That would be considered a pretty good year for most stocks or even the metals, but it's only March 27. Gold and silver have much further upside. There's a very good possibility that gold will hit $3,500 this year. and silver will - some day - vault over $40 per ounce.
To the non-believers, consider that for gold to hit $3,500 this year it would have to rise another 15% or so. On December 31, 2024, gold, on the COMEX continuous contract was $2,618.10. If it hits $3,500 this year that would be an overall gain of 33.7%, or, a little better than what it did last year (27%).
A five-year chart of gold or silver shows the same thing, the trajectory is rising. It wasn't that long ago - two years - that gold breached the $2,000 level for the first time (March 25, 2023). Over the next year, to late March, 2024, it only rose about another $180. So, over the past year - late March 2024 to late March, 2025 - the gain has been approaching astronomical levels. From $2,180 to $3,060 today is a gain of over 40%.
Gold may continue on this upward trajectory and might even surpass that 40%, meaning that by this time next year, the gold you hold now at $3,060 could very well be worth $4,284. With world politics being what it is currently - a total crap-shoot - that actually doesn't seem very far-fetched.
Gold and silver suppression has been a kind of sport or parlor game for the purveyors of fiat currencies, in particular, the mighty US dollar, for decades. Of late, the dollar has been strong against other currencies, except, of course, the currency that is actual MONEY, gold. While the US$ has been holding its own against the euro, pound and yen, it's been taken behind the woodshed and beaten to a pulp by gold, and, to a lesser extent, silver. That's because the actual purchasing power of the dollar has been falling, debased by easy money policies of the Federal Reserve and profligate spending by the federal government.
President Trump, with exemplary assistance by Elon Musk and his team at DOGE, is changing part of that equation. The aim is to restore honesty, integrity, and accountability to the government. No more work from home. No more shuffling papers to make $80,000 a year. No more money to agencies like USAid and the Department of Education - just to name a few obvious examples - that produce nothing other than expense for U.S. taxpayers.
Trump's plan of austerity for the government will likely result in a balanced budget during his term, and probably a surplus for the first time this century. That would change the calculus on gold's value to some degree, though there's much more to gold's story than just that.
Central banks continue to buy gold hand over fist, as they've done for the past three years running. That is not going to stop. Anybody keeping tabs on BRICS also is aware that they are not going away just because America suddenly has a sane, purposeful president. Their path continues to be clear. Bilateral trade between BRICS members and associates will continue to be a central theme for them. Settlement in gold, while not practical at present because of the volatile nature of geo-politics and the price of gold (which are intertwined), is also part of the longer-term agenda.
Clouding the global trade picture are Trump's tariffs, designed to level the playing field for the United States, though U.S. trading partners aren't about to stand idly by and pay tribute to the U.S.A. Retaliatory tariffs are already on the menu, and the prices are going up. If, as many economists contend, tariffs mean inflation, that will only add to gold's charm and price appreciation. Even if the tariffs prove to be only mildly inflationary, gold will still maintain its underlying value as the currency of final choice.
The inflation from tariffs may not be felt as acutely in the United States as in other countries, as they scramble for trade policies to salvage their economies. Over the longer term, the major trading countries - primarily, the United States, China, Russia, India, Brazil, and the European Union - will sort things out and decide to either go to war or settle on some rational trade policy settlement currency, and that is most likely to be gold.
A year ago, when gold was just breaking towards $2,200, talk of $3,000 gold was considered by some to be a pipe dream, yet, here we are, one year hence, with gold holding above $3,000 and not looking back.
It's time to take the people who've been talking about $5,000 or $10,000 gold more seriously.
Monday's stock market rally is already a fading memory and beginning to look like just another run-f-the-mill bear market, short-covering rally with no follow through. Tuesday's trade was tepid, to say the least, and without conviction. Wednesday's trading erased almost all of the gains from the first two days and it appears that the lows from March 13 are soon to be re-tested. It's a safe bet that they won't hold, simply because the lows, especially on the NASDAQ and S&P 500, were not at significant support levels.
Besides the chartist view, stocks remain overvalued, the U.S. is headed for a recession within months, if not weeks, and Trump, Musk, DOGE, and Border Czar Tom Homan are just getting started. Thanks to activist judges, much of the work done the past two months to eliminate waste, fraud, abuse, and millions of illegals has been put on hold or otherwise turned back. That's going to change. The courts don't have the power to block presidential, executive actions. Watch and see what happens at the Supreme Court level, soon to come.
This morning, the third and final estimate of 4th quarter 2024 GDP came in at 2.4%, which wasn't of much importance, up 0.1% from the first and second estimates. Since GDP is a lagging indicator, more important, moving forward, will be GDP for the 1st quarter, which will be released the last Thursday in April.
The estimates for 1Q GDP are not encouraging, ranging from +1.5 to -2.5%. There's ample time for stocks and interest rates to adjust to what is likely to be a newer reality. In the meantime, all anybody can talk about is tariffs. The problem is that nobody knows for certain what effect tariffs will have on trade policy of other countries, inflation, or any other metric that may be affected.
Markets, disliking uncertainty, are going to be quite volatile for longer than most people expect.
As of 8:30 am ET, S&P futures are basically flat, NASDAQ futures are 24 points down, Dow futures are up 69. There's more downside coming, if not today, then soon enough.
WTI crude oil traded for over $70/barrel for about an hour on Wednesday. It was the first time in a month that the price was at that level and it did not hold. Oil is going to settle in somewhere around $66-68, possibly lower.
Gold made another record on the COMEX at $3,065 this morning, but the bigger move was in silver, hitting a six-month high of $34.83. Should silver break above $35 - a key resistance - and hold, it’s a straight shot to $40.
A bear market in stocks and a bull market in precious metals are the most obvious developments. Hard to miss.
At the Close, Wednesday, March 26, 2025:
Dow: 42,454.79, -132.71 (-0.31%)
NASDAQ: 17,899.02, -372.84 (-2.04%)
S&P 500: 5,712.20, -64.45 (-1.12%)
NYSE Composite: 19,585.83, -92.61 (-0.47%)
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