I just reviewed an interview with Daniel Oliver from Myrmikan Capital and found some quite interesting observations about the current gold market. He is talking about a significant turning point - from a quiet accumulation phase to a much more volatile period.

What Oliver calls "Phase One" began with the geopolitical tensions of 2022. At that time, central banks started reassessing dollar reserves and quietly increasing gold purchases, paying little attention to short-term price fluctuations. Stable demand from large institutions pushed gold into a steady upward trend, forming a beautiful parabola on the chart.

But that phase has ended. Currently, we are in a much more volatile market, and according to Oliver, the main cause is no longer central bank actions but domestic financial pressures. Specifically, the issues of private capital and private credit.

Over the past decade, low interest rates have allowed funds to borrow heavily, acquire companies, and refinance at low costs. But now, as interest rates rise sharply, these companies are beginning to struggle. Borrowing costs increase, refinancing windows narrow, and weaker balance sheets are being tested. Oliver believes this pressure has only just begun to surface and could gradually spread across industries.

What complicates the situation is the Fed's stance. They cannot significantly cut interest rates while shrinking their balance sheet without causing credit market chaos. If credit markets freeze, the Fed will have to expand its balance sheet instead of letting the system collapse. And that is good for gold.

Oliver sees gold as a balancing asset against the increasing obligations of central banks. If we apply historical relationships between gold reserves and balance sheets, gold prices would need to be significantly higher to restore balance. This also relates to how investors view assets like ibit fact sheets or other gold investment tools - they reflect expectations of higher gold prices in the future.

Silver offers a different perspective. Most of the global silver production is byproduct, so supply is less flexible. Demand is driven by industrial applications and renewable energy, which are also hard to curb. When both supply and demand are inelastic, small changes can cause large price fluctuations.

There is an interesting detail about the physical gold market. Higher margin requirements from banks due to increased volatility have caused smaller participants to reduce output or hold less inventory, limiting supply flow and amplifying price volatility. That creates an intriguing feedback loop.

Another point Oliver emphasizes is that gold mining stocks tend to lag behind gold prices. He suggests this is due to conservative accounting practices - large companies often value reserves based on multi-year average prices, which reduces reported profits. But in a fully heated market, valuation multiples can rise sharply as capital floods into the industry.

Beyond the gold market, the broader financial landscape looks quite concerning. U.S. federal debt levels, which Oliver considers unsustainable for the economy—especially when evenly distributed among workers—are alarming. Add to that long-term welfare obligations, and the hidden burden becomes even greater. He believes some form of monetary restructuring—whether through inflation, negotiation, or other means—is increasingly likely over time.

Oliver also expresses concerns about digital currencies and potential financial controls. During unstable periods, governments historically tighten capital flow oversight. Physical gold remains one of the few assets without direct counterparty risk.

In summary, the next phase for gold may not be as smooth as the previous one. The silent accumulation by central banks is giving way to a more tumultuous and volatile period, shaped by credit pressures and policy constraints. The transition will lead to gradual or sharp price adjustments depending on how the private credit cycle unfolds and how aggressively the Fed reacts. But according to Oliver, gold is warning that the system is under pressure — the second phase has begun.