The Oval Office is not the only place in the world that is covered in the yellow metal. Gold is glittering on Wall Street, with prices on a bullish run not seen since the global financial crisis (and briefly during the early days of the coronavirus pandemic). While gold prices – and silver too! – are rocketing and making plenty of people rich, they are also sending possible signals about the future.
An ounce of gold is poised to reach the $4,000 mark for the first time. Soaring 46% this year, the precious metal has been on a tear on the COMEX division of the New York Mercantile Exchange. However, you should not forget its little sister. Silver recently topped $47 per ounce thanks to its 61% year-to-date gain, and the white metal could eye $50 by the year’s end.
First, from the perspective of technical gobbledygook, gold prices have benefited from a weakening US dollar and lower Treasury yields.
The US Dollar Index (DXY), a gauge of the buck against a weighted basket of currencies, has declined 10% this year. A weaker buck makes it more affordable for foreign investors to purchase. The dollar has soared since the early days of the global pandemic, but it has slumped this year amid the current administration’s sweeping global tariffs.
Yields on US Treasury securities have started easing, which helps diminish the opportunity cost of holding non-yielding bullion. While the Federal Reserve has signaled a more conservative outlook in its easing cycle, the fact that interest rates will fall is enough for traders to dive headfirst into Scrooge McDuck’s basement of gold coins.
Another factor has been demand among institutional investors and retailer traders. Inflows of gold-backed exchange-traded funds (ETFs) have been enormous this year, with approximately $215 billion in assets under management, or AUM.
Now, it is no secret that the wolves of Wall Street and armchairs are scooping up the yellow metal, but the fact that central banks are on track for their fourth consecutive year of massive gold buying should send a warning that something worrisome is on the horizon. Additionally, according to the World Gold Council, 95% of central bankers anticipate that international gold reserves will increase this year, and 43% of respondents said their own central bank’s gold holdings will rise in 2025.
Aside from a slumping greenback and easing yields, why else is there a ravenous appetite for gold?
When chaos is the global norm, many people will flock to gold and silver. The precious metal is a chief safe-haven asset for a reason. And worries about the world are indeed justified!
President Donald Trump’s aggressive trade agenda, conflicts in Europe and the Middle East, skyrocketing debt levels, and fears of inflation and recession have driven the planet to fall in love (again) with the shiny metal. Is it overbought? The various indicators, including the widely watched Relative Strength Index, suggest it is. However, if everyone is pouring into Scrooge’s shop and taking all of his gold coins, can anyone blame investors for seeing the writing on the wall?
Peter Schiff, the world’s loudest gold bug, has frequently posted on X to tout the latest gold rush. “Gold keeps hitting new record highs on Trump’s watch,” he wrote on Sept. 26. “Soon silver will do the same. This is a warning sign that few are paying attention to. But when oil prices also hit new record highs, few will be able to ignore the problem. Prepare for the greatest inflation in U.S. history.”
When you factor in the money supply hitting an all-time high, lower interest rates, and potential persistent tariff-driven price pressures, Schiff’s warning might not be out of the realm of possibility.
Of course, gold prices are dominating all the headline copy in business media. But this is unfair, as other metals have experienced a tremendous 2025. Platinum prices have spiked almost 80% this year to above $1,600 an ounce. The cost of an ounce of palladium has risen 42% to nearly $1,300. Copper has climbed 22% to close to $5 a pound. This checks off all the metal boxes.
Even if this trend may not lead to a doom-and-gloom scenario, the gains could squeeze companies’ margins, pad investors’ brokerage accounts, and boost central banks’ reserves.