Gold Could Fall Further. Here’s What I’m Buying | Rick Rule

Summary

Rick Rule expects gold could fall further in the short term. He attributes this risk to rising interest rates and says fear-driven rallies have historically lasted about six weeks before fundamentals reassert themselves. He continues to buy physical gold, which he views as an insurance or accumulation asset, while treating physical silver as speculative. He sold silver during a January rally and said he planned to increase his silver-stock positions in the fourth quarter.

Over a longer horizon, Rule is bullish on gold and gold miners. He said leading gold companies look unusually cheap on a net-present-value basis, using gold prices he considers reasonable, and that their valuation premium is at the lowest level he has seen in his career. His central macro thesis is that inflation and government debt will erode the dollar’s purchasing power, eventually increasing demand for precious metals.

Markets, outlook, and key figures

• Gold and interest rates: Higher rates could pressure gold in the near term. Rule expects gold may decline before rising substantially over his preferred five-year investment horizon.
• Gold-miner earnings: Rule said miners’ results beat expectations partly because analysts’ assumed gold prices were about $1,000 per ounce below prices during much of the reporting period. He cited an example of estimates based on $3,300/oz versus realized prices around $4,000/oz. He cautioned that higher labor costs, taxes, royalties, concession fees, and energy costs could weigh on upcoming results.
• Dollar and gold forecast: Rule forecast that the U.S. dollar would lose 75% of its purchasing power from 2024 to 2034. If so, he believes gold could rise roughly three to four times in nominal terms over that period.
• Debt: He cited about $40 trillion in on-balance-sheet U.S. liabilities and more than $100 trillion in off-balance-sheet liabilities, arguing that dollar purchasing power is likely to deteriorate.
• Historical comparison: He said the dollar lost about 75% of its purchasing power in the 1970s, while gold rose from $35 to $850/oz. He also described gold falling from about $200 to $100/oz during a mid-1970s period of rising interest rates before later rallying.
• Precious-metals allocations: Rule said gold represented less than 0.5% of U.S. savings and investment assets, compared with a historical precious-metals share of roughly 2%–2.5% cited from JPMorgan estimates. He argued that a return toward that range could mean four to five times as much demand from the U.S. investment market.

Metals and company-specific views

• Silver: Rule sees silver investment demand as closely tied to gold’s price momentum: a rising gold price can draw general investors into precious metals, after which silver may lead. He did not consider substitution by copper in solar panels a decisive threat, citing silver’s reflectivity, bactericidal properties, and electrical conductivity. He suggested higher silver prices—such as $100/oz, versus $20–$30/oz—would create stronger incentives to improve efficiency.
• Barrick–Newmont: Rule said Barrick had strategic reasons for the Nevada transaction but believes it overpaid and contributed an asset for less than its value. He said his preferred arrangement would have been to combine the companies, jointly list the Nevada assets, and sell or spin off their global assets. The discussion cited $1.95 billion and several assets in connection with the deal.
• Lithium: Rule is not broadly bullish. He said about 150 deposits were identified over five years, but the market may have room for only eight or ten; he expects roughly 140 of 150 projects to be sidelined. Albemarle and SQM together, he said, had reserves equivalent to about 80 years of production at the rates then prevailing. He cautioned that direct lithium extraction from oil-and-gas or geothermal brines could challenge hard-rock producers, while stressing that the technology’s prospects remain uncertain. He sees potential in a small number of top projects but considers the sector difficult for investors who cannot assess projects and wait three to four years for winners and losers to emerge.
• Honey Badger Silver: Rule owns shares and described the company as extremely speculative. He said its assets would not be economic at $50 silver but could be highly profitable at $100, and warned that investors should be prepared for substantial losses.
• Tectonic Metals: Rule said he still owns shares and praised the company’s management, geological thesis, and drilling results in Alaska’s Tintina Gold Belt. He emphasized that it remains a high-risk exploration investment because of the project’s remote location. He cited the Donlin Creek deposit, reportedly over 30 million ounces, as an example of a large discovery that has not entered production because of remoteness. Tectonic had raised more than $90 million, according to the interviewer.
• Yukon projects: Rule advised evaluating projects assuming on-site generators and oil at $80–$100 per barrel. His rule of thumb: if a project is not economic with generator power, do not buy it. A possible Yukon-to-British Columbia grid connection would be a potential bonus, not an assumption; he estimated it could take about five years. He also discussed how closer-spaced drilling can identify higher-grade zones that wider 50–100 metre grids may miss.
• Uranium: Rule said only about 10 of 100–110 uranium companies appear viable. He considers select uranium stocks attractive relative to the uranium price, but is cautious about using uranium ETFs as a measure of the sector’s quality. ETFs may suit investors who do not want to analyze individual companies. He highlighted the shift from spot-market sales toward long-term contracts that can provide producers with roughly 10 years of revenue visibility.

Methodology and investment framework

• Gold exposure: Treat physical gold as a long-term insurance or accumulation holding; distinguish it from more speculative physical silver.
• Gold-miner valuation: Assess leading producers on a net-present-value basis using a gold-price assumption appropriate to a multi-year horizon, rather than focusing only on the next 12 months.
• Lithium selection: Focus on a small number of top-quality deposits, account for technology risk such as direct lithium extraction, and be prepared to wait several years for projects to differentiate.
• Yukon project screening: Use feasibility studies; assume generator power and oil at $80–$100/bbl; require economic viability under those conditions before treating a future grid connection as upside.
• Uranium stock selection: Favor detailed company analysis over sector-wide assumptions; Rule’s estimate was that only about 10 out of 100–110 companies were viable.

Disclosures and cautions

• Rule disclosed that he owns Honey Badger Silver and Tectonic Metals; he also said he had not sold any of his Tectonic shares.
• He repeatedly characterized Honey Badger and Tectonic as speculative and warned that investors may face significant losses, particularly without specialist geological expertise.
• Rule said he has an unusually high tolerance for speculation and access to paid geological research.
• No explicit “not financial advice” disclaimer appears in the subtitles. Rule offered to review viewers’ existing natural-resource holdings for free through ruleinvestmentmedia.com, excluding cryptocurrencies, technology promotions, and marijuana stocks.

Assets, sectors, and companies mentioned

• Assets and instruments: Gold, physical silver, silver equities, lithium, uranium, U.S. dollar, gold-mining equities, uranium ETFs, spot uranium, long-term uranium contracts, oil, copper, bonds and interest rates, and generators.
• Companies and projects: Barrick, Newmont, Nevada Gold Mines, Fourmile, Livent, Albemarle, SQM, Chevron, ExxonMobil, Berkshire Hathaway, Agnico, Kinross, Lundin, Honey Badger Silver, Tectonic Metals, Donlin Creek, and Victoria.
• Tickers: No stock tickers or specific ETF tickers were provided in the subtitles.

Presenters and sources: Rick Rule (guest); Steve (interviewer/host; surname not stated); The Deep Dive channel.