The stock market is in a world of hurt, giving up all of its post-election gains due to worries about tariffs, trade wars, and the threat of recession. But gold continues to shine! The yellow metal is getting ever closer to $3,000 an ounce, opening up investment opportunities. Here are some to consider from top MoneyShow experts.
Sean Brodrick | Weiss Ratings Daily
There’s something very curious going on in gold — and it says something about where the yellow metal might be headed. An easy way to play the coming move is through the SPDR Gold Shares ETF (GLD).
The first thing you need to know is that seasonally speaking, gold shouldn’t be rallying at all. This is the weak time of the year for gold, as you can see from this chart…
Gold usually doesn’t start making significant gains until April, if then. To be sure, this is an average, and every year is different. But this rally at this time of year is kind of a shocker!
So, what makes this year different? “Chaos as policy.”
First, I’m pretty sure President Trump and his team have set out to “break” the US government. That’s what Elon Musk’s Department of Government Efficiency, or DOGE, is all about. Their plan is to rebuild and restructure the government, only leaner. Trump says we’ll be much better off when it’s all said and done. In the short term, it’s chaos.
Meanwhile, the White House’s on-again, off-again approach to tariffs with our major trading partners is so chaotic, it can barely be called a policy. Chaos scares investors. And that is one of the major forces driving gold higher.
Second, this raises the odds of the Federal Reserve cutting benchmark interest rates this year. As recently as Feb. 12, the market was pricing in only one rate cut. While Fed Chair Powell said recently that the Fed wants to take it slow on rate cuts, the market is now pricing in three cuts in 2025, starting in June. Combined with the rate cuts that began last year, America is in a rate-cutting cycle.
Now, we don’t know exactly how much gold will run this time around. But odds are it’s going a LOT higher. If the past is a guide, gold will more than double. GLD has a Weiss Rating of “B-” and an expense ratio of just 0.4%, which is pretty cheap.
Recommended Action: Buy GLD
Eoin Treacy | Fuller Treacy Money
Gold has been very resilient over the last several weeks. The current range has a much narrower amplitude than those posted over the last year. There are two ways of thinking about it.
The first is the pace of the advance is picking up and traders are not willing to wait for a deeper pullback to buy. The second is the trend is still very consistent and a reaction of $200-$250 is still possible.
Of course, the other point is this is the US Dollar price of gold. The currency has fallen sharply over the last month so that has helped to support the gold price.
In British Pounds, the price of gold has pulled back £133 from its peak. The October – January range has a maximum drawdown of £160. The April-to-September range had an amplitude of £154.
The message is quite similar. The size of the current reaction is smaller than the last two. Since this has occurred against a background of an appreciating Pound, that is good news.
It’s a similar story for the Australian Dollar price. This reaction was for A$160. The last two were A$332 and A$351, respectively.
When we look at gold priced in several currencies, there is no questioning that the pace of the advance has picked up. This global surge in demand for physical gold has been driven by central banks. Political volatility has increased substantially since Donald Trump took office.
The news over the last week has been filled with talk of tariffs and war. It’s easy to get caught up in the minute details of which tariff is being increased or decreased. The bigger message is more important to gold.
The US is no longer a reliable partner. That means the status quo is no more and we are entering a new era of great power politics. That is going to have far-reaching consequences.
Gold is currently pausing below the big, psychological $3,000 level. Twenty years ago, $3,000 was considered an ambitious, far-away target. Today it is upon us and I don’t hear many people talking about a future price of $5,000 or $10,000.
I can’t tell you when those levels will be achieved, but the long-term trend of currency debasement is alive and well. That means those targets are inevitable. The only question is when.
Mark Skousen | Forecasts & Strategies
Gold is over $2,900 an ounce and headed for $3,000, largely due to global uncertainty and strong central bank purchases by China and other countries. The SPDR Gold Shares ETF (GLD) is ahead nearly 11% in six weeks. I also like Kinross Gold Corp. (KGC).
Here’s a surprise: Which is up more over the past 25 years — gold or stocks? The average investor would answer stocks. But the correct answer is gold.
(Editor’s Note: Mark Skousen is speaking at the 2025 MoneyShow/TradersEXPO Las Vegas, which runs Feb. 17-19. Click HERE to register)
As the Wall Street Journal reported recently, the S&P 500 — including dividends — returned 525% between 2000 and the end of 2024. But gold increased by more than 800% over the same period, jumping from $281.63 an ounce to $2,603.01.
It remains a great inflation hedge. And mining stocks are a good way to play it. That brings me to KGC. It yields only 1%, but is now up 30% for us.
Recommended Action: Buy KGC.
Read the full article here
