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There's something truly different about gold/metals ATH right now. As many have pointed out, these are safe haven assets. When there is turmoil in the world, when the value of government currencies are uncertain, equities are uncertain, this is where the money flows. Can't make more of it, no government can affect it, can hold, can travel.
Previous highs, like the 70's, functioned in this way. Gold at all time highs. Equities in the cellar, bonds in the cellar. The dollar, as the universal currency, strong. Strong demand for US treasury bills as a safe haven usually follows.
In the 70's we were in stagflation (high inflation low growth) in the US though, so interest rates were rising to try to limit inflation, but inflation remained high and growth was low... so demand for t bills was still weak, high inflation. So the fed made a crazy move - pegged interest to 20%. This killed inflation, and brought strong interest back to the dollar, and gold went into a 20 year decline.
They can't do that anymore. The US has gotten into a situation where the treasury needs to service debt more than a third of our annual GDP. How do we service that debt? We issue more bonds. If those bonds paid 20%, we'd go bankrupt.
So back to the beginning, what's special about right now. We have never had this situation. Equities are near all time highs. CAPE, which measures P/E ratio of the market, is over 40 for the second time in history, implying very high valuations. The buffet factor, which compares GDP to the value of stocks is at 224%, the highest ever. And we know metals are also at ATH's. What is happening?
Everyone knows the fed sets interest rates, but in the 90's, Japan taught all the feds around the world a new trick. Treasury issues bonds. Fed buys them. They just create the money and give it to the treasury. They collect payments. Then they send the interest collected back to the treasury. US does this the most, but everyone has allowed it because there's no better currency.
When COVID hit, the fed kicked this into high gear to prevent recession. In one month, they bought $1.3T of bonds (April 2020). They agree to buy $120B per month thereafter. In the last five years, the money in the world has increased from $15T >>> $22T. This is unprecedented, and rightfully so, countries' central banks were feeling like the dollar may be a little less safe if they're just going apeshit printing money. (Also that COVID money went straight to people via stimulus checks and PPP "loans" that were forgiven --->> all that extra money drove up equities, properties, groceries... it's the root of the hyper inflation.)
Ok we're almost there. 2022. Russia invades Ukraine. US freezes $300B of Russia's dollars. OH shit the dollar isn't what it used to be they are printing it like mad and if they don't like us they can just cancel it. Central banks changed their rainy day fund strategy. Instead of buying \~400 tons of gold per year (about 12% of demand) they started buying 1200 tons - 25% of demand in 2024. Now they are buying 900. They are only buying less because the price is up, they don't care about the price they are buying anyway. Jewelry is still buying the same 1200 tons regardless of price. Retail is buying 1000 tons because of the same reason central banks are, and industry can't buy less.
They are buying less treasury bonds. So the dollar has fallen 15% in the last year. Tariffs just making it worse for the dollar.
So why would this stop? US deficit just got way bigger with the big beautiful bill. Which means more t bills, and the interest rate is starting to divorce from fed rate changes because there is too much supply. They can't raise interest rates like the 70's. If stagflation hits (low growth, high unemployment AND high inflation) we are fucked. Remember our clever friend Japan? Well they just kept buying their t bills. Then they started buying nikkei stocks too. They hold 226% of their gdp in debt, interest is zero, and the yen is cratering. (One of the only places to take your dollar on vacation right now, FYI.)
Stocks WILL drop - who knows when exactly, but the highest CAPE ever was 44 in the dotcom era, we're at 40+. Oh and another record - $1.3T of those stocks are leveraged. When the drop happens where is the safe haven now? Dollar is no longer safe haven. This is why I think gold, silver, platinum could double again.
Side note: as soon as the world accepts bitcoin does in fact check every box gold does in these situations I think it goes apeshit too. Signs are already there - in October is started behaving a little differently - it's not a high risk asset that should track equities, it's a safety asset. Quantum computing the core risk there IMO.