The QE Infinity Train to Nowhere. Copyright NextLevelCorporate, 2025.

TLDR

War. Inflation. Debt. You can pick your poison. Gold always seems to find a way back into the narrative. This time, though, it’s not fear of tanks driving the trade. It’s monetary inflation/debasement insurance. The world’s biggest balance sheets are quietly locking in protection before the next fiscal storm hits and the QE Infinity train to nowhere fires up again.

Here are some thoughts about gold’s ascent, this time around.

Gold still climbing even when the tanks are quiet and real yields are falling

Everyone’s been taught that gold goes up when the world goes off the rails. War, price inflation, falling real yields, right? Yup, all those old drivers.

But the facts are that a lot of those reasons have eased off lately. Real yields are still positive. The Gaza situation has cooled. Even the big geopolitical flashpoints are shifting into “talks” rather than “tanks.” And yet, gold just keeps climbing.

So, what gives?

The boomer rocks playbook doesn’t explain it anymore

Traditionally, gold rallies (goes up) when:

Real yields (interest rates after inflation is deducted) fall, because holding gold costs you nothing.
Everyone’s scared and wants a safe haven.
Consumer price inflation is chewing through the value of paper money.

That’s still part of it, but there’s been something else that’s been quietly overtaking these issues since COVID.

Central banks

The quiet force behind gold’s rise is the world’s central banks. They’ve been buying more than a thousand tonnes a year, especially in Asia and the Middle East.

Why? They’re betting that gold will still matter when today’s dollars don’t stretch as far. And that’s not about consumer prices. It’s about currency debasement.

Currency debasement isn’t loud like inflation. It’s slow, invisible, and permanent. Every new dollar that enters the system quietly chips away at the purchasing power of the last one. Over time, what once cost one unit of effort takes two. Central banks see that long game.

They’re not chasing yield, they’re defending value. Gold, for them, is time-tested insurance against the quiet erosion of money itself. It’s timeless and never erodes, changes. And many investors are acting in the same way.

Debasement is the ultimate silent tax, approximately 8% to 12% per annum depending on how you measure it. You don’t notice it until one day you realise your money just doesn’t buy what it used to. Most people mistake that for consumer price inflation, but it’s not the same thing.

Inflation is the symptom you see when more money is spent; debasement is the disease beneath it when more money is made.

Fiscal spending is QE, just delayed

Even if the wars calm down, the spending and money creation hasn’t.

Governments are still borrowing, stimulating, monetising, printing, rinsing and repeating like it’s the only truly international sport on the planet. And given the size of the global debt stack, ongoing deficits and interest bills, budgets can only be filled with borrowed money (treasuries issuance). When that runs its course, central banks step in to monetise (buy) that debt.

In the land of the world’s reserve currency, Trump’s proposed tariffs, the post-shutdown clean-up now past day 14, and his “growth at all costs” policies will all lead to the same place. More stimulus, debt and money creation.

So, while traders might not be hiding from missiles anymore, they’re still buying protection against the next round of fiscal fireworks, and that protection comes in a golden form (or bitcoin, but that’s another story for another day).

ETFs and momentum are a trend trade

Gold’s not just for central banks and doomsday preppers anymore. ETFs and mobile fintech platforms have made it easy for anyone to own it.

That’s created a feedback loop where price goes up, liquidity flows in, price goes up more.

And nobody wants to be the last one not holding it.

Not every miner gets to celebrate

Given the gold price, life’s good if you’re a gold producer with significant tonnage and you don’t even need to be in the lowest quartile of the cost curve. But if you haven’t got many ounces and/or your costs are really high, the margin’s not as fat.

So, while gold itself and metal-backed ETFs are shining, smaller or higher-cost miners aren’t keeping up. This rally’s rewarding big and efficient tonnes, not necessarily exploration plays.

The rally makes total sense

Zoom out, and the logic checks out. Gold’s not reacting to today’s headlines. It’s reacting and adjusting quickly to tomorrow’s fiscal hangover (as well as bursts either way of war, real yields, sentiment, flows and momentum).

But even when things look calm, everyone knows another round of debasement is somewhere on the horizon.

And that’s gold’s whole point! It doesn’t yield, it doesn’t innovate, it doesn’t default. It just sits there, quietly being one of a couple of things that governments can’t print more of (like bitcoin, but that’s another story for another day).

And right now, that’s more than enough.

Sure, we will see profit taking leading to drawdowns, but that’s usually followed by consolidations, new support levels, and usually higher prices.

Unless there’s a debt jubilee or forgiveness like we had during the GFC, higher prices are likely.

Takeaway

You don’t need to be a gold bug to see the message here.

This isn’t a panic trade. It’s an insurance policy against currency debasement/monetary inflation chaos, currency fatigue, and political gridlock.

You can call boomer rocks old-fashioned if you want. But when the smartest balance sheets on the planet start stacking cold yellow bars, it might be worth asking what they see coming next.

Mike

Mike Ganon is the founder of NextLevelCorporate Advisory and pitchhawk. He writes where macroeconomics, financial markets, and corporate strategy collide — helping Australian business owners, leaders and investors translate global moves into actionable local opportunities.

Gold, the real reason