• Gold is projected to continue its upward trajectory into 2025, potentially breaking $3,000
• The price is driven by monetary policy, central bank purchasing, BRICS+ de-dollarization
• Now is the time to protect your portfolio with physical precious metals before the price climbs even higher

Gold Prices Continue to Rise

Gold prices are continuing their ascent to all-time highs. The rise is being supercharged by growing uncertainty across a changing economic landscape. Investors are already taking profits amid gold’s upward momentum. But banks such as Goldman Sachs suggest gold’s rise will continue well into 2025 – breaking new records along the way.

Interest Rate Volatility and Gold’s Role

One of the key drivers of gold’s rise has been fluctuating expectations around Federal Reserve rate cuts. Initially, there was speculation about a significant 50 basis point rate cut in the near future. However, stronger-than-expected job reports and higher-than-anticipated inflation have dampened these hopes. Despite this, more rate cuts are expected, and historically, the price of gold tends to rise by about 6% within the first six months of an easing cycle.¹

This correlation between lower interest rates and higher gold prices is well documented. Safe haven gold becomes more attractive compared to other interest-bearing assets.

Divergence in Global Investment

North American investors have been steadily increasing their gold purchases. Though they are still catching up to the rest of the world. According to the World Gold Council, North Americans bought $1.36 billion worth of gold last month, compared to $1.4 billion in global inflows. Western investment is rising. But there’s still untapped potential to drive prices even higher.²

Analysts are asking whether it’s too late for Western investors to catch up. Particularly as some Western banks have been short-selling gold. Comparisons are being made to the silver squeeze of 1980. Some are predicting that gold could face a similar short squeeze. That would potentially lead to massive buybacks and unprecedented price increases.

Central Bank Demand and the BRICS+ Factor

Central banks have been significant buyers of gold. Many are turning to the precious metal as a hedge against geopolitical uncertainty and financial instability. Officially, China has not purchased gold in the last five months. But market observers speculate that central banks, including Russia’s, may be buying in secret. The World Gold Council estimated that 67% of central bank gold purchases in the second quarter went unreported. Russia, for example, is expected to spend $535 million over the next three years to replenish its precious metals reserves.³

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The BRICS+ nations (Brazil, Russia, India, China, South Africa, and others) are hoarding gold at an unprecedented rate. These nations represent over 40% of the global population. They are using gold to diversify their reserves and to pursue de-dollarization. At the upcoming BRICS+ Summit in Kazan, Russia, leaders are expected to discuss further steps to counter the Western-dominated financial system. The draining of gold from the London Bullion Market Association (LBMA) vaults by Eastern nations is seen as a sign of resistance to the West.

A New Global Financial System on the Horizon?

At a recent panel discussion hosted by the LBMA, experts agreed that gold’s role as a reserve asset in global foreign reserves will continue to grow. Central banks from countries like Czechia, Mongolia, and Mexico have all announced plans to increase their gold holdings. They see it as a vital diversifier and hedge against falling interest rates and geopolitical risks.
The discussion also highlighted the growing appeal of gold as a global currency. As nations seek alternatives to the U.S. dollar, gold is becoming increasingly attractive for international trade. They see the world becoming multi-polar – which will support gold demand.

Geopolitical relationships are shifting. Nations fear sanctions or need to find ways to trade with sanctioned countries. Currently, the gold market is too small to meet this need for the global economy. Nevertheless, the trend suggests increased demand, which could lead to higher prices. With China reportedly preparing to launch a gold-backed yuan and Russia trading in currencies pegged to gold, we may be witnessing the birth of a new global financial system centered around gold.

Gold Price Predictions

As of now, gold is trading around $2,640 per ounce, nearing its all-time high of $2,685. Goldman Sachs predicts that gold could continue to hit all-time highs by the end of 2024, potentially reaching the $3,000 mark by 2025. That would represent a 12.5% return on investment from the current price level.⁵

Goldman Sachs repeated their bullish stance. They stated, “We reiterate our long gold recommendation due to the gradual boost from lower global interest rates, structurally higher central bank demand, and gold’s hedging benefits against geopolitical, financial, and recessionary risks.”⁶

Conclusion

The global economic landscape is shifting. Lowering interest rates, increasing safe haven demand, and accelerating global de-dollarization is likely to keep gold on an upward trajectory. Prices are predicted to reach all-time highs in 2025. Owning physical precious metals, particularly in a tax-advantaged Gold IRA, can secure and potentially grow the value of your retirement savings. Contact us today at 800-462-0071 to learn more.

Notes
1. https://www.kitco.com/news/article/2024-10-11/gold-defies-odds-yet-again
2. https://www.kitco.com/news/article/2024-10-11/gold-defies-odds-yet-again
3. https://www.kitco.com/news/article/2024-10-11/gold-defies-odds-yet-again
4. https://assets.finbold.com/uploads/2024/10/image-70.png
5. https://watcher.guru/news/goldman-sachs-revises-gold-price-prediction-for-2025
6. https://watcher.guru/news/goldman-sachs-revises-gold-price-prediction-for-2025

• Natural disasters and their aftereffects inflict trillions of dollars of damage on the economy
• Beyond immediate physical damages, hurricanes result in unemployment, inflation, higher insurance, and market volatility
• The rising intensity and frequency of natural disasters heightens the need for protective financial strategies like a Gold IRA

Hurricanes Devastate Savings

Hurricanes are among the most destructive natural disasters, leaving a trail of devastation – both physical and financial. Their damage wreaks havoc not only on the afflicted area, but on the national economy. As we face a growing number of extreme weather events, such as Hurricane Milton and Helene, understanding their economic impact has become essential to protecting one’s financial future.

A Growing Danger

Hurricanes and tropical storms have accounted for over 50% of the $1.79 trillion in damages from billion-dollar weather disasters since 1980.¹

2022 – Climate disasters cause almost $30 billion in losses²
2023 – Americans experienced 114 declared disasters³
2024 – $181.7 billion in GDP losses predicted if three major hurricanes make landfall⁴

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Local Economic Damage

The economic damage caused by hurricanes is vast and multifaceted. Direct costs from the storms include the immediate destruction of homes, infrastructure, and businesses. Hurricane Katrina caused over $200 billion in losses. Those losses include not only physical damage but also the broader financial aftershocks.

Joel Myers, AccuWeather’s founder and executive chairman, stated Milton is poised to become “one of the country’s most damaging and costly hurricanes.” Early estimates suggest economic losses could exceed $200 billion. That figure accounts for property damage, business closures, and significant infrastructure failures. All of which will have long-term consequences for the region.⁶

Hurricanes can result in mass unemployment. Following a major storm, many businesses are unable to reopen for days, weeks, or even months. Following Hurricane Katrina, for instance, over 230,000 individuals lost their jobs within ten months of the storm. This resulted in nearly $3 billion in lost wages. Helene could cause the loss of more than 100,000 jobs. ⁷

The repair and rebuilding efforts can stimulate economic activity. However, the net economic impact is still negative due to the massive losses and disruptions. In areas affected by back-to-back hurricanes like Milton and Helene, these losses are compounded. A prolonged period of economic stagnation can emerge.

Additionally, hurricanes disrupt key industries like agriculture and energy production. When Hurricane Ian hit Florida in 2022, the state’s citrus industry saw losses between $400 million and $700 million. ⁸

Similarly, the energy sector is vulnerable. Storms often force oil rigs and refineries to shut down temporarily. Chevron, for example, evacuated personnel at several Gulf of Mexico oil rigs in anticipation of Hurricane Milton. Potentially driving up energy costs nationwide.

National Impact

The economic impact of hurricanes often reverberates throughout the country. Hurricanes can negatively affect Gross Domestic Product (GDP). Particularly when they hit heavily populated or economically important regions. In 2005, the trio of storms—Katrina, Rita, and Wilma—lowered national GDP growth.

If Hurricane Milton’s damage exceeds $200 billion, the impact on third-quarter GDP could be significant. This is especially concerning because the storm comes right after Hurricane Helene. Helene has already affected states that contribute nearly 13% of the U.S. GDP.⁹

Increased Debt Burden

The cost of rebuilding after a hurricane is another financial burden that can last for years. Rebuilding infrastructure, homes, and businesses requires massive investments that can drive up public debt and insurance premiums.

Disaster relief is often classified as “emergency” spending. Therefore, it can circumvent normal budget caps and add directly to the national debt. It is rarely offset by cuts elsewhere in the budget. Between 2012 and 2021, Congress spent more than $400 billion outside discretionary spending caps on emergency relief. And this cost is projected to increase due to changing climate conditions. Relief further burdens the $35 trillion national debt. And in turn, threatens higher taxes and cuts to Social Security and Medicare. ¹⁰

Insurance Costs

The cost of insurance in disaster-prone areas is skyrocketing. Premiums have risen by over 30% since 2020, with storm-prone areas seeing hikes up to 50% or more. Some major insurance companies have even stopped issuing new policies in hurricane-prone states like Florida.¹¹

Increased Retiree Risks

For retirees, the financial risks of hurricanes can be particularly devastating. Many retirees move to states like Florida, Texas, and North Carolina. The very same areas that are in the path of hurricanes. Beyond the potential for property damage, hurricanes disrupt local economies, leading to rising costs for essentials like food, utilities, and insurance. These price hikes, combined with market volatility during and after a storm, can erode retirement savings. Additionally, if retirees need to tap into their savings earlier than planned to cover emergency expenses, they may face tax penalties and fees, further depleting their funds.

Conclusion

As hurricanes become more frequent and severe, understanding their economic impact is crucial. From massive property damage to lost jobs and ruined businesses, the financial toll of hurricanes is far-reaching. For those nearing or in retirement, the risks are even greater. In the aftermath of a natural disaster, when markets are volatile and inflation risks increase, holding a portion of your savings in physical gold can offer peace of mind and financial security. A Gold IRA can provide long term savings protection against the increasing number of disasters. Contact us today at 800-462-0071 to learn more.

Notes
1. https://www.climate.gov/news-features/blogs/beyond-data/2022-us-billion-dollar-weather-and-climate-disasters-historical
2. https://www.climate.gov/news-features/blogs/beyond-data/2022-us-billion-dollar-weather-and-climate-disasters-historical
3. https://www.investopedia.com/natural-disasters-impact-on-retirement-8704241
4. https://blog.implan.com/hurricane-season-2024#:~:text=The%202024%20hurricane%20season%20poses,job%20creation%20and%20economic%20growth.
5. https://licensing.visualcapitalist.com/wp-content/uploads/2024/10/Cost-of-Hurricanes_02-web.jpg
6. https://www.barrons.com/articles/hurricane-milton-economy-jobs-gdp-2c975ee3
7. https://www.pbs.org/newshour/show/hurricane-katrina-job-losses
8. https://citrusindustry.net/2022/10/28/hurricane-ian-citrus-damages-could-hit-675-million/
9. https://www.barrons.com/articles/hurricane-milton-economy-jobs-gdp-2c975ee3
10. https://www.romney.senate.gov/romney-braun-reintroduce-legislation-to-require-congress-to-budget-for-natural-disasters
11. https://www.eenews.net/articles/not-just-the-coastal-areas-insurers-hike-premiums-everywhere/

• A combination of crises is exposing the fragility of the American economy
• A port strike, Middle East war, and commercial real estate collapse could reignite inflation
• Growing global uncertainty surrounding the future health of the U.S. economy is sending gold prices to record highs

Crises Expose Economic Fragility

A confluence of crises is exposing just how fragile the U.S. economy is. These vulnerabilities could lead to serious long-term consequences. As geopolitical tensions rise, industries struggle, and inflation simmers, the economy may not be equipped to withstand the mounting pressures. These challenges threaten to destabilize markets and shake consumer confidence. Serious questions are arising about how best to protect your financial future.

Port Strike and the Inflation Threat

One such challenge is the threat of a massive dockworkers’ strike. It could further disrupt supply chains and reignite inflation. The International Longshoremen’s Association represents workers from 14 major ports along the U.S. East and Gulf Coasts. They have already initiated walkouts at ports handling over 68% of the country’s imports. This disruption could potentially cost the U.S. economy between $4.5 billion and $7.5 billion per day.¹

The strike threatens to reverse that progress the Federal Reserve has made against inflation. The ripple effects could mirror past crises. During a similar strike in 1977, inflation jumped from 0.3% to 0.5% within a month. It set back years of economic stabilization. “Increased shipping rates and transportation expenses will eventually flow into consumer prices, undermining the progress made on inflation,” said Matt Colyar, an economist at Moody’s Analytics. A similar scenario now could force the Fed to rethink its current path of interest rate cuts.²

Middle East Conflict and Oil Prices

The escalation of tensions in the Middle East adds another layer of instability. Particularly in global oil markets. Recent clashes between Israel and Iran have driven up oil prices by over 5%. That is the largest increase in nearly a year. With oil prices rising, the cost of goods, transportation, and services will inevitably follow suit. Inflationary concerns will intensify. Both businesses and consumers will feel the strain.

As geopolitical risks grow, investor confidence is faltering. The Financial Times summed up the sentiment of an economic panel at the UN General Assembly. They said, “The US is not an anchor for stability, but rather a risk to be hedged against. “³

Commercial Real Estate Collapse

On the home front, the commercial real estate (CRE) sector continues to implode. Office vacancies continue to swell. Mortgage defaults are skyrocketing. The delinquency rate for office mortgages spiked to 8.4% in September. The highest since the Great Recession. The retail and lodging sectors are also seeing rising delinquency rates. Brick-and-mortar stores are struggling to compete with e-commerce and hotels face lower demand.⁴

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The structural issues in these sectors go beyond interest rates. “We are seeing systemic weaknesses in office and retail that cannot be fixed by rate cuts,” said a report by Trepp, a firm that tracks CMBS data. The ongoing struggles in the commercial real estate market can ignite a banking crisis that wrecks the rest of the economy.⁶

The U.S. Becoming an Emerging Market?

All these factors are contributing to a growing sense of uncertainty about the future of the U.S. economy. Mark Rosenberg is co-head of the research firm GeoQuant. He warned that the U.S. is displaying characteristics typically associated with emerging markets. “The U.S. has become full of unpredictability—politically, socially, and economically.” Rosenberg noted that institutional instability and social polarization are making the U.S. resemble historically volatile nations like Russia, Turkey, or South Africa.⁷

The U.S. is no longer seen as the stable economic anchor it once was, with rising debt levels, political gridlock, and the risk of social unrest. Some governments and businesses are distancing themselves from reliance on American markets and technology. For example, European corporations like SAP and the Port of Hamburg have shifted away from U.S. technology platforms over concerns about “digital sovereignty” and the reliability of U.S. policies.

Conclusion

As the cracks in the economy continue to widen, one thing is becoming increasingly clear: uncertainty is jeopardizing future savings and investments. Inflation risks, rising debt, and political instability are shaking the financial system. Now may be the time to consider gold as a safe haven. Gold has long been regarded as a reliable store of value in times of crisis. Physical precious metals held in a Gold IRA can protect your portfolio from a degraded American economy. Contact us today at 800-462-0071 to learn more.

Notes
1. https://www.investopedia.com/us-dockworkers-strike-begins-what-it-means-for-the-economy-8721616
2. https://www.investopedia.com/us-dockworkers-strike-begins-what-it-means-for-the-economy-8721616
3. https://www.ft.com/content/5f83a3fc-74e6-4b00-a3cd-aa9a81bb21a7
4. https://wolfstreet.com/2024/09/30/cre-mess-not-letting-up-cmbs-delinquency-rates-jump-in-september-as-office-retail-and-lodging-deteriorate-further/
5. https://wolfstreet.com/2024/09/30/cre-mess-not-letting-up-cmbs-delinquency-rates-jump-in-september-as-office-retail-and-lodging-deteriorate-further/
6. https://wolfstreet.com/2024/09/30/cre-mess-not-letting-up-cmbs-delinquency-rates-jump-in-september-as-office-retail-and-lodging-deteriorate-further/
7. https://www.ft.com/content/5f83a3fc-74e6-4b00-a3cd-aa9a81bb21a7

• The value of the dollar continues to decline as it is challenged by the prospect of new currencies
• Shifting to a multi-polar global economy with a BRICS+ currency could have devastating effects on the dollar and the US
• You can defend and potentially grow your portfolio with a tax-advantaged Gold IRA.

Decline of the Dollar

As the dollar is rapidly losing value, the BRICS+ alliance is aiming to challenge its position as the world’s reserve currency. According to the Federal Reserve, the U.S. dollar has lost 97% of its purchasing power since 1913, leaving only 3% of its original value. What cost $1 in 1913 would now cost around $30. The global shift away from the dollar is positioning gold as the ultimate winner in this economic transformation. Owning physical precious metals offers a way to safeguard your finances from the consequences of this changing economic landscape.¹

Lynette Zang is CEO of Zang Enterprises. She stated that the dollar’s 3% purchasing power in 2024 could turn to zero in 2025. Zang pointed to the FRED’s chart showing the Purchasing Power of the Consumer Dollar in U.S. City Average, stating that even the Federal Reserve tells you the greenback can approach zero. Hyperinflation and job losses could result from such a drop.

“I believe with all my heart and everything that I know that we’ve already begun the transition to hyperinflation,” Zang said. “We’re going to see more borrowing, more money printing, more inflation because they have not killed that beast that they created and continue to create,” she stated.²

Growing BRICS+ Challenge

The BRICS+ Alliance began with four nations – Brazil, Russia, India, and China. South Africa then joined to add the ‘S’. Four additional countries joined in January 2024 with 24 others informally expressing interest in joining. And now another 23 countries applied to join before the BRICS+ alliance summit in October.

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The countries are all emerging economies from the ‘Global South’ that are eager to flee dollar dominance. They want to defend against a dollar that has been weaponized by sanctions. The alliance members also want to fortify their own economic interests as the world shifts from a single superpower, the US, to a more multi-polar world.

According to the Atlantic Council’s Dollar Dominance Meter, the global share of U.S. dollar reserves has fallen since 2002, the first full year of the BRICS alliance. Until recently, nearly 100 percent of oil trading was conducted in U.S. dollars; however, in 2023 one-fifth of oil trades were reportedly made using non-U.S. dollar currencies. The undermining of the petrodollar erodes one of the pillars of dollar support. ⁴

BRICS+ Summit

The next BRICS summit will take place in Russia on October 22nd. The summit agenda will focus on accelerating de-dollarization. The alliance is primed to announce a de-dollarization roadmap. There is speculation that they will unveil key developments in ditching the dollar for trade and reserves.

A new report states that the bloc is “expected to introduce a multicurrency platform along with a roadmap for a gold-backed BRICS trading currency.”

Among the expected announcements is the launch of a new BRICS Pay system. It would provide an alternative to SWIFT, a cross-border payment platform dominated by US dollars. Russia was barred from SWIFT after its Ukraine invasion. The new system will use local ‘digital dollars’ to simplify and speed up trade for members, free from Western influence.

There is even more anxiety surrounding the potential creation of a BRICS currency. Preparing for such a launch might explain why BRICS countries have been stockpiling gold reserves at a record pace in recent years. If it happens, not only would trade between members accelerate, but it will also effectively eliminate the need for the U.S. dollar on a global scale.

The ramifications of such a demand loss could be catastrophic to the U.S. economy. It would also weaken U.S. global influence and the standing of the dollar as the global reserve currency. According to the Atlantic Council, the U.S. dollar is used in approximately 88 percent of currency exchanges, and 59 percent of all foreign currency reserves held by central banks. That may all come to an end. Especially if a BRICS currency sparks the launch of other competing currencies. ⁵

Devalued Dollar, BRICS+, and Gold

The devalued dollar and the growing strength of the BRICS+ may give gold strong tailwinds. A devalued dollar leads to higher gold prices because when the dollar weakens, it takes more dollars to buy the same amount of gold, making gold more expensive.

And if a BRICS+ currency is backed by gold, as suggested by Putin, the demand for gold would surge, driving its price higher. As of now, the BRICS+ nations account for more than 20 percent of all the gold held in the world’s central banks. Russian, India, and China rank in the top 10 for central bank gold holdings. They are perfectly positioned to capitalize on a new gold-backed currency.

Conclusion

The world is experiencing a major economic shift in real time, with the dominance of the dollar fading as challengers like the BRICS+ alliance emerge. The full impact of the global economy moving toward a multi-currency system is still unknown, but the decline of the dollar is clearly linked to the rise of these new currencies. This change is accelerating, making it crucial to act now before it’s too late to safeguard your dollar-based savings. Gold is expected to reach record highs as part of this shift, and you can benefit by moving a portion of your portfolio into a tax-advantaged Gold IRA. Contact us today at 800-462-0071 to learn more.

Notes:
1. https://money.visualcapitalist.com/buying-power-us-dollar-century/
2. https://www.kitco.com/news/article/2024-09-20/transition-hyperinflation-has-already-begun-feds-own-charts-show-dollars
3. https://asiatimes.com/2024/09/bric-by-bric-de-dollarization-only-a-matter-of-time/
4. https://www.nasdaq.com/articles/how-would-new-brics-currency-affect-us-dollar-updated-2024
5. https://www.nasdaq.com/articles/how-would-new-brics-currency-affect-us-dollar-updated-2024