April 2025 - Week 1 Edition

First Quarter Review Shows Gold and Silver “Lapping the Field” in Performance

With March and the first quarter in the books, the precious metals have eclipsed all the stock market indexes by a wide margin – reaching “escape velocity” during the month of March.

For the year-to-date, gold and silver are up over 17%, while all of the stock indexes are down. Part of this is due to the decline in the U.S. Dollar Index (DXY), both year-to-date and in March:

In the first quarter, gold also threw the U.S. Gross Domestic Product (GDP) deep into negative territory due to a strange accounting method for non-central-bank gold imports. Due to all the new imported gold from Britain and Switzerland to back up the gold ETF and futures account buying in America, the Atlanta Federal Reserve’s projection for the first quarter dropped five full points in three business days in early March, from +2.3% to -2.8%. On Tuesday, April 1, it was lowered to -3.7%, with first-quarter gold imports accounting for more than half of the decline.

However, we know the primary engine for gold’s surge is 24 straight years of high and rising deficits, plus the new wave of inflation since 2021. America’s debt-to-GDP ratio will reach 140% this year and other nations with such a high ratio have had a long history of slow to no growth: Venezuela, Japan, Italy, Greece and Portugal. Our annual deficit-to-GDP spending is also near 7%, second only to Brazil, double the EU nations and most other rich nations. When high levels of debt cripple a nation, they can’t grow and their currency goes into decline.

On top of that, Elon Musk’s cost-cutting team is being met with violence and mass resistance by a nation of “entitled” recipients of federal jobs, unnecessary or ill-gained contracts or payouts they will not surrender peacefully. Gold is giving America its verdict: You are on borrowed time.

Last week, I profiled our current spending and deficit dilemma. Each week, we tally up gold vs. stocks since Y2k. Now, I’d like to look all four stock market indexes over the last 25 years, because gold’s powerful surge since 2000 reflects our inability to balance budgets since 9/11. Soaring deficits during the financial crises of 2001 to 2011 sent gold up from $260 to $1,500. After a pause, gold began a second rise to $3,000, also on soaring debts, this time with inflation added.

In all, as this chart shows, gold has soared three to four times faster than stocks over the past 25 years and silver has more than doubled all four of the stock indexes over the past 25 years. 

In the five years since 2020, gold has more than doubled (+106%), from $1,519 to $3,122, while the Dow is up only 47% and the S&P 500 is up 74% as of April 1. Gold is clearly winning the race across all time frames but you won’t find much coverage of this story on Page 1 of any financial journal or on the financial news channels. That’s just fine with us because if the media were all over this gold story and telling people to get into gold, we would be concerned about a bubble readying to pop. Instead, gold and silver may take a slight dip over the next few days but I expect them to rebound and continue trending upward.

In addition, as I wrote earlier, central banks are creating a new Gold Standard. Since 2022, the world’s central banks have been buying over 1,000 metric tons each per year, exchanging paper currencies in favor of GOLD! It is the metal that has triumphed over all paper currencies throughout time and the metal that gave birth to the original gold standard and funded the industrial revolutions of Great Britain and the United States in the late 18^th through early 20^th centuries. Central bank buying has more than doubled the previous average (2011-21) of 500 tons per year, reflecting their response to deficits and high inflation, with no paper currency emerging to challenge the weak U.S. dollar.

As gold soars in response to weak currencies and weak stock markets, continue creating your own gold (and silver) standard by accumulating bullion coins and even better-performing rare coins. Also, for assistance in easily diversifying your IRA with gold, call our professional account representatives, many of whom have worked for me for over a decade.

The First Quarter results are in, and precious metals won in a landslide. The first week of April is filled with question marks due to the April 2nd reciprocal, not punitive, tariff deadlines that President Donald Trump dubbed “Liberation Day.” Because of this, stocks and precious metals will likely remain volatile until trading partners meet and work on lowering or raising tariffs, some of which will likely be done as negotiation tactics.

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