Gold at $3,000 Could Be Just the Beginning
Dear subscriber,
Some investors love gold. I've always found it dreadfully dull. Talk of drill sites and mining assays makes my eyes roll back in my head.
But something wild has been happening with the yellow metal over the past couple years – and you need to pay attention...
Last week, gold's price cracked an all-time high of $3,050 per ounce. So far, the rally has pretty much been unloved and unnoticed.
This week, though, there's evidence that investors are finally starting to take notice... And that means there's room for gold's price to run even higher.
So today, let's break down what's happening with gold and the opportunity ahead.
As you can see in the chart below, gold prices have surged from $1,600 per ounce in 2022 to more than $3,000 per ounce today...
The question is... why?
Gold has been used as a form of money and a store of value for more than 5,000 years. So by now, we know how its price typically moves.
If we look at the historical playbook for gold, there are only two reasons why the metal could surge like this...
First, gold tends to rise when interest rates are low and inflation is high. If investors can't earn much in bonds or they expect inflation to eat up the value of the dollar, they'll look to gold to protect their purchasing power.
In more technical terms, gold rises when real interest rates are low or negative.
You can use the yield on 10-year Treasury Inflation-Protected Securities (or "TIPS") to see when real rates are negative. As the name suggests, TIPS are bonds adjusted for inflation. And as you can see, when real yields head down, the price of gold goes up...
Today, 10-year TIPS yield about 2%, right in line with their long-term average. The 10-year Treasury yields about 4.3%. And inflation is tame at just under 3%. So there's no logical justification for investors to flock to gold. But its price is still rising.
That brings us to the second reason for why gold typically rises...
Folks buy gold when they're scared.
In the chart above, you can see how the price of gold surged after the global financial crisis in 2008 and the COVID-19 pandemic in 2020.
When investors panic, they flock to "safe haven" assets that will hold their value during tough economic times. It's a tale as old as money itself.
Now, it's true that we've seen a few weeks of fear and uncertainty since the market peaked. But gold has been rising alongside a very strong and confident bull market.
So what gives?
It's not a combination of low interest rates and high inflation... nor is it flighty stock investors.
Rather, it's global central banks fearing economic and geopolitical turmoil.
The upward pressure on gold stems from central banks around the world building up their gold reserves. As you can see, central banks have been buying 1,000-plus tonnes of gold per year, for the past three years...
They've been rapidly stockpiling a safe, hard asset hoping that it'll protect their domestic economies.
The buying frenzy started in 2022, shortly after the Russian invasion of Ukraine... which, in many ways, completely upended the global order.
Since the end of World War II, we've lived in a world where countries didn't really invade sovereign nations in wars of conquest. The international community simply wouldn't allow it.
And if Russia's attack portends a more war-prone world with less international cooperation, countries want to be prepared. In particular, they want their economies to be prepared with larger reserves of gold at home.
Remember, shortly after Russia's invasion, the U.S. and its allies froze $300 billion worth of Russia's assets.
It looks to me like other countries witnessed this financial show of power and decided that they need more gold – something that can't necessarily be frozen – in their vaults.
The buying has also found renewed purpose recently with President Donald Trump's nontraditional approach to international relations and his tariff threats...
Already, the president has placed tariffs on steel and aluminum imports, and he has announced plans to tax copper as well. Gold could be next.
Now, individual investors haven't taken part in this gold rally... yet.
As Rich Checkan, president of precious metals and coins dealer Asset Strategies International and a longtime friend of Stansberry Research, recently told me, "Retail investors are not yet in this market."
Rich can tell if individual investors are buying gold... because they call him to do so.
Plus, he pointed out that silver prices are low and that the premiums investors pay for gold bars and coins are very low compared with the spot price of pure gold. He said, "If investors were clamoring for coins and bars, those premiums would be sky high."
There's also evidence in the share prices of gold-mining stocks...
These stocks tend to be levered plays on the price of gold. When gold rises, the prices of gold miners tend to spike even higher.
However, mining stocks have largely been left out of the rally. After all, central banks buy gold itself. They don't speculate in mining shares.
That said, recent action in gold exchange-traded funds ("ETFs") tells us that individual investors are now moving on the gold rally, too...
ETFs are a great way to monitor demand for all sorts of assets. That's because when ETFs see rising demand, they create new shares to accommodate more investors.
Many individual investors use gold ETFs to get exposure to gold. And if you watch these funds' outstanding share counts, you can see if folks are piling into gold ETFs.
This is where we get to the big news of the week. Share counts for gold ETFs are starting to tick up. In the chart below, you can see the rising stock price and shares outstanding for the SPDR Gold Shares (GLD) – a fund that tracks the price of gold and holds physical gold in vaults.
This is a sign that, with gold crossing $3,000 an ounce, individual investors are starting to get interested in gold as well...
We don't know when central banks will feel they have "enough" gold. But it's unlikely that central banks have suddenly started to feel more confident about the state of the world or the value of the dollar.
Looking at the rest of 2025, gold could have much more room to run. Its rally is starting to attract "animal spirits." And if fears about the market or the economy continue to plague Wall Street and Main Street, gold is the asset folks will turn to.
What Our Experts Are Reading and Sharing...
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Earlier this week, I joined our very own Dan Ferris and Corey McLauglin on the Stansberry Investor Hour podcast. We covered the difference between investing and gambling... the AI boom... crypto and meme coins... and market expectations for growth. We even looked at a few specific recession indicators and what Trump's tariffs mean for certain industries.
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New Research in The Stansberry Investor Suite...
With the market in a downturn, you should be building your shopping list.
Some quality businesses are going on sale today. You can even see a few climbing up the ranks of the Stansberry Score...
The Stansberry Score is how we measure a company's fundamental business quality and help long-term investors find stocks to buy and hold.
This month, Stansberry Research analyst Tyler Jarman and our team break down one retailer that has surged to No. 40 in the Stansberry Score.
This company has built up a global empire of strong and unique brands, and it's now trading at a stellar valuation thanks to a recent sell-off.
Decades ago, this company figured out a formula for doing something unique... making what some would consider "ugly" products, but which its customers love.
(You're sure to recognize at least a few of this company's products, as you likely see them everywhere... if you don't already own a few yourself.)
What's surprising is that this company is extremely profitable – with a 22% free-cash-flow ("FCF") margin – and it's still growing revenue at about 18% per year.
Shares have taken a significant hit since January. No stock moves perfectly "up and to the right," after all. But that means this stock now trades at just around 18 times FCF today – a great price in this market.
Stansberry Investor Suite subscribers can read the entire report here.
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Until next week,
Matt Weinschenk
Director of Research
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