Gold’s $4,000 Moment

There’s something about big, round numbers that draws investors like moths to a flame.

In the stock market, every 1,000 points in the Dow or 100 points in the S&P 500 tends to act like a magnet.

Now, after consolidating for five months, gold has broken higher to $4,000.

Over the past nine months, gold is up about 50% – more than triple the returns in the S&P 500 over the same time.

What’s the limit? And what should investors do now?

That’s one of many conversational topics Andrew Packer and I had over dinner last night at Sweetwater, a speakeasy-themed restaurant in Boynton Beach, Florida.

We own gold, of course. And bought extra for the benefit of the kids – at around $1,900. So today we’re sitting on the proverbial double.

Given the lag in gold mining stocks in 2023 and 2024, we’ll admit – we were behind the curve on that one.

Mr. Packer suggests a simple strategy for precious metals: Gradually accumulate physical gold and silver over time. When gold is in an uptrend, buy the mining companies for a leveraged return to the metal.

It’s a sound strategy. Gold mining stocks have finally popped higher, with big ETFs like the VanEck Gold Miners ETF (GDX), up 97% this year.

“I got my first gold back in the 1990s when it was $400 per ounce,” notes Andrew. “Sure, that’s now a 10X return today, but there was a drop to $250 first.”

A similar drop today would take the metal to $2,500. It’s hard to see that level of a drop – yet.

A Safety Valve in a World Gone Mad

We’re concerned about an eventual pullback in gold for the very reason that things can’t go up forever. We know our Grey Swan members are fans of the metal, and we don’t want to see them get hurt.

But we also know that our thesis hasn’t changed. The reasons for holding gold are intact:

The world is awash in debt, deficit spending that increases the debt, and no real endgame in sight. The U.S. dollar is having one of its worst-performing years against other fiat currencies.

Investors, swimming in cash and having to contend with sticky inflation, have no alternative but to invest it. Gold acts as a safety valve against the madness of fiat currencies.

For now, the thesis hasn’t changed. Which means any pullbacks in gold’s price should be bought.

Silver’s Breakout

Silver prices have broken to $49 in early trading. Just as $4,000 is a magnet for gold right now, $50 may be next for the metal.

The question is – what comes next.

Silver is a monetary metal, but also an industrial one. It’s critical for today’s battery technology, solar power, and medical devices. There are alternatives – there are always alternatives. But pricier ones for consumers.

What’s most interesting about silver’s price move now is the lack of fanfare.

During silver’s brief rally to $50 in 1980, it was driven by the Hunt Brothers’ attempt to corner the market.

The move higher in 2011 was brought about by a parabolic move higher in precious metals. Today’s move is fairly strong, but it’s not parabolic.

After $50, there’s no telling where silver prices could go. Adjusted for inflation, silver is still far away from making inflation-adjusted new highs. BullionStar calculates that, adjusted for inflation since 1980, silver would need to reach over $900 per ounce.

That seems like a stretch right now… but anything’s possible. Just beware – if silver prices are going up quickly, it could be a strong sign of a monetary crisis underway.

Searching for the Next Golden Share Lotto

Announcements of strategic investments by the United States government – ostensibly for defense purposes – have been enough to create some big winners such as MP Materials (MP) and Trilogy Metals (TMQ).

Now, investors are speculating where the President will direct taxpayer money next.

As The Kolbiessi Letter notes:

Yesterday, President Trump said the United States’ electricity grid is “old and tired.”

The Trump Administration recently bought equity stakes in Intel and metals companies.

Is the Trump Administration’s next 10% equity stake in an electricity-related company?

We wouldn’t be surprised. And President Trump isn’t wrong – America’s power grid needs some work. It’s a patchwork of various utility coverage areas, being run and upgraded differently at different times.

Turn Your Images On

America’s power grid is overdue for an overhaul. (Source: FEMA)

Of course, the AI trend has already gotten investors excited for utility companies – so finding an electricity company in dire need of a taxpayer infusion is a new challenge.

Traders, on the look for the next big market mover, are already on it – never mind that it puts the government in the business of picking winners and losers.

Still, at least investing in a power company sounds like a relative value investment to buying the latest hyped AI stock.

Between AI companies, power companies or gold at $4,000 – we’ll stick with our gold, thanks.

~ Addison

P.S. This morning, I’m off from Florida to Washington D.C., to hear Palmer Luckey, founder and CEO of defense startup Anduril, talk about the evolution of warfare in the 21st century.

Tomorrow, I’m back home in Baltimore to record our latest Grey Swan Live! with George Gilder.

George once handed President Reagan the first microchip, and now he says today’s tech wave dwarfs the original $6.5 trillion tech revolution of the 1980s.

Eight exponential technologies — AI, quantum computing, robotics, self-driving cars, blockchain, chips, advanced biotech, and even space — are no longer advancing in isolation.

They’re colliding, compounding, and accelerating into what could be the single greatest wealth-building event of our lifetimes.

The pace is staggering. The pace is staggering. George just issued new research with our colleague Ian King, which you can review here before Grey Swan Live!

If you have any questions for us about the market, send them our way now to: Feedback@GreySwanFraternity.com.

There’s something about big, round numbers that draws investors like moths to a flame.

In the stock market, every 1,000 points in the Dow or 100 points in the S&P 500 tends to act like a magnet.

Now, after consolidating for five months, gold has broken higher to $4,000.

Over the past nine months, gold is up about 50% – more than triple the returns in the S&P 500 over the same time.

What’s the limit? And what should investors do now?

That’s one of many conversational topics Andrew Packer and I had over dinner last night at Sweetwater, a speakeasy-themed restaurant in Boynton Beach, Florida.

We own gold, of course. And bought extra for the benefit of the kids – at around $1,900. So today we’re sitting on the proverbial double.

Given the lag in gold mining stocks in 2023 and 2024, we’ll admit – we were behind the curve on that one.

It’s a sound strategy. Gold mining stocks have finally popped higher, with big ETFs like the VanEck Gold Miners ETF (GDX), up 97% this year.

“I got my first gold back in the 1990s when it was $400 per ounce,” notes Andrew. “Sure, that’s now a 10X return today, but there was a drop to $250 first.”

A similar drop today would take the metal to $2,500. It’s hard to see that level of a drop – yet.

A Safety Valve in a World Gone Mad

But we also know that our thesis hasn’t changed. The reasons for holding gold are intact:

The world is awash in debt, deficit spending that increases the debt, and no real endgame in sight. The U.S. dollar is having one of its worst-performing years against other fiat currencies.

Investors, swimming in cash and having to contend with sticky inflation, have no alternative but to invest it. Gold acts as a safety valve against the madness of fiat currencies.

For now, the thesis hasn’t changed. Which means any pullbacks in gold’s price should be bought.

Silver’s Breakout

Silver prices have broken to $49 in early trading. Just as $4,000 is a magnet for gold right now, $50 may be next for the metal.

The question is – what comes next.

What’s most interesting about silver’s price move now is the lack of fanfare.

During silver’s brief rally to $50 in 1980, it was driven by the Hunt Brothers’ attempt to corner the market.

The move higher in 2011 was brought about by a parabolic move higher in precious metals. Today’s move is fairly strong, but it’s not parabolic.

That seems like a stretch right now… but anything’s possible. Just beware – if silver prices are going up quickly, it could be a strong sign of a monetary crisis underway.

Searching for the Next Golden Share Lotto

Now, investors are speculating where the President will direct taxpayer money next.

As The Kolbiessi Letter notes:

Yesterday, President Trump said the United States’ electricity grid is “old and tired.”

The Trump Administration recently bought equity stakes in Intel and metals companies.

Is the Trump Administration’s next 10% equity stake in an electricity-related company?

Turn Your Images On

America’s power grid is overdue for an overhaul. (Source: FEMA)

Of course, the AI trend has already gotten investors excited for utility companies – so finding an electricity company in dire need of a taxpayer infusion is a new challenge.

Traders, on the look for the next big market mover, are already on it – never mind that it puts the government in the business of picking winners and losers.

Still, at least investing in a power company sounds like a relative value investment to buying the latest hyped AI stock.

Between AI companies, power companies or gold at $4,000 – we’ll stick with our gold, thanks.

~ Addison

P.S. This morning, I’m off from Florida to Washington D.C., to hear Palmer Luckey, founder and CEO of defense startup Anduril, talk about the evolution of warfare in the 21st century.

Tomorrow, I’m back home in Baltimore to record our latest Grey Swan Live! with George Gilder.

George once handed President Reagan the first microchip, and now he says today’s tech wave dwarfs the original $6.5 trillion tech revolution of the 1980s.

Eight exponential technologies — AI, quantum computing, robotics, self-driving cars, blockchain, chips, advanced biotech, and even space — are no longer advancing in isolation.

They’re colliding, compounding, and accelerating into what could be the single greatest wealth-building event of our lifetimes.

The pace is staggering. The pace is staggering. George just issued new research with our colleague Ian King, which you can review here before Grey Swan Live!

If you have any questions for us about the market, send them our way now to: Feedback@GreySwanFraternity.com.

Trump and Powell are no buddies. They’ve been fighting over rate cuts all year—Trump demanding more, Powell holding back. Even after cutting twice, Trump called him “grossly incompetent” and said he’d “love to fire” him. The tension has been building for months.

And Trump now seems ready to install someone who shares his appetite for lower rates and easier money.

Trump has been dropping hints for weeks—saying on November 18, “I think I already know my choice,” and then doubling down last Sunday aboard Air Force One with, “I know who I am going to pick… we’ll be announcing it.”

He was referring to one Kevin Hassett, who—according to a recent Bloomberg report—has emerged as the overwhelming favorite to become the next Fed chair.

Here we sit — investors, analysts, retirees, accountants, even a few masochistic economists — gathered beneath the leafless monetary tree, rehearsing our lines as we wait for Jerome Powell to step onstage and tell us what the future means.

Spoiler: he can’t. But that does not stop us from waiting.

Tomorrow, he is expected to deliver the December rate cut. Polymarket odds sit at 96% for a dainty 25-point cut.

Trump, Navarro and Lutnick pine for 50 points.

And somewhere in the wings smiles Kevin Hassett — at 74% odds this morning, the presumed Powell successor — watching the last few snowflakes fall before his cue arrives.

With U.S. stocks trading at about 24 times forward earnings, plans for capital growth have to go off without a hitch. Given the billions of dollars in commitments by AI companies, financing to the hilt on debt, the most realistic outcome is a hitch.

On a valuation basis, global markets will likely show better returns than U.S. stocks in 2026.

America leads the world in innovation. A U.S. tech stock will naturally fetch a higher price than, say, a German brewery. But value matters, too.

As copper flowed into the United States, LME inventories thinned and backwardation steepened. Higher U.S. pricing, tariff protection, and lower political risk made American warehouses the most attractive destination for metal. Each new shipment strengthened the spread.

The arbitrage, once triggered, became self-reinforcing. Traders were not participating in theory; they were responding to the physical incentives in front of them.

The United States had quietly become the marginal buyer of the world’s most important industrial metal. China, long the gravitational center of global copper demand, found itself on the outside.

And Trump now seems ready to install someone who shares his appetite for lower rates and easier money.

He was referring to one Kevin Hassett, who—according to a recent Bloomberg report—has emerged as the overwhelming favorite to become the next Fed chair.

Spoiler: he can’t. But that does not stop us from waiting.

Tomorrow, he is expected to deliver the December rate cut. Polymarket odds sit at 96% for a dainty 25-point cut.

Trump, Navarro and Lutnick pine for 50 points.

And somewhere in the wings smiles Kevin Hassett — at 74% odds this morning, the presumed Powell successor — watching the last few snowflakes fall before his cue arrives.

On a valuation basis, global markets will likely show better returns than U.S. stocks in 2026.

America leads the world in innovation. A U.S. tech stock will naturally fetch a higher price than, say, a German brewery. But value matters, too.

The arbitrage, once triggered, became self-reinforcing. Traders were not participating in theory; they were responding to the physical incentives in front of them.

The United States had quietly become the marginal buyer of the world’s most important industrial metal. China, long the gravitational center of global copper demand, found itself on the outside.