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Perspective
By Rich Checkan
Shortly after the first shots were fired in anger against Iran a little over a month ago, gold and silver prices came under pressure.
Gold made lows over $1,000 per ounce below the recent highs at $5,500. Silver traded nearly $50 per ounce lower than its previous highs at $115.
As March closed, U.S. equities markets hit highs for the year. Meanwhile, gold had its worst monthly loss since 2008. Silver had its worst monthly loss since 2011.
I want to dig into that a bit later, but first I want to share how this pullback is being perceived.
Investment U
Two weeks ago, knee-deep into the retracement by gold and silver, I attended the 28th annual Investment U conference, sponsored by the Oxford Club. Our Founder, Michael Checkan, and/or I have been to every conference.
The Oxford Club is a fantastic organization, and Oxford Club Members are simply amazing. We developed wonderful relations there over the years.
I fully expected to be greeted by myriad questions from panicked Members wondering what was going wrong with gold and silver.
I was wrong.
Instead, this highly educated group of investors knew exactly what they were witnessing. They were observing a change downward in price for gold and silver that was not consistent with their fundamentals.
In fact, the change in fundamentals for gold and silver dictated a higher price.
When savvy investors see the price of an asset fall when it should be rising, they appreciate the opportunity to buy well. Those who are able act on that opportunity. Those who cannot act ride it out.
The group assembled in Las Vegas a couple of weeks ago know full well that gold is dirt cheap, and silver is even cheaper.
Deceptive Price Discovery
Data can be misleading.
I mentioned earlier that U.S. equities markets finished March on a high note while gold and silver saw their biggest losses in 15 to 20 years. I want to dig into this a bit further.
All three U.S. stock indices – DJIA, S&P500, Nasdaq – have been making new all-time dollar highs for what seems like forever. Gold and silver have only recently started making new all-time dollar highs.
Gold did so a few years ago thanks to central bank gold buying. Silver started to do so at the tail end of last year thanks to the involvement of investors in the market.
But here is the thing, when you are using mismanaged dollars with an ever-changing value to measure value or worth, the picture becomes incredibly distorted.
Through overspending and monetary expansion, the purchasing power of the U.S. dollar has been eroding for decades. A dollar simply does not buy what it used to buy.
So, why do we put any value in U.S. dollars as our “measuring stick” of wealth or value. More importantly, why on earth would we trust the results of the dollar’s price discovery?
If I measured my 6-foot-long desk with a 12-inch ruler, it would take six ruler lengths. If I cut an inch off the end of the ruler, it would now take six and a half rulers (or “feet”) to measure my desk’s length.
Did my desk grow?
Of course not! My measuring device is not constant and should not be trusted to yield the proper measurement of length.
Well, when the supply of dollars in the global economy is expanded hyperbolically like we saw in response to the Great Financial Crisis and again in response to the Covid-19 pandemic, every dollar was watered down in value. Each dollar purchased less than it did prior.
As a measure of wealth, value, or purchasing power, our measuring stick – the dollar – was not a constant. It was… and is… a poor measuring device that leads to distorted results.
Gold, on the other hand, is a stable “measuring stick” for wealth, value, and purchasing power. So, it is no surprise how poorly the stock market is doing when measured in gold…
As you can see, while the Dow Jones Industrial Average (DJIA) is making new all-time highs on a regular basis in U.S. dollar terms, when measured in gold, the DJIA is only about two-thirds of the way up to the all-time high value at the peak of the dot.com bubble.
With the U.S. dollar as a measuring stick, you get the false sense that the DJIA is at the peak of its all-time value.
With gold as your measuring stick, you get the accurate measure of the DJIA… part of the way to its all-time value.
Mismanaged and fluctuating dollars distort and deceive true price discovery… true value and worth.
Gold accurately portrays value and worth.
We Have a Long Way to Go
I always keep my eye on the long-term prize with gold.
I do not trade it. I use it as a store of purchasing power, with high liquidity, for a potential financial crisis I hope to never have. I use it as wealth insurance.
As long as we measure that gold in mismanaged and ever more diluted dollars, gold’s price will rise over time.
That cycle will only reverse when Congress stops overspending and when the Federal Reserve no longer needs to expand the money supply to cover the deficit.
Until then, buy well on these inexplicable dips in the gold price. And if you are unable to do so, ride it out.
Gold will always help you Keep What’s Yours! … if you let it.
We can help.
Send us an email. Call us toll free at (800) 831-0007.
And by all means, join us Wednesday, April 22nd at 7PM EST for our next On the Move webinar. Adrian Day and I look forward to speaking with Avi Gilburt, Founder of Elliott Wave Trader, LLC.
—Rich Checkan
Editor's Note: Avi Gilburt of ElliottWaveTrader is our April 2026 On the Move webinar featured guest. Avi is a highly sought after speaker by financial forums and conferences in the U.S. and internationally, is interviewed by radio stations across the country, and is widely syndicated on sites including The MoneyShow, MarketWatch, TheStreet, Seeking Alpha, Nasdaq.com, Forbes and more. To join Rich Checkan, Adrian Day, and Avi Gilburt live on April 22nd at 7 pm, register here.
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[Video] Market Update with Avi Gilburt
Rich Checkan and Avi Gilburt discuss mining stocks, markets and more.
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Editor's Note: Adrian Day is president of his eponymous money management firm, offering discretionary accounts in both global markets and resources. He also manages the Europac Gold Fund. To see if a managed account might be right for you, call ASI and we'll make the connection. Call 1-800-831-0007 for more information.
Hard Stuff
Gold and War: Not So Straightforward
By Adrian Day
The questions continue: why, if gold is a safe-haven asset, did it drop after the war with Iran started? Does this mean gold is broken or is the bull market at an end?
The popular expectation is that gold would move up sharply whenever there is geopolitical chaos or a military eruption somewhere in the world. But in practice it does not always work out that way. If one plotted the price of gold against (negative) geopolitical events over the past 50 years, as I have done, one would be hard-pressed to see any particular correlation.
In fact, more often than not, gold declines in the weeks following a geopolitical event. There are three explanations for this.
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Often, gold moves up in advance of the “event” and then falls, a classic case of buying on the rumor and selling on the news.
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The dollar, another safe-haven asset, often rises sharply on any geopolitical event, and since gold is measured in dollars, other things being equal, the dollar-price of gold declines.
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Often a serious geopolitical event sees a liquidity crisis, and gold, having a price 24-hours a day, around the globe, often sees the brunt of selling. Indeed, people often buy gold for precisely such an emergency.
A recent classic example involves the Russian invasion of Ukraine in February 2022. For weeks, as rumors swirled and tanks massed on the border, the gold price moved up, $260 in one month. The day the tanks crossed the border was just a week from the high, and the gold price slid for the next seven months. For those seven months, the dollar rose, while there was some gold selling among the combatant nations to raise funds for the war.
Whether Gold is Already in a Bull Market is Important
Whether or not gold advances following a geopolitical event depends not only on the factors above, but also on the extent to which it rose ahead of the event, as well as the other factors surrounding the gold market. If gold is already in a bull market, then a geopolitical event can have a longer-lasting effect, whereas if it is in a bear market, a geopolitical event, however serious, may produce only a short-lived spike.
Lastly, and importantly, if the event is viewed as likely contained, the impact on the gold price will be short lived, while if there is a wide view that the conflict may expand, then the effect on the gold price may be longer.
In 1979, Gold Was Already Strong
The 1979 hostage taking of the U.S. Embassy in Tehran was quickly followed by the Russian invasion of Afghanistan and then the failed U.S. rescue mission. Russian power was seen to be expanding while U.S. power was undercut. The U.S. dollar actually declined in the face of this crisis (the loss of U.S. power and prestige). Gold, of course, was already in a sharp up move, more than doubling in the year leading up to the hostage taking.
So, it is not surprising, that gold moved up sharply for a couple of months after this and remained above the price on the day the Embassy was overrun, for another two years (until Ronald Reagan was elected promising a new dawn in America, and the hostages returned home). Note also that the monetary policy that had propelled gold all the way from 1971 was reversed by Fed Chairman Paul Volker.
Where Do We Stand Today?
So what of the current Iran crisis and gold? In classic buy-the-rumor, sell-the-news style, gold appreciated almost $500 in the eight days before the weekend bombing of Iran on the last day of February as tension built in anticipation. Gold gave back almost $200 of that in the first 36 hours of trading after the first bombs dropped, and fell again on optimism that the war might be close to an end.
Higher oil prices hurt gold prices in two ways. Given that a higher oil price has a significant impact on oil-importing countries such as India and China that have been major public and private buyers of gold, a continuation of the Iran war could start to put pressure on buying from these and other oil-importing emerging nations.
Higher oil prices, which will boost the CPI, have also led analysts to expect few interest rate cuts ahead, as the Federal Reserve and other central banks emphasize the effect on inflation more than on the economy. This would be another negative for the gold price.
In addition, the war has not only boosted the dollar price, but also seen interest rates move up, providing a double-whammy on competition for gold. Lastly, there were moves to liquidate physical gold in the region at wide discounts. We now know of course that Turkey sold almost 60 tonnes to defend its currency, a not insignificant amount; for context, all central banks bought about 860 throughout all of 2025.
If the war ends, then much of this gets unwound. A lower oil price would remove concerns about reduced buying from China and India, and central bank focus on higher consumer prices might subside.
The near-term direction in the dollar might depend partly on the outcome. If the conflict ends with the U.S. aims achieved and its military might apparent, that might delay the long-term move away from the dollar. In particular, the Gulf states and Saudi Arabia would probably return to a closer relationship with the U.S. On the other hand, a long, drawn-out conflict, particularly with casualties on the U.S. side, and a perception that U.S. military power is not overwhelming––think Vietnam and Afghanistan––could hasten the move away from U.S. protection, U.S. global dominance, and the dollar. In this regard, the downing of a F-15 plan with one crewman missing, could turn into another disastrous hostage situation.
Even in the first scenario, however, I posit that it would only delay and perhaps soften the move away from the dollar. Remember, that move is because of a concentration in a single asset, an asset of a fiscally profligate government, and one willing to weaponize its dominance. With the U.S. dollar still almost 50% of all central bank foreign reserves; the budget deficits continuing to widen with no serious attempt to rein in spending; and President Trump’s threats to allies who did not support the war effort, none of the rational for reducing dollar exposure has changed.
Editor's Note: Jim Woods is the editor of Investing Edge, Bullseye Stock Trader, Fast Money Alert and his latest publication, Crypto & Commodities Trader. A self-described radical for capitalism, he celebrates the virtue of making money from his Southern California horse ranch. You can read more of his work here.
The Inside Story
To the Rhythm of the War Drums
By Jim Woods
Since Friday, February 27, when President Trump announcement that the United States had begun major combat operations against Iran, markets have beat to the rhythm of the war drums.
Now, I think it’s important here to say a few things about this situation in moral terms before we delve into the financial implications, because understanding the philosophical justification for this war will give us the intellectual ballast and framework by which to assess this situation objectively.
Let’s begin here by stating that for the record that I am no fan of war. That’s a relatively safe stance, I admit, as I don’t think most people in the West are fans of war. And as someone who decades ago raised his right hand and swore an oath to protect and defend the Constitution against all enemies, foreign and domestic, as a member of the United States Army, I don’t take war or military action lightly.
Yet sometimes, war is both justifiable and necessary.
In the case of Iran, not only do I think war was eventually going to be necessary, but I also think it has been justifiable, and even many decades overdue. I say this, because the Islamic theocracy in charge of that nation kills its own citizens as a tool of repression, sponsors terrorism through its proxies all around the globe, promotes and funds radical Islamic teachings, and even suborned the attempted murder of my friend, author Salman Rushdie, for the “crime” of writing a novel.
These are reasons alone to wage armed conflict on Iran, but the real reason is, as President Trump has correctly and repeatedly said, is that Iran must not be allowed to acquire and/or produce a nuclear weapon. For me, the bottom line is rather easy to understand: Islamic theocrats in control of apocalyptic weaponry are antithetical to the survival of the human species, full stop.
Stymieing this situation now is in the interest of the entire free world, and that’s why the actions taken since late February are, in my view, justifiable and long overdue.
Now, having said all of the above, there are certainly legitimate questions to be asked about the tactics, strategy, blowback, messaging, and politics around this issue. And most importantly for us as investors, we need to understand the implications of this situation on financial markets and our money.
Since the war broke out in late February, the S&P 500 has declined approximately 5% (through April 2). The decline hasn’t been pernicious, although the benchmark domestic equity index is now trading below its long-term support at the 200-day moving average. That’s the first time we’ve dipped below the 200-day average since last March, right before markets were hit unexpectedly by the “Liberation Day” tariffs.
Back then, markets traded below their 200-day moving average for most of March, through all of April, and about midway through May, before moving markedly higher toward a series of all-time highs for the remainder of the year, and all the way through to January 28, when the S&P 500 closed just shy of the 7,000 mark.
This was a remarkable run higher that showed that equities are resilient, and that the bulls are able to see through the fog of the immediate negative headlines and identify the distant clarity of what really matters, which is economic growth, earnings growth, innovation, problem solving, and all that accompanies the bounties of capitalism.
The chart here shows the S&P 500 over the past 15 months, plotted with the long-term, 200-day moving average (blue line). The roar back from the April 2025 lows represented a massive wealth creation event, one that we certainly took advantage of via the holdings in my Forecasts & Strategies newsletter advisory service. Encouragingly, I think that this Iran war-inspired downturn below the 200-day average could also be setting us up for another big wealth creation event.
Here’s how I see things improving in the weeks and months to come. And just to be mindful of the flipside of this thesis, I’ll also present you with the ways I think things could get worse.
Right now, the markets are being driven by one massive, major influence: The war in Iran. But when I say the war in Iran, what I mean more specifically is, “When normal transit resumes through the Strait of Hormuz.”
Please don’t read what I am about to say next as callous, because I assure you it is not. You see, from a strict market perspective, it’s not the war itself that matters. Rather, it’s the Strait of Hormuz and the flow of oil.
It’s important for us, purely as investors, to remember that the market does not really “care” what happens with the war, as long as the Strait of Hormuz reopens and the transit of ships through this critical waterway returns to something close to pre-war levels. I know I care what happens in the war, and I suspect you do, too. However, we are not “the market,” and the market is eyeing the impact of persistently higher oil prices—because remember, the market beats to the rhythm of the war drums.
The reason being is that the higher oil prices rise, and the longer they stay elevated, the greater chance of a global economic slowdown, and possibly even a recession. Then we will have the potential for perniciously high inflation, as oil funnels down to the cost of just about all goods, worldwide. Higher inflation along with a global economic slowdown means the potential for one of the most-destructive economic conditions we can face, and that is the dreaded prospect of “stagflation.”
If there can be a ceasefire to this hot war soon, and if the Strait of Hormuz can resume something approximating pre-war transit, then oil prices will come down sharply from their recent highs, the global economy can begin the process of getting back to normal, and inflation will refrain from spiraling out of control.
The flipside here is that if the Strait of Hormuz remains effectively closed for an extended period (and by this, I mean another month or more), then oil prices will continue to remain near the $100 mark (or even climb materially higher), and that will result in all of the negative consequences outlined here, including stagflation.
The bottom line is that until the war drums quiet to a whisper, and until the Strait of Hormuz is safe to transit, the market will continue to beat to the rhythm of this conflict. And for the market’s sake, and for humanity’s sake, let’s hope this situation can be resolved quickly, and more importantly, in a manner that renders the world safer.
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