[YouTube Video] UK Gold Deliveries in ‘ Technical Default’? What Games Is US Playing with Gold? Willem Middelkoop6 min read

In a nutshell

The gold market is experiencing unprecedented dynamics as prices have surged over 40% in the past year, approaching the $3,000 per ounce mark. Meanwhile, significant geopolitical shifts are occurring with the new Trump administration potentially reshaping U.S. economic and foreign policy. According to Willem Middelkoop, founder and CIO of the Commodities Discovery Fund, we’re witnessing a historic monetary reset aligned with an 80-year cycle of systemic change.

Physical gold is moving from London vaults to the U.S. at record rates, while the Bank of England is experiencing what Middelkoop calls a “technical default” with delivery times extending to 60-90 days instead of the contractual next-day delivery. Central banks from over 25 countries are demonstrating record demand for gold, and refineries are imposing surcharges and suspending production due to supply constraints. Amidst calls for a Fort Knox audit from both Trump and Elon Musk, Middelkoop suggests gold’s role in the monetary system is being reestablished, with potential price targets reaching $5,000 within 18 months based on historical rally patterns.

Three key takeaways:

1. Gold Market Under Stress: The physical gold market is experiencing unprecedented pressure with the Bank of England in “technical default” as delivery times extend to 60-90 days instead of the contractual next-day requirement. This supply constraint is exacerbated by record central bank purchases and growing institutional demand.
2. Monetary Reset Underway: According to Middelkoop, we’re experiencing an 80-year cycle of systemic change (80 years after the 1945 end of World War II), marked by a shift from a unipolar, dollar-centric world to a multipolar monetary system. This transition is creating market instability but driving gold’s importance as a monetary anchor.
3. Gold Price Projections: Based on historical gold rally patterns, Middelkoop projects gold could reach $5,000 within 18 months. Meanwhile, gold mining companies are generating substantial free cash flow but remain undervalued at just 8-10 times earnings, suggesting significant upside potential for both physical gold and mining equities.

Summary of “UK Gold Deliveries in ‘Technical Default’? What Games Is US Playing with Gold?”

Market Context and Political Environment

(00:00 – 02:46): Ray Dalio warns America is in a “civil war” amid a debt crisis that could trigger an “economic heart attack.” Meanwhile, gold has surged more than 40% over the past year, approaching $3,000/oz. Both Trump and Elon Musk are calling for an audit of Fort Knox while gold flows from London vaults to the U.S. at unprecedented rates. Middelkoop describes the current U.S. political situation as “near civil war” with Trump’s second administration being significantly different from his first—better prepared with an “alternative team” and a clear plan for transparency that could potentially destabilize established systems.

Market Concerns and Systemic Risks

(02:46 – 05:43): Middelkoop notes U.S. markets are significantly overvalued—”a bubble in search of a needle”—while resources and gold funds are performing well (his fund up 10% YTD vs. NASDAQ down 2%). He outlines major global concerns: China facing economic crisis with near-zero interest rates; Russia struggling after decades of sanctions; Japan in long-term crisis with exploding rates; Europe confronting numerous problems; and the U.S. finally acknowledging budget constraints while mortgage rates remain around 7%. Middelkoop references the “80-year cycle” described in Neil Howe’s “The Fourth Turning,” noting that 2025 marks 80 years since the end of World War II—a period typically associated with leadership changes and potential chaos.

Gold Market Dynamics

(05:43 – 09:38): Middelkoop discusses the shift from a unipolar world centered around the dollar to a multipolar system. Regarding gold’s unprecedented movement from London to the U.S., he suggests there’s more at stake than just tariff concerns. Central banks in over 25 countries are demonstrating record demand for physical gold for three consecutive years. Middelkoop expects significant revelations if Fort Knox is audited (the last audit was over 50 years ago). Critically, he notes the Bank of England is in “technical default” with gold delivery times extending to 60-90 days instead of the contractual T+1 (next day delivery). Based on historical gold rally patterns, he projects gold could reach $5,000 within 18 months.

Physical Gold Market Stress

(09:38 – 11:24): Refineries are imposing surcharges and suspending production due to overwhelming demand. Institutional investors who typically avoid gold are entering the market due to geopolitical tensions. Middelkoop highlights the extreme leverage in paper gold/silver markets—for every physical ounce in London vaults, there are 270 paper claims on silver. He suggests this could trigger “the big one”—a major market dislocation—while noting the Trump administration is exploring creative monetary solutions, including building Bitcoin reserves, as they recognize the traditional approach is a “dead-end street.”

Gold Revaluation Scenarios

(11:24 – 12:58): Middelkoop outlines two possible gold revaluation scenarios: 1) Revaluing at current market prices (around $2,700/oz) from the official U.S. gold price of $42/oz, which would benefit the U.S. balance sheet while not helping adversaries; or 2) Revaluing to much higher levels ($10,000/oz), which would also benefit China and Russia. He notes that after the 2008 financial crisis, central banks worldwide recognized gold’s importance in the monetary system, with even the Dutch Central Bank president stating publicly that “we need gold to stabilize the system when things go wrong.”

Mining Sector Outlook

(12:58 – 14:35): Gold mining companies are generating substantial free cash flow but remain undervalued at just 8-10 times earnings. Junior miners discovering gold are valued at just $5-10 per ounce in the ground. Middelkoop’s fund has seen significant inflows—$15 million EUR last year and $5 million EUR in just the first two months of 2025. He notes a shift in investor profile, with family offices now making larger investments ($500K-1M) compared to previous retail investments of $25K-50K.

Dollar’s Future and Geopolitical Shifts

(14:35 – 18:18): While the U.S. dollar will likely survive as the British pound did after the empire’s decline, Middelkoop expects a bifurcated system where Western nations continue using the dollar while the BRICS alliance develops a parallel system. He notes that China already conducts most bilateral trade in non-dollar currencies. Trump’s threats of 100% tariffs against BRICS nations demonstrate U.S. concern about this alliance but may accelerate de-dollarization as countries seek alternatives. The Trump administration appears to favor a weaker dollar, which supports gold prices. Middelkoop suggests the administration has a “strong financial team” that understands these dynamics and is working on creative solutions, potentially involving Bitcoin reserves, while carefully managing the Fort Knox audit process to avoid market destabilization.