February 5, 2025 – Gold prices soared to an all-time high on Wednesday, topping $2,870 per ounce. Global trade tensions, a weakening U.S. dollar, and inflation concerns continue to push the gold price.

Key Drivers Behind the All-Time High

1. Trade War Tensions: The ongoing trade war between the United States and China has prompted investors to flock to gold as a safe-haven asset. China’s recent tariffs on U.S. imports in retaliation for U.S. duties on Chinese goods have only heightened these tensions. For example, China recently imposed tariffs on U.S. imports such as coal, LNG, crude oil, farm equipment, and automobiles in retaliation for U.S. duties on Chinese goods. This tit-for-tat tariff exchange has heightened economic uncertainty.
2. Weakening U.S. Dollar: A softer U.S. dollar has made gold more attractive to international buyers. When the dollar weakens, gold becomes relatively cheaper for holders of other currencies. This increased affordability boosts demand as international buyers seize the opportunity to buy gold at lower prices. Additionally, gold’s status as a safe-haven asset during times of currency volatility makes it a more appealing investment, further driving up demand.
3. Inflation Concerns: Gold is traditionally seen as a hedge against inflation. With rising inflation risks and uncertainty over the Federal Reserve’s policy path, investors are turning to gold to protect their wealth. By investing in gold, they aim to preserve their purchasing power and shield their assets from inflation.
4. Central Bank Buying: China’s continued accumulation of gold reserves amid escalating trade tensions also contributes to the price surge. Analysts believe that gold prices could cross the $3,000 per ounce mark (a new all-time high) if trade tensions persist this year.

Market Reactions and Future Outlook

The surge in gold prices has had a ripple effect across other precious metals, with silver, platinum, and palladium also experiencing gains.

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The historic significance of gold has been evident in almost every culture and has captivated the hearts and minds of people worldwide. Its radiant luster and rarity have made it a universal symbol of wealth, power, and spiritual significance. It is easy to get caught up in the short term. However, we should remember that the value of gold has been maintained for thousands of civilizations all across the world. Gold has shown significant increases in price over the last few years, but it has been valuable for all of human history. Let’s explore how different civilizations have valued gold throughout history.

Ancient Egypt 

In Ancient Egypt, people considered gold to be the flesh of the gods, especially the sun god Ra. The Egyptians used gold extensively in tombs and temples to signify the pharaohs’ eternal nature. They also commonly incorporated gold in jewelry. The famous burial mask of Tutankhamun, crafted from gold, symbolizes the historic significance of gold to the Egyptians.

Mesopotamia 

The Mesopotamians were among the first to use gold in jewelry and currency. Religious artifacts used gold in their decorations. Wealthy people used gold to show their status. The lavishly decorated temples and ziggurats often featured gold elements, reflecting the metal’s historic significance and divine connection. The Mesopotamians imported gold from distant regions due to the lack of local metal deposits. Even in this very early period of human history, the Mesopotamians were importing gold because of the demand for it.

India

 In Indian culture, gold is profoundly spiritual and culturally significant. It is integral to religious ceremonies and weddings, symbolizing purity and prosperity. This reverence towards gold goes back to India’s first roots. The Rigveda, one of the oldest sacred texts, mentions gold and its extraction from rivers like the Sindhu and Ganga. Gold artifacts and coins from various archaeological sites highlight its importance in trade and daily life. The tradition of gifting gold jewelry during considerable life events continues today, rooted in the belief that gold brings good fortune, showcasing the historic significance of gold in Indian traditions.

China 

Gold has long been a symbol of good luck and prosperity in Chinese culture. Gold decorations are typical during the Lunar New Year, as they are believed to attract wealth. Sycees, gold ingots, were used as currency and remain a symbol of wealth and prosperity in modern China. Ancient Chinese emperors also adorned themselves and their surroundings with gold to showcase their divine right to rule, emphasizing the historic significance of gold in Chinese culture.

The Americas

 The pre-Columbian American civilizations, such as the Incas and Aztecs, highly valued gold for its beauty and spiritual significance. For the Incas, gold represented the sweat of the sun, and they used it to craft stunning ceremonial objects. The Incas, Aztecs, and other civilizations used gold in elaborate headdresses, jewelry, and offerings to deities. Rituals incorporated gold artifacts and symbols to demonstrate power and immortality. Craftsmen designed gold objects to dazzle and reflect light, showcasing the wearer’s rank and authority. The Spanish conquest, driven by the pursuit of gold, profoundly impacted these cultures, marking the historic significance of gold in shaping their histories.

Modern Times

 Today, gold remains a powerful symbol of wealth and status. Gold is used in various forms, from investment commodities to luxury goods. Its cultural significance endures, reflecting our fascination with this timeless metal and maintaining the historic significance of gold in contemporary society.

Gold’s allure transcends time and geography, weaving a thread through the tapestry of human history. It is easy to want to overreact to the factors that influence gold in the short term, however, it is important to remember the historic significance of gold. Gold has been used as a store of value for 5,000 years and will continue to be a store of value going forward.

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As we enter 2025, the gold price outlook remains positive, driven by macroeconomic factors and geopolitical uncertainties. Analysts predict a promising year for gold, with prices expected to reach even higher heights than 2024.

Central Bank Purchases and Geopolitical Tensions

One of the key drivers for gold’s performance continues to be central bank purchases. Global central banks have been steadily adding gold to their reserves, reflecting a shift away from the U.S. dollar and towards more stable assets. Additionally, ongoing geopolitical tensions, such as conflicts in Ukraine and the Middle East, are expected to sustain high demand for gold as a safe-haven asset.

Inflation and Monetary Policy

Inflation remains a significant factor influencing gold prices. As central banks, including the Federal Reserve, consider more rate cuts, gold is positioned to benefit from a declining real yield environment. Lower interest rates typically make gold more attractive as an investment, offering a hedge against inflation and currency devaluation.

Weakening U.S. Dollar

The U.S. dollar’s performance will also be crucial in gold’s outlook. A weaker dollar makes gold more affordable for international buyers, boosting its appeal. Analysts predict that gold prices will likely rise in response as the dollar continues to soften.

Market Consensus and Predictions

Analysts have varying predictions for gold prices in 2025, with estimates ranging from $2,600 to $3,300 per ounce. J.P. Morgan forecasts an average price of $2,600 per ounce, while ANZ Research offers a more optimistic outlook of $2,805 per ounce. Trading Economics predicts gold prices could reach $2,711 per ounce in early 2025, continuing a bullish trajectory. While gold is not expected to have the same level of growth that it had during 2024, the bullish atmosphere on gold has not gone away. It is hard to predict exactly what the future holds, but what is certain is gold’s position as a hedge on the US dollar and a stable store of wealth.

Investment Opportunities

For investors, 2025 could present significant opportunities to capitalize on gold’s bullish momentum. Structural factors, including inflation hedging, geopolitical tensions, and monetary easing, make gold a reliable store of value in uncertain times.

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The Federal Reserve’s recent interest rate cuts by 25 basis points has sent ripples through the financial markets. While this move initially caused a dip in gold prices, the long-term outlook for precious metals remains strong. Let’s explore why gold will continue to grow in price.

Market Reaction to Interest Rate Cuts

Following the rate cut, gold and silver prices experienced a short-term decline. Typically, a drop in interest rates would lead to an increase in the price of gold. This unexpected reaction was influenced by the Fed’s hawkish tone regarding future rate cuts. Even though there was an interest rate cut, the Fed implied there would be less interest rate cuts in 2025. However, these short-term fluctuations do not affect the underlying strength of gold as an investment.

The Long-Term Bullish Case for Precious Metals

Despite the Fed’s cautious outlook and attempts to control inflation, several key factors suggest that gold will continue its upward trajectory in the coming years:

Economic Uncertainty: The global economic landscape remains uncertain. Geopolitical tensions, potential recessions, and ongoing financial instability create a favorable environment for gold as investors seek safe-haven assets to protect their wealth.

Inflation Concerns: Inflation is driven by fiat currency. This issue is not going away. Gold has historically performed well as a hedge against inflation.

Monetary Policy and Debt Levels: While the Fed’s current stance is less dovish, the long-term reality of high national debt and the need for supportive monetary policy will lead to further rate cuts. These measures tend to weaken the dollar and boost gold prices.

Gold as a Long-Term Investment

It’s crucial to remember that gold is a long-term asset. Although its value may fluctuate in the short term due to market reactions and economic policies, its historical performance showcases its ability to preserve wealth over time. Unlike other investments that can be more volatile and dependent on market cycles, gold offers a stable and enduring store of value.

Short-term price movements should not sway investors; instead, they should focus on the broader economic and geopolitical factors that underline gold’s intrinsic worth. Holding gold as a long-term investment can provide financial security and diversification benefits, protecting your wealth.

Conclusion

While the Fed’s recent rate cut actually led to an initial dip in gold prices, the long-term outlook for gold remains positive. Economic, inflationary, and global uncertainty create a strong foundation for gold’s continued growth. Gold should be viewed as a long-term asset, capable of preserving wealth and providing stability.

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Every current and prospective precious metals investor should read this evergreen article by Alan Greenspan title, “Gold and Economic Freedom”.  Here, you will hear directly from the prior Chairman of the Federal Reserve, exactly why you should hold Gold, as indirectly, other precious metals such as Silver.

By Alan Greenspan – As reprinted from the book “Capitalism, the Unknown Ideal”  – by Ayn Rand with additional articles by Alan Greenspan

Gold: The Foundation of Economic Freedom

An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions. They seem to sense-perhaps more clearly and subtly than many consistent defenders of laissez-faire, that gold and economic freedom are inseparable, that the gold standard is an instrument of laissez-faire and that each implies and requires the other.

In order to understand the source of their antagonism, it is necessary first to understand the specific role of gold in a free society.

The Role of Money in Economic Transactions

Money is the common denominator of all economic transactions. It is that commodity which serves as a medium of exchange, is universally acceptable to all participants in an exchange economy as payment for their goods or services, and can, therefore, be used as a standard of market value and as a store of value, i.e., as a means of saving.

The existence of such a commodity is a precondition of a division of labor economy. If men did not have some commodity of objective value which was generally acceptable as money, they would have to resort to primitive barter or be forced to live on self-sufficient farms and forgo the inestimable advantages of specialization. If men had no means to store value, i.e., to save, neither long-range planning nor exchange would be possible.

Why Gold is the Ideal Medium of Exchange

What medium of exchange will be acceptable to all participants in an economy is not determined arbitrarily. First, the medium of exchange should be durable. In a primitive society of meager wealth, wheat might be sufficiently durable to serve as a medium, since all exchanges would occur only during and immediately after the harvest, leaving no value-surplus to store. But where store-of-value considerations are important, as they are in richer, more civilized societies, the medium of exchange must be a durable commodity, usually a metal. A metal is generally chosen because it is homogeneous and divisible: every unit is the same as every other and it can be blended or formed in any quantity. Precious jewels, for example, are neither homogeneous nor divisible.

More important, the commodity chosen as a medium must be a luxury. Human desires for luxuries are unlimited and, therefore, luxury goods are always in demand and will always be acceptable. Wheat is a luxury in underfed civilizations, but not in a prosperous society. Cigarettes ordinarily would not serve as money, but they did in post-World War II Europe where they were considered a luxury. The term “luxury good” implies scarcity and high unit value. Having a high unit value, such a good is easily portable; for instance, an ounce of gold is worth a half-ton of pig iron.

The Natural Selection of Gold as Money

In the early stages of a developing money economy, several media of exchange might be used, since a wide variety of commodities would fulfill the foregoing conditions. However, one of the commodities will gradually displace all others, by being more widely acceptable. Preferences on what to hold as a store of value, will shift to the most widely acceptable commodity, which, in turn, will make it still more acceptable. The shift is progressive until that commodity becomes the sole medium of exchange. The use of a single medium is highly advantageous for the same reasons that a money economy is superior to a barter economy: it makes exchanges possible on an incalculably wider scale.

Whether the single medium is gold, silver, sea shells, cattle, or tobacco is optional, depending on the context and development of a given economy. In fact, all have been employed, at various times, as media of exchange. Even in the present century, two major commodities, gold and silver, have been used as international media of exchange, with gold becoming the predominant one. Gold, having both artistic and functional uses and being relatively scarce, has always been considered a luxury good. It is durable, portable, homogeneous, divisible, and, therefore, has significant advantages over all other media of exchange. Since the beginning of Would War I, it has been virtually the sole international standard of exchange.

The Gold Standard and Banking

If all goods and services were to be paid for in gold, large payments would be difficult to execute, and this would tend to limit the extent of a society’s division of labor and specialization. Thus a logical extension of the creation of a medium of exchange, is the development of a banking system and credit instruments (bank notes and deposits) which act as a substitute for, but are convertible into, gold.

Free Banking System

A free banking system based on gold is able to extend credit and thus to create bank notes (currency) and deposits, according to the production requirements of the economy. Individual owners of gold are induced, by payments of interest, to deposit their gold in a bank (against which they can draw checks). But since it is rarely the case that all depositors want to withdraw all their gold at the same time, banker need keep only a fraction of his total deposits in gold as reserves. This enables the banker to loan out more than the amount of his gold deposits (which means that he holds claims to gold rather than gold as security for his deposits). But the amount of loans which he can afford to make is not arbitrary: he has to gauge it in relation to his reserves and to the status of his investments.

Bank Loans

When banks loan money to finance productive and profitable endeavors, the loans are paid off rapidly and bank credit continues to be generally available. But when the business ventures financed by bank credit are less profitable and slow to pay off, bankers soon find that their loans outstanding are excessive relative to their gold reserves, and they begin to curtail new lending, usually by charging higher interest rates. This tends to restrict the financing of new ventures and requires the existing borrowers to improve their profitability before they can obtain credit for further expansion. Thus, under the gold standard, a free banking system stands as the protector of an economy’s stability and balanced growth.

Gold and Global Economic Integration

When gold is accepted as the medium of exchange by most or all nations, an unhampered free international gold standard serves to foster a world-wide division of labor and the broadest international trade. Even though the units of exchange (the dollar, the pound, the franc, etc.) differ from country to country, when all are defined in terms of gold the economies of the different countries act as one–so long as there are no restraints on trade or on the movement of capital. Credit, interest rates, and prices tend to follow similar patterns in all countries.

For example, if banks in one country extend credit too liberally, interest rates in that country will tend to fall, inducing depositors to shift their gold to higher-interest paying banks in other countries. This will immediately cause a shortage of bank reserves in the “easy money” country, inducing tighter credit standards and a return to competitively higher interest rates again.

The Decline of the Gold Standard

A fully free banking system and fully consistent gold standard have not as yet been achieved. But prior to World War I, the banking system in the United States (and in most of the world) was based on gold, and even though governments intervened occasionally, banking was more free than controlled. Periodically, as a result of overly rapid credit expansion, banks became loaned up to the limit of their gold reserves, interest rates rose sharply, new credit was cut off, and the economy went into a sharp, but short-lived recession. (Compared with the depressions of 1920 and 1932, the pre-World War I business declines were mild indeed.) It was limited gold reserves that stopped the unbalanced expansions of business activity, before they could develop into the post- World War I type of disaster. The readjustment periods were short and the economies quickly reestablished a sound basis to resume expansion.

The Beginning of the Problem

But the process of cure was misdiagnosed as the disease: if shortage of bank reserves was causing a business decline- argued economic interventionists-why not find a way of supplying increased reserves to the banks so they never need be short! If banks can continue to loan money indefinitely–it was claimed–there need never be any slumps in business. And so the Federal Reserve System was organized in 1913.

It consisted of twelve regional Federal Reserve banks nominally owned by private bankers, but in fact government sponsored, controlled, and supported. Credit extended by these banks is in practice (though not legally) backed by the taxing power of the federal government. Technically, we remained on the gold standard; individuals were still free to own gold, and gold continued to be used as bank reserves. But now, in addition to gold, credit extended by the Federal Reserve banks (paper reserves) could serve as legal tender to pay depositors.

The Federal Reserve and the Great Depression

When business in the United States underwent a mild contraction in 1927, the Federal Reserve created more paper reserves in the hope of forestalling any possible bank reserve shortage. More disastrous, however, was the Federal Reserve’s attempt to assist Great Britain who had been losing gold to us because the Bank of England refused to allow interest rates to rise when market forces dictated (it was politically unpalatable). The reasoning of the authorities involved was as follows: if the Federal Reserve pumped excessive paper reserves into American banks, interest rates in the United States would fall to a level comparable with those in Great Britain; this would act to stop Britain’s gold loss and avoid the political embarrassment of having to raise interest rates.

The Results

The “Fed” succeeded: it stopped the gold loss, but it nearly destroyed the economies of the world, in the process. The excess credit which the Fed pumped into the economy spilled over into the stock market-triggering a fantastic speculative boom. Belatedly, Federal Reserve officials attempted to sop up the excess reserves and finally succeeded in braking the boom. But it was too late: by 1929 the speculative imbalances had become so overwhelming that the attempt precipitated a sharp retrenching and a consequent demoralizing of business confidence. As a result, the American economy collapsed. Great Britain fared even worse, and rather than absorb the full consequences of her previous folly, she abandoned the gold standard completely in 1931, tearing asunder what remained of the fabric of confidence and inducing a world-wide series of bank failures. The world economies plunged into the Great Depression of the 1930’s.

With a logic reminiscent of a generation earlier, statists argued that the gold standard was largely to blame for the credit debacle which led to the Great Depression. If the gold standard had not existed, they argued, Britain’s abandonment of gold payments in 1931 would not have caused the failure of banks all over the world. (The irony was that since 1913, we had been, not on a gold standard, but on what may be termed “a mixed gold standard”; yet it is gold that took the blame.)

Gold Versus the Welfare State

But the opposition to the gold standard in any form-from a growing number of welfare-state advocates-was prompted by a much subtler insight: the realization that the gold standard is incompatible with chronic deficit spending (the hallmark of the welfare state). Stripped of its academic jargon, the welfare state is nothing more than a mechanism by which governments confiscate the wealth of the productive members of a society to support a wide variety of welfare schemes. A substantial part of the confiscation is effected by taxation. But the welfare statists were quick to recognize that if they wished to retain political power, the amount of taxation had to be limited and they had to resort to programs of massive deficit spending, i.e., they had to borrow money, by issuing government bonds, to finance welfare expenditures on a large scale.

Under a gold standard, the amount of credit that an economy can support is determined by the economy’s tangible assets, since every credit instrument is ultimately a claim on some tangible asset. But government bonds are not backed by tangible wealth, only by the government’s promise to pay out of future tax revenues, and cannot easily be absorbed by the financial markets. A large volume of new government bonds can be sold to the public only at progressively higher interest rates. Thus, government deficit spending under a gold standard is severely limited.

Abandoning the Gold Standard

The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. They have created paper reserves in the form of government bonds which-through a complex series of steps-the banks accept in place of tangible assets and treat as if they were an actual deposit, i.e., as the equivalent of what was formerly a deposit of gold. The holder of a government bond or of a bank deposit created by paper reserves believes that he has a valid claim on a real asset. But the fact is that there are now more claims outstanding than real assets.

The law of supply and demand is not to be conned. As the supply of money (of claims) increases relative to the supply of tangible assets in the economy, prices must eventually rise. Thus the earnings saved by the productive members of the society lose value in terms of goods. When the economy’s books are finally balanced, one finds that loss in value represents the goods purchased by the government for welfare or other purposes with the money proceeds of the government bonds financed by bank credit expansion.

Inflation and the Confiscation of Wealth

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

Conclusion: Gold and Property Rights

This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the “hidden” confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.

We also recommend that you take a moment and view the 2011 video in which Ron Paul questions Federal Reserve Chairman Ben Bernanke on “Is Gold Money?”

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Looking back over 2024, gold prices surged to record highs, significantly influenced by central bank buying. This trend was marked by unprecedented rates of reserve accumulation by banks around the globe. Let’s explore the key events and their impact on the gold market over the past year.

Record-Breaking Central Bank Purchases

Central banks were on a gold-buying spree throughout 2024, with total purchases reaching historic levels. Countries like China, Turkey, and India led the charge, significantly bolstering their gold reserves. For instance, the People’s Bank of China added a substantial 27 tonnes of gold during the first quarter alone, contributing to a total global net purchase of 290 tonnes in that period – the highest Q1 total since records began in 2000.

Geopolitical Tensions and Economic Uncertainty

Geopolitical tensions, particularly the ongoing conflict in Ukraine and the resulting sanctions on Russia, prompted central banks to diversify their reserves away from U.S. Treasuries. This strategic shift was aimed at safeguarding national wealth against potential fiscal instability. By the end of 2024, these banks held 36,089 metric tons of gold, reflecting a significant increase from previous years.

Response to Interest Rate Cuts

A notable factor that impacted gold prices was the response to interest rate cuts by major central banks, including the Federal Reserve. As predicted, the Fed implemented a rate cut in September, which reduced the opportunity cost of holding gold. This move made gold a more attractive investment, contributing to its bullish run and pushing prices above $2,600 per ounce as we approach the end of the year.

The Role of Exchange-Traded Funds (ETFs)

In addition to central bank demand, there was a resurgence in demand for gold-backed ETFs throughout 2024. Western investors poured into these funds, particularly in North America, further driving up gold prices. The combined effect of central bank purchases and ETF inflows created a robust market for gold, sustaining high prices throughout the year.

Conclusion

Reflecting on 2024, the gold market was shaped by a confluence of factors but one of the biggest was central bank buying. As they strengthened their gold reserves and investors sought safe-haven assets, the outlook for gold remained strong. Given the favorable market conditions, 2024 presented a prime opportunity for people who invested in Gold.

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After a strong year for gold and silver, the market has seen a downturn since the election. It can be easy to get nervous and panic, but it’s important to remember that these short-term movements are a normal part of the market cycle. Instead of panicking, this is a great time to recognize the value of dollar cost averaging.

Understanding Market Movements

Precious metals, like any other asset, experience price volatility. Over the past few weeks, we’ve seen some significant swings. This price “ping pong” can be influenced by various factors, including economic data releases, geopolitical events, and market sentiment shifts. While these movements can be dramatic, they are typically temporary and do not alter the long-term value proposition of investing in precious metals. The world is still printing money, which means gold will continue to be a good investment when pitted against fiat currencies.

The Power of Dollar Cost Averaging

One of the most effective strategies to manage market volatility and avoid emotional reactions to market movement is dollar cost averaging (DCA). This approach involves regularly investing a fixed amount of money into precious metals, regardless of the price. Here’s why Dollar Cost Averaging is a smart strategy:

1. Mitigates Risk: By spreading out your investments over time, you reduce the risk of making a large purchase when prices peak. This helps to smooth out the effects of market volatility.
2. Builds Discipline: Dollar cost averaging encourages disciplined investing habits. It removes the emotional aspect of market timing and helps you stay committed to your long-term investment plan.
3. Cost Efficiency: When prices are high, your fixed investment buys fewer ounces of precious metals. When prices are low, the same amount buys more. Over time, this can lower the average cost per ounce, enhancing your overall return.

Practical Tips for Dollar Cost Averaging

• Set a Schedule: Decide how often you will invest (e.g., monthly, quarterly etc…) and stick to it.
• Determine an Amount: Choose a fixed amount to invest each time, aligning it with your financial goals and budget.
• Don’t Get Fixated on the Price: The price will go up and down, but it will continue to go up in the long term. Instead of being paralyzed by watching the price, buy at regular intervals regardless of it.

Long-Term Perspective

At Fisher Precious Metals, we advocate for a long-term investment approach. Precious metals have proven to be a reliable store of value over time, preserving wealth through economic ups and downs. By focusing on the big picture and consistently applying dollar cost averaging, you can confidently navigate short-term market fluctuations.

Conclusion

Recent movements in the precious metals market are a natural part of the investment journey. Remember the importance of dollar cost averaging instead of getting caught up in the daily price swings. This disciplined strategy allows you to build a solid portfolio over time without the stress of market timing. Stay the course, and keep your eyes on your long-term goals.

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It is the day after the election, and gold and silver have tanked. What should you do? Should you sell, should you buy? Will gold and silver continue to tank? Here are some things to keep in mind.

Trump’s Economic Perception

• Better for the Economy: President Trump is perceived as better for the economy. His policies, which focus on reducing regulations and taxes, are conducive to economic growth.
• Calming Geopolitical Conflicts: Trump has made clear that he intends to lower the temperature of the conflicts around the world, such as in Ukraine and the Middle East. Geopolitical conflicts typically lead to buying gold as a safe haven asset. Demand for gold and silver could lessen which could make the price tank. 
• Cutting Government Waste and Tightening Trade Deficits: His proposed policies aim to reduce government spending and address trade imbalances, which can positively impact the economy.

However, Remember:

• Debt Accumulation: It’s crucial to remember that Trump’s administration added a substantial amount of debt, nearly as much as the current administration has.
• Real Estate Debt: Trump’s real estate  business empire is built significantly on debt.
• Promises and Debt: His promises of tax cuts and increased spending (e.g., no income tax, no tax on Social Security, no tax on tips, lowered corporate and personal tax rates, and military rebuilding) will likely require significant borrowing, potentially increasing national debt.
• Rebuild the Military: Trump has made promises to rebuild our nations military, this also carries an expense.
• China, Japan & the EU: These regions are aggressively expanding their monetary base, printing more money to stimulate their economies. This practice typically leads to inflation, which in turn can drive up the prices of precious metals.

All of this requires money, and it has to come from somewhere! All of that new money, rather than, making gold and silver tank, would lead to an even higher price.

Investment Strategy

Bottom line—today is a day to buy. Gold and silver have tanked. BUY THE DIP! I never say that, but I am saying that today. DON’T GET GREEDY thinking the metals will get cheaper. DON’T be scared to buy. Just buy a little—you don’t have to buy a lot. Gold will be $3500 – $4000, and silver $50 by the end of next year. Global expansion of the M2 money supply is sufficient in itself to drive the metals higher.

Remember, investing is about balancing risk and reward. Diversify your portfolio, stay informed, and make calculated decisions based on the latest economic data.

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In today’s economy, inflation is becoming a major concern for the average American. Prices keep rising, and wages have not kept up, making it increasingly difficult to make ends meet. The dollars that were worked for and saved up are becoming less valuable. Precious metals like gold and silver have historically served as hedges against inflation, as we have mentioned before, and here’s why.

Understanding Inflation

Inflation is the rate at which the general level of prices for goods and services rises, decreasing the purchasing power of currency. When inflation is high, each unit of currency (for example the dollar) buys fewer goods and services. Your dollars do not have intrinsic value, so they are only as valuable as their purchasing power at any given time. This is where precious metals enter the conversation.

Intrinsic Value and Scarcity

Precious metals are inherently valuable due to their scarcity and unique properties. Unlike paper currency, which can be printed in unlimited quantities, the supply of gold, silver, platinum, and palladium is limited. It is impossible to create more gold or more silver than already exists. This intrinsic value means that, even when the value of currency decreases, the value of precious metals often remains stable or even increases. As more money is printed, the price of gold and silver will go up as it takes more dollars to buy these precious metals. This means, that if you own gold and silver, as the dollar inflates, your precious metals maintain or even grow in value.

Historical Performance vs Inflation

This makes sense from a logical perspective, but history has also backed up this claim. Gold and other precious metals have performed well during periods of high inflation. For instance, during the 1970s, when inflation rates in the U.S. soared, gold prices experienced a significant surge. In 1971, Nixon took the dollar off of the gold standard meaning it was no longer backed by precious metals. Gold jumped from $35 pre ounce to $850 per ounce between 1971 and 1980. Investors turned to gold to preserve their wealth, and the price of gold skyrocketed.

Supply and Demand Dynamics

Not only do precious metals maintain their value during inflationary periods, they can often grow in value due to supply and demand. The demand for precious metals typically increases during inflationary periods as people seek to preserve their wealth. Investors seek to protect their assets by purchasing metals, which then leads to higher prices. Additionally, the supply of precious metals cannot be ramped up quickly, ensuring their value remains robust.

Non-Correlated Assets

Precious metals often move independently of other asset classes, such as stocks and bonds. During periods of economic instability, when traditional investments might underperform, precious metals can provide a safe haven. This is why they are called “safe-haven assets”. This non-correlation makes them an effective tool for diversification and risk management.

Conclusion

We believe in the enduring value of precious metals as a hedge against inflation. Their intrinsic value, historical performance, and non-correlation with other asset classes make them invaluable tools for preserving wealth during periods of high inflation. As investors seek stability in uncertain times, precious metals remain a reliable option.

For more on inflation, read our article on inflation here: https://fisherpreciousmetals.com/inflation-the-hidden-tax/

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Over the past 12 months, gold has experienced a significant rise, with prices climbing nearly 30% year-to-date. Currently hovering around $2,667 per troy ounce, gold is climbing closer to the $2,700 mark. The bar is moving higher and higher. Just a few months ago everyone was asking, “will gold rise past $2,400”. Not long before that the target mark was $2,200. It is time to ask a simple question. Is there an end in sight to gold’s rise? This upward momentum shows no signs of slowing down, and this is because the drives have not slowed down. Gold is driven by a mix of economic uncertainty, geopolitical tensions, and strong demand from central banks.

Key Drivers Behind Gold’s Surge

1. Economic Uncertainty: Inflation concerns and a weakening U.S. dollar have led investors to seek refuge in gold, a traditional store of value. All you need to do is compare the price of groceries from two years ago to now, and you can see the significant effects of inflation.
2. Geopolitical Tensions: Conflicts in regions like Gaza and Ukraine have heightened global instability, prompting more investors to turn to gold as a safe haven. With Israel now fighting Hezbollah in Lebanon and Ukraine counter invading Russia, neither conflict seems to be slowing down.
3. Central Bank Demand: Central banks worldwide are bolstering their gold reserves, reflecting ongoing worries about inflation and economic stability.

Staying the Course with Dollar Cost Averaging

As gold continues its ascent, maintaining a disciplined investment approach is crucial. Dollar cost averaging (DCA) remains a smart strategy, allowing investors to mitigate market volatility and build wealth over time. If you have been dollar cost averaging over the last few years, you have seen significant growth in the value of your precious metals. By regularly investing a fixed amount, you can take advantage of gold’s upward trend while managing risk effectively.

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