Stocks Whacked to Open Week; Gold Rockets Higher, Reaches $3,500 Overnight; Silver Likely Being Sold to Raise Cash

It’s becoming clear that the declines in stocks and rising interest rates on longer-dated bonds are not due to simply concern over tariffs. There are larger matters at hand. Judging by the extraordinary gains in gold, a re-ordering of the entire global financial system seems to be in play, and, perhaps even something as elemental as what constitutes "money" is about to be re-evaluated.

Thus, passive investors, whether they realize it or not, may be holding onto dead money. The market has been proving them wrong and taking them to the cleaners since mid-February. Monday's bloodbath wasn't the consequence of Trump mentioning that he may be considering firing Federal Reserve Chairman Jerome Powell. It was much deeper than that. Trump may, at any given moment, express a desire to abolish the Federal Reserve completely and return the United States to sound money, likely backed by gold. Whether silver has a place in his machinations remains to be seen, though the recent evidence suggests not.

Having little to no input into what kinds of investments people's IRAs or 401ks are making, these long-term managed accounts are at the mercy of fund managers and the market, a doubly-troubling condition.

Contributing to the overall sense of gloom on Wall Street are recent earnings reports, with more than a few companies lowering their revenue and profit estimates. There is simply too much uncertainty over the future for company executives to compose realistic plans for growth or expansion.

Earlier Tuesday morning Verizon (VZ) reported earnings above estimates but also saw a decline in subscribers to their various cellular services, sending the stock down more than two percent. On the flip side, Synchrony Financial, a sub-prime lender, saw lower charge-offs and delinquencies, somewhat bucking recent trends. Shares of the company are cautiously positive, up less than one percent.

Gold continued its rapid assent, topping $3,500 early Tuesday morning before the usual gang of thieves at the COMEX knocked it back down about $60. Silver remains moribund, unable to follow gold's lead, the gold:silver ratio at an eye-watering 105.17.

What may be occurring is a selloff of silver holdings by firms in need of quick cash, either to cover margin calls or shore up liquidity after taking massive losses. Usually, when the markets are as stressed as they are now, both gold and silver would be sold off to raise cash. At this time, nobody is letting go of their gold, only silver, which might explain to some degree why silver has not followed gold's move higher.

As long as there is confusion and stress and stocks under pressure, silver seems likely to suffer. When it breaks free - and it eventually will - the gains are likely to be spectacular.

At the Close, Monday, April 21, 2025:
Dow: 38,170.41, -971.82 (-2.48%)
NASDAQ: 15,870.90, -415.55 (-2.55%)
S&P 500: 5,158.20, -124.50 (-2.36%)
NYSE Composite: 18,032.37, -334.75 (-1.82%)