After each furious rally in gold over the past year, analysts and investors have openly wondered what the metal was seeing ahead.
But what if gold wasn’t discounting some future dire event, but instead simply recognizing that we’ve already reached the point of no return?
All investment markets are predictive mechanisms. Current values are simply the aggregate estimation of market actors regarding the future and the discounting thereof.
I’ve often maintained that the gold and bond markets, each https://www.moneymetals.com/news/2025/09/17/welcome-to-cheaper-money-004347" rel=”noreferrer”>intimately tied to the value of money, are the most sensitive of all. Yet, with bonds so deeply manipulated by the Fed, that leaves gold as the sole remaining accurate barometer of economic health and predictor of future developments.
That’s especially so today, when it seems that the yellow metal has overwhelmed all attempts to manipulate its price over any length of time.
So what has gold been telling us, particularly in the two instances this year when it gained $400-$500 over barely more than two weeks of trading?
Episodes like these have prompted gold bugs like me to recollect https://share.google/mjIzOkW2F052Ikqa1" rel=”noopener noreferrer” target=”_blank”>H.L. Mencken’s famous admonition, often paraphrased as: “Be careful what you ask for. You might just get it, good and hard!”
In other words, we may not want to live in a world with gold trading eagerly above $10,000 or higher.
It reminds me of an email conversation I had a while back with Jim Grant, who had signed off a message to me with a rallying cry of “Here’s to $25,000 gold!”
My response: “Jim, when gold’s trading at $25,000, we’ll be lighting our cigars with $100 bills…with our AR-15s draped across our laps!”
This, then, is the source of our fears regarding the signal gold may be delivering. Gold priced at many thousands of dollars won’t do us much good if our personal safety and/or the entire financial system is at risk.
So we keep peering ahead, wondering what dire event lies around the next corner.
My question is this: What if the dread development doesn’t lie ahead…but behind? What if gold is telling us not that something is about to happen, but simply recognizing the incontrovertible math resulting from decades of ever-easier money and ever-greater debt?
A warning that something lies ahead implies that we can somehow avoid the repercussions. What gold is likely telling us right now is that the cause has already occurred, and the effect is inevitable.
Anyway, that’s my rant for today…a day when gold is taking off to the upside once again.
The Golden Constant
Gold and silver — and in fact the entire metals and mining sector — are heading higher again today.
The yellow metal is accelerating to the upside after shaking off a bit of dollar strength early in the trading session.
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This isn’t surprising — gold has been outperforming every other market sector recently. Even during the near-panicked selling bouts in stocks this month, gold has refused to fall significantly further during this “correction,” and has even https://www.moneymetals.com/news/2025/07/21/bottoms-up-004218" rel=”noreferrer”>posted some nice gains as the rest of the markets were falling apart.
You may have seen a number of people posting charts showing the gold price coiling in an ever-tightening wedge formation, portending an https://www.moneymetals.com/news/2025/10/13/gold-from-tin-foil-to-tina-there-is-no-alternative-004408" rel=”noreferrer”>imminent breakout to the upside.
I don’t disagree. I believe the next rally is directly ahead.
But, while I’ve been impressed with gold’s relative strength during the market volatility of the past couple of weeks, my feeling is that we’ll continue to trade sideways for at least a couple more weeks before beginning the next rally.
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We can find some support for that timeline in our Bollinger band chart above. As you can see, the bands are once again “pinching,” and the band width in the bottom panel is falling rapidly toward the levels that have predicted new rallies with fair consistency during this bull market.
It hasn’t quite reached the point where I’d say a breakout is truly imminent, but it’s getting there.
Mid-December is historically a common launching pad for gold, and I wouldn’t be surprised by that timeline this year.
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