Steve Grasso: Fed opening doors to rate cuts will bring gold higher but may take time

本站添加: 2026-05-26

[00:00:00]Is this just a rough patch or is the gold rush over? Let's ask Steve Graasso.

[00:00:03]He's got an opinion. He's CEO of Graasso Global. And Steve, what do you say? It's good to see you.

[00:00:08]>> Good to see you, Kelly. So, it depends.

[00:00:11]This this can really confuse a lot of different people because when you think about it, and I know you've discussed this at Nauseium, gold is supposed to be an inflation hedge. Gold is supposed to be a geopolitical hedge. It's supposed to be an everything to everyone. But when the markets rally, it's not supposed to rally. We've seen it rally with the overall markets. And I think you have to look at it through the prism of gold really starts to rally when the Fed gets involved, not the leadup to when the Fed gets involved. So if you look at the course of history, whether it's the dot bubble, whether it's the financial crisis or COVID, real yields went negative and gold spiked.

[00:00:58]>> So you need that element to it. But now the latest thing that's going on with geo geopolitics is that it's the sanctioned countries that are getting around dollar denominated assets.

[00:01:12]>> Right? So, so and and think about this one last one last uh little bit on this.

[00:01:18]So, if if Russia was sanctioned or Iran is sanctioned, they can't move Bitcoin around. They can't move uh equities around. They can't move dollars around, but they can move gold around. So, that's why you sold.

[00:01:30]>> But, okay. So, let me jump in here. So, Turkey has been a culprit in selling gold in the last few months. Obviously, it's I think it he's either trying to support its currency or gave up. Um, do we do so what is the narrative for gold that's going to drive it higher or lower? Is it going to be, you know, making sure that no other central banks are dumping it? If the dollar maybe the dollar starts weakening again, so that puts less pressure on it. And as for lower real yields, you would have thought we were in an environment like that right now because the inflation rate has taken off, but the policy rate has stayed the same. And yet gold's going down, not up.

[00:02:02]>> Yeah. Well, real yields, all you have to do is look at the 10-year TIPS market and real yields have not been have not been moving lower. And the other aspect to that is M2 money supply. Money supply is actually still increasing. So, you have a couple of different things that are that are with gold and against gold.

[00:02:21]Um, but to your point, if if geopolitics is sort of getting curtailed here and there could be an Iran Iranian deal, then I would think that's less of a reason to own gold. If you think that they're uh the other central banks are dumping it, less of a reason. But I think what you're going to see is if Worsh's door opens, and what I mean by that is if you have the ability to see where he can cut rates, because right now they're not factoring in any rate cuts, but if you have an open door to rate cuts, then you're going to see gold probably take off, but it does take time.

[00:02:59]>> Steve, what do you make about the move in oil? We just talked about the straight of hor moves. We showed some ships that apparently have moved. Ship owners aren't waiting. But let's be clear, we hit Iran with limited military strikes today. This war not over.

[00:03:14]Multiple people sort of claiming control over the country and oil is down 15 bucks a barrel in the last couple of sessions. What's the grasso take on crude oil?

[00:03:24]>> Yes, sir.

[00:03:25]>> So, if you if you look at the back months, which I know you you follow it better than anyone, better than traders do. back months towards the end of the year have it priced in as uh $75 a barrel for WTI crude. So we're in extreme backwardation.

[00:03:40]Having said that, you need a couple things to happen. You need this really to resolve not just talks of the war resolving. But but Brian, you know, the cure for high prices is high prices. So at the end of all of this, people have been saying there's going to be a risk premium. I think we could be trading lower than where oil started pre-war because of the demand destruction probably to the tune of of four million barrels per day or so. But you're going to have demand destruction that could actually push oil back down below $65 once this is resolved. It comes with a huge caveat. The caveat is this. They cannot charge tolls to get through the Hermu straight and they cannot be in control of the You mean Iraq?