are changing, and there is no immediate dollar successor, (It might be the Renminbi, but it won’t be the Euro) then the absence of an alternative makes gold the easy answer!

Trump’s policies are accelerating these trends and adding to mounting uncertainty. European leaders may fawn upon him, but they don’t trust him – the US bond to Europe is ruptured.

His meeting with Ukraine’s President Zelensky last week was not televised, but it was apparently as bad as the one last February, with the President of the most powerful nation on earth swearing at the leader of a nation fighting for its very survival for the temerity of standing up to the bullying strength of an invader.

Which is why I’ve chosen this morning’s quote. I was reminded of it reading the Atlantic – my daily dose of Trump Derangement Syndrome juice. (Let me repeat the quote to save you mousing up to the top of the page.) In 1963 a previous President told America at his inauguration: “Let every nation know, whether it wishes us well or ill, that we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe to assure the survival and the success of liberty..”

That’s the fundamental difference between today and the days of the Cold War. Back then we knew the dictators, the autocrats, the thieves, the frauds, and the thugs were our enemies and our leaders stood four-square against them.

Today we wonder what sort of “Deal” Trump has proposed to them…

Out of time and back to the day job..

Bill Blain

CEO – Windshift Capital

Author – The Morning Porridge

Partner – Shard Capital