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| Katusa's Investment Insights |
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Gold's "Fattest Profits" in HistoryBy Marin Katusa |
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They called it the London Gold Pool.
Eight central banks had one mission: to keep gold at $35 an ounce.
For seven years, they burned through billions defending that price. It was a coordinated effort to convince markets that gold wasn't worth a penny more.
On March 14, 1968, the market called their bluff. Buyers took $400 million in gold in a single session.
The Queen declared an emergency bank holiday.
The London market went dark for two weeks. When it reopened, the central banks stopped fighting.
Gold ran from $35 to $850 over the next twelve years. A 2,300% move.
The lesson was that central banks can delay price discovery. They can't prevent it. I'm telling you this because central banks aren't fighting gold anymore. They're front-running it.
The people who print the money would rather own gold than hold their own paper.
I think they know the price is wrong.
The Number Everyone's Looking At Is the Wrong One
At $4,900, the headlines scream 'all-time highs.'
And they're right, nominally.
But zoom out and you'll see what central banks are looking at.
Gold is still cheap when you adjust for M2 money supply. The setup for much higher prices is staring us in the face.
Since March 2020, the Federal Reserve created $6 trillion in new money, which is a 40% increase in M2. That's more dollars conjured in four years than in the previous decade combined.
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Yet gold, the asset that's supposed to protect against currency debasement, hasn't even kept pace.
It should have. But it hasn't. Gold has caught up to its 2011 money-supply ratio. It remains well below its 1980 peak.
Look at this chart.
Despite hitting nominal all-time highs, gold is cheaper relative to money supply than during previous peaks. |
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That yellow line (the actual gold price) should be tracking much higher if it maintained its historical relationship to M2. - Matching its 2011 money-supply ratio implies roughly $4,400 per ounce – a level gold has already exceeded.
- If it matched the 1980 ratio? $9,800.
That's not a prediction. That's just math. The same math central banks are using while everyone else stares at nominal prices and thinks they missed the move.
The Professionals Aren't Fading This Rally
Look at how the big money is positioned.
Watch what China has been doing for fifteen years.
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Look at the inflection point around 2015.
That's when China's gold accumulation accelerated. It's also when they started dumping Treasuries in earnest. This wasn't a reaction to sanctions or inflation fears. This was a strategic decision made years before anyone was talking about de-dollarization.
And China isn't alone.
When Washington seized Russia's dollar reserves in 2022, it sent a signal to every finance minister in the world: your dollars are only yours if we say so.
The "risk-free" asset was suddenly full of political risk.
Central banks from Poland to Singapore have been repatriating their gold and adding to reserves at the fastest pace since the 1960s. - An Invesco survey of 50 central banks found that two-thirds are moving their gold out of Western vaults.
- Half plan to increase their allocation further.
They are preparing for a world where a nation's wealth is measured not by how many U.S. bonds it holds…
But by how many gold bars sit in their own vaults.
The Pro's Just Moved the Targets (Again)
Wall Street is starting to see the same math.
In the past month alone: J.P. Morgan raised their 2026 forecast to $5,055. Goldman Sachs bumped to $5,400 by December.
Bank of America is at $6,000. Jefferies went to $6,600.
- Ed Yardeni just issued a $6,000 target for year-end 2026. He sees $10,000 by 2030.
Notice what's happening: the revisions only go in one direction. Every time gold hits a new high, the analysts scramble to catch up.
The "Fattest Gold Profits in History"
This global monetary shift is creating an overlooked opportunity in the companies that actually produce gold.
The average all-in sustaining cost to mine gold runs about $1,500 per ounce.
With gold above $4,700, that's roughly $3,200 in operating cash flow per ounce, the fattest production margin in history.
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In 2022, when gold sat at $1,800, that margin was closer to $600 (AISC - $1,200). Today's spread is five times larger.
Yet the GDX trades at roughly 8x forward cash flow while the S&P 500 trades at 22x.
Gold miners are generating record free cash flow, raising dividends, buying back stock and the market still prices them like this is 2020.
I've seen this movie before.
Could a dollar rally create a short-term pullback? Yes.
But central banks were net sellers during the 2013 gold crash. Today they're the largest buyers. That's a different floor than any previous cycle.
The last time gold miners traded at these valuations with margins this wide, the GDX doubled in fourteen months. That was 2016.
The setup today is better.
And our gold stocks are moving significantly… - One of my largest gold holdings in the portfolio is up 275% in the last year and a half (and climbing higher).
- A gold developer stock we just recommended to subscribers has achieved a DOUBLE in just a couple of months. And going higher.
These are exciting times in the gold market.
If you want the names and tickers, join us inside the Members Area ofKatusa's Resource Opportunities.
The institutions have made their move. Central banks have shown their hand.
And I'm about to release my next big play any week now.
– Marin Katusa |
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