Why Gold Can Hit $5,000

The tailwinds for gold continue... The Egyptians, Romans, and us… Central banks make history… The real question to answer… Why interest rates matter… Gold could gain another 33%... What to do about it…

'How high can gold go?'...

We asked that question just two weeks ago, with gold trading at a new record around $3,600 per ounce... And we shared a technical outlook from Ten Stock Trader editor Greg Diamond, who was eyeing a "conservative" target near $4,000...

Two weeks later, gold's price has continued moving in that direction (and Greg wrote to his subscribers yesterday to take "a 21% gain off the table" in a short-term trade). That said, the tailwinds that have lifted gold's price by 40%-plus this year alone continue.

That's roughly three times the S&P 500 Index's 13% year-to-date return.

Why? Well, here's what we wrote on September 8...

We've been talking about the fundamental case for gold for years.

The precious metal has long been viewed as an antidote to inflation and "chaos" in general. It's a centuries-old store of wealth that has proved itself during a global pandemic... the institutional responses to it... and an ensuing bout of decades-high inflation.

That's why central banks around the world have been buying gold in increasing amounts... especially with policy signals in the U.S. (such as the "Mar-a-Lago Accord") pointing to a weakening dollar and a higher value of hard assets like gold and other assets denominated in those dollars.

We frequently suggest having at least some gold as part of a well-diversified portfolio, and right now is certainly no exception. As I've written before, often the very best time to get bullish on gold (and gold stocks) is when central banks like the Fed signal that they're planning on loosening monetary policy – like by cutting rates.

Last week, as you know by now, the Federal Reserve announced its first interest rate cut in nine months and signaled more to come. That's despite the central bank's outlook for a 3% inflation rate (above its supposed 2% target) for the rest of 2025.

Today, gold traded up again to a fresh all-time high around $3,760 per ounce... Gold stocks are trending higher, too. So we ask the question again: "How high can gold go?"

As we explain today, a few, but not too many factors go into finding an answer...

First, the setup...

We've been writing about the bull case for gold for years.

Trace back its characteristics as a store of value, and an inflation hedge, as long as you'd like. Gold's real, constrained supply has proved powerful over time. As Stansberry Research analyst Mike Barrett wrote just the other day on our free Stock Market Trends website...

Mining the world's only yellow metal dates back some 5,000 years, when Egyptians believed it to be the flesh of their sun god, Ra. But finding large deposits that can be easily mined has proven elusive. Consequently, the World Gold Council estimates that all of the gold ever mined would fit in a cube measuring just about 72 feet (22 meters) on each side.

This scarcity renders gold a timeless store of value, and the U.S. government is believed to own the world's largest stockpile of it – about 261 million troy ounces.

I (Corey McLaughlin) won't forget another example that Verdad Advisers founder Dan Rasmussen once shared with me and Dan Ferris on the Stansberry Investor Hour podcast.

He told us that, converted into ounces of gold, the U.S. government pays a 21st-century Army captain the same salary that a centurion would have received in ancient Rome. (That tidbit came courtesy of a paper by Campbell Harvey of Duke's business school.)

We also covered the promising technical setup and macroeconomic tailwinds for the precious metal in this August 2024 issue.

Gold was trading around $2,500 when we said that "this could be just the start of a longer leg higher" based on price signals. We also noted...

There are at least three fundamental catalysts that support a bullish case for the centuries-old store of value...

1. The threat of escalating war in the Middle East and the ongoing war between Russia and Ukraine. Simply put, more developments in these wars could lead to further "shocks" for stocks and send investors into "safe haven" assets like gold or bonds.

2. It looks like the Federal Reserve is comfortable returning to "business as usual" and will lower interest rates. This isn't that long after the economy endured a 40-year-high rate of inflation (and still-rising prices). Cheaper dollars means rising prices for dollar-denominated assets... like gold.

   Other central banks are also buying gold as a way to hedge against the dollar... to the tune of more than 1,000 tonnes in each of the past two years.

3. Campaign promises from the U.S. presidential candidates to "fight" inflation. We've seen this story before... The proposed policies, in one way or another, will only exacerbate U.S. debt and inflation, and certainly won't get to the root of the problem: fiat currency and money printing.

All three of these points are still playing out...

As Stansberry Research analyst Bill McGilton wrote in a great look at the case for gold yesterday in Stock Market Trends...

According to 2024 data, the U.S. dollar makes up 46% of global reserves – down from around 55% a decade ago. Gold has now surpassed the euro and comprises 20% of global reserves – trailing only the dollar.

For the first time since 1996, foreign central banks are holding more gold than U.S. Treasurys. And that's not by accident.

As the U.S. fiscal problem becomes more acute, we expect central banks' gold holdings to trend higher.

Central banks are navigating massive government debt, a global trade war, monetary expansion, inflation, and geopolitical conflicts.

It's no wonder, central banks have been net gold purchasers for the past 15 years in a row. And they're buying a lot more lately...

Central banks loaded up on more than 1,000 metric tons of the metal in each of the past three years. And the trend will continue.

In the first half of 2025 alone, central banks added another 415 metric tons of gold. That's slightly behind last year's pace. But it shows central banks' willingness to buy gold even at higher prices.

Bill noted that Poland, Azerbaijan, Kazakhstan, China, and Turkey have been the largest purchasers in 2025 so far. And China, India, and Russia are among the countries increasing gold reserves specifically to reduce reliance on U.S.-dollar assets.

And keep in mind, central banks are long-term holders that keep steady pressure on prices.

At the same time, investors have been getting more interested in gold. Bill wrote that gold exchange-traded funds ("ETFs") are seeing their most net inflows since 2020, "when COVID-19 stimulus checks were being handed out like candy."

Gold rose more than 30% from the start of 2020 to a high that year just above $2,000. Then it traded sideways before breaking out in early 2024.

Now, despite all the arguments for gold we've shared, with the price up more than 40% this year, you might think this bull run is set to lose steam. But that still might not be the case...

Think back to our opening question: How high could gold go?

The answer comes from a different question instead...

Gold investing isn't about speculating or comparing different bull-run tops... A fundamental story is at the heart of all of this, as Mike Barrett recently explained in his piece in Stock Market Trends on September 15. You can and should read it in its entirety here.

In short, to understand why gold is soaring, Mike says you need to understand the relationship between the commodity and "real" interest rates...

The term "real" refers to the actual, or nominal, interest rate after adjusting for inflation. Typically, the Consumer Price Index ("CPI") is used as a proxy for inflation. To adjust any nominal interest rate for inflation, simply deduct the latest reading for CPI.

For example, the nominal three-month U.S. Treasury yield closed on Friday [September 12] at 4%. Deducting the latest CPI reading of 2.9% means the "real" three-month Treasury yield is just over 1%. After accounting for inflation then, bond investors are currently earning a 1% real return on three-month Treasuries.

Gold has no yield at all. It's just a commodity, after all. But it does tend to maintain its value over time. And when real rates decline, or even go negative, gold becomes more attractive for that reason.

That was the case from 2000 to 2012, when the real 10-year rate fell from approximately 3.44% to negative 0.17%. This coincided with a gold bull that brought the metal from approximately $300 in 2000 to its then-peak around $1,800 in 2011.

So, the question worth asking: Where are real rates headed?

And the answer to this other question is straightforward...

As we've been writing about since the Fed's policy announcement last week, the central bank decided to prioritize the weakening labor market over inflation risks.

Whether that is "right" or "wrong" is another matter, but it is what's happening. At its meeting last week, the Fed projected out at least one more, and likely two more, 25-basis-point cuts to its federal-funds rate in 2025. That would put its benchmark rate around 3.6%.

As Mike wrote...

If that happens, and if CPI inflation remains at 2.9%, then the real three-month Treasury yield will move below 1% (3.6% – 2.9% = 0.7%). As the real return on bonds erodes, gold, which pays no interest, becomes more attractive relative to bonds, pushing its price higher.

The Fed aggressively cut the fed-funds rate during the early days of the pandemic and gold soared almost 50% between March and August 2020 (from a low around $1,451 per ounce, to a high of about $2,075 per ounce), as real interest rates plunged.

Such a move for gold could happen again as the real three-month Treasury yield moves below 1%. That's what could send the price of the precious metal above $5,000 per ounce, from its current price around $3,600 per ounce.

So, there's one answer... rooted in Mike's "real" analysis of "real" interest rates. It's reasonable to expect gold to reach $5,000 – and for the value of bonds to keep eroding – if the Fed continues to cut rates as it says it will. That's another 33% gain from today's price.

What to do about it...

To protect and grow your wealth, you have multiple ways to add gold exposure to your portfolio.

You can own physical gold, like bars or coins. You could own an ETF that tracks the gold price. Or you could own gold stocks that offer leveraged returns to the price of gold... Several of our editors have recommended stocks of gold miners that stand out from their industry.

More broadly, this surge in gold's price is a prime example of why the precious metal should be part of a long-term diversified portfolio...

And it's central to the message we've recently mentioned from Stansberry Research senior partner (and MarketWise CEO) Dr. David "Doc" Eifrig about an intentional "controlled demolition of the monetary order," and the devaluation of the dollar.

The role of gold and other "hard assets" in a portfolio is critical, Doc says...

Think about it...

What's in your savings account? Your money market fund? What is your mortgage valued in? How do you express the value of your stocks and bonds? Unless you're one of those rare Americans who has money parked overseas, every single thing you own is in dollars.

That's what makes this intentional devaluation so dangerous. And this isn't speculation, by the way. It's already happening: The dollar has suffered its worst six months in more than half a century... The "Mar-a-Lago Accord" is the driving force behind this alarming drop.

And this is just the beginning.

Again, this plan is all written down in black and white... as you're about to see.

For more detail, be sure to check out Doc's new free briefing.

If you don't already have access to Doc's signature Retirement Millionaire newsletter, you'll also hear about how you can get started with a subscription today and get access to his latest recommendations.

And if you're one of Doc's existing subscribers or a Stansberry Alliance partner, feel free to watch the presentation, but know you also already have access to this research from Doc here. You'll find two stocks he recommends to play this gold trend... plus two other precious metal stocks and an alternative hard asset.

New 52-week highs (as of 9/22/25): ABB (ABBNY), AbbVie (ABBV), First Majestic Silver (AG), Altius Minerals (ALS.TO), Valterra Platinum (ANGPY), ASML (ASML), Barrick Mining (B), Alpha Architect 1-3 Month Box Fund (BOXX), Ciena (CIEN), Quest Diagnostics (DGX), iShares MSCI Emerging Markets ex China Fund (EMXC), EnerSys (ENS), Comfort Systems USA (FIX), Franco-Nevada (FNV), VanEck Gold Miners Fund (GDX), VanEck Junior Gold Miners Fund (GDXJ), SPDR Gold Shares (GLD), iShares Convertible Bond Fund (ICVT), iShares U.S. Aerospace & Defense Fund (ITA), Kinross Gold (KGC), L3Harris Technologies (LHX), Grand Canyon Education (LOPE), Lynas Rare Earths (LYSDY), Mueller Industries (MLI), Newmont (NEM), New Gold (NGD), Pan American Silver (PAAS), Invesco WilderHill Clean Energy Fund (PBW), Sprott Physical Gold Trust (PHYS), Sprott Physical Silver Trust (PSLV), Construction Partners (ROAD), ProShares Ultra Technology (ROM), Seabridge Gold (SA), Skeena Resources (SKE), iShares Silver Trust (SLV), SSR Mining (SSRM), Torex Gold Resources (TORXF), Uranium Energy (UEC), ProShares Ultra Gold (UGL), Global X Uranium Fund (URA), ProShares Ultra Semiconductors (USD), Valero Energy (VLO), Vanguard S&P 500 Fund (VOO), Vistra (VST), and SPDR S&P Semiconductor Fund (XSD).

In today's mailbag, feedback on yesterday's edition, which discussed why it's time to talk about the next stock market "Melt Up"... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.

"Deja Vu all over again? This looks, smells, and indeed acts like the Tech Wreck Melt Up. Fortunes were made and lost. The danger? Not having a VQ stop [volatility quotient stop loss, from our corporate affiliate TradeSmith], and worse? Not acting on a stop if you had one. Even worse? Leverage. Those that Leveraged AND failed to exit with their winnings took the biggest hits. Even worse than that? FOMO's got in late and out even later..." – Stansberry Alliance member Bill B.

"Just trying to understand the market. Thank you for explaining and being honest with me. I am 65 and worked hard all my life. Not a lot of money, so want to invest to leave something for my children. God bless." – Subscriber Kurt S.

All the best,

Corey McLaughlin
Baltimore, Maryland
September 23, 2025