Gold 2025 YTD
Higher for Longer
I want to take a page out of Jerome Powell’s playbook here.
Of course, when Chairman Powell used the phrase “higher for longer,” he was referring to his plan to hold interest rates higher for longer in response to “sticky” inflation.
In my case, I am referring to gold and silver prices going “higher for longer.”
Why? Simple…
The trade wars seem to be spiraling further out of control as opposed to settling down into a civilized review of trade agreements. And although we have not really seen the impact of tariffs on prices yet, we fully expect that is coming.
Another factor stoking the fires of gold and silver is the regression we have seen in the conflicts between Russia and Ukraine and between Israel and Hamas. Just a month ago, things looked promising for potential ceasefires in both theaters. Unfortunately, the prospects for peace seem to be fleeting.
Debt and the U.S. dollar round out my factors pointing to higher gold and silver prices. The U.S. dollar is looking particularly weak with over $36 trillion of debt hanging around its neck. The U.S. Dollar Index touched below $100 this week. It was not all that long ago that the U.S. Dollar Index was trading around $116.
“Oh, how the mighty have fallen!”
Needless to say, gold struggles against U.S. dollar strength, but it shines against U.S. dollar weakness.
Wealth Insurance
The only real knock on gold came in the first week of April. But it was not really a knock at all.
As the tariffs hit, U.S. equities markets plunged. And initially, so did gold and silver.
This led a number of people to complain that gold and silver did not do their jobs. They did not store purchasing power when they were needed… as stocks collapsed.
I disagree. Gold and silver worked their roles to perfection.
As stocks fell, investors who borrowed money to buy stocks saw the value of their assets (the stocks) fall below the loan value. As a result, they needed to make up the difference or risk losing it all. Simply put, they faced margin calls.
When that happened, investors turned to the most liquid assets they had… gold and silver. They sold these liquid assets to raise the cash to meet the margin calls.
Within three business days, gold and silver recovered as bargain hunters swooped in to add gold and silver to their portfolios at prices lower than they should have been.
We see this whenever there is a precipitous fall in equities markets. This time was no different. In fact, it is a fairly predictable short-term dip you can use to buy well in the future.
Gold and silver were the perfect wealth insurance for those facing margin calls. They were a store of purchasing power, with high liquidity, for a potential financial crisis they hoped to never have.
Gold and silver did not fail as stocks fell. They excelled.
Much Further Yet to Go
It should come as no surprise that my message still has not changed. I have been screaming to anyone who would listen for the past few years that gold at all-time highs is dirt cheap, and that silver below all-time highs is even cheaper.
That is still the case today.
Gold and silver investors are just now awakening from their slumber… slowly.
They have not yet entered this market in a meaningful way.
They will.
Buy before they do so.
Buying gold and silver now is the best way I know to Keep What’s Yours!
Now that taxes are behind you and you know where you stand financially, call us today at (800) 831-0007 or email us. Or visit www.assetstrategies.com to buy bullion bars and coins directly. There are plenty of options for you to get started regardless of your current financial status. Let us help you figure out what is best for you.
Good investing…