Crassus Investments Pty Ltd
Australia
3m
Rate cuts in 2026 and how they underpin gold and royalty exposure. The probability of meaningful rate cuts in 2026 is rising, and that has big implications for how I’m positioned. Central banks rarely move in straight lines, but you can already sense the pivot forming. Inflation has been sticky but trending lower, while growth momentum across the developed world continues to cool. Fiscal stimulus is fading, consumer credit is stretched, and real yields remain historically tight. Eventually, something gives. My base case is that by 2026, the Fed and other major central banks will be forced to ease to prevent a deeper slowdown or a funding crisis at the sovereign level. This isn’t about returning to the “easy money” era of the 2010s. It’s about survival within a highly indebted system. When governments run structural deficits and interest costs approach unsustainable levels, monetary policy becomes a fiscal necessity. You can’t keep rates high when debt service starts consuming 20-plus percent of tax revenue. Whether the justification comes via a “soft landing” narrative or a new round of economic weakness, the result will be the same: rates head lower, and real yields compress. That’s an environment where gold tends to shine and where royalty companies quietly compound in the background. Gold’s rally in 2024–25 wasn’t a fluke. It reflected a repricing of fiat risk and the recognition that real assets are the only anchor left in an age of monetary distortion. The next leg higher likely comes when the market starts front-running the rate cuts of 2026. As nominal yields fall and the dollar weakens, capital will again seek shelter in tangible stores of value. Royalty companies, particularly in precious metals and energy offer the purest way to express that view with cash-flow leverage and limited operating risk. They sit above the producers, collecting a slice of top-line revenue without having to worry about inflation in labor, energy, or equipment costs. They are the toll collectors of the real asset economy. I continue to hold a blend of gold bullion and royalty equities. The bullion is my insurance a position that benefits from monetary debasement and loss of confidence in fiat systems. The royalties are my compounding engine assets that can expand in value as long as inflation persists and real rates stay suppressed. Together, they form a portfolio core designed for a world of financial repression and policy volatility. If the central banks manage a soft landing and cut gradually, gold should grind higher and royalties re-rate as discount rates fall. If they’re forced into aggressive easing because of debt stress, gold will explode higher and royalties will still win by virtue of long-duration optionality. Either way, patience is rewarded. The hard part isn’t knowing what is coming it’s staying positioned when the crowd is distracted by short-term noise. I’m content holding my ground, collecting royalty cash flows, and waiting for the next policy shift to confirm what’s already written in the balance sheets.
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