Why Gold Can Look Expensive, and Still Be Undervalued | Taylor McKenna

The Gold Exchange PodcastMonday, October 26, 2026

Summary

The discussion centers on the current state of the gold market and the broader implications of inflation and investment strategies in natural resources. With a deficit exceeding $40 trillion, inflation is viewed as a potential means to alleviate this burden. The conversation highlights the concept of a "shadow gold price," which suggests that gold could be significantly undervalued based on historical standards, currently trading at about 15% of its shadow price. This discrepancy presents opportunities for value-oriented investors like Copernic Global Investors, which employs a contrarian approach to commodities.

Taylor McKenna emphasizes the importance of understanding the "incentive price" for various natural resources, including gold, uranium, and oil. This price reflects the level at which new supply must be incentivized to meet future demand. McKenna explains that while gold's price has recently risen, it remains essential for investors to assess the risks associated with mining companies and the broader market dynamics. The conversation also touches on the volatility of commodities, which McKenna views as an opportunity rather than a risk, allowing for strategic buying and selling based on market conditions.

The dialogue concludes with insights into the importance of patience in investing, particularly in cyclical markets. McKenna advocates for a long-term perspective, suggesting that investors should focus on supply and demand fundamentals rather than short-term price fluctuations. He also discusses the significance of jurisdictional risk in mining investments and the need for a substantial margin of safety when evaluating potential investments in various regions. Overall, the conversation provides a comprehensive overview of strategies for investing in precious metals and natural resources amidst economic uncertainty.