The Federal Reserve's balance sheet can only be rebalanced when the gold price reaches $8,000.

FX678, February 27—— Daniel Oliver, founder of Myrmikan Capital, stated that historically, central banks, under market pressure, held gold reserves roughly equivalent to one-third of their balance sheets. According to his analysis, applying this historical ratio to the current Federal Reserve balance sheet would yield a much higher implied gold price. He said: "Gold prices must reach a level that rebalances the Federal Reserve’s balance sheet, and currently $8,000 can reach about one-third."

Daniel Oliver, founder of Myrmikan Capital, stated that the international accumulation phase of the current gold bull market has officially ended, giving way to a turbulent second phase driven by pressures in the US credit system.

Oliver said that the combination of excessively leveraged private equity and the ever-expanding US Treasury debt is trapping the Federal Reserve. He outlined the mechanisms driving up the prices of physical gold and silver, pointing out the fundamental vulnerabilities that exist in the broader financial system.



US Treasury debt now exceeds $38.5 trillion. Meanwhile, the Congressional Budget Office (CBO) projects that by 2036, net interest payments on national debt will more than double to $2.1 trillion. Oliver noted that if you take into account the net present value of unfunded liabilities such as Medicare and Social Security, the real debt burden is much higher. He believes that,

He said: "Every major credit bubble ends with a price collapse. In contrast, ."

This systemic pressure is becoming increasingly closely related to the private credit market. Analysts at UBS recently warned that, due to the rapid disruption of corporate borrowers by artificial intelligence, private credit default rates could soar to 15% in a worst-case scenario.

Oliver explained that, unlike the 2008 financial crisis when the Federal Reserve could stimulate the housing market by printing money, saving the private equity industry presents different challenges. He pointed out that due to lack of consumer demand, highly leveraged businesses face bankruptcy and cannot be saved simply by injecting liquidity into the banking system.

Oliver said: "I "

Due to these macroeconomic pressures and weakening confidence in paper financial instruments, the physical metals market is undergoing structural changes. He observed that industrial demand for silver is tightening as manufacturers abandon the standard inventory model. Out of concern for supply chain disruptions, he noted that companies are directly stockpiling physical silver at factories, depleting available inventories in the market.

Meanwhile, Oliver emphasized that stressed banks are tightening margin requirements for smelters and refiners. He said this is forcing these entities to process less physical metal, becoming a bottleneck that limits the flow of gold into retail and institutional markets.

. According to his analysis, applying this historical ratio to the current Federal Reserve balance sheet would yield a much higher implied gold price. He said: " , while $12,000 can reach about half."


Spot gold daily chart Source: FXeasy

GMT+8, February 27, 13:24 – Spot gold quoted at $5,187.65/oz