Jay Martin opens with the news that BHP, the largest mining company on Earth and an Australian Five Eyes ally, was forced by China’s state buyer to settle roughly 30% of its iron ore sales to China in yuan — 88 million tons a year, about $8-10 billion in trade off the dollar system — a deal nobody would have touched five years ago. He explains the “machine beneath the world’s money” as five jobs any global system must do — price goods, move money, park surpluses, provide trust, and provide freedom — and runs the dollar through that scorecard: still dominant on pricing (80%+ of trade) and payments (half of cross-border payments across 11,000+ banks), straining on parking given $39 trillion in US debt, and broken on trust and freedom since the 2022 freeze of $300 billion in Russian reserves taught every government that dollars can be confiscated. He stresses this is not a dollar-crash prediction but a transition warning: the last handoff between monetary systems produced the Great Depression, when world trade collapsed about 60% between 1929 and 1933, while the far side of such gaps — like Bretton Woods in 1944 — brought the greatest booms in history.
BHP forced into yuan settlement: China’s state buyer demanded yuan settlement and BHP agreed, moving about 30% of its China iron ore sales — 88 million tons, $8-10 billion a year — off the dollar. Martin stresses BHP didn’t want the deal; when your biggest customer demands it, you comply, and China is now big enough to pull even a close American military ally off the dollar “one shipload at a time.”
The five jobs of a monetary system: Any global system must price goods with one yardstick, move money between unconnected banks, park surpluses in a deep liquid market, guarantee money won’t be frozen or debased, and allow free movement without permission. These five are the scorecard for judging the dollar and any challenger.
The dollar’s honest scorecard: Still miles ahead on pricing (80%+ of world trade, nearly all oil) and moving money, but more than 80 central banks now hold yuan, TotalEnergies settled gas in yuan in 2023, and Brazil trades with China in yuan. On trust and freedom the dollar “has broken its own promises, not by accident, but by choice, by using the system as a weapon.”
The 2022 Russia freeze as the fracture: Freezing $300 billion of Russia’s reserves taught every government that dollars inside the American system can be confiscated and that freedom to move money depends on staying in Washington’s favor. That is why central banks have bought gold at the fastest pace in generations, and by end-2025 held more gold than US Treasuries for the first time in decades.
The valley between two peaks: Britain did all five jobs until the 1931 gold break and Smoot-Hawley, after which world trade fell about 60% into the Great Depression; Bretton Woods in 1944 then launched the greatest boom ever, with advanced economies growing 4-5% a year from 1950-1973. The danger is not the new system but the gap between systems — and we may be living in the early part of exactly such a transition, so the world quietly moves toward things that cannot be printed, frozen, or switched off.
Value investor Adrian Day, speaking at the Rule Symposium, says the monetary thesis for gold is fully intact since neither the US nor Germany nor Britain shows any fiscal rectitude, calls this a normal mid-cycle correction like 1975’s 45% gold drop, but reports that bullish sentiment on gold miners hit 7% — with one day two weeks ago registering zero bulls — the worst sentiment he has seen in 50 years of managing money in any sector at any time. He sees the trillion-dollar unwind of the AI trade (Nvidia down ~$1 trillion since May, Microsoft/Amazon/Nvidia down 15-20% in four weeks against an S&P down 2%) rotating into foreign markets, value, small caps, and eventually gold equities, which per a Scotiabank study of top producers over 70 years now sit in the lowest quartile of every valuation metric despite phenomenal margins like Agnico’s sub-$1,340 all-in sustaining costs. His playbook: buy the big-cap miners and royalty companies first since that is where generalist money lands, put at least 50% of new money to work now while holding cash in case gold breaks the last low toward $3,600, and turn cautious only if central banks post two or three quarters of net selling.
Worst sentiment in 50 years: Gold miner bullish sentiment is about 7% versus roughly 80% bullish on the dollar, and one day two weeks ago registered zero bulls — something Day has never seen in either direction in 50 years. He treats this extreme as the contrarian setup, even as GLD and GDX see massive ongoing redemptions.
The AI unwind and the great rotation: Nvidia shed about a trillion dollars since May, Korea fell into a bear market, and Microsoft, Amazon, and Nvidia dropped 15-20% in four weeks while the S&P fell just 2%; money is rotating into Alibaba and foreign markets (up ~32% last year vs 17% for the S&P), value (Vanguard value up 14%+ YTD vs 4% for growth), and small caps. Gold equities catch their share once the S&P stops rising for two or three months and 401(k) investors call their advisors.
Historically cheap miners: A Scotiabank study of the top ~20 producers over 70 years shows every valuation metric — price to NAV, price to EBITDA, price to free cash flow — in the lowest quartile of history, while Agnico Eagle trades within a hair of its all-time-low price to free cash flow despite all-in sustaining costs under $1,340 and a trivial 40-80,000-ounce production issue the market overreacted to. Buy the biggest and best first: Franco, Wheaton, Agnico, Barrick, Newmont.
Buy half now, keep powder dry: For a brand-new investor he would put at least 50% to work this week in quality big caps plus lower-risk juniors (strong balance sheets, income sources, in-the-money warrants, or strategic shareholders like Rule or Beaty), while holding cash because gold could easily break the last low and fall to $3,600. In silver he sees better pure potential than gold but worse risk-reward, with $55-60 likely a floor, noting Chinese solar makers already cut silver usage ~25% because “the solution to high prices is high prices.”
Oil as the most hated trade and the discipline rules: Oil is the most despised commodity — banks won’t lend, funds won’t invest, and 10-11 years of underinvestment guarantees future supply shortfalls, though he wants the war spike to settle before buying aggressively. His career rules: know yourself (nobody admits to being a nervous Nelly), know what you own so you can tell an overreaction (Agnico, Cobre Panama) from a disaster, never oversize positions, and turn bearish on gold only after two or three quarters of net central bank selling — Q1 was still net positive despite high-profile sales by Turkey, the Gulf States, Poland, and Russia.
Gold Newsletter editor Brian Lundin calls this one of, if not the best environment he has ever seen in his career in metals and mining, driven by debt and deficits that guarantee long-term currency depreciation and negative real rates, and believes gold may have bottomed in late June after a roughly 25% correction, with seasonal weakness for a few more weeks before a fall uptrend. He explains the market has shifted from central-bank-driven to Western-investor-driven — the West now makes the price while China takes the price on dips via what amounts to a PBOC dollar-cost-averaging program (China’s May purchases were its biggest reported since 2023) — and argues miners only “lagged” gold because central banks don’t buy mining stocks or silver, so strength in miners and silver is now the classic leading indicator it usually is. He calls copper “the most certain of the bull cases” with 15-16-year supply timelines against unprecedented demand, says silver industrial demand will soon absorb every ounce of newly mined supply with above-ground stocks eliminated by years of deficits, and notes producers enjoy margins near 80% versus 20% historically, with last summer delivering the best drill results he has ever seen across the market.
Best environment of his career: Debt and deficits demand significant currency depreciation and structurally negative real rates, or “the whole house of cards falls apart,” making metals and mining a target-rich environment where explorers are cashed up, developers are progressing, and producers make money hand over fist. He thinks gold may have bottomed in late June after dipping just below $4,000, with a few more weeks of seasonal weakness before the fall rally — “this is gold on sale.”
West makes the price, China takes the price: For the first 18 months central bank buying drove gold higher; now Western traders lump gold in with risk assets and sell everything on hawkish-Fed fears, creating dips that China gladly buys through a de facto dollar-cost-averaging program — more tonnage when prices are low, less when high. Central bank buying, which he expects to be stronger this year than last, has become the support rather than the driver.
Miners as leading indicator, not laggard: The claim that miners lag gold is a fallacy born of an atypical, central-bank-driven market — central banks don’t buy mining stocks or silver, which are traditionally the precursors to gold rallies. With Western speculators back in control, strength in miners and silver again signals upcoming gold strength; majors offer junior-like upside with far less risk, and juniors are already up three- or four-fold from 18 months ago.
Copper is the surest bull case: A demand curve unlike anything in any commodity in modern history is colliding with 15-16-year (or multi-decade) project timelines, meaning higher prices cannot summon new supply — a “set it and forget it” story. Grade is king, but big porphyry capex of $800 million to $1 billion means a junior’s ideal position is a 20-30% carried partner, either bought out at a premium or carried along.
Silver’s industrial squeeze and 80% margins: Lundin long dismissed the industrial case for silver, but within a few years — if not already — industrial demand will absorb all newly mined supply, with above-ground stocks eliminated by years of deficits, putting industry in a bidding war against monetary investors for metal it needs at virtually any price. Meanwhile producers’ margins near 80% (versus 20% historically, when $140 oil ate the 2008-2011 bull market’s profits) are not yet priced in, developers can now credibly finance $200-300 million capex themselves, and critical minerals like tungsten (up 10-15x) add sovereign security-of-supply demand with the US taking equity stakes and setting price floors.
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