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You’ve probably noticed gold and silver taking it on the chin lately.
But there’s what’s actually happening in the markets, and then there’s the internet noise. You can find any opinion you want online if you look hard enough.
So let me walk you through what the real fundamentals are signaling right now, because we’re sitting on the exact same setup I called back in December 2023.
The Fundamentals That Matter
Start with the debt picture. U.S. debt is sitting at roughly $40 trillion, and global debt is tracking a similar path.
As that mountain grows, the only way the Federal Reserve can service it is by creating more money. And when you print more money, the purchasing power of every existing dollar slips.
That erosion pushes inflation higher, and historically, periods like that have funneled capital toward hard assets like gold and silver.
Central banks are already acting on this shift. About 27% of their holdings are now in gold compared with just 22% in U.S. dollar investments such as Treasury bills and bonds.
That’s a dramatic reversal from traditional allocations, and it’s not being led by small players. China has been running one of its largest gold accumulation programs ever in recent months — a major signal of where big money sees long-term stability.
This is where the contradiction forms. Policymakers say they want to beat inflation back down, but inflation is a natural consequence of the very debt expansion they rely on.
Unless the economy grows at a breakneck pace, they’re boxed in. That tension supports metals far more than it hurts them.
The Seasonal Pattern and What’s Coming
Now about this recent weakness in gold and silver — seasonally, this time of year almost always brings choppy action.
It’s normal for metals to drift or pull back through the summer before gathering directional momentum.
Historically, late August into September is when the metals markets shake off the sluggishness and shift into cruise mode. That pattern has repeated often enough that I’m not surprised by anything we’re seeing right now.
If you want an early tell, look at Southern Copper (SCCO). Copper acts as an underlier for the broader metals complex.
When copper is firming up or moving higher, it often precedes strength in gold and silver. And this year, copper is up roughly 15% while gold and silver have been drifting.
That divergence usually doesn’t last. Copper tends to light the runway before the other metals lift.
Yes, we’ve had a seven-month correction. But keep perspective. Silver is still up more than 100% from where we were almost this time last year.
Gold is still hanging above $4,000. Gold pulled back from $5,000 to $4,000, and silver slid from $110 to the high $50s. Corrections like that are normal in a strong bull trend, not signs of a reversal.
The bigger question is when all these underlying economic forces finally assert themselves.
With a new fiscal year approaching, rising debt pressures, central banks repositioning and seasonal tailwinds lining up, the metals markets look ready to heat up in the months ahead.
Remember back in December 2023 when I said gold was about to take off and run like a banshee?
Nobody believed it because January and half of February were brutal. Then the market flipped — and it did exactly that.
I think we’re setting up for the same kind of move now. There’s nothing in the fundamentals that says these metals should be heading lower.
At some point, the market wakes up to that, and when it does, the reversal is fast.
You may need a little patience — but you definitely don’t want to miss the move when it hits.
Geof Smith
Geof Smith Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
P.S. Trump’s Fed Choice Just Lit the Fuse
Two years ago, I made a public prediction that ruffled a lot of feathers.
I stated that three giant “mega-catalysts” were about to trigger a historic, multi-year run in one specific asset.
Almost immediately, the first two triggers went off.
And the results were absolutely wild.
I’m talking about a perfect 52-for-52 trading record last year.
52 weeks… 52 trades… 52 wins.
Regular folks had the chance to pocket an extra $43,717 in a single year… without ever reinvesting or compounding.
Just tapping into a simple weekly setup to target $841 payouts like clockwork.
But here is the crazy part…
We did all of that… while catalyst number three was still lying dormant.
It never triggered.
Until right now.
You see, a new hand-picked choice has officially taken over the Fed.
And he is under immense pressure to start aggressively slashing interest rates.
I’ve spent 25 years trading these markets, and history is very clear on what happens next.
Every single time this specific rate-cut cycle happens, this exact $4,000 asset doesn’t just rise… it historically explodes.
In the 70s, it skyrocketed 369%… then another 521%.
In the early 2000s, it surged 536%.
And now, the fuse on catalyst number three is officially lit.
In fact, as soon as the calendar turned to July, this asset started heating up again… signaling that the next major run-up is starting right now.
If you think the run we had last year was impressive… you haven’t seen anything yet.
This rate-cut cycle is going to pour absolute gasoline on our weekly payouts.
And we are setting up our very next trade this week.
This Saturday, July 18th at exactly 1 p.m. ET, I am hosting an urgent, live briefing.
While I cannot make any guarantees in the market…
I’ll show you the exact sequence of events about to unfold…
And how you can copy my exact weekly setup over my shoulder to target these $841 payouts as this historic cycle takes off.
I’m not charging a dime for this briefing, but the virtual room will fill up fast.
If you’d like to join me…
Disclaimer: Since 12/05/2024, the trading approach discussed today has published 66 trade alerts. 65 of 68 have returned as winning trades, for a 95.6% win rate. The average return per trade, winners and losers combined, has been 12.84% on an average holding period of 10 days. With a $5,000 starting stake, every trade targets about $841 in returns, and every trade you see today will be based on that $5,000 starting stake unless otherwise stated.
