Gold, Robots and the $100 Loaf of Bread — Bizarro World 383

The free version of Episode 383 of Investing in Bizarro World is now live.

Gold weakened while China was closed for a holiday, then moved back above $4,100 after Chinese markets reopened. Gerardo believes the metal is establishing a new floor near $4,000 — and China’s persistent accumulation may help explain why.

China continues buying gold while tightening its control over critical-mineral supply chains. The country spent decades securing resources and building the processing infrastructure that now handles 80%–90% of certain strategic materials.

The West finally recognizes the problem, but executive orders and government financing can't produce new mines overnight. Discoveries still require permitting, engineering, construction and years of development before delivering metal.

Gold remains under near-term pressure from rising bond yields and a U.S. Dollar Index above 102. Silver looks weaker below $60, while copper continues to display the strongest price action of the three metals.

Nick expects those macroeconomic headwinds to ease over the next several months. Third-quarter GDP growth could reach 3%–4%, but elevated oil prices should slow the economy during the fourth quarter and early 2027. Inflation could also decelerate as year-over-year energy comparisons become more difficult.

The market has already reduced its expectations from four additional Federal Reserve rate hikes to three. Slower growth, softer inflation, lower yields and a weaker dollar would create a much more favorable environment for precious metals.

Meanwhile, the S&P 500 continues reaching record highs even though only one of its 11 sectors produced a positive return over the preceding month. A small group of technology companies is carrying the capitalization-weighted index while most stocks and sectors decline beneath the surface.

AI remains the dominant source of capital spending. Goldman Sachs estimates that AI-related expenditures could exceed $1 trillion in 2026 as hyperscalers race to build data centers, power infrastructure and computing capacity.

That spending intensifies an already formidable copper supply problem. Gerardo believes copper could eventually reach 12–14 per pound if AI infrastructure develops as expected and technology companies prioritize access to metal over price.

Aldebaran Resources provided an immediate example of what the market will pay for a major copper result. The company reported an approximately 1.7-kilometer intercept grading better than