Central banks are hoarding gold. The dollar’s reserve status is fading.

Transcript

Tom Central banks are literally shipping gold bars back home — and the dollar’s reserve crown is slipping. You want to follow the smart money, buddy? We’re talking gold, Japan, and a few other gems this morning.

Marie It’s June 17, the London Edition of Investment Flash. I’m Marie, with Tom and Gerald. And Tom’s not wrong — gold’s move last session has fingerprints all over it.

Tom Yeah, and we called it on yesterday’s show — buy gold. The SPDR Gold Trust is up over six percent in a week. But here’s the kicker: it’s still twenty-two percent below its fifty-two-week high. Central banks aren’t just buying, they’re physically moving bullion home. That’s a vote of no confidence in the system, not just a trade.

Gerald Alright, calm down. A six percent weekly pop is something, but gold at three ninety-seven — still a quarter off the peak. The US Dollar Index is barely one percent off its high. If the Fed even whispers something hawkish, gold could give back a chunk. To be fair, the repatriation is gradual — it’s a multi-year thing, not a this-week trade.

Marie I’m going to push back here. It’s not just about this week. The Financial Times and Wall Street Journal both ran front-page stories on the same day — that’s rare. And the World Gold Council survey shows eighty-four percent of central banks expect higher gold allocations. The structural de-dollarization bid isn’t even close to priced in, Gerald.

Gerald Yeah look, the survey is striking. But I’m just saying, chasing the rip after a six percent move is tricky. I’d rather wait for a pullback — maybe pair it with something. Long gold, short long-duration Treasuries — that’s the cleaner expression, combining the de-dollarization theme with rising global rates.

Tom Exactly.

Marie One hundred percent.

Gerald That’s the whole story.

Tom And speaking of rising global rates, the BOJ just hiked to one percent — but without any hawkish language. The Nikkei briefly cleared seventy thousand, and the yen fell to one sixty. The iShares Japan ETF is now just one percent off its fifty-two-week high. The carry trade is waking up, buddy.

Marie Right, and we’re shorting the yen accordingly. But I’m watching that deputy governor’s warning on inflation and Iran risks — the market ignored it. If that caution gets priced back in, the yen snaps back hard. For now, the momentum is with Japanese equities.

Gerald Japan hitting seventy thousand on a dovish hike — only in this market. It’s like the time the Fed cut rates and stocks sold off because they didn’t cut enough. Central banks, master communicators.

Tom Ha — fair enough. But the iShares Japan ETF near highs, the trade is working. And we’re also short the long-term Treasury ETF, TLT, because rising global rates crush bond prices.

Marie Exactly. Long Japan, short yen and bonds — that’s a coherent macro trade. Now, let’s talk about something that’s pure speculation: SpaceX.

Tom Oh man, SpaceX — on track to overtake Amazon as the fifth-largest US company. It’s up sixty percent since listing! But MarketWatch warns the surge is fuel from a tiny free float, retail speculation, and forced passive buying. No fundamental anchor. We’re watching this one, not buying.

Gerald The valuation is a meme with a rocket logo. Remember that electric truck company that went public and tripled on no revenue? Float-based rallies have a way of coming back to earth.

Marie Ouch — but true. And speaking of meme-adjacent names, Tesla’s in the crosshairs again. T. Rowe Price’s David Giroux says kick it out of the Magnificent Seven. Forward P-E of a hundred sixty-two times. He’s rotating into healthcare and utilities.

Tom Alright, alright, we sold Tesla on yesterday’s show, and it’s still hanging out — I’m not sure if it’s courage or stubbornness. One fund manager calling for rotation doesn’t mean the AI narrative is dead. But I’ll admit, a one sixty-two P-E is… aspirational.

Gerald Look mate, when you can buy healthcare at a trailing P-E of twenty-four — flat on the week, five percent off highs — or utilities up two percent with actual yield, it’s a no-brainer. The rotation has fundamental backing. Sell the electric car company, buy the hospitals and power grids.

Marie Gerald’s right. Tesla’s valuation has detached from anything resembling gravity. And I’ll add: the regulatory environment for autonomous driving is tightening in Europe — the EU’s AI Act implementation is a real headwind. So, sell Tesla, buy the healthcare ETF, buy the utilities ETF.

Tom Fair points. I’ll keep a little for momentum, but I see the logic. Now, onto the most original take today: fertilizer. MarketWatch says an interim Hormuz peace may give oil priority transit, stranding fertilizer supplies. That’s asymmetric upside for CF Industries and Nutrien.

Gerald Stranded fertilizer — finally, a trade for the logistics nerds. CF Industries is twenty-six percent below its fifty-two-week high, Nutrien twenty-three percent below. Cheap optionality on a fragile peace. The only catch is if peace holds and fertilizer flows freely, you’re holding a bag of crop nutrients.

Tom Yeah, a bag of nutrients — that’s the risk. But the peace talks are fragile. I’ll take a flyer on it.

Marie And that peace is held together with tape and hope. Low conviction, but it’s a legitimate hedge. Meanwhile, we’re selling the oil fund — increased transit flows could pressure crude, and it’s already off four point seven percent last session. Gerald, your sell oil call from yesterday is looking prescient.

Gerald I’ll take it. Oil had its moment on the peace deal pop, now reality sets in. Alright, let’s shift to the real engine: AI spending is still ripping. Amazon, Nvidia, and AMD just invested three hundred ten million dollars into Odyssey ML — a startup simulating the physical world.

Tom This is huge! Nvidia at two hundred seven bucks, forward P-E of sixteen — that’s cheap for AI dominance. AMD got hit seven percent last session, offering a bounce entry. The AI capex cycle isn’t slowing, it’s just moving into physical-world simulation.

Marie And this is what the market keeps underestimating — the breadth of AI adoption. From cybersecurity to industrial twins, the spending is broadening. SoftBank just launched an OpenAI-powered cybersecurity service in Japan, warning of a ‘Black Ships’ moment from AI attacks. The ADR dipped five percent last session — that might be a gift.

Gerald SoftBank has a talent for dramatic naming — Black Ships. But the ADR is up fifty-two percent year to date. That five percent dip could just be profit-taking. I’d rather play the cybersecurity theme through the HACK ETF — up twenty-one percent, only nine percent off highs.

Tom HACK is a solid, broad play. And on the memory side, Nikkei Asia says Kioxia is cautious on capex despite the AI memory boom. That’s good for Micron — supply stays tight. Micron already rallied fourteen percent this week, so the easy money is gone, but the trend is your friend.

Marie Calling the bottom on memory chips again — that’s six bottoms this cycle. But honestly, the structural underinvestment in memory while AI gobbles it up is real. I’m watching for a pullback to add.

Gerald Six bottoms and counting. Alright, let’s talk about something that’s genuinely undercovered: battery storage costs have fallen below gas-fired plants for the first time. This is a structural shift, and the press is mostly asleep on it.

Tom Finally, a clean energy story that matters! The solar ETF, TAN, is up seventeen percent year to date, but dipped three percent last session — buy the dip. The broad clean energy ETF, ICLN, same pattern. And short the natural gas fund, because batteries are undercutting gas plants structurally.

Marie This milestone is the one I’m leaning into hardest today. When the economics flip, policy and investment follow. The under-investment in the energy transition is glaring. Buy the solar ETF, buy the clean energy ETF.

Gerald And hanging off that, look at Vietnam. A three hundred sixty million dollar aircraft maintenance hub with Japanese and Hong Kong partners. The Vietnam ETF, VNM, is down five percent year to date and near fifty-two-week lows — non-consensus emerging market value.

Marie Right, it’s insulated from China’s malaise. A patience trade, but one worth watching. Alright, let’s step back. The spine of today’s move is gold and de-dollarization. Tom mentioned it earlier — the central bank repatriation wave and the World Gold Council survey. The convergence is clear: institutional trust in the dollar reserve system is eroding.

Tom Exactly. And our pair trade — long gold against short long-term Treasuries — is the clean expression of that realignment. The BOJ’s dovish hike just reinforces it. Capital is flowing away from perceived geopolitical risks into hard assets and non-dollar equities.

Gerald But hold on — what’s missing from today’s coverage? With gold grabbing headlines, nobody’s talking about silver or platinum. Silver’s industrial demand for solar and EVs is completely ignored. And the battery storage milestone gets a paragraph while AI flash dominates. The press is underplaying the quiet, durable shifts.

Marie No but that’s exactly my point! The under-investment opportunities are piling up. The market is so focused on the flashy AI stories and the gold rush that it’s missing the real structural shifts in renewables and infrastructure. The solar ETF, the clean energy ETF, the Vietnam ETF — these are the trades that will surprise people in six months.

Tom And I’ll be the first to admit, I’ve been all about chips and AI. But Marie’s right — the battery milestone is a bigger deal than another three hundred million dollar AI funding round. I’m adding the solar ETF.

Gerald Totally.

Marie That’s it.

Tom Nailed it.

Gerald As always, none of this is investment advice. Just three friends talking markets.

Marie We’re back later today at nine a.m. New York time for the New York Edition. If you’re just finding us, hit follow on Spotify — or check investmentflash.com for the full digest with charts and sources.

Tom See you then, buddy.