Dear Investors & Colleagues,
As to our activities during January, I'll save everyone the repetition and simply refer to my recently published detailed discussions of our 2025 year in our2025 Annual Wrap Up, as well as further commentary on our Quarterly Reports. These more than adequately cover off our January news, and our first '5 year act' as a public company.
Instead, the recent stunning gyrations in gold and silver prices offer an opportune moment for some deeper philosophical reflection about the state of current (and future) markets, about where we (as a Company) have come from, and where we (as a Company, and a world) are heading.
This is perhaps especially timely and relevant in that, as a 'global citizen' (or collection thereof, as a group of shareholders), we are quite directly positioned to benefit from major fundamental, structural, and therefore substantial changes which are now plainly emerging in the global geopolitical, trade and monetary orders.
We are also now approaching the 10 year anniversary of my original gold thesis. I founded Barton 2019 specifically to advance an Australia-based, long-term macro view formed in 2016 on the expectation of the precise global events we are now watching unfold. Global fragmentation is driving trade, political, financial and threats of actual conflict between long-standing allies of the post-WWII, NATO / USA-led world order.
This is all happpening at precisely the moment the monetary excess from which that 'western bloc's' leader (the USA) has benefitted is at its most extreme, is compounding faster than it can be repaid, and is most vulnerable to that leader shaking allies' faith.
Meanwhile, the main global opponents of dollar hegemony, the sole basis of support for this monetary excess, have spent the past ~20 years collecting US dollars in trade, and lending / converting those dollars into commodity assets and a strategic monopoly on processing technologies.
They are now leaning in to this advantage, rapidly driving de-dollarisation of multiple commodities markets, after having reduced their own exposure. Most current [new] observers of the gold market appear to be focused on central bank buying over the past 2 - 3 years. However, the principal actors driving de-dollarisation today stopped buying US Treasuries (on net) and started stockpiling gold more than 10 years ago.
The above quote by the legendary newscaster Ron Burgundy probably well captures what those of us watching precious metals markets for the past two weeks (or past 10+ years) have been thinking. But this was a readily predictable phenomenon.
The setup has been a long time coming - and the way it plays out probably has a very long way to go. The USD dollar remains broadly (and deeply) held as the largest % share of global reserves - but this share is unravelling quickly and US Treasuries, the anchor of USD exposure, have just now been overtaken by gold.
This doesn't mean that the USD is going to disappear - but it does mean that it will henceforth simply beone ofthe, but notthe, global reserve currencies, and a substantial loss of power in many dimensions. Likely, it will simply become one of many, such as the currencies issued by major trading and financial blocs (USD, EUR, CNY) - and the return of gold, the pre-1971 undefeated 5,000 year champion of money.
This is how currencies go, so to speak. At the end of WWII, the GBP was the USD of its day, representing over 80% of foreign reserves held by global central banks. Ten years later, it was 40%, ten years later, 25%. Ten years later, by 1975, it was less than 5% - systematically broken down by a conflict-fuelled debt crisis and the rise of a new world power...
At the end of WWII the USD was around 15% of foreign reserves held by central banks - by 1975, it was over 80%. In 2001, the year China joined the WTO, it was ~70%. At the beginning of 2025, it dropped to under ~60%. So it's share hasn't 'collapsed' yet - but the US is now entering a conflict-fuelled debt crisis, and grappling with the rise of a new world power...
The recent stunning rise of gold and silver prices, peaking in recent days to nearly A$7,900/oz and A$170/oz (respectively strongly suggests the first wave of 'western markets' emerging concern or awareness (but not yet acceptance or broad adoption) that a 50 year monetary aberration - the commodified US dollar, and its near exclusivity asthe'global reserve' asset - may be starting to unwind in favour of a new equilibrium.
Where this equilibrium settles is the real question, and one without a pricisely foreseeable answer. However, we can ask ourselves generally: where must sovereign-scale capital be re-allocated if Governments are concerned to hold USD exposure whether for political (seizure) or financial (debasement) reasons? Well given the scale of capital in question, it must either go predominantly to one of two very deep markets, being (a) US equities - same problem, or (b) gold (and other physically possessed metals) as historically proven, geopolitically neutral reserve assets.
As to recent price moves, these have both impressed with directionality and scale, and startled with head-spinning volatility. However, very few institutional investors - much less retail - yet have material gold exposure. They are yet to place the trade that the 50 year 'terms of reference' they learned around global trade, USD FX, interest rates and gold are steadily dissolving as underlying global trade and monetary structures shift.
We are yet to see what actual institutional (not just private-scale PE funds) re-allocation into gold and gold equities looks like.
There will no doubt be periods of increased volatility in precious metals prices as short-term traders and long-term strategists wrestle for control of the narrative, battling short-term profits against long-term positioning. However, short-term traders do not control the majority portion of global trade (and trade settlement) structures, nor the levers of power which control these.
A prime example of this volatility is that which has emerged over the past 48 hours following President Trump's nomination (for now, anyway) of Kevin Warsh as the new Chairman of the Federal Reserve. Mr Warsh has of late presented himself as a newly-minted 'inflation dove', advocating lower rates. However, Mr Market knows Mr Warsh more traditionally as an inflation hawk, prone to favouring rising rates over rising prices.
Mr Market was clearly expecting a more obviously 'dovish' nominee and reacted rather forecfully to the nomination (for now, anyway) of a [traditionally] more 'hawkish' nominee, 'crashing' precious metals and precious metals equities by 10 - 20% across the board - meaning they still remain at long-term weighted average record highs (the metals), and 80 - 90% of recent record highs and recent rally peaks (the equities).
So even if Mr Warsh is an 'inflation hawk', the market is confirming that gold's (and silver's) recent run isn't entirely just about rates. Equally, let's not forget that Mr Warsh is not yet the Fed Chairman - and that President Trump has a long track record of taking 'public soundings' of key nominees, only to change his mind if he doesn't like the market's reaction.
Also notable is that, upon President Trump's announcement of Mr Warsh as his nominee, US equity markets - the engine of US Federal tax receipts - started dropping, and the 10 year US Treasury rate - the soft underbelly of the US' current fiscal dilemma - started climbing. If President Trump oscillates to backing a decidedly more 'dovish' nominee, could a 'recovery crash back up' be in the cards?
If Mr Warsh does advance to confirmation, then the question becomes whether he is truly, newly, an 'inflation dove', or does he actually remain, as Mr Market fears, an 'inflation hawk' opportunistically donning a different jacket to secure a career-making appointment? Or will he, like so many other recent US Federal appointees, push to remake the institution itself? My brilliant friend and former classmateHeather Longhas some thoughts.
But let's not forget the big picture - that of the outside world nervously looking in. Either Mr Warsh is a bona-fide, newly minted 'inflation dove' of the politically astute sort, and will successfully push for rate cuts, or he will fail to deliver cuts and disappoint President Trump, who will once again resume (or amplify) his existing attacks on the Federal Reserve. There is no third choice, and no middle ground for a binary outcome.
One must inevitably happen, and either will further erode the already fading global confidence in Fed independence. The world's collective confidence in this independence has been an unwritten monetary law central to the past ~50 years of global reliance upon the USD as the first and best choice to preserve value and access to trade.
Either outcome is bad for global faith in the USD and USD hegemony. Both are therefore good for gold. Any [temporary] relief from the immediate fiscal and credit pressures driving the politicisation of the Fed, via massive issuance (printing) or default - whether 'hard' by non-payment, or 'soft' by devaluation - is also good for gold.
These are the narrow, dark alleyways available to a reserve currency entering a credit crisis. It has never worked out well, in all of human history (so far), for said reserve currency. Gold, conversely, has always (so far) been on the winning side.
The other big picture fact to remember is that the biggest buyers of gold, those who are leading the realignment of global geopolitical, trade and monetary orders (or those smaller players cautiously following suit) - are not price buyers. They are also not 'paper buyers'.
Sovereign buyers are policy buyers, they are 'physical' buyers - and most importantly they are therefore price insensitive buyers. They determine what proportion of their reserves, and/or trade surpluses, they will hold in or convert to gold as a target - and then goal seek in execution.
If they have set a new, higher % allocation of rserves to gold, then theymustbuy that gold, and theymusthave it in physical form. Short-term price shocks are a bonus convenience to them, not a concern, and they will build to their target position regardless.
Paradoxically, the higher the gold price, the easier it is for them to reinvest growing nominal trade surpluses (such asChina's 2025 record $1.2 Trillion) outside of USD. They can also more easily store it in a small physical format inside their own borders.
If my thesis from 10 years ago fell short, it was in failing to recognise just howquicklythis can all unfold, in the sense that the shaking of 'absolute confidence' - such as in US foreign policy, or the value of a US dollar - mixed with a few key catalytic events, can rapidly turn a thrown snowball into an avalanche.
Are we at 'avalanche' stage? No, clearly not. However, to the extent that we may have 50 years' worth of 'excess US confidence and monetary privilege' to [at least partially] unwind to some new equilibrium, there are likely large structural shifts yet to be realised.
And, given the amount of printed and unbacked, or 'fiat', paper money manifested globally since the start of this contemporary monetary aberration - especially post GFC / COVID - I suspect that the long-term trend is set, and that it yet has a long way to run.Thankfully, and quite deliberately, Barton is well positioned for this. Our focus for 2026 will be upon commercialising the platforms we have carefully and methodically assembled, building up risk-mitigated development optionality, and transitioning to the our next '5 year act' - production, growth and further strategic initiatives.
We are standing at the once-in-a-lifetime intersection of the right assets, in the right jurisdiction, and the right time, all driven not by short term factors, but rather by generational shifts in the global geopolitical, trade and monetary orders. And we have an exceptional team shaping, driving and executing our strategy as we manouevre in parallel.
What we have achieved so far to get here, we have achieved with very little capital and fierce market headwinds. Going forward, the ride may be a little bumpy here and there, but we are now better capitalised than ever before in our history, and the wind is at our back.
As always, we are honoured to have your support. We are very excited to move forward together into 2026, and look forward to the year ahead.
Regards,
Alexander Scanlon
Managing Director & CEO
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