---
title: "James Rickards Thinks Gold's Wartime Premium is About To Finally Kick In"
url: "https://www.readplaza.com/articles/l9tOHR83RmK"
type: "article"
publisher: "Commodity Culture"
category: "Market Commentary"
published: "2026-09-17T20:09:00+00:00"
updated: "2026-09-21T15:30:34.193546+00:00"
reading_time_minutes: 12
tags: ["Gold", "Silver"]
---

# James Rickards Thinks Gold's Wartime Premium is About To Finally Kick In
I had James Rickards back on Commodity Culture this week, and we started with gold, as we usually do. It had run hard toward $4,600, pulled back to around $4,300, and suddenly the usual crowd was out again declaring that the move was over, rates were going higher, the dollar was about to rip, and the whole precious-metals trade had finally run its course.

Rickards was not buying it.

He has been around long enough to know gold does not move in a straight line, and he made a point I liked: when gold is bouncing around in dollar terms, he is less interested in what it says about the metal than what it says about the dollar. Gold is still gold. Atomic number 79. It does not change because a Fed official uses the wrong word in a speech or because traders spend a week repositioning around a rate decision. The thing moving around is the unit used to price it.

The more important question is whether the underlying setup has changed. Central banks are still buying. China is still buying. The US debt problem is still there. And now, layered on top of all of that, you have a conflict in the Middle East that has disrupted two of the most important maritime choke points on the planet.

That is where the conversation became more interesting than a normal gold interview.

Rickards thinks Iran has effectively achieved its objective in the war. Not because it is going to invade the US or win some conventional military victory, but because its goals were more limited: survive, keep the regime intact, retain its leverage over the Strait of Hormuz, and make the cost of normal shipping through the region high enough that the rest of the world has to deal with the consequences.

You do not need to board every tanker to control a shipping lane. You only need to make the risk credible. Blow up a ship every so often, force insurance premiums higher, make captains wonder whether they are taking their crew into a war zone, and eventually the traffic starts finding another route or not moving at all.

At the same time, the Houthis have become more active around the Bab el-Mandeb Strait and the Red Sea. If that route is disrupted as well, then you are not just talking about Hormuz. You are talking about the Red Sea and, by extension, the Suez Canal. That is a massive amount of energy, LNG, sulfur, helium, fertilizer inputs, and industrial materials moving through a system that is suddenly much less reliable.

The strange part is that the benchmark oil price does not fully reflect it.

Futures markets are not the same as a tanker of oilMost people see Brent or WTI on a screen and assume that is the price of oil. Rickards pushed back on that.

A futures contract is a financial instrument. It is a weighted average of hedgers, speculators, producers, consumers, and traders making bets across different months. It can be useful, and it tells you something about expectations, but it is not necessarily the price you would pay if you called a broker and said you need a physical cargo delivered to a refinery next week.

That market is telling a different story.

Rickards said a wet cargo on the spot market is trading closer to $140 a barrel, potentially higher, while the futures benchmarks have been closer to $105. You can see a similar disconnect in the crack spread, which is the difference between the price of crude and the value of refined products like gasoline, diesel, and jet fuel.

Under normal conditions, that spread might be around $20 per barrel. Right now, Rickards pointed to diesel at the equivalent of roughly $180 a barrel. Work backwards from that price and you get an implied crude price that looks far closer to $150 or $160 than the headline benchmark price investors are watching every day.

Diesel is the part of this that should get more attention. People focus on what they pay at the gas pump because it is visible, but diesel is what moves much of the world. It powers trucks, freight, agriculture, construction, shipping, and the supply chain behind almost every product that ends up on a store shelf or at your front door.

If diesel stays elevated, the inflation does not remain confined to the energy market. It works its way into food, shipping, manufacturing, building materials, and just about everything else.

Rickards does not see a simple exit from that situation. He thinks the conflict in Iran is likely to continue, the disruptions are likely to remain in place, and the real economic cost of the war will show up through physical supply chains before it is fully acknowledged by the paper market.

That is why he sees it as bullish for gold.

Not because gold moves up every time there is a conflict somewhere in the world, but because a sustained disruption to energy and shipping feeds directly into inflation, uncertainty, and the kind of policy responses that are supportive for the metal.

Silver has two different reasons to workSilver gets more complicated because it lives in two worlds.

On one side, it is a monetary metal. Gold goes up, confidence in paper currencies weakens, and silver often follows with a lag before catching up violently. On the other side, silver is an industrial input. If the world heads into a serious recession, you can make the argument that industrial demand weakens and silver suffers more than gold.

Rickards understands that argument. He just thinks it misses the scale of the demand that is being created elsewhere.

Every data center, semiconductor plant, hyperscaler buildout, grid upgrade, control system, circuit board, and electronic component needs silver somewhere in the chain. There is plenty of debate around whether AI spending is becoming a bubble, whether the returns will justify the capital being deployed, and whether some of these companies are simply financing one another’s growth. Those are all reasonable questions.

But the money is being spent.

Trillions of dollars are being committed to data centers and computing infrastructure. Even if the AI trade eventually blows up in the market, that does not automatically mean the infrastructure disappears or that silver demand suddenly evaporates. The projects are being built, the hardware is being ordered, and the underlying electronics still require the metal.

That is why Rickards remains constructive around the $60 area. He sees two forces pulling in the same direction: gold’s monetary strength and sustained industrial demand. A recession could create volatility, and silver will never be the easy metal to own, but the long-term case does not disappear because the price pulls back from $70 to the low $60s.

That is the part people keep forgetting. Volatility is not proof that the thesis is dead. With silver, volatility is usually the entry fee.

The dollar is not dying tomorrowThis was probably the most useful part of the conversation because there is so much noise online around Treasury yields, BRICS, de-dollarization, and the supposed imminent death of the US dollar.

Rickards is not dismissing the issues. He is one of the more serious people talking about gold, debt, and the risks inside the global monetary system. But he is also careful about separating real structural changes from the kind of sensationalism that gets clicks.

When people say “countries are dumping Treasuries because the dollar is finished,” they are often missing the mechanics. Foreign central banks do not hold stacks of $100 bills in a vault. They hold Treasury securities. If they need actual dollars to support their own currency, they have to sell those securities and raise cash.

Japan is the clearest example. The yen has been under pressure, and Japan has to import energy and raw materials. A weaker yen makes those imports more expensive. One way to support the currency is to raise interest rates. Another is to sell Treasuries, get dollars, and use those dollars to buy yen.

That selling can put pressure on US yields, which is why the Treasury and Federal Reserve have every reason to help Japan avoid it. Rickards explained that the currency swaps and dollar support being provided to Japan are not necessarily a sign that the dollar is collapsing. They are an attempt to stop Japan from being forced into selling more Treasuries.

In fact, the demand for dollars in that scenario is evidence of a dollar shortage, not a flight from the dollar.

That does not mean the US is in perfect shape. It is not. The debt burden is enormous. Financial sanctions have made other countries more cautious about leaving their reserves exposed to US or European seizure. Countries are building payment rails that allow them to settle trade in local currencies. That is real de-dollarization at the payment level.

But a payment system is not a reserve system.

BRICS can create ways for Russia, China, India, Brazil, and others to settle trade without relying on SWIFT or the dollar. That is meaningful because it makes sanctions less effective and gives countries more independence in day-to-day trade. It does not mean they have created a deep, liquid, trusted alternative bond market where central banks can park trillions of dollars in reserves.

China does not have that market. Russia does not have that market. The eurozone is large, but it is not a unified sovereign-bond market. US Treasuries remain unique because of their size, liquidity, primary dealer network, futures markets, options markets, clearing infrastructure, and relative rule of law.

The problem is that the US is damaging some of that trust itself when it freezes foreign reserves. Russia may be an easy case politically, but every country holding Treasuries is watching. If Washington can freeze Russia’s assets because it does not like Russia’s actions, other countries have to ask what happens if they become the next geopolitical problem.

That is where gold comes back into the picture.

You can freeze a security. You can block a payment system. You can sanction a bank account. It is harder to freeze gold that sits in your own vault.

A quiet gold revaluation would matterRickards also gave one of the clearest explanations I have heard of what a gold revaluation could actually look like inside the US system.

The Treasury legally owns the US gold reserve, which is held largely at Fort Knox and West Point. The Federal Reserve holds a gold certificate tied to that reserve, and the certificate is still valued at $42.22 an ounce. That number is a relic of the old monetary system, but it remains on the Fed’s balance sheet.

If the Treasury and Fed agreed to mark that certificate to the market price of gold, the difference would create a large amount of cash in the Treasury General Account without issuing new debt. At roughly $4,300 gold, Rickards estimates the revaluation would create around $1 trillion.

That would not automatically send gold to the moon. It is an accounting entry, not a sudden physical shortage. But it would be an enormous psychological admission: gold is still a monetary asset, and it matters enough for the US government to use it in managing its finances.

The interesting part is that this is not purely theoretical. Rickards pointed out that a version of it happened under Eisenhower, when the Treasury needed money after Congress left without raising the debt ceiling. The Fed adjusted the gold certificate, the Treasury received the cash, and the government paid its bills until Congress returned.

Could the Treasury simply revalue the gold certificate to $10,000 or $20,000? Rickards is skeptical. Market value is one thing. Picking a number far above the market would be difficult to justify to auditors and would likely create a much more disruptive signal about the dollar.

But marking the certificate to market would still be a major development. It would give the Treasury liquidity without another bond auction, and it would tell the world that the US sees gold as something more than an old relic locked in a vault.

That is probably why it has not been done. Once you admit gold matters, it becomes harder to keep pretending that the entire system rests comfortably on paper promises.

The thing I keep coming back toWhat I appreciated about this conversation was that Rickards did not give the easy answer.

He is bullish on gold. He is bullish on silver. He thinks the war and the shipping disruptions are inflationary. He thinks the physical oil market is tighter than the benchmark price suggests.

But he is not saying the dollar dies next week, BRICS takes over the world, or every Treasury holder is racing for the exits. Those stories are satisfying because they are simple. They also tend to leave out the plumbing that actually determines how money moves through the system.

The US dollar is not immortal. No reserve currency is. But the alternatives are weaker and less developed than many people pretending to call the end of the dollar want to admit.

For now, the more interesting story is the pressure building around the edges: energy disruptions that are not fully reflected in futures prices, countries building ways to avoid the dollar in trade, central banks continuing to buy gold, and the Treasury sitting on a reserve asset it still values like it is 1973.

Gold does not need a dramatic overnight collapse of the dollar to work from here.

It only needs the same things that are already happening: more debt, more inflation pressure, more geopolitical uncertainty, more demand for assets outside the reach of another government’s balance sheet, and more people realizing that the price on a screen does not always tell you what is happening in the real world.

Bonus: Solstice Laboratory SubstackJames Rickards wrote the introduction to an excellent book I recommend called The Entropy Trap by Mickey Maini. It examines modern markets not only through the lens of history, but of physics as well and despite the inherent complexity of the systems Mickey uses to measure markets, it's a surprisingly intuitive read. 

Mickey has also started a Substack called The Solstice Laboratory along the same lines as the book. One piece I particularly enjoyed is The Cheapest Insurance. It looks at how markets can appear remarkably calm even while bigger risks are building underneath, and why gold can still be relatively cheap insurance against a major system breakdown.

The Solstice Laboratory is free to subscribe to, so have a look a The Cheapest Insurance and if this kind of writing brings you value, consider signing up to get future letters.

Read it here: https://read.solsticelabs.com/cheapest-insurance/full