Photo by Zlaťáky.cz on Unsplash
 

Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason.

Coming up don’t miss this week’s Money Metals exclusive interview, this time with Ted Oakley with Oxbow Advisors out of Austin, Texas. Ted shares his amazing insights as a longtime advisor for high-net-worth investors and the tricks of the trade he’s learned over his decades of experience of investing.

Ted is a rare bread in the world of investment advising in that he is a firm believer in the idea of precious metals being a key component to a diversified portfolio and shares how it was that he broke from the mainstream way of thinking on Wall Street and positioned his clients in gold.

Mike Maharrey and Ted discuss all of that and also breakdown the recent market action in the gold and silver markets and help folks make sense of all of the volatility we’ve been seeing of late.

So, be sure to stick around for a wonderfully enlightening conversation with Ted Oakley of Oxbow Advisors, coming up after this week’s market update. And if you enjoy this material, please do us a favor and like and subscribe to this podcast wherever you consume this content.

Well, it's been an incredibly volatile week in the gold and silver markets, with silver crashing all the way from its spike high of $120 late last week to below $70 last night. Gold has been a little different, peaking around $5,600 before pulling back under $5,000 again.

Investors who are new to the metals may be finding this massive whipsawing to be a little unsettling, but these kinds of moves are not unusual on the heels of multi-decade breakouts. Even after all of this, gold and silver are both higher than where they started the year -- and dramatically higher than where they were a year ago.

On the retail side, Money Metals continues to see huge buying and selling activity -- really at unprecedented levels in our 16-year company history. All the price swings have been attracting attention, with folks finding reasons to either buy or sell physical gold or silver -- depending on their circumstances or outlook. Money Metals has been staffing up like never before to handle the volume, and we certainly appreciate everyone's patience.

Turning to the topic of Asia, which is where a lot of the global demand for gold and silver is coming from, a new cooperation agreement between the Hong Kong Special Administrative Region (HKSAR) and Shanghai will facilitate new gold trading activity to help expand those markets. It's all part of a push to elevate the role of China’s two main financial centers in the global gold market.

Western markets – London, New York, and Switzerland – have dominated the gold trade for nearly two centuries. However, with gold progressively flowing from West to East, China and other Asian hubs are developing the infrastructure to challenge Western dominance. At the same time, it's been learned that Chinese President Xi is specifically working to elevate the Yuan to world reserve currency status.

According to a report by China Daily, the landmark gold deal signed by Hong Kong and the Shanghai Gold Exchange will promote long-term interconnectivity opportunities, with a more integrated renminbi-based Asian gold market in the making.

Under the cooperative agreement, the Hong Kong government will establish “a high-level, collaborative governance structure,” with the Shanghai Gold Exchange providing technical and regulatory input on system design, rulemaking, institutional access, risk management, and operational standards.

According to China Daily, the goal is to ensure the efficient development of the trade-clearing system for gold and alignment with international gold standards to create a cross-boundary, trade-clearing system for the precious metal and to create a regional gold reserve hub.

Hong Kong plans to launch a trial run of its centralized gold clearing system later this year. Officials will initially focus on system infrastructure and a regulatory framework before expanding the number of eligible participants.

Hong Kong also plans to expand its gold storage capacity from 200 to more than 2,000 tonnes over the next three years.

Abaxx chief economist David Greely said this all points to the fact that “the center for gold trading is increasingly moving East.”

Cooperation with the Shanghai Gold Exchange will reportedly include facilitation of physical gold delivery, warehousing, and further enhancing financial connectivity between the two markets.

The big question is whether investors, financial advisors, states, and national governments in the Western world are in the process of waking up to the central need for gold to shore up the system -- or if their financial power will continue to slowly bleed away.

Well before we get to this week’s interview let’s take a look at the once again highly volatile trading action for the week.

Gold is up now, about $60 or 1.3% to check in at $4,965 an ounce. Silver is well off the lows we saw in the mid $60s in last night’s trading, but is still down nearly $9 or 10.0% during this extreme up-and-down week in the silver market. The white metal currently checks in at $77.53 as of this Friday late morning recording.

As for the PGMs, platinum is down $100 or 4.5% since last Friday’s close to trade at $2,114. And finally, palladium is relatively quiet, gaining $13 or 0.7% to trade at $1,748.

Well now, for more on the recent action in metals prices and a whole lot more, let’s get right to our exclusive interview.

Audio Length: 00:31:53

Mike Maharrey: Greetings. I'm Mike Maharrey, and I'm joined today by Ted Oakley. Ted is the founder of Oxbow Advisors in Austin, Texas. He's the author of 11 books, and he brings more than 40 years of experience in advising high net worth clients in the investment industry – brings all of that to the table. Ted, thank you so much for joining me today. How are you?

Ted Oakley: I'm doing great, Mike.

Mike Maharrey: Well, it's an absolute pleasure to talk to you and a lot of goings on in the markets out there and things I want to cover. But before we do that, since this is the first time that you've been on this particular show, I would love for you just to give a little bit of your background because you have a pretty intriguing story of how you got to where you are today.

Ted Oakley: Well, I've been really blessed in my life, Mike. I grew up very poor on the color, the backwoods of North Carolina, Georgia. I used to call us hillbillies, but we really were very poor. We didn't have any running water in my early days or outhouse and that sort of thing, and then I always had to work. We didn't have any money. Ended up getting to Texas sort of a roundabout way, and I don't know, never. I guess I've had every job you can think about physically. So, I've had a lot of that, but I've had a lot of help along the way, and I realized early on you had to get educated. I left home as soon as I got out of high school, like eight or nine days after that. I had to because of sort of the situation, but that's okay. And I'm not any different. I don't think that a lot of people that try to get ahead, probably yourself, everybody has a bag of rocks along the way. Mine was a little different in that I ended up with no money. I mean, started out with no money and ended up with money. So, that was not necessarily my lifetime goal was just to better myself. But here I am. But I had a lot of help along the way. A lot of nice people, I got to tell you.

Mike Maharrey: Yeah, yeah. We never get to where we are by ourselves. There's always a lot of people that kind of support my wife, and you could probably commiserate. She grew up in rural West Virginia and also had no running water early in her life.

Ted Oakley: Well, it didn't. I think about it at the time, and I'm sure she didn't either. You just make do with it. I mean, as long as you can get water, you can make it work. Right. But anyway, that's certainly interesting. I'm sure she can,

Mike Maharrey: Yeah. How did your background kind maybe formulate your approach as you deal with investing? I mean, it's such a divergent world. How do you think that's influenced the way that you approach things?

Ted Oakley: Well, I think the biggest thing is that when you're having to pay for everything, I had to work 40 hours a week going to college. I got a good, great degree and I worked on Wall Street for two years. But it's like that you can't afford to lose any money because you, you're not in a position to do that. So you end up, no matter where you get into, and I think a lot of entrepreneurs are like this too, business owners, you end up running scared your whole life sort of no matter where you are, you're always sort of looking back over your shoulder. And I've gotten past a lot of that a little bit, but my wife still says, Hey, you still think about that? And I said, well, the only thing worse with not ever having anything on the bottom is having a lot and then going back there. And so, I always think about that and I think about that for people. We manage money for. Look, I don't want to put you in a position to where you're going to have to worry about you've lost money.

Mike Maharrey: Yeah.

Ted Oakley: It's not that we don't lose any money. I'm not saying that, but we keep it pretty close to the vest.

Mike Maharrey: Yeah, yeah, absolutely. You're a little bit different than a lot of folks that are out there in the investment advising world in that you actually believe that gold and silver are a strategic portfolio component. And it seems like so many folks out there, especially looking back into the past, were either ambivalent about gold and silver or downright negative toward it. And I'm curious as to what makes you a little bit more bullish on gold and silver and see it as an important part of the portfolio, whereas a lot of folks in your field do not?

Ted Oakley: Well, Mike goal, to me, if you go back historically, really thousands of years is one of the things that's always held its value, but we use it. We think about gold as more of a currency. I know people might not think of it that way, but we do because it's always been a tradable item. I mean, you go through downdrafts where it doesn't do anything or is not doing well, but in the long run it's a currency and we hold it in most portfolios like that as a currency. Silver is more of an industrial side for us. We trade it a little bit more. They're just one component of the three strategies we use, but we use them in the strategies and particularly gold. We've always had gold as a piece of every strategy because we look at it like that. We look at as a currency, and especially now with all these currencies falling apart and probably will continue to fall apart, then I think your one on goal is that sort of item for us, and that's how we own it.

Mike Maharrey: Yeah. What did you make of the CIO of Morgan Stanley advocating for a rethinking of that traditional 60-40 portfolio to a 60-20-20 with 20% allocated to precious metals? Where you kind of like, oh, well we've been doing that, or was that surprising to you that he actually said that out loud?

Ted Oakley: Well, I think he had to because, and he's made some good calls over the years, but I think he had to here because what was happening is that wasn't working particularly. And if you look at an average investor, they've just been buying some exchange rated funds and indexes and throwing in some bond funds and up until a couple years ago, three years ago, so that it worked like a charm because they threw so much money in the system that it had to work. But all of a sudden, the guard is changing now, and I think he probably saw that and said, Hey, we've got to go a little different direction here if we're going to stay up. And I don't know what the man was thinking because of course I followed him. I can't remember my exact name. But anyway, I followed him over the years and I know where he's been. But that's my guess, Mike is what he did.

Mike Maharrey: Yeah. So we just had a pretty significant selloff. And in fact, as we're speaking today on Thursday, the day before this interview will air gold and silver are both down a bit again. And I feel like that a lot of precious metals investors are kind of like the puppy that's been hit with the newspaper one too many times. Every time that we have any type of correction, people freak out and I hear, oh, the bull market's over and all of those things. So, from your position, looking at now we're entering into kind of a phase where we're seeing some correction, we're seeing a lot of volatility in precious metals. How do you advise your clients and folks that maybe just out there asking questions? How do you handle that from even an emotional standpoint as you watch this volatility?

Ted Oakley: Well, it's interesting. I had not had any calls, and we manage a lot of money, but I hadn't had any calls until silver went to, I would say one 10 or one 15, and gold was up over 5, 50, 100, whatever it was. And then they started calling, wanting to know if they wanted to buy more. And I took that as a sign than I usually do when the average person all of a sudden gets really excited at a high, you're typically going to have some selling. That doesn't mean it's over,

But it's going to get some selling and the same way with the stock, but when you get it, and it'll be the same way. I don't think this is over in two or three days. Usually when you get a break like that, it takes you three or four months to get situated. So, if you're going to make another run, and I think you do over the next couple of years, and I could see us in a situation, for example, with the goal where if it were to come down to $3,500 or something like that, you'd have people screaming that it's the end of it and everything's over and that sort of thing. But what they should be doing is looking at that as a buying opportunity. We trade some of these. We certainly trade the miners and we lightened up on those before this break.

But I think people have to be aware of that and whatever you want to allocate the goal, I think you have to allocate it and say, okay, I'm going to stay with it here. This is not something, goal is not like, and the knock on it is it doesn't pay any income and this, that and the other. And I always ask people this. I say, well, have you ever owned a business that didn't pay any income to you? I bet you have. And secondly, if you ever owned any land, just raw land for development, well, let's not paying you any income. Okay? So there's ways to invest that don't necessarily have cash flow. We're big on cashflow, don't get me wrong, but not on goal. Goal. I think whatever you're going to allocate, whatever your number is, and I think you need to be steady about it, and that's not a hundred percent investment, but whatever your investment is, it's 5%, 10%, whatever. You just got to stay with it. And that's the offset. And I always tell people this, go back and look at a home price 20 years ago and how much gold it took to buy that home and go look at that same price today, which has gone up a lot really double, and how much less gold it takes to buy that home today. And then you'll get an idea about what gold does for you. But you got to think about it in those terms, I think.

Mike Maharrey: Yeah. What are some of the macro factors that you look at specifically? We'll start with the gold market, and then I'd like you to kind of compare and contrast that with the silver market, how they're similar and different between those two metals.

Ted Oakley: Well, I think gold is more conservative to start with, and you also have a different set of buyers depend on the, particularly since we took the Russian money back in ‘22, since then, I think the central government buying, that's one of the differences between gold and silver, and I think that's really supported gold, but it was pretty supported anyway. I mean, gold had a lot of support, and I know I've been around longer than most people, so, I've seen gold at 800 in January of 81, and I knew what it did after that. Then you have to, that's a little different kind of market. I don't think you want to get, it's just one of those things we tell people, look, have what you're going to have. Don't get carried away. Now, you don't want to sell 80% of your portfolio and put it in gold.

I mean, it's your money and do what you want to do, but we just don't think it's crude up with that. The goal is different. It is not as volatile. If you look at the bait on it, it doesn't move around as much as silver, and since silver is a cheaper price, it garners a lot of people buying it that wouldn't have the money to buy gold. It's a lot of difference between gold at 4,000 and silver at 25 bucks. I think that brought in a much higher speculative factor in gold. You had more smaller investors that could come into it because even at a hundred bucks, they can buy it, but it's never been, it's more on the industrial side and it really will play out that it's another industrial metal. I mean, you're going to need it, but it probably will have a much higher beta as worth as move volatility. Then gold will. So if you're going to put 'em in a portfolio to us, you got to put less silver than you would gold.

Mike Maharrey: Yeah. Yeah, that makes sense. Absolutely. Have you seen, and are you kind of a believer in the kind of fundamental issue with silver right now being just a lack of metal with the structural market deficits that we've seen? Do you see that as kind of an underlying factor that's going to support silver moving forward, even if we have more volatility?

Ted Oakley: Well, to a degree, Mike, because when you're mining this stuff, it takes a while. It's not like it's one thing to produce semiconductor chips because you can produce a whole lot of 'em to be real expensive real fast. You can't do that with a metal. You have to. It's going to take a while for supply to meet demand, and the other side is now all of a sudden you have all the people and the government, everybody's looking at the metals and they certainly look at silver. But yeah, there's a lead lag time there where you can't just produce supply. If it's not there, the price is going to move.

Mike Maharrey: Yeah. What's your view on the inflation situation right now? Some people say, oh, they've got it under control, and some folks say, well, it's just tariff related. How do you see the inflation environment as we kind of move forward here, especially in light of the decision to appoint Kevin Walsh as the Fed chair?

Ted Oakley: Well, I think, and I've been this way for really a number of years. I think the inflation that is talked about is what I call a stealth inflation. In other words, the real inflation is not really brought to the front what the average person pays for medical and groceries and insurance and all of that. That doesn't come to the forefront. You look at the CPI, it's the third real estate. I mean, come on. Yeah, it's effective because rents are going down, and so they think, well, we've got it all under control. But I think what we are on the government side, I think the only way out of it is to have more inflation, and maybe they can hide it and they can do what I call a yield curve control. They can buy the bonds down and make the rates stay down, but the inflation on the side, you go back and look at 1946 to for the next 15 years, inflation ran hotter than the interest rate. So, that's how they got out of that period where debt to GDP was so high. I think they're going to try to go through, it's really sort of going through it right now where they'll be showing 2.7, 2.8 CPI, but if you go really look at things, and for a period here, it may be correct. I mean, we could be in a soft spot. I'm just thinking over a five or 10-year period, you have to assume that inflation's going to run hotter than they think it is.

Mike Maharrey: Yeah. I mean, it's almost a necessity at this point. That's kind of how they're financing the borrowing and spending, it seems like.

Ted Oakley: Well, if you're going to have growth outstrip everything so you can grow out of a recession at the same time, have your price indexes really truly higher than the interest rates. That's the only way you pull out of the, and I think it looks like you've heard of this yield curve, compression repression, I should say. That's what I think they're going to shoot for, but the average person needs to realize that because if you look at the 30 year bond right now, it hasn't carried at all what they did with the short-term rates. In fact, it's higher than it was, so we're in for some changes there. For sure. Mike.

Mike Maharrey: Yeah, so let me ask you this question. What is something out there in the kind of macro dynamic world that you think a lot of folks are missing? Something that you think is important that people should be paying attention to? If they're investing that kind of they're missing on the mainstream, what would that be?

Ted Oakley: It's probably this, the average investor out there, and I'd say really by a long shot, I'm talking about a 90% plus are invested in indexes and S&P 500 and investing exchange strategy funds in the us and I think there's a changing of the guard there, and what would happen is if I'm a foreign investor and my stocks did better, which they did in 2025, and then I'm looking at, well, everything that I've got over in the US is getting hurt because of the dollar, then that's something that could change because if they decide, well, we're going to keep investing in these foreign countries and companies and where the dollar where it is, we're just going to sell the us. That would be a situation where the average investor and sort of looking like that this year, if you looked at these exchange trade funds on the s and p, they're really not doing it well at all, but people are so locked into them because then they've spent a long time doing well.

But I don't think they're seeing the changing of the guard here, and I think that's what they're going to miss. Because you got to realize, Mike, there's people in this industry. If you go back, so many people got into this industry after I'm talking about the advisors got in after 2009. Well, they spent better part of 17 years. I never seen anything bad. I mean, that's why they don't buy gold. That's why they don't invest in commodities. That's why they don't know how to trade. They don't how to trade something when it gets expensive, and they don't see that. They just buy 10 or 11 or 12 funds, exchange traded funds and say, Hey, don't worry about it. 20 years later, you'll be fine. Well, we think that's where they're going to get blindsided because that's not going to worry. Now, it can trade back and forth. Don't get me wrong. I wouldn't surprise to make a little money in the next year or two, but I think the next 10 years though, that's what will throw them the most.

Mike Maharrey: Yeah, you make a really good point. I've said this often about the number of people that came into the world of investing after the financial crisis and the bias that creates. I mean, we have this whole generation of people who have never seen what I would call a normal interest rate environment. I mean, they think that three and a half percent is a high interest rate and more than a decade of zero will do that to you. But it is interesting, and I think that bias is very real in a lot of different ways. That's a really good point. Before we go, I know that your charitable work is very important to you and you have a very strong passion for children. I would like for you just to share a little bit about that and how you got involved in that particular direction.

Ted Oakley: Well, Mike, I've always been charity-oriented. I guess I do some sort of charity every day. If I tip a hundred percent or I just see somebody and needs something, give 'em some money. That's how I get a lot of personal satisfaction. But about 30 years ago, 28 years, 29 years ago, he says Now, I read a book called A Child called it. It was about a guy that wrote the book. He was a foster child out in California. It was a sad book, and at the time I thought, there's got to be a lot of these kids in foster care. Nobody knows anything about 'em. They're words of the state, so you can't see them.

And so, I thought, I'm just going to start whatever I spend at the country club I'm going to spend on foster kids, and I went to this one region. I have two foundations now, two of the biggest in Texas. All in all, we cover about 68 counties in Texas between the two, but they're two different five oh ones. But I went to the head of that region for child protective surgeon and said, Hey, I want to try to do something. Just send me a fax when you need something from these kids. Well, I got so many faxes, so much money that I said, well, I've got a form a foundation here if I'm going to really help a lot of kids and raise a lot of money. Of course we did. We help probably close to 10,000 kids a year now. We help a lot of kids through college. I think the biggest thing for me is people help me along the way, and I thought, if I can make a difference for a kid, especially these little kids, these are sad, sad stories. They're tear jerkers, but if you're going to leave anything behind in life, you got to leave that.

Mike Maharrey: Well, I really do appreciate you taking a little bit of time out of your day and spending it with us. I appreciate your insights on the markets. We are definitely very much aligned in our approach and a way of thinking, so it's enjoyable getting to know you a little bit, and we'd love to kind keep you in the rotation as we move forward and as things develop, there's always exciting things to talk about in this crazy world. So appreciate your insights.

Ted Oakley: You bet, Mike. Good to see you.

Mike Maharrey: Thank you.

Enjoyed having Ted Oakley on for the first time there and I trust you enjoyed that interview as I did.

---

More By This Author:

Gold ETF Momentum Continues With Record-Setting January
A Violent Gold And Silver Selloff Tests Conviction, Not The Bull Market
Investors In The East Line Up To Buy Gold On The Dip