Introduction to the Current Market
Today, we’re going to look at some important charts that tell the story of the current market. These charts will give us an idea of where the market is headed and what we can expect in the future.
Gold Miners vs Other Sectors
The first chart shows the performance of gold miners compared to other sectors in 2025. Gold mining stocks are finally getting the respect they deserve, with spot metal prices soaring and profitability in this sector exploding. However, after more than a decade of underperformance, gold miners are just starting to catch up.
Jobs Revisions and Rate Cuts
Recent BLS revisions show a shocking trend in payrolls, with many jobs created under Biden turning out to be a mirage. This historic revision sets the stage for interest rate cuts from the Fed and other central banks. Lower rates should push the dollar down and continue to boost gold and silver prices.
Gold vs U.S. Treasuries
Gold has been on an epic run lately, and there are solid fundamental reasons for its ascension. As we can see in the chart, gold is tracking closely with US Treasuries outstanding (U.S. government debt). This suggests that gold is a good hedge against government debt and inflation.
The Turning Point in 2022
The chart below shows the fascinating relationship between the real return of the 10-year U.S. Treasury bond (accounting for inflation) vs the price of gold. Until 2022, the two tracked closely, but after Russia invaded Ukraine and the U.S. seized Russian central bank assets, central banks began switching from dollar assets to gold. This trend is only strengthening, and it will have a major impact on the gold market.
Gold as an International Reserve Currency
The chart below shows the rise and fall of various assets in international monetary reserves. Gold was once the dominant currency, but it was surpassed by the dollar in the 1980s. Now, gold is reclaiming its rightful place in the global monetary order. Despite its impressive comeback, gold today still only makes up 24% of total global reserves. If it climbs back to 60% or 70%, the price will need to continue its current run.
Strong Foundations for Hard Assets
Gold, silver, and miners have performed well over the past year, but this bull run has plenty of gas left in the tank. A global debt spiral is underway, and central banks have finally gotten the memo that gold is in, and fiat is out. The Fed is about to restart money-printing operations, and stimulus packages will be unleashed soon. This will lead to a broader commodity boom over the coming years, with many opportunities to make outsized returns.
Conclusion
In conclusion, the current market trends suggest that gold and other hard assets are poised for a significant increase in value. With central banks switching to gold, interest rates decreasing, and a global debt spiral underway, the foundations are strong for a bull run in hard assets. As gold continues to reclaim its place in the global monetary order, we can expect to see many opportunities for growth and investment in the coming years.
