MacroVoices #378 Ronnie Stoeferle: In Gold We Trust - Showdown

Episode Summary

Executive Summary: Macro Voices 378 centers on Ronnie Sturfelle’s In Gold We Trust report and a bullish long-term case for gold amid recession risk, de-dollarization, and future inflation waves. He argues gold is near a major breakout, but warns of a potentially deeper near-term pullback before a move to new highs, while the post-game segment reviews key levels across oil, equities, the dollar, and commodities.

Main Topics: In Gold We Trust 2023 report overview (Priority: 5/5): Sturfelle explains the annual report’s broad scope: not just gold, but inflation, rates, debt, geopolitics, mining stocks, technicals, narratives, and the gold-vs-Bitcoin debate. This year’s theme is 'showdown,' reflecting multiple structural conflicts in markets. Recession and monetary-policy trilemma (Priority: 5/5): The interview frames central banks as trapped between fighting inflation, avoiding recession, and preserving financial stability. Sturfelle argues recession is the base case, with disinflation dominant in the short term, but credibility loss and renewed inflation likely later. Gold fundamentals, sentiment, and near-term correction risk (Priority: 5/5): He sees a strong strategic setup for gold but cautions that the market may correct another ~$100 before breaking to fresh highs. Sentiment among investors and industry participants remains weak, which he views as constructive longer term but not a reason to chase immediately. West-to-East shift in gold demand and de-dollarization (Priority: 5/5): A major theme is the migration of gold demand, pricing influence, and infrastructure toward Asia and emerging markets. Central bank buying, consumer demand, and trading infrastructure in Shanghai, India, Dubai, and Russia are increasingly important as de-dollarization accelerates. Mining equities, ESG, and capital discipline (Priority: 4/5): Sturfelle says mining shares are not yet in a broad mania; royalty companies are strongest, large producers remain well below prior highs, and juniors are not yet a major crowding trade. He also emphasizes the often-overlooked social benefits of mining and the industry’s community role. Post-game market technicals across major assets (Priority: 4/5): The post-game segment reviews crude oil weakness, SPX resistance near 4,300, NASDAQ momentum driven by mega-cap tech, subdued VIX, a strengthening dollar near key resistance, and gold’s technical picture complicated by contango and contract roll effects.

Key Arguments: Gold is nearing an important technical and fundamental inflection, but a deeper washout before breakout would not invalidate the bull case. The current macro environment is defined by recessionary pressure and disinflation in the short run, but medium-term inflation risks remain elevated due to war, deglobalization, demographics, and green transition costs. Central banks are in a trilemma: they cannot simultaneously fight inflation, prevent recession, and maintain financial stability without tradeoffs. Most analysts and investors are still not positioned for a hard landing; recession remains a minority view despite aggressive tightening. Western gold demand and pricing influence are fading relative to Asia and emerging markets, especially China and India, while gold infrastructure increasingly shifts eastward. Gold is likely to gain more importance as a reserve-diversification asset in a world of sanctions, reserve confiscation risk, and de-dollarization. Mining stocks are still not broadly attractive from a risk-appetite perspective; the sector has not yet entered a true mania, so selective accumulation is favored over aggressive broad exposure. Social license and local community impact are central to mining economics, and the ESG debate should focus more on social outcomes than just environmental criticism.

Data Points: Macro Voices episode: 378 - Episode number and production date noted as June 1, 2023. SP 500 close: 4190 - Closing level as of May 31, 2023; up 155 bps week over week. US dollar index close: 104.23 - Dollar up 34 bps week over week; strengthening off lows. July WTI crude close: 68.09 - Down 841 bps week over week; testing 2023 lows. Gold close: 1982 - Gold up 87 bps week over week, near a possible short-term low. Silver close: 23.64 - Bouncing from recent lows; up 225 bps. Uranium close: 54.60 - Up 74 bps; holding breakout and pressing yearly highs. US 10-year Treasury yield: 3.67% - Down 8 bps week over week. Gold all-time-high breakout level: ~2120 - Townsend says a weekly hold above this area could target 2500-3000 within 12 months. Potential gold downside correction: ~$100 - Sturfelle and hosts discuss the possibility of another $100 downside before breakout. August gold contract premium vs June: ~$20 - Contango widened due to higher rates and contract roll. Gold market benchmark resistance: ~2000 - Key psychological and technical level discussed repeatedly in the post-game. SPX call wall: 4300 - Option market resistance for June 16 expiry. SPX put wall: 4000 - Option market support for June 16 expiry. SPX implied move for June 16 OPEX: 110 points - Implied range around the June 16 expiry and FOMC meeting. NASDAQ spot price: 348 - As discussed in the post-game options analysis. NASDAQ call wall: 360 - Option resistance for the June 16 expiry. VIX range: ~17-20 - Volatility remained suppressed and repeatedly bounced near 20. Gold consumer demand share: China 25%, India 23% - Sturfelle says Eastern demand now dominates global consumer demand. China consumer demand share in 2000: 8% - Illustrates the long-term shift in demand from West to East. India gold imports over 20 years: 31,000 tons - Used to highlight scale of Indian demand. Central bank holdings comparison: 31,000 tons > holdings of top 27 central banks - Sturfelle compares India’s cumulative imports to central bank holdings. BRICS membership interest: 17 nations - Shown as evidence of momentum in de-dollarization and reserve diversification. Gold ETF flows: Modest inflows in March and April 2023 - Western investor participation remained limited despite rising prices. Annual management meetings: ~120 per year - Sturfelle notes the level of company engagement in Incrementum's research process.

Pivotal Quotes: "the light motif of this year's report is showdown because we're seeing three different showdowns" — Ronnie Sturfelle: Explaining the theme of the 2023 In Gold We Trust report. "I think that if we can clear 2120 or so and stay there for a week, Or two. I think it really sets up a technical picture for a big advance up to at least 2,500, maybe even 3,000 within the next 12 months." — Eric Townsend: Initial framing of the bullish gold breakout scenario before the interview. "the price of gold is more and more being made in Shanghai, in India, in emerging markets in general" — Ronnie Sturfelle: Describing the shift in global gold price discovery and demand toward the East.

Implications: Listeners should expect continued macro volatility: gold remains strategically attractive, but tactical patience matters because a deeper pullback is still possible. More broadly, de-dollarization, recession risk, and rising inflation volatility could reshape portfolio construction and commodity markets.