Economic conditions varied widely, but gold held up better in tough times as well as during periods of growth. In all likelihood, no one who held gold through the past couple of decades regrets it.

Why has gold done so well and when will that change?

Investors would have, for example, missed the past three years where gold had some of its best performance — while the Fed hiked interest rates.

Price inflation and the gold price are well correlated. The cost of goods and services moved relentlessly higher over the past two and a half decades — similar to the gold price.

Yet there is still more to the story. The past three years, again, hint at something else going on as inflation slowed while gold accelerated higher.

The most important driver might be confidence.

Markets are complicated and it can be dangerous to oversimplify. However, one trend has been remarkably steady over the past 25 years. Confidence has been in overall decline.

The election of Donald Trump and the implementation of DOGE might be signals of a bottom in confidence. It’s fair to say roughly half of the nation feels the country is headed in a better direction.

However, the other half feels quite differently. And Congress has yet to join in the effort to rein in spending and limit government.

There is a lot of very difficult work that has to be done before trust is restored. And it isn’t cyclical in nature, like springtime inevitably following winter.

At some level, it appears investors instinctively understand. The gold price, at least thus far, is signaling the bottom in confidence remains out of sight.

This week’s Market Update was authored by Money Metals Director Clint Siegner.

Call Money Metals for Precious Metals Coins,
Bars, and Rounds 1-800-800-1865
We Buy Back Too!