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

In one refrain from our book Empire of Debt, we warned that late-stage credit systems always suffer the same fate: the debasement of money disguised as growth. Ray Dalio said the quiet part out loud in an interview yesterday:

“If you depreciate the money, it makes everything look like it’s going up.”

Which is precisely why the markets get jittery at the top. And why politics are as wacky and polarized as they have been.

In New York, Mayor Zohran Mamdani is demanding higher taxes on the rich to plug budget holes left by former Mayor Adams. He wants billions from Albany. Governor Hochul has yet to weigh in.

In California, Sergey Brin, Eric Schmidt, and other Silicon Valley billionaires are backing a new pro-business PAC to fight a proposed 5% wealth tax on the state’s 200 richest residents. Larry Page has already moved to Florida. The line to Nevada is forming.

Ray Dalio, again, with the map:

“When governments run large deficits and the debt is no longer bought willingly, they have two choices: raise taxes and cut spending, or print money. Those that can print, do. Those that can’t, fall apart.”

Populist politics surge. Moderates vanish. Scapegoating begins. The wealth gap widens until it becomes an impassable chasm.

The S&P 500 topped 7,000 for the first time yesterday, adding to its stack of all-time highs this year and continuing the trend set in 2025.

But… those highs are measured in dollars. When priced in gold, which topped $5,500 — also a historic number— this morning, stocks are actually at a 12-year low.

Trump is trying to force two converging economic events that haven’t aligned like this in over 40 years.

The first is the cost of borrowing. After the fastest rate-hiking cycle in decades, rates are rolling over. Trump wants them at 1%. Jerome Powell’s term ends at the Fed on May 15. The path is being cleared for a true believer in lower interest rates to take his spot.

The second is the cost of living. Oil has fallen from $95 to just over $60 in a year. Gas is averaging $2.88 nationally. And because oil feeds into everything — shipping, food, plastics — falling prices cascade across the economy. The capture of Venezuela’s Nicolas Maduro is not a coincidence. Venezuela is one of the leading exporters in the OPEC block of oil producers.

A push for lower interest rates, jawboning by Trump administration officials, and concerns over U.S. debt levels are giving the dollar a good thrashing.

Dollar-denominated assets, from global commodities to U.S. stocks — even competing fiat currencies — will see prices rise versus the U.S. variety until this trend shifts.

“If you depreciate the money, it makes everything look like it’s going up.”

Which is precisely why the markets get jittery at the top. And why politics are as wacky and polarized as they have been.

In New York, Mayor Zohran Mamdani is demanding higher taxes on the rich to plug budget holes left by former Mayor Adams. He wants billions from Albany. Governor Hochul has yet to weigh in.

Ray Dalio, again, with the map:

Populist politics surge. Moderates vanish. Scapegoating begins. The wealth gap widens until it becomes an impassable chasm.

The S&P 500 topped 7,000 for the first time yesterday, adding to its stack of all-time highs this year and continuing the trend set in 2025.

But… those highs are measured in dollars. When priced in gold, which topped $5,500 — also a historic number— this morning, stocks are actually at a 12-year low.

Trump is trying to force two converging economic events that haven’t aligned like this in over 40 years.

A push for lower interest rates, jawboning by Trump administration officials, and concerns over U.S. debt levels are giving the dollar a good thrashing.

Dollar-denominated assets, from global commodities to U.S. stocks — even competing fiat currencies — will see prices rise versus the U.S. variety until this trend shifts.