February Newsletter 2025

Let’s take a look at the ten-year chart of gold through the lens of our assertion that gold’s primary role today is financial and geopolitical insurance. There are some key markers that stand out.

1. From roughly 2015 through early 2019, the world was perceived to be in a relatively stable geopolitical and financial state. By historical standards, it was a low-risk environment. Therefore, the price of gold was generally range bound.
2. As the U.S. entered its election cycle, uncertainty increased, and the price of gold edged up.
3. In early 2020, the “pandemic” struck, and the risk of financial turmoil skyrocketed. After an initial panic-driven sell-off across all asset classes, gold surged. As domestic violence spread during the summer of 2020, the price of gold briefly went parabolic.
4. Once it became clear that US domestic unrest would not spread, the pandemic would not result in hundreds of millions of deaths, and the U.S. presidential election resolved, the global “risk factor” began to subside—along with the price of gold.
5. As it became evident that the idea of the Russia-Ukraine conflict being short-lived and contained began to subside, gold began rising steadily again.

A closer look at a three-year chart reveals the more recent events driving the price action of this “insurance policy.”

1. In October 2023, another war front opened in the Middle East, reversing a months-long plateau in gold prices.
2. By mid-2024, it was clear that global confidence in U.S. leadership was waning. A highly contentious presidential campaign was underway. Meanwhile, the war in Ukraine had escalated to the point of calls for NATO intervention—raising fears of World War III. The rate of increase in the price of gold accelerated.
3. With President Trump’s election, uncertainty faded, and his calls for peace drove gold prices down substantially.
4. As 2025 began, something changed—leading to the consistent weekly highs we’re seeing now.

Why?

We can only speculate. A two-month rise in gold prices—even a sharp one—does not establish a major trend. Some of the price action is likely due to the sheer speed at which the new administration is moving to reshape the world (almost literally). It’s far too early to tell whether this pace of change can be managed without disrupting a number of fragile geopolitical relationships—or a financial system that, particularly in Europe, is already staggering. Other speculation centers on the potential impact of tariffs on gold and the calls to audit both Fort Knox and the Federal Reserve. Since the beginning of the year, we are likely seeing upward pressure driven by uncertainty of how this will all play out and unusual physical demand, as substantial quantities of gold are repatriated to the U.S. By the next newsletter, we should have a better sense of the longer-term trend driving gold’s price.

As for silver, we’re skipping a chart analysis. It continues to lag behind gold and isn’t much of a factor in the “financial insurance” world. While it dances on the same dance floor, it certainly has a different dance partner—and sometimes even dances to a different tune. This seems to be one of those times.