Is Gold a Good Investment Now? Andrew Sarna

Key Takeaways

Massive deficits may be blocking a recession. With the US running a deficit of roughly 6% to 7% of GDP, Sarna argues he cannot see how a conventional recession takes hold, which is why, in his view, bears keep getting burned.

There is an implicit ceiling on Treasury yields. If yields rise too far the federal budget becomes unsustainable, so Sarna sees an unofficial cap on rates that also shapes policy and even foreign policy.

Bonds are no longer a core holding, in his view. Even after the 10-year yield backed up, Sarna treats bonds as a trade at best and has replaced that portfolio ballast with real assets.

Energy and gold are his real-asset core. Sarna says the negative correlation between oil and gold, which he puts near a 30-year low, helped protect the portfolio this year, and he is constructive on both looking out five years.

The AI capex boom is rolling over. He sees the growth rate of hyperscaler spending slowing, with the damage so far isolated to leveraged AI supply-chain names rather than showing up as broad job losses.

Key Moments

00:43 - Why Treasury yields have a ceiling The deficit math that, in Sarna's view, caps how high yields can go.

04:05 - Fed Chair Warsh and whether rates stay higher Why Sarna expects a hawkish hold rather than a hike or a cut.

05:39 - Why Andrew Sarna says a recession is unlikely The 6% to 7% deficit and the K-shaped economy underneath it.

07:45 - Why bonds are no longer a core holding The case for treating bonds as a trade and building a real-asset core.

10:43 - Is the AI bubble starting to crack? Slowing capex growth and the rolling-bubble backdrop.

13:03 - Should investors buy the AI dip? Why a capex slowdown may actually help the US market.

15:10 - Why energy stocks could outperform The "paid to wait" case built on underinvestment and geopolitics.

17:24 - Is gold still a buy? Gold at the $4,000 level, real rates, and the long-term case.

Is Gold a Good Investment Now? Why Andrew Sarna Says Deficits Make Real Assets Win

Whether gold belongs in a portfolio is really a question about everything around it: deficits, yields, the dollar, and what still counts as a safe holding. Speaking with Wealthion in late July 2026, Andrew Sarna, a portfolio manager at Fourth Lane Partners, made the case that enormous government deficits are keeping the economy afloat and a recession at bay, that bonds have lost their role as portfolio ballast, and that real assets, energy and gold in particular, are where he wants his clients invested for the long run.

Is gold a good investment right now?

Sarna's answer is a qualified yes, as a long-term holding rather than a short-term trade. He is candid that gold is hard to trade in the moment, an asset with no cash flows and a new Fed chair adding uncertainty, and he notes it has recently traded with rising real interest rates, which has pressured the price. He points to gold holding the $4,000 level as a key support to watch. But stepping back five years, his case is macro: there is, in his words, no realistic way the US or the rest of the G7 balance their books, and with the global order fracturing, he sees that as a lasting argument for gold. It is a view that rhymes with other Wealthion guests who argue the dollar system is losing trust.

Why does Sarna think a recession may never come?

Because, in his framework, the deficit simply overwhelms the usual warning signs. Running a deficit of 6% to 7% of GDP, he says, "I just don't even know how a recession is possible," and he notes that bearish investors have been burned repeatedly since leading indicators turned negative back in 2022. The catch is that the strength is nominal. Beneath the surface he describes a K-shaped economy: lower-end consumers struggling, delinquencies rising, a labor market propped up by government hiring, and growth increasingly dependent on AI investment. In his words, it is almost a "fiat economy" that looks fine nominally because so much cash is being injected, which is exactly why he thinks investors need real assets.

Is there a ceiling on Treasury yields?

Sarna believes there is, even if it is unofficial. His logic is blunt: if Treasury yields go too high, the US budget becomes insolvent, so there is an implicit target on rates well before any formal yield-curve control appears. He argues this cap reaches beyond markets, suggesting it was the bond market that pulled the administration back from more aggressive posturing toward Iran and returned it to negotiation. The constraint, in his telling, is a mix of the 10-year yield, oil prices, the dollar, and the stock market all bounding policy at once.

What will the Fed do under Warsh?

Sarna expects "a hawkish hold." He doubts a newly installed chair would break ranks in only his second meeting, and reads the incentive as staying out of the political spotlight. In his view Warsh needs to talk markets down, given how much the bond market matters, but there is no room for an actual hike. He was skeptical of a report suggesting a hike was coming, treating it as noise rather than signal. That places him within the live hike-versus-hold debate, on the side of no move.

Are bonds still a safe core holding?

No, in Sarna's view. Even acknowledging that bonds became a bit more attractive as the 10-year yield backed up, he argues the deficit dynamics mean "it can only be a trade. It's no longer a core holding." The traditional role of bonds as portfolio ballast is what he has replaced with real assets. For a related concern about what is happening beneath the surface of the bond market, see Michael Green on how the bond market is hiding a banking crisis.

Is the AI bubble starting to crack?

Sarna thinks the pressure is building, framing the era as "a world of these rolling bubbles" where something new reaches euphoria every six months. On AI specifically, he points to the second derivative of capex growth beginning to slow: hyperscalers are still raising spending, but the pace is decelerating, which he reads as writing on the wall. So far, he says, the damage is isolated to leveraged AI supply-chain and data-center names, and looks more like a washout of global leverage than a wave of job losses. His base case is that the complex rolls over into a more anemic, government-spending-driven economy as the AI narrative fades. That caution echoes coverage of why the smart money is selling AI stocks.

Should investors buy the AI dip?

Sarna's take here is counterintuitive: the US stock market may actually benefit from a slowdown in AI capex. He notes that when one hyperscaler signaled higher spending, its stock fell about 5% the same day, which he reads as the market asking big companies to pull back. Many of the purest AI supply-chain winners, he argues, are international and concentrated in emerging markets, so the bearish scenario for US indices is continued spending, not restraint. Rather than chasing the crowded names, he says his team hunts for overlooked domestic stocks that do not look expensive precisely because attention has been elsewhere. As always on Wealthion, this is his attributed approach, not a recommendation.

Why does Sarna favor energy and real assets?

He frames energy as a place where investors are "being paid to wait." His thesis, contrary to the glut narrative, is that the sector has been underinvested, that a geopolitical premium should support domestic producers, and that higher long-term oil prices eventually force a re-rating. In the short term he treats it as a mean-reversion trade, bounded below by physical markets and above by an administration keen to cap oil prices. Crucially, he pairs energy with gold: with the two near a 30-year-low correlation, he says the combination protected capital this year while he stayed constructive on both. It all rolls up to a single attributed conclusion, that "everyone needs to have real assets in their portfolio." For the link between AI, energy demand and oil, see Mark Mills on why AI's dirty secret is oil.

What Investors Should Watch

• The US deficit trajectory: Sarna's core reason a recession is unlikely and the reason he holds real assets.
• Treasury yields versus the implicit ceiling: any drift toward formal yield-curve control would confirm his thesis.
• Oil prices and the physical-versus-paper tension: his main inflation and energy signal.
• The pace of hyperscaler AI capex: the decelerating growth rate he is watching for confirmation the boom is rolling over.
• Gold's $4,000 support and real interest rates: his near-term tells for the metal.

FAQ

Is gold a good investment right now? Andrew Sarna views gold as a long-term holding rather than a short-term trade. He is watching the $4,000 level and notes that rising real rates have pressured it recently, but argues that unbalanced government finances and a fracturing world order make a lasting case for gold over a five-year horizon.

Why does Andrew Sarna think a recession may never come? Because of the size of the deficit. Running 6% to 7% of GDP, he says he cannot see how a conventional recession happens, even though the economy is K-shaped and weaker beneath the nominal surface.

Are bonds still a safe investment? Not as a core holding, in Sarna's view. He argues that deficit dynamics mean bonds "can only be a trade," and he has replaced their role as portfolio ballast with real assets.

Is the AI bubble bursting? Sarna sees the growth rate of AI capital spending slowing and the AI complex rolling over, but so far in an isolated way, concentrated in leveraged supply-chain names rather than showing up as broad job losses.

Why does Sarna like energy stocks? He describes energy as a sector where investors are "being paid to wait," citing underinvestment, a geopolitical premium, and the prospect of higher long-term oil prices eventually re-rating domestic producers.

Which expert and interview does this article reference? This article draws on Wealthion's interview with Andrew Sarna, a portfolio manager at Fourth Lane Partners: "Why a Recession May Never Come... and Why Gold Still Wins."