Seven Charts That Put the Gold Bull Market in Context

“We have gold because we cannot trust government.”

– Herbert Hoover

March 31, 2025 — Remember that long, boring stretch where gold couldn’t break resistance at $2,000/oz?

Here it is in the context of this century’s bull market — note the definitive breakout in early 2024.

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What’s driving the bull market? Central bank buying. And what’s driving that? Geopolitics. Emerging market central banks started planning for a post-dollar world when the Ukraine war broke out:

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While the above was happening, the BRICS countries’ cumulative GDP surpassed that of the G-7 developed countries. As Incrementum notes:

For years, the BRICS+ countries have had a considerable trade and current account surplus with the West. A steadily increasing share of gold in the currency reserves of emerging economies is the manifestation of this development. This is similar to the situation after the Second World War, when Europe, especially Germany and France, successively increased their gold reserves as a result of high current account surpluses. In contrast, U.S. gold reserves fell to almost one quarter, or just over 8,000 tonnes, as a result of the gold drain. While the U.S. experienced a gold drain in the 1960s, there are currently signs of a gold gain in the emerging markets.

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Not surprisingly, China, with its persistent trade surplus, has been a leading buyer of gold.

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As they accumulate gold, foreign central banks are dumping U.S. dollar-denominated debt.

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China is also encouraging its citizens to own gold. The resulting strong domestic demand is driving gold prices to a premium on the Shanghai Gold Exchange. This, in turn, is increasing the flow of gold from West to East. From Incrementum:

The enormous Chinese appetite for gold can be seen in the premium for Chinese gold compared to LBMA prices. The high domestic demand in China is also being fueled by China’s youth, who have recently discovered gold beans as an investment opportunity. In addition, import restrictions or tariffs on gold imports could keep prices in China artificially high. Another reason is likely to be China’s withdrawal from the LBMA gold auctions last year, which may have restricted the volume of gold flowing into China.

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Western investment advisors have yet to recognize the above dynamic. In 2023, 71% of their clients have virtually no exposure to gold, and that number has barely risen since then.

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A Bull Market With Legs

The trends driving the gold bull market — de-dollarization, inflation, and a looming currency reset — accelerated in the past year and have much further to go. Combined with the apparent cluelessness of Western investors, the result should be higher gold demand and rising prices in the coming decade. Keep stacking!

Regards,
John Rubino, Grey Swan Investment Fraternity

P.S. from Addison: The gold trade still has room to go. Please review our research on the gold bull and our investment recommendations here.

“I have always enjoyed Addyson’s thoughts and commentary,” writes Joan. D “

The second Trump administration is rapidly realigning the U.S. position in global politics; new policies (tariffs!) and advancements in AI are rebooting the entire U.S. economy, and — every day – your investments and your money are reflecting those changes…

We’ll have plenty of chances to point out things that make you go “hmmm…” and add a snarky comment or two.

Any first impressions? Please add your ideas or suggestions right here: addison@greyswanfraternity.com

“We have gold because we cannot trust government.”

– Herbert Hoover

March 31, 2025 — Remember that long, boring stretch where gold couldn’t break resistance at $2,000/oz?

Here it is in the context of this century’s bull market — note the definitive breakout in early 2024.

Turn Your Images On

What’s driving the bull market? Central bank buying. And what’s driving that? Geopolitics. Emerging market central banks started planning for a post-dollar world when the Ukraine war broke out:

Turn Your Images On

While the above was happening, the BRICS countries’ cumulative GDP surpassed that of the G-7 developed countries. As Incrementum notes:

Turn Your Images On

Not surprisingly, China, with its persistent trade surplus, has been a leading buyer of gold.

Turn Your Images On

As they accumulate gold, foreign central banks are dumping U.S. dollar-denominated debt.

Turn Your Images On

Western investment advisors have yet to recognize the above dynamic. In 2023, 71% of their clients have virtually no exposure to gold, and that number has barely risen since then.

Turn Your Images On

A Bull Market With Legs

Regards,
John Rubino, Grey Swan Investment Fraternity

P.S. from Addison: The gold trade still has room to go. Please review our research on the gold bull and our investment recommendations here.

“I have always enjoyed Addyson’s thoughts and commentary,” writes Joan. D “

We’ll have plenty of chances to point out things that make you go “hmmm…” and add a snarky comment or two.

Any first impressions? Please add your ideas or suggestions right here: addison@greyswanfraternity.com

Since the US confiscation of Russian assets in 2022, pretty much every pull back to 50-day moving average (red line) has been bought, and they continue to be bought. The average is now flattening out, as you would expect with this summer consolidation, rather as it did late last year. Some sideways consolidation is good. Ideally, you want to see the short-, medium- and long-term moving averages all flatten and converge. There often follows a big move higher.

We know many consumers continue to live paycheck to paycheck. After spiking higher, the drawdown in savings—cash that can be used in an emergency—is back to pre-pandemic levels.

While the overall debt picture is ugly, in some ways it isn’t – and that it may take some more time for a debt crisis to reach a kitchen countertop near you.

As we knock off for the week approaching mid-summer, it strikes us how hard it is to distinguish signal from noise. Markets defying gravity gives us pause.

Don’t buy in at elevated prices.

Keep your asset allocation in full view.

Buy cheap.

Sell dear.

It’s a funny old world, isn’t it?

AI is buying engineers like they’re first-round picks. The military is investing in rare earths like it’s the 1950s space race. Tariffs are flying, cocoa’s getting scarce, and your cereal may soon come with a luxury markup.

None of it, likely, concerns your portfolio.

This new wave of tokenized shares is exciting. It has the potential to break down walls and democratize access to pre-IPO giants.

But at the moment, it’s also risky, opaque, and largely unregulated.

So while we applaud the innovation, we urge caution — especially if you’re being offered something that seems too good to be true.

We know many consumers continue to live paycheck to paycheck. After spiking higher, the drawdown in savings—cash that can be used in an emergency—is back to pre-pandemic levels.

While the overall debt picture is ugly, in some ways it isn’t – and that it may take some more time for a debt crisis to reach a kitchen countertop near you.

As we knock off for the week approaching mid-summer, it strikes us how hard it is to distinguish signal from noise. Markets defying gravity gives us pause.

Don’t buy in at elevated prices.

Keep your asset allocation in full view.

Buy cheap.

Sell dear.

It’s a funny old world, isn’t it?

None of it, likely, concerns your portfolio.

This new wave of tokenized shares is exciting. It has the potential to break down walls and democratize access to pre-IPO giants.

But at the moment, it’s also risky, opaque, and largely unregulated.

So while we applaud the innovation, we urge caution — especially if you’re being offered something that seems too good to be true.