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Perspective
By Rich Checkan
Precious metals continue to soar.
After a brief period of consolidation at the end of October and the beginning of November, all four precious metals have resumed their movement upward.
For the year, palladium is up 56%. Gold is up 61%. Platinum is up 81%. And the big winner thus far is silver… up 95% for the year.
As a result, we have finally started to see the Gold/Silver Ratio (GSR) – the number of ounces of silver it takes to buy one ounce of gold – move down from 80 or higher.
Typically, when the GSR is at 80 or more, it suggests both gold and silver are attractive buys. As both metals mover higher in price, silver will initially lag gold, but it will eventually appreciate faster than gold… causing the GSR to drop as both metals rise.
This is due to the fact that silver is a smaller capitalized market than gold. So, the same capital flowing into the silver market as is flowing into the gold market will have a bigger impact.
It is similar to the splashes caused by tossing a rock into a lake and a puddle. The larger proportional impact is on the puddle. Gold is your lake. Silver is your puddle.
The GSR was stuck between 80 and 90 for a few years as central banks were doing all the gold buying. Now that Western investors are starting to buy gold, they are also buying silver. This is very typical behavior, and it has caused the GSR to drop from 82 to 74 over the extended Thanksgiving Day holiday.
Of course, we have a long way to go before we begin to worry about an end to this precious metal bull market. The GSR should get down to somewhere between 35 and 50 before we shift to a bear market.
Bullish Indicators
Last month, I shared the nine indicators I look at to determine whether the bull market is coming to an end. I revisited them during my weekly update video, Getting Rich, last week… the day before Thanksgiving.
I see those indicators as clouds gathering for a rainstorm. One or two puffs of cloud in the sky do not suggest we will see rain. However, once three or four gather, you can expect to need your umbrella before long.
Right now, none of the indicators suggest this bull market is coming to an end. On the contrary, all of them point to a sustained bull market with much higher prices.
However, some indicators are stronger than others. Here are the indicators I see as the most bullish right now…
Interest rates – The Federal Open Market Committee (FOMC) is scheduled to meet for their final interest rate decision meeting of 2025 on December 9th and 10th. A few weeks ago, hawkish comments from Chairman Jerome Powell had completely convinced market participants that there would be no interest rate cut in December.
But a lot can change in a few weeks.
With a few days until the FOMC meets, expectations are now near certain there will be a third 25-basis point interest rate cut in as many FOMC meetings. Adrian Day covers this topic in-depth in his article in this issue.
U.S. dollar strength – or lack thereof. A few weeks ago, the U.S. dollar was making a case that it could reverse its weakening trend. It inched back up above 100 on the legacy index measuring the dollar’s strength against its major currency trading partners.
This past week, the U.S. dollar has rediscovered its weaker self.
This is not surprising given the dysfunction we all recently witnessed in Washington, DC. Our Congress is incredibly partisan, divisive, and fiscally irresponsible. This is what has caused our debt to balloon to over $38 trillion. It is why there is no end in sight to the damage they will do to our currency and our economy.
This U.S. dollar weakening trend is entrenched.
Geopolitical instability – When the U.S.-negotiated cease fire in Gaza between Israel and Hamas went into effect, there was great hope that this would be the first of many peace initiatives to take hold in our conflicted world.
However, the flames of war continue to burn elsewhere… Russia/Ukraine, Syria, Yemen, Sudan, Haiti, Afghanistan, and Venezuela.
As long as these conflicts continue, gold will be sought after as a safe haven asset.
Take Profits to Buy Well
As we approach the end of 2025, I encourage you to take a good, long, hard look at your portfolio. If precious metals are under-represented, fix it. Now.
It does not take a rocket scientist to see the U.S. equities markets are completely over-valued. Stocks are selling at price to earnings ratios that are completely unsustainable.
If you have profits – and you most likely do – take some off the table. Sell a portion of your overheated stocks and preserve those gains in precious metals.
There is no better way to preserve your purchasing power – to Keep What’s Yours! – than to bank your gains in the best hedge against fiscal irresponsibility known to mankind… Gold.
Central banks have been doing this for the past four years. They know the problems resulting from monetary expansion. They know the solution as well. Only gold can counteract the impact of poorly managed fiat currencies.
Follow their lead. Protect your portfolio today.
We stand ready to assist. Email us or call us toll-free at (800) 831-0007.
And as we approach this Holiday Season, all of us here at ASI are thankful for your trust and your friendship over the years. Enjoy your time with your family and friends. We wish you all a Happy, Healthy, and Prosperous New Year!
—Rich Checkan
Editor's Note: Bill Bonner is the Founder of Bonner Private Research and owner of the Agora Companies. This article was originally published by Bonner Private Research on December 1, 2025. You can subscribe to Bonner Private Research here (save 62% on an annual subscription with this link).
Feature
Strategic Investment
By Bill Bonner and Dan Denning
Long ago people discovered that private enterprise — where people have their own ‘skin in the game’ — is much more productive than a government-run economic system. Rather than take a big part of a bad system...the feds take a small part of a good one...and end up with more.
Art Laffer pushed the limit of this insight a little too far. In 1980, he argued that lowering tax rates would result in more tax receipts for the feds. At the extremes, it was certainly true. If the feds took 100% of citizens’ output, they could get more by reducing their tax level to, say, 90%...leaving taxpayers with at least some incentive to produce.
But when the feds take 20% of output, cutting taxes in half is not likely to pay off. Even if the lower rates stimulate the economy as advertised, the feds collect only a portion of the extra GDP. At a tax rate of just 10%, for example, output would have to go up 100%to yield the missing revenue.
Both Reagan and Trump pumped tax cuts as a way to stimulate GDP growth, claiming that growth would make up for the lost tax revenue. In neither case did it pan out; instead, deficits expanded.
At least the idea behind the tax cut experiment was headed in the right direction. And if they had followed through with spending cuts, we would have been better off.
And while Reagan was cutting taxes, the Soviet Union continued its own experiment in the wrong direction. It had a centrally-planned and government-run economy. The results were so conclusive you’d think the matter would be settled. The Soviets simply gave up in 1991.
And so we come to what seems like a water-tight proposition: the more the feds get involved in the process of creating wealth, the less wealth is created.
But despite the clarity and finality of that lesson, like a Hollywood film mogul surrounded by aspiring starlets, the feds just can’t keep their hands to themselves. The New York Times:
"$10 Billion and Counting: Trump Administration Snaps Up Stakes in Private Firms
The Trump administration is trading billions of dollars of taxpayer money for ownership stakes in companies. The unusual practice shows no sign of slowing. "
The administration took a “golden share” of US Steel.
It bargained for an option on Westinghouse Nuclear.
A share of Vulcan Elements cost it $620 million
With $400 million, it bought a 7.5% stake in MP Materials.
Another $36.5 million landed 10% of Trilogy metals Minerals
Five percent of Lithium America cost $182 million worth of ‘deferred debt payments.’
On and on. Another grand experiment. And what will we learn this time?
Daniel Kishi of American Compass:
"Markets have already been significantly distorted by Chinese subsidies and Beijing’s efforts to monopolize global industries...We need an industrial policy of our own to combat the predation of our trading partners."
And maybe he’s right...it will be a first. But maybe letting the feds make the strategic investment decisions will work this time.
Maybe we’ll discover that if we label this intervention “national security driven” it will turn out better. Certainly, the Trump Team believes it is fixing something. Kush Desai, White House mouthpiece:
“If business-as-usual policies worked, America would not be reliant on foreign countries for critical minerals, semiconductors and other products that are key for our national and economic security... The administration’s targeted equity stakes ensure that taxpayers get a good bargain and that the ball meaningfully moves forward to encourage further investment by the private sector.”
Sounds like blah, blah to us. But maybe he’s right. Maybe investors, now buying ‘at the market,’ are chumps. And for perhaps the first time in history, shrewd bureaucrats will get the real bargains.
And maybe insiders won’t see an opportunity to front-run the feds...maybe they won’t rip-off the taxpayers the way they usually do.
Maybe the companies — under the influence of enlightened intervention of federal bureaucrats — will surprise us. Unlike Amtrak or the Post Office...and let’s not forget Fannie and Freddie, who caused the biggest housing crisis in US history...heck, maybe these new ventures will succeed.
Maybe today’s US public officials are smarter, and more civic minded, than those in the Soviet Union, North Korea, Cuba et al.
Maybe people with no skin in the game...no money of their own at risk...no expertise or proven competence...will turn out to be great corporate stewards.
Maybe CEOs who don’t have to answer to real owners will be able to take a longer-term view.
Maybe the visionaries in the Trump Administration will know which of the thousands of new technologies...and new companies...will succeed. Maybe they’ll know which of today’s aspiring tech geniuses will turn out to be the Jeff Bezos or Steve Jobs of the future.
Maybe this will prove to be the exception. The bureaucrats in the boardroom will prove to have the wisdom of Buffett. And this experiment with central planning will be the first one that isn’t a complete disaster.
Or, maybe not.
Research Note, by Dan Denning
Well, well, well! Silver futures traded above $58/ounce this morning. Silver is up 100% this year—the first time it’s done that in a twelve month period since 1979. It’s also up more than six times the S&P 500. But check out the chart above from Ron Greiss at www.thechartstore.com
Even at fifty eight bucks, silver is still twelve dollars below the inflation-adjusted high in 2011. The all-time, inflation-adjusted high for silver was set in January, 1980 at over $200/ounce. Earlier this month, the Department of the Interior finalized its list of ‘critical minerals’ and included silver. You can read the annual report on silver published by the US Geological Service to take a deeper dive.
Meanwhile, over in the land of the rising sun, yields on 10-year Japanese bonds hit 1.87% overnight, the highest level since 2008. Last week, we highlighted Japan as the source of ‘carry trade’ money propping up US stock valuations. Higher Japanese yields tighten off the source of cheap money that can be borrowed abroad and invested in US growth stocks. Stay tuned for more this week.
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
What Will the Fed Do…And What Should We Do?
By Adrian Day
The last Federal Reserve meeting and interest rate decision of the year could be pivotal for gold in the near term. Expectations for a rate cut are now overwhelming, as high as 86%. And although a rate cut is more-likely-than-not, such lopsided expectations set the market up for disappointment.
Will the Fed cut? In recent weeks, there have been conflicting signals, including comments from different Fed members for and against (but most recently influential members in speaking in favor); the publication of the last Fed meeting minutes, which showed significant opposition to another cut; the lack of meaningful government data (which would lean to a wait-and-see approach); and most recently reports, probably leaked, that the ultra-dovish Kevin Hassett is the front-runner to replace Powell as the next Fed chair.
As the market sentiment moved strongly towards a rate cut, there was no push back from Powell; this Fed under the current chair has not liked to surprise the market, so this increases the probability for another cut.
Gold Has Moved With Expectations for a Rate Cut
Following the October Fed meeting and rate cut, the gold market has broadly moved with changes in expectations for a December cut. From the end of October, the betting market Polymarket saw the odds of a December cut drop precipitously from 90% to a low of 31% in the middle of November. Not coincidently, gold’s price broadly reflected these expectations. Gold has recovered as expectations of a December rate cut have increased again.
Chicken or egg? It sort of doesn’t matter. Enough that they have broadly tracked each other.
There are other factors, of course. U.S. military intervention in Venezuela would boost the gold price. It would be easy to assert that in the absence of October and November economic data the Fed should hold steady. The commentary around any rate decision, of course, can also be important. And beyond all this, the price of gold no longer revolves around the U.S., let alone the Federal Reserve.
But the key point is that a rate cut in 10 days times, the last Fed meeting of the year, is already priced into the market. That means that, ceteris paribus, a rate cut will have modest positive effect on the stock and gold markets, but that a failure to cut could see markets, particularly gold, fall back. On balance, the larger risk is of a pullback on no rate cut, rather than a surge upwards on a cut.
If we see additional strength in coming days, particularly if there were U.S. military intervention in Venezuela, that might be an opportunity time to lighten up, selling whatever one is thinking of selling, and standing back from additional buying until after the Fed rate decision. Geopolitical events sometimes cause a spike in the gold price, but price action tends to be short lived. Needless to say, this is not a recommendation to sell all gold and gold stocks, hoping to buy back at a lower price. Far from it, it is just a word of caution in what could be a volatile few weeks.
Longer-term Outlook Very Positive
Further out, I could hardly be more bullish on gold and gold equities, as the dollar debasement trade continues, fiscal deficits in the U.S. and around the world get worse; and central banks are cutting rates before inflation is under control.
Sticking with the Federal Reserve, apart from the direction of interest rates, another policy shift is of equal importance, and that is the ending of Quantitative Tightening and the move towards Quantitative Easing. QT is officially over December 1st, but the reduction in the Fed’s balance sheet had already dwindled to insignificance; $5 billion a month in the context of a near $7 trillion balance sheet is near meaningless. Moreover, as we have discussed, proceeds from maturing mortgage securities are being rolled over into Treasuries. We are not at QE yet, but we are moving towards it.
Then, nearly all the main drivers of gold over the last three years remain intact. Gold’s move did not start this year, but it is fair to say that nothing the current Administration has done has assuaged the concerns of those abroad, be it central banks wanting to diversify assets from dollar concentration in the face of dollar weaponization, or those concerned about fiscal profligacy, and not only in the U.S.
Is Gold Overvalued?
The recent pullback in the gold price––and any possible drop if the Fed fails to cut interest rates later this month––is by no means a sign of the top. Not only are the fundamental factors driving gold higher still in place, but neither valuations, nor momentum indicators, nor sentiment suggest that gold is anywhere close to its top.
Valuations can be tricky for gold, which famously has no earnings, pays no dividend. One way to judge gold’s value is to compare it with other metrics: gold to money supply, gold to debt, gold to financial assets. The gold price adjusted for CPI shows it is above its 1980 peak by about 13%, but this bald comparison is flawed in looking only at the U.S., and assuming some validity to the CPI as a gauge of the depreciation of money. On other metrics, though off its lows, gold is far from highs.
Then we can look at how this move in gold has compared with other recent bull markets. Looking at a gold chart in log terms, it becomes immediately clear that the gold move from 2015 has not been as great as the bull move from 2001, nor the move in the 1970s. If gold had the same percentage move as it did during its last bull market (from 2001 to 2011), then gold would need to move to over $7,000. Again, this is not conclusive; there have been several good bull moves where gold topped after a smaller move. But it is another indicator putting the gold move in perspective with others.
Gold Stocks as Cheap as They Have Ever Been
Gold stocks are somewhat easier to value. And on many metrics, most stocks carry lower valuations today than their long-term averages. Since we should expect multiple expansion as the gold price moves up, this in itself is noteworthy.
It might seem perverse to state that stocks are better value today after they have more than doubled, but of course the denominators have been changing (as well as the price). As the price of gold moves up, so too does the value of the mines and of a company’s reserves. Indeed, they increase on a leveraged basis to the price of gold since a higher gold price not only increases the value of existing reserves to the same degree, but a higher price can bring more resources into the reserve category. Similarly, a higher gold price with reasonably static costs will increase cash flow and net cash flow on a leveraged basis.
So, to take one example, if we look at the price-to free cash flow (my favorite metric) for Agnico Eagle, although today’s multiple is higher than it was at year end, it lower than it was at every other year end over the past five years. In fact, has rarely been much cheaper over the past four decades.
Sentiment is Far From Manic
For me, with gold and gold stocks, assets for which demand can be emotional, sentiment is a very important indicator. There are hard indicators or sentiment and soft ones. Most important of the former are flows. For all of this year, flows into the GDX ETF and into mutual funds were negative, over $3 billion in aggregate. There were net inflows in October, ahead of the peak, but hardly a flood of money pouring in, and mild relative to the period before the top in 2011. Most public mutual funds indicate that outflows are continuing.
Various surveys of different groups––financial advisors, family offices, individual investors–-show that gold is significantly under-owned relative to the past. On average, U.S. investors have meaningfully less than 1% exposure to gold, compared with 2–2.5% historically. I know of no example in any market where there was a major top without public participation.
To be honest, I expected a larger pullback after the late-October peak, perhaps as much as a 50% retracement of the recent up-move that would have taken gold back to $3,650. That seems increasingly less likely; the lack of follow through is certainly a positive.
In sum, I would be cautious ahead of the Fed’s meeting, not because I do not think that they will cut rate, but because the risk-reward from where the market already is skewed to the downside if we do not see a cut. If that were to happen, however, that would be a signal to load up. The long-term outlook is overwhelmingly positive.
Editor's Note: Frank Holmes is the CEO of U.S. Global Investors —a company that produces quality analysis concerning gold, precious metals, natural resources, and emerging markets—in conjunction with his work as a fund manager. Frank is a long-time friend of ours, and we've chosen to share his article originally published November 17, 2025. For more articles like this from Frank and other leading experts, you can subscribe to the U.S. Global Investors newsletter here.
The Inside Story
The Gold Miners Crushing Bullion
By Frank Holmes
As someone who’s been involved in capital markets his entire adult life, I can safely say that gold investors haven’t seen a period like this in decades. The third quarter of 2025 was nothing short of historic, and in many ways, I believe we’re witnessing the beginning of a new era for the yellow metal.
According to the World Gold Council (WGC), global demand reached 1,313 metric tons in Q3, the highest quarterly figure ever recorded. In dollar terms, the world spent $146 billion on gold, another record, while the metal broke 13 new all-time highs during the quarter alone. Prices averaged $3,456 an ounce, up 40% from a year earlier.
And then came October. Gold blasted through $4,400 for the first time ever before cooling off. Even after a normal, expected pullback, the metal continues to trade above $4,100.
The Love Trade and Fear Trade Working in Tandem
The gold drivers in Q3 included all the usual suspects. Central banks continued to diversify away from the U.S. dollar, adding another 220 metric tons. This brought total buying in 2025 so far to 634 tons, far above what we saw in the decade before the pandemic, according to the WGC.
Investors also poured into gold ETFs at the fastest pace since 2020. Meanwhile, demand for bars and coins stayed above the 300-ton mark for the fourth straight quarter, something we haven’t seen in over 12 years.
If you need another reason, the Federal Reserve is expected to continue cutting rates, though a December rate cut is now being called into question. Long-term real yields are softening, historically a tailwind for gold. The Love Trade and Fear Trade are working in tandem.
Our Best Performing Gold Mining Stocks
Against this backdrop, gold mining stocks have surged. As part of our investment process, we always examine which names are outperforming gold itself, both quarter-over-quarter (QoQ) and year-over-year (YoY). I wanted to share several of the names, which we hold in at least one of our metals and mining funds. All data is as of September 30 and priced in local currency, mostly the Canadian dollar.
Barrick Gold (LEAPS Calls)
+207% in Q3
Let’s start with the standout in the QoQ category. Barrick Gold, which we have exposure to through long-dated January 2027 call options, was up an impressive 207% in Q3.
Barrick, which is considering a move from Toronto to the U.S., has been a textbook turnaround story. After years of lagging peers, the company has sharpened its focus, sold off non-core assets and made free cash flow growth and balance sheet strength top priorities.
When you combine a disciplined senior producer with gold above $4,000 an ounce, you get powerful margin expansion. And because we held Barrick through LEAP options rather than common shares, the torque to rising gold prices was magnified. The strategy paid off handsomely.
McFarlane Lake Mining
+341% in Q3
Another strong performer this year has been McFarlane Lake Mining, up 341% in Q3. McFarlane, also based in Toronto, focuses on the Juby Gold Project in Ontario’s Abitibi Greenstone Belt, a region that’s produced more than 200 million ounces of gold over the past century.
After acquiring Juby from Aris Mining in September, McFarlane updated its mineral estimate to roughly 1 million ounces; the surrounding land package, which includes the McMillan property, offers meaningful exploration potential.
McFarlane’s leadership team has decades of mine-building experience in Ontario, and they’ve earned credibility within the investment community by moving quickly on permitting and geological work. As gold prices have climbed, investors have rewarded junior explorers with scale and momentum, and McFarlane was one of the clearest beneficiaries.
Omai Gold Mines
+650% for 12-Month Period
Let’s turn to names that dominated on a YoY basis. The single biggest mover in our portfolio over the past 12 months was Omai Gold Mines, which climbed an extraordinary 650% through the end of September. The Toronto-based company operates the historic Omai Mine in Guyana, one of the most prolific gold regions in South America.
Investors love brownfield opportunities with proven geology and existing infrastructure, and Omai has delivered exactly that. In an August report, the company reported 2.1 million ounces Indicated and 4.4 million ounces Inferred across its Wenot open-pit system and the deeper, high-grade Gilt Creek, both in Guyana.
An earlier economic study of Wenot, released in April 2024, estimated a net present value (NPV) of more than half a billion dollars at $1,950 gold. At today’s (much) higher gold price, the project’s valuation has undoubtedly soared.
Others
Other names in the gold mining sector that also delivered exceptional performance in Q3 included Andean Precious Metals, Vault Minerals and Felix Gold.
Andean, up 183% in Q3, reported the best financial results in its history, with record revenue, record earnings and a record cash position. Vault Minerals, up 59%, saw its own record quarter, with more than 92,000 ounces produced, $703 million in cash and bullion and no debt. Australia-based Felix Gold, up an incredible 351% in the third quarter, continued to advance its gold-and-antimony discovery in Alaska’s Fairbanks district, positioning itself not just as a precious metal explorer but also as part of the U.S.’s emerging domestic supply chain for critical minerals.
Preparing for the Next Leg Higher
Looking ahead, I believe the setup for Q4 remains constructive. Gold has already had a phenomenal year, rising 66% year-to-date at its high on October 20, but the forces at work this cycle remain. Fiscal deficits are widening. Geopolitical tensions are rising. Central banks are diversifying away from the greenback.
At the same time, the supply side of the gold mining industry isn’t expanding fast enough to keep up with demand. Major discoveries are rare, and average mine lead times are long, averaging 15 years between discovery and production.
Some analysts, at JPMorgan and elsewhere, now see gold reaching $5,000 as soon as next year if real yields fall further and political risks increase. I believe we could see $7,000 gold by the end of President Trump’s second term as the amount of debt around the globe continues to accelerate.
As always, I recommend a 10% weighting in gold, with 5% in physical bullion and 5% in high-quality gold mining stocks, mutual funds and/or ETFs. Remember to rebalance at least once a year.
If you’d like to learn more about gold equities, just email info@usfunds.com with the subject line GOLD STOCKS. Someone from our team will be happy to send you more information.
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