Gold

Silver Succumbs To Selling Pressure; Gold Follows Reluctantly

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Gold and silver fell sharply on Wednesday last week, with both metals moving back towards their post-peak lows established in July.

Gold was priced at $4072 in early trading, down almost $90 oz; then rebounded to close slightly above $4100, down about $60 from yesterday’s close. The net loss was 1.14%.

Silver found little support and landed at $55.27 early in the day. The closing price for silver was $55.51, down $3.54, a whopping 6% from the day before.

Weakness in both gold and silver spread to mining stocks, and trading was influenced by a hot CPI print and rising fears of further Federal Reserve rate hikes.

The current gold price is $4117. The current silver price is $57.76.

BACK TO THE FIFTIES FOR SILVER 

After a brief respite that took silver back above $60 oz. for several weeks, the white metal has returned to the $50s with a vengeance. From last Monday’s (October 12th) intraday high at $61.57, the silver price fell more than 10%. Whatever encouragement might be inferred from gold’s reluctance to surrender to bearish forces seems lost on silver. (see Silver R&B – Can’t Do Sixty No More)

GOLD AND SILVER TAKE THEIR CUES FROM THE USD 

The U.S. dollar continued its upward march against fellow fiat currencies. Intraday, DXY (USD ETF) was up nearly 1% before backing down in later trading.

Currently, DXY is trading at 101.73. Its recent high was 102.96.

The U.S. dollar will continue to strengthen versus other currencies and could gain purchasing power as dollar prices for most assets (stocks, bonds, commodities, and real estate) will see huge declines soon.

Gold and silver have seen their peak prices for months to come. The U.S. dollar has more life left and will continue to strengthen. Correspondingly, declining gold and silver prices have not seen their lows yet.

1980, 2011, & 2026 

Gold and silver prices experienced blowoffs in 1980 and 2011. The blowoffs resulted in peak prices that lasted for years.

I believe that gold/silver at $5400/$120 in January 2026 were major price peaks. The trend for gold and silver prices is down and will remain so indefinitely.

The cumulative declines will exceed worst-case scenarios and last longer than most people can imagine. (also see Lower Gold Price, Stronger USD, Higher Interest Rates)

 

 

Lower Gold Price, Stronger USD, Higher Interest Rates

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Investors should expect three things for the remainder of this year (2026) and throughout next year (2027): 1) a lower gold price, 2) a stronger U.S. dollar, and 3) higher interest rates.

LOWER GOLD PRICE 

Gold at $5400 in January 2026 was a major price peak. The trend for the gold price is down and will remain so for an indefinite period of considerable length. Gold’s long-term, erratic rise in price since 1971 reflects the loss of U.S. dollar purchasing power over the past century. Gold’s price tops in 1980, 2011, and 2026 were the culmination of decade-long catch-up moves to bring its dollar price in alignment with the erosion of purchasing power that had taken place.

The 1980 peak price for gold gave way to a 70% decline that lasted twenty years, and the prior $850 peak price was not surpassed until twenty-eight years later, in January 1980.

The gold price peak in 2011 was followed by a 45% decline that lasted nearly five years. The 2011 peak at $1900 was not exceeded until nine years later, in August 2020.

The gold price peaked in January 2026 at $5400 oz. Five months later (June 2026), the price had dropped to about $4000 oz., where it found temporary support. After rising to $4650, the gold price fell back to $4112.

I expect gold to break $4000 on the downside, and it could go as low as $3000 by the end of this year or early next year.

STRONGER U.S. DOLLAR

The past four years (2022-26) show relative dollar strength/weakness at a higher level than at any other time in the past forty years. The price action for DXY between 90 and 100 lasted for seven years and provides substantial support.

The recent breakout above 100 for DXY (US Dollar Index) has taken it to as high as 101.8. After some brief consolidation below 100, DXY is now above 102 and is moving strongly to the upside.

There are no better fiat alternatives to the U.S. dollar. That is because all governments inflate and destroy their own currencies.

Regarding BRICS, I said the following…

“Without convertibility, any new currency, even one issued with the pretense of being backed by gold, is just another empty promise and another substitute for real money, i.e., gold. 

Do you trust the governments of Russia and China, or any quasi-government authority, to institute and maintain any proposed new currency (gold-backed or not) that would supposedly be a better alternative to the U.S. dollar?

As bad as the dollar is, you won’t get a better alternative from BRICS or any of its countries. (see Throwing Gold BRICS At Broken Windows)

CBDCs are digital fiat currencies. With the move to eliminate cash, the U.S. dollar is pretty much a digital currency anyway.

The U.S. dollar will continue to strengthen versus other currencies and could gain in purchasing power as dollar prices for most assets (stocks, bonds, commodities, and real estate) are likely to suffer huge declines soon.

HIGHER INTEREST RATES

The Federal Reserve pursued a policy of lower interest rates that lasted forty years. Then, in an about-face that slammed the bond market and rate-sensitive investors, it told everyone that “spiked punch” would be more expensive for quite some time.

The Fed first announced a shift in emphasis regarding price stability and interest rate policy in March 2022…

“In support of these goals, the Committee decided to raise the target range for the federal funds rate to 1/4 to 1/2 percent and anticipates that ongoing increases in the target range will be appropriate” (FOMC, March 16, 2022)

The financial press coined the exact phrase “higher for longer” shortly thereafter, and former Chair Powell himself confirmed the meaning and accuracy of its use at the September 2023 Federal Open Market Committee (FOMC) meeting, emphasizing that borrowing costs would remain elevated for much longer than investors initially hoped…

“Restoring price stability will likely require maintaining a restrictive policy stance for some time. The historical record cautions strongly against prematurely loosening policy.” (J. Powell, Jackson Hole, Wyoming, August 2022)

In an interview a couple of years ago, former Fed Chair Powell said…

“I think instinctively – I can’t prove this; we’re going to learn about this empirically – but it seems to me that the neutral rate is probably higher than it was during the intra-crisis period. And so, rates will be higher.“

No matter the extent of collateral damage thus far, the potential for further harm to financial markets and the economy is likely, as interest rates could rise much higher. This is true regardless of Federal Reserve intentions. Here’s why…

The Fed’s action caused a misallocation of resources and inefficient use of capital, thereby distorting the markets.

Rates were forced to lower levels that were not economically efficient. The rates were held at those levels for too long. A cleansing of sorts has to occur before the economy can build momentum that reflects lasting, real growth.

That next wave higher for interest rates could be triggered by a collapse in the credit markets. The credit collapse could push the world economy into a severe economic depression. (see The Looming Threat of Credit Collapse and Deflation)

SUMMARY AND CONCLUSION 

Gold and dollar-denominated assets will soon see huge price drops. The inflationary wave that carried them to such extremes is in danger of breaking.

The likelihood of much higher interest rates and lower bond prices is high and rising.

The U.S. dollar will continue to strengthen on both a relative and absolute basis, defying the naysayers for now. (Also see Bonds Break Badly; Bad News For Investors)

Stubborn Gold & Slumping Silver – Crazy Man, Crazy

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The declines in gold and silver are continuing, although gold has exhibited stubborn resistance to silver’s downside lead. Gold’s potential for a huge price decline is not obvious to most investors because they focus on the assumed strength of the yellow metal, as evidenced by its refusal to stay below $4000.

I expect that to change soon, and it might already be happening. Currently, gold is well below $4000. This comes after several spikes higher, which have not held.

Silver, on the other hand, is stuck below $60 and seems ready to give up the ghost. The white metal has been unable to poke back above $60 for nearly two weeks, with closes below that mark for eight consecutive trading days.

IF GOLD BREAKS DOWN 

If/when gold breaks down, there isn’t any technical support until $3400-3450, so it is reasonable to expect a sharp price drop of $500 oz. After that, there might be some stabilization, but it should be temporary.

Silver would follow suit, possibly stopping at $50. There is no technical support below $50 and nothing to stop a plunge straight to $40.

CRAZY MAN, CRAZY

With a nod to Bill Haley and The Comets, yes, the projections above may very well sound crazy to some. But these are crazy times, and crazy markets…

The gold price more than doubled, and the silver price quadrupled over 9 months last year. That’s crazy, and it’s not unreasonable or crazy to expect something similar on the downside.

CAVEATS AND CONCLUSION

Crazy is as crazy does. As long as investors and others continue to respond crazily to the crazy actions of others and a world full of crazy events and circumstances,  the markets will continue to reflect crazy results. This should not be a problem unless you have been dragged into the fray, where participants allow crazy emotions to displace common sense.

If you are dependent on explosively higher gold and silver prices for investment success and personal gratification, you might want to review your expectations and prepare for a longer period of lower prices.

A longer period of lower prices could last for months or years.

 

Silver Rhythm & Blues – “Can’t Do Sixty No More”

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After more than one full week of trading, silver has failed to break above $60 and stay above it. In morning trading overseas (10pm NY), silver is down 2.46% at $58.28, less than one dollar above its recent closing low of $57.30.

Billy Ward and the Dominos recorded a song in 1955 called “Can’t Do Sixty No More“. It was a follow-up to their big hit “Sixty Minute Man”, released several years earlier in 1951…

 

Billy Ward & His Dominoes

Silver, as it has done in the past, has lost considerably more (twice as much) on the downside than gold since their respective peaks earlier this year. The silver spot price is down 50%, while gold is down merely 25%.

I expect the gap to widen as both metals continue to decline. The lower the eventual bottom(s), the worse it will be for silver.

HOW BAD CAN IT GET FOR SILVER? 

Pretty bad. After both metals peaked in 2011, silver lost more than 70% over the next five years, dropping from $49.00 to $14.00. The decline in gold was comparatively smaller at 45%, dropping from $1900 to $1050.

After gold began to climb the price ladder higher, silver struggled and eventually fell as low as $12 in April 2020, a decline of 76% from its 2011 high. Even at its concurrent low point, gold was up almost 30% from its low of $1050 several years earlier.

In 1980, the price of silver fell from $48 to $5.70 in less than two years. The decline of 88% was much worse than gold, which dropped from $850 to $290 for a loss of 66%.

Silver’s case worsened after that. Its price dropped as low as $3.57 ten years later, for a cumulative loss of 93%.

WHERE’S THE BOTTOM? 

We don’t know. But I expect the selling to accelerate, and it could take silver as low as $30 oz. That would represent a 50% decline from its current price and a cumulative decline of 75% from its peak price in January 2026 at $120. 

To whatever extent the decline in the silver price continues, it will be worse than that for gold. If you own gold, though, that should not make you happy. Look for gold at $3000 oz. on the downside. 

(also see Silver Surfers Hit By Killer Wave and New Closing Low For Gold – Again)

 

 

Gold, Silver, Bitcoin, et al.

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New lows for gold, silver, and bitcoin continued last week.

Gold (spot) broke below $4,000, dropping as low as $3959 on Wednesday before closing at $3998. A small rebound brought the yellow metal up to $4088, where it closed in New York on Friday/26th.

Silver price action was more dramatic, closing solidly below $60 for three straight days, finishing the week at $59.05. The new intraday low for silver was $55.53. (see Silver Surfers Hit By Killer Wave)

At their respective lows, gold has dropped 27% since its peak of $5414 in January, and silver has declined by 54%. Bitcoin broke below $60,000 and reached a 52-week low of $58,075, matching silver’s decline of 54%. Bitcoin was sitting at a peak of $127,000 only 10 months ago.

Crypto woes extended to Ethereum (ETH) and Ripple (XRP), which are both at 52-week lows. Ripple (XRP) leads the crypto carnage with a loss of 72% since its peak price of $3.65, less than one year ago. Ethereum (ETH) isn’t far behind, sporting a loss of 70% since its peak last summer.

Collateral damage from Bitcoin’s collapse extends to Strategy (MSTR) stock, which dropped as low as $81 on Friday/26th, before closing at $82, a decline of 82% from its peak price last year at $457.

$REALITY OF THE LOSSES 

The damage that has occurred to investors should be apparent, but when talking about financial matters in percentage terms, the actual relevance is sometimes lost. To be clear about the numbers, below are the specific dollar amounts of losses for each of the investments above. Calculations are based on the same percentages cited above and refer to an investment amount of $100,000.

GOLD        $100,000      $73,000       ($27,000)

SILVER     $100,000      $46,000       ($54,000)

BITCOIN   $100,000      $46,000       ($54,000)

MSTR         $100,000.     $18,000       ($82.000)

If you owned Strategy (MSTR) stock worth $1,000,000 last summer, that same amount of stock is now worth $180,000.

FINAL THOUGHTS 

People are usually quite willing to share details of how well their latest investment has performed, implying that their own results are similar. It is not a one-way street, though, and the numbers above are offered in the hope they might provide some needed insight and provoke thoughtful consideration of the facts before jumping aboard the next rocket ship to the moon. (also see Silver and Bitcoin Both Aim For 60 After Peaking at 120 and New Closing Low For Gold – Again)

Silver Surfers Hit By Killer Wave

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After an absolutely awesome crest, the silver wave has collapsed. In surfing vernacular, the action is referred to as a plunger –  “Plungers occur when the wave collapses in a short period of time. The energy release is sudden and can be highly dangerous.” (https://powerboatand rib.com)

Here is a photo (courtesy of Kitco) that depicts the damage done thus far…

Live silver chart

This evening, at 8:49 pm in New York, the bid price for spot silver touched $56.99. More damage could be ahead, as the potential for spillers exists, which can release energy more gradually but still in a negative fashion.

GOLD BOAT CAPSIZES

Heavy damage was inflicted on others in the immediate vicinity of the killer wave. A large boat of gold traders was capsized, but reports indicate there are fewer casualties and the damage, while heavy,  appears less severe than that suffered by the silver surfers…

Live gold chart

ANALYSIS AND COMMENTARY 

Both silver and gold are in the throes of an unwinding that is mostly attributable to a reversal of previous excesses. When you ask someone about the fundamentals for either of the two metals, the common answer includes lip service to snippets about gaps in consumption vs. supply, the Fed and interest rates, revaluations (repricing) to “absorb” debt loads, etc.

Unfortunately for those who bought at higher prices, those same “fundamentals” aren’t keeping the sinking ship afloat. Talking about them now might assuage hurt feelings after the fact, but it doesn’t restore price losses of 30-50 percent.

Investors are price-conscious and fickle. They are usually not interested in value. They want to know when the price of something is going up, and by how much. Sometimes they want to know the reasoning, i.e., why. The ‘why’ is mostly an afterthought. Usually, ‘why’ enters the conversation after the price goes down when it was expected to go up.

That is when investors and their advisors start talking a lot more about fundamentals. Since the fundamentals they talk about don’t always apply to gold and silver, whatever logic they use tends to be faulty because it is based on incorrect assumptions. This leads to unrealistic expectations.

Some of those unrealistic expectations were fulfilled, albeit temporarily, when silver surpassed $100, and gold exceeded $5000. The aftermath can sometimes reverse the entire excess of those unrealistic expectations.

How much of silver’s leap from $30 to $120 in 9 months was unrealistic? (see Do The Fundamentals Justify $100 Silver?) How much of the gold price increase from $3500 to $5500 in 5 months was unrealistic? (see  New Closing Low For Gold – Again)

 

New Closing Low For Gold – Again

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In a previous article, New Closing Lows For Gold And Silver, I said the following…

“Irrespective of all the 1) fundamentals, 2) proclamations about what is different now, and 3) justifiable arguments and expectations for much higher prices, etc., the price action in gold and silver, coupled with the attitudes and behavior of investors, leads me to the conclusion that $5500 for gold and $120 for silver are major price peaks and are not likely to be exceeded for several years.” 

Last Friday’s action in both gold and silver adds at least a modicum of confirmation to the above statement.

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Bond Market Says It All – And More

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Yes, the complete title is technically incorrect. However, I want to emphasize a point. Whatever we think the bond market is telling us might be dwarfed by what goes unnoticed by most observers.

Obviously, lower bond prices are synonymous with higher interest rates. Today’s (and this week’s) drop in Treasury bond prices and the correlative increase in interest rates are stark reminders of how quickly the tide can turn in the credit markets. What makes that a real eye-opener is that seven weeks ago, the long bond (TLT) was perched at the relatively lofty peak of 91. At the close on Friday, TLT stood at 83.7, a decline of more than 8%.

Even so, it doesn’t seem that severe unless we look closer.  Bond prices are now near their lowest point since the shift in Fed policy four years ago to push interest rates upward from near-zero to levels described as “higher for longer.” At current prices, long-term Treasury bonds are down more than 50% from their peak prices less than five years ago.

We have seen bond prices reach this point three times in the past two years. On the two previous occasions, bond prices have rebounded. They could do so again, but I doubt that will happen.

Current long-term bond prices appear close to breaking down and sending interest rates much higher. It has been twenty years since bond prices traded below current levels, and, conversely, interest rates exceeded current levels. A drop in bond prices now will bring consequences that younger investors are unfamiliar with and won’t be prepared for.

OTHER SIGNS OF TROUBLE 

The potential enormity of negative fallout from lower bond prices and higher interest rates was confirmed by big down days in all markets, including stocks, gold, and silver. Only oil was higher. What did you expect?

Also, the U.S. dollar index was up sharply. I expect a strong break above 100 in the US dollar index (DXY), which will be reflected in lower prices across the board for most assets (stocks, bonds, and commodities).

The severity and duration of declines depend on the extent to which the credit markets are affected. Something similar to 2008 is not only a strong possibility, but conditions will likely be worse.

WHAT TO DO

It all depends. If you think the markets will survive and recover, then you could wait things out.

As I said in a previous article, though…

“Thirty percent of investable assets in cash is not harshly negative. For most investors, however, it may be an uncomfortable stretch to have that much lying around, doing nothing. Although when the winds blow, and the rains come, it probably won’t be enough.” (see Buffett’s Cash Cache – $350B Isn’t Chump Change)

Buffett’s (Berkshire’s) Cash Cache

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$350 BILLION ISN’T CHUMP CHANGE 

All kidding aside, the amount is startling, if not staggering. Berkshire Hathaway now holds $350 billion in cash and Treasury bills. The amount represents 30% of total assets.

What is the thinking that led to this accumulation of cash, and what does it mean for investors?

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New Closing Lows For Gold And Silver

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Spot gold closed Friday in New York at $4490, and spot silver closed at $67.69. Both prices were new closing lows for the two metals. See the charts below, courtesy of Kitco…

Live gold chart

Live silver chart

Both gold and silver peaked earlier this year and within 24 hours of those peaks, both metals experienced serious price implosions. The respective lows of close to $4600 for gold and $72 for silver occurred on February 2nd, 2026. At their worst points, the damage amounted to a 15% loss for gold and a 40% loss for silver – in one day! (see Silver Price Implosion – What About The Fundamentals?)

Both prices held up until Friday (March 20, 2026). After two months of consolidation, any technical support appears to have given way. That cannot be a good sign if you are expecting a quick turnaround to the upside and much higher prices. Gold actually did run back up to its old high on the back of concerns about the war with Iran; however, it has lost a considerable amount of air in the past week.

ANALYSIS AND COMMENTARY 

There is a great deal of posturing about the “fundamentals” for both gold and silver. This is meant to assuage and comfort those who have seen a large portion of their metals values disappear – 19% for gold and 44% for silver in short period of time. It is also intended to justify previous predictions of much higher prices for both gold and silver.

There have been various attempts to downplay the significance of the declines. After all, silver had quadrupled in price (up 300%) after just nine months. Is it really so bad that it declined  “only 44 percent” after such a stellar run? The depressing reality of the math should startle anyone awake who might be sleeping – if you owned silver on January 29th when it peaked at $120 oz., you have lost nearly half of your money in less than two months.

In other words, $100,000 in silver at its January peak is now worth $56,000. That might not matter to you if you are in at $25 oz., but another halving of the silver price would erase most of your profits. Will you be able to hold on for the “long term” if silver drops to $25 or lower?

FINAL THOUGHTS

As far as gold and silver prices are concerned, I think we are seeing something quite similar to 1980.

Irrespective of all the 1) fundamentals, 2) proclamations about what is different now, and 3) justifiable arguments and expectations for much higher prices, etc., the price action in gold and silver coupled with the attitudes and behavior of investors leads me to the conclusion that $5500 for gold and $120 for silver are major price peaks and are not likely to be exceeded for several years. (also see Gold vs Silver – Gold Still Wins)