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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Gold’s price rise reflects concerns that world bankers, international monetary authorities (and you and I) should know.  Everyone in the know understands this is unsustainable.  The populous is told everything is fine and just continue to put your trust in the central banks. 

Debt is very, very easy to create with fiat currency.  However, the more debt you make, the less valuable is the previous debt you created.  You can not randomly create gold.  It only inflates at about 1.8% per year.  World governments know this, hence their increased gold holdings.

Not only is debt growing but, of course, the interest due on that debt continues to grow. Tell me, is this sustainable?

Gold price will continue to rise and do very well for the balance of 2024 and into 2025.  We could see $3,000 this year and probably $3,500 to $4,000 next year.  Silver should ride its coattails and maybe outperform.

Finally, I know that the gold price seems high. I have been at this for 30 years. It has always seemed high, and it’s going higher. Dollar-cost averaging in modest amounts on a consistent basis is, and always has been, the best approach.

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Great returns, right?  Well, all the liquidity (money) created by central banks has to go somewhere, right?  So, are all these 1 year asset classes performing well in real terms, or does all this money have to find a home?  People know that if they keep it in the bank at negative real yields, it is depreciating.  Thus, government basically incentives people to buy some asset, any asset with the hope their purchase will outplace inflation, which at its core is M2 (broad money supply) growth.

Money supply growth drives GDP growth – while everyone feels like they are barely treading water or even falling backwards.

What to do?

• Buy precious metals (tangible and private)
• Buy Bitcoin
• Buy technology (the only stock sector I would invest in)
• Buy real estate (do you want the hassle)
• AVOID fixed income and any debt instrument (Bonds,  Treasuries and CD’s are debt instruments)

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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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Gold is in the process of establishing a new base at $2,500.  Much as when gold fought to establish a base earlier this year at $2,000, and traded above and below for a period, we now see the same thing at $2,500.  If I am an investor, what should I do?  Let us take a look at the charts first:

1 Year Chart

Above is the 1-year chart of gold (gold-color line and price of gold on the right side) and the S&P (black line and price on the left side).  I drew the blue line from start of the period to today.  As you can see, gold has both underperformed and overperformed the S&P in the last 12 months.  Gold is currently out-performing the S&P on a 1-year basis.  The trend is definitively up.

5 Year Chart

Above is the 5-year chart of gold, the S&P (black line) and percentage increases for both on the left-hand side of the chart.  The red line is the simple moving average of the gold price. 

Gold was pretty flat from 2021 to 2023, but has since accelerated upward, now outperforming the S&P on the 5-year time frame.  Are you surprised?

Personally, I was calling for $2,500 by the end of this year, not as early as this past August.  Where will gold end in 2024?  I do not know, but what I do know is that gold is going higher.  Ask yourself, “what would cause gold to decline?

• Declining sovereign debt?
• Declining deficits?
• Decreased geopolitical tensions?
• No future monetary stimulus?
• BRICS’s abandoned
• Petrodollar reinstated?

Bottom line, everything that drives gold higher will remain in place.  I predict we will easily see gold at $3,000 in twelve months and very possibly $3,500 by end of 2025.

Finally, I hear “gold is too expensive” all the time.  Please consider this:  The gold price never really changes.  Rather, the denominator (the U.S. dollar) continues to decline in value.  It just takes more of increasingly less valuable fiat currency to purchase an ounce of gold, which doesn’t change.

“Gold is a treasure, and he who possesses it does all he wishes to in this world.” – Christopher Columbus

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If you’ve been tracking gold prices over the past year, you’ve likely noticed a remarkable trend. Gold keeps climbing, breaking new barriers, and what was once considered a good buying price is now a distant memory. Let’s dive into how gold has surged over the last 12 months and why waiting for a significant drop might be futile. Instead, the best strategy would have been—and still is—to dollar cost average.

A Year of Unprecedented Growth

In the past 12 months, gold has seen an impressive rise. Gold has climbed from around $1,800 per ounce to over $2,500 per ounce. This is a significant increase that keeps pushing the bar higher and higher. Many people I spoke to at the beginning of the surge said, “I will buy once it gets back to $1900.” Which then became $2,000, $2,100, $2,200, etc. The bar kept getting higher and they still hadn’t bought gold.

The Changing Landscape of “Good” Buying Prices

As gold continues to climb and set new records, the benchmark for what is considered a good buying price keeps evolving. Just a few months ago, $2,000 per ounce was seen as a high point. Today, that price seems like a bargain compared to current levels. This constant upward movement has redefined expectations. We tend to have short memories as we will see the price drop 30 dollars one day and think “wow gold has dropped”. We forget and ignore the growth of almost $700 over the last year.

Breaking Barriers: A New Normal AS Gold Climb Continues

Gold’s ability to break through previous resistance levels has created a new normal in the market. Each time gold surpasses a new milestone, it sets the stage for further gains. Investors who were waiting for a dip at $2,000 are now looking at $2,500 and wondering if they should wait for another drop or jump in before prices climb even higher.

The Power of Dollar Cost Averaging

Instead of trying to time the market, a more effective strategy has been—and continues to be—dollar cost averaging. By investing a fixed amount of money at regular intervals, you can mitigate the risk of market volatility and avoid the pitfalls of trying to predict price movements. Instead of being paralyzed by watching the price and anticipating the next fall and subsequent rise, just plan to spend a certain amount at certain intervals. Over time, you will reap the benefits of investing in precious metals and accumulate the precious metals you want. As the gold price climbs over time, you will be able to realize that as you accumulate metals.

Conclusion

The past 12 months have shown that waiting for a significant drop in gold prices might be a losing strategy. Gold’s upward trajectory continues and shows no signs of slowing down. Instead of waiting for a dip that may never come, it might be wise to consider the long-term benefits of dollar cost averaging. You can take advantage of the climb without being paralyzed by watching the price movement.

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Disclaimer, this article is based on my gut feeling for my gold price prediction – for whatever value you place on that.  I have been in the precious metals business 29 years.  After a while you start to develop a feeling about what should (note:  not will) happen.  First, what has happened so far this year?

Gold (yellow line below) started the year at slightly over $2,000 per oz and has performed better than the S&P 500 (blue line).  Gold will easily reach $2,500 this year. 

If gold continues to perform as it has for the past two years, up more than 45%, it only needs to rise 20% between now and the end of 2025 to reach $3,000 per oz (see below). 

My prediction is gold prices will continue rising due to several key factors:

1. Economic Uncertainty: Inflation and potential recession
2. Geopolitical Tensions: Conflicts, wars, and geopolitical instability are breaking out everywhere.
3. Central Bank Policies: Central banks worldwide continue to buy massive amounts of gold to diversify their reserves.
4. Interest Rates: Expectations of lower interest rates will make gold more attractive compared to interest-bearing assets.
5. Fiscal Policy: No matter who gets in the White House, that president will deficit spend – guaranteed
6. Monetary Policy: The Federal Reserve will continue to print—they have to pay the interest on the debt and meet Treasury demands. And if we tilt into a recession or asset prices fall (stocks, housing, employment), it will print with a vengeance.

I know gold seems expensive—I get it. It has already risen almost $500 this year. But I assure you, it is only going up. You can gamble and try to catch a dip, but averaging in is almost invariably the best strategy.

Remember, gold is not really going up.  If the dollar’s purchasing power were preserved, it would not go up.  It just takes increasingly more decaying paper to buy it.

Weimer Republic (Germany) 1923 fueling stove with currency:

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Are you surprised?  Would you make any changes in your investment strategy based on this data?

“Gold is money. Everything else is credit”: – J.P. Morgan, an influential banker who believed in gold’s inherent value

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Gold prices in 2024 have soared from $2,050 to over $2,350 per ounce. That is over $300 dollars, or an almost 15% jump, since the beginning of the year. This significant movement in the price of gold says a lot about the economy and inflation. The surge in gold prices can be attributed to various factors, but inflation concerns are taking center stage.

The Federal Reserve’s efforts to keep inflation rates in check have faced considerable challenges. This has contributed to the allure of gold as a hedge against inflation. Despite the Fed’s efforts and reluctance to adjust interest rates, inflation has remained stubbornly high. This is prompting investors to seek refuge in assets like gold. Gold is a great way to avoid the negative effects of inflation as it maintains its value while the Fiat dollar continues to lose buying power.

There is no reason not to think gold prices’ upward trajectory will continue throughout the remainder of 2024. With ongoing concerns about inflationary pressures persisting (not to mention a turbulent geopolitical sphere), gold is expected to maintain its allure as a safe-haven asset. Investors are closely watching developments in global financial markets, geopolitical tensions, and central bank policies for clues on the future of gold prices. As uncertainty looms over the economic landscape, gold stands out as a beacon of stability.

With all of this in mind, if you haven’t bought any gold yet this year and think you may have missed the opportunity, you haven’t. There is still reason to be concerned over the economic landscape, and gold remains a hedge against inflation. Gold is maintaining its growth and it is never too late to protect your wealth from inflation.

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