Silver and Gold

In early November of this year, silver was officially designated a U. S. critical mineral. The Secretary of the Interior made this announcement through the U. S. Geological Survey’s Final 2025 List of Critical Minerals in the Federal Register. The Secretary of the Interior justified silver’s inclusion on the following bases: (1) silver is essential to U. S. economic and national security, (2) silver has a supply chain vulnerable to disruption, including foreign dependence and geopolitical risk, and (3) silver serves an essential function in manufacturing and defense-related, energy, and electronic technologies, the absence of which would have significant national consequences, as defined under the Energy Act of 2020. 

This comes at a time when the silver supply has been squeezed through rising industrial, consumer, and investment demand — and, at the time of publishing, the silver spot price has surged beyond $70 USD per ounce, at the same time that gold has eclipsed the $4,500 USD (per ounce) level. Silver started the year at $28 per ounce, while gold began the year around $2,600 per ounce, marking a 150-percent gain for silver, and nearly a 74-percent gain for gold, in 2025 alone. This marks the continuation of a strong bull market dating back to March of 2020, when silver traded just below $12 per ounce and gold traded at roughly $1,471 per ounce. This means that the gold-to-silver ratio has narrowed from around 125:1 in March of 2020 to approximately 64:1 as of the time of this writing — just as gold and silver have set fresh all-time highs.

These moves and the underlying reasons indicate that this is not just a flash-in-the-pan kind of moment, but rather the continuation of a new era — a ‘reset’ or a revaluation of hard assets, and a rotation out of U. S. dollars and speculative risk assets into safe havens and sound money. While this rotation is yet to begin in earnest, the groundwork has been laid, and we are currently witnessing the makings of the next leg up for precious metals — not only as safe havens and sound money, but (in time) as preferred financial vehicles for institutions, investors, money managers, and everyday workers.

During the 2001–2011 precious metals cycle, gold climbed from roughly the low-$200s to about $1,900/oz at its peak — more than a 660-percent gain over the decade — while silver rose even more dramatically, with total percentage gains exceeding 1,100 percent through to the 2011 high. During that cycle, institutional and retail allocation expanded noticeably, as reflected in the growth of gold ETF assets: for example, large gold ETFs like GLD and IAU collectively grew from modest inception sizes into tens of billions of dollars in assets by 2011 (with estimates of approximately $135 billion in global gold ETF assets at the peak) and represented a much larger share (roughly 8 to 9 percent) of total ETF assets at that time.  

By contrast, in 2025 the gold price has again surged, with gold and silver repeatedly setting all-time (nominal) highs. However, allocations have yet to adjust: despite much higher absolute ETF assets today (gold ETF AUM is in the hundreds of billions and at record tonnage levels), gold ETFs represent a much smaller percentage of the broader ETF universe and investor portfolios than at the 2011 peak — for example, in the United States, gold ETFs account for only about 0.17 percent of private financial portfolios, and fewer than half of large institutions hold any gold ETFs at all, typically only in tiny allocations (0.1–0.5 percent). In relative allocation terms, precious metals are far less embedded in portfolios in 2025 than they were at the 2011 bull market peak, even as current prices are continually setting new highs. With this in mind, one can’t help but wonder what is in store when allocations begin to adjust upward: if allocations are to eventually match the ‘8 to 9 percent’ witnessed at the peak of the prior 2001-2011 cycle, then gold and silver are bound to climb still magnitudes of order higher from current levels. And by the looks of it, this ship not only has the momentum, the thrust (from easy monetary policy), the reserves (where allocations are likely to contribute to this bull market), and the economic fundamentals making it likely to head higher; it also appears that resistance will become less of an issue than it has been in the past — particularly where short selling has served to keep a lid on prices.

As we have seen, while gold and silver continue to set new all-time highs, those with short positions are constantly being squeezed and facing progressively greater risk (and doubtless progressively more angst) in re-establishing any short positions; especially while precious metals — from gold and silver to platinum and palladium — continue their secular bull runs, knocking out one price level after another.

What’s more, the Federal Reserve has officially announced the end of ‘quantitative tightening’ while President Trump has committed to appointing an ‘accommodative’ Federal Reserve chairman who will commit to lower interest rates and more ‘stimulative’ policies; and this comes after the Federal Reserve has already committed to another round of ‘quantitative easing’ at a clip of $40 billion per month. 

Meanwhile, institutional investors are or will be facing pressure to increase allocations to gold and silver in the year(s) ahead; not only to satisfy clients’ wishes but to mitigate volatility and risk where there still remains significant upside potential in an asset class on a record run and showing no signs of slowing, especially relative to dollar-denominated assets. 

With current allocations being negligible, or even nonexistent, and with discouraged shorts out of the way and no apparent ‘resistance levels’ ahead, the future for gold and silver as financial vehicles seems promising, poised for progressively higher highs and higher lows. 

With the U. S. Dollar Index (DXY) losing its grip on the key 100 level, and with so much systemic risk in the form of geopolitical tensions, escalating trade wars, supply constraints, and domestic economic woes — considering record-high debt, both personal and public, as well as the lows in consumer confidence, the continued deficits in trade and government spending, and the longterm demands of unfunded liabilities — the U. S. dollar remains only relatively and artificially ‘stable’, but certainly not ‘strong’ compared to the real goods and assets it chases; indeed, it appears that the dollar’s relative ‘strength’ is limited strictly to comparisons against other fiat currencies which are also in decline, and that the artifice buoying the dollar is under threat by ‘de-dollarization’ and waning international appetite for U. S. debt. 

As central banks across the globe continue to ditch dollars for gold and silver, and as more central banks follow suit, the dollar will continue to lose its grip on international trade as the world’s reserve currency — an exorbitant privilege squandered by politicians who have, from one administration to the next, funded foreign wars, special interests, and an out-of-control welfare state (all of it irresponsible, not to mention unconstitutional) with complete disregard for the Americans who inevitably would have to pay the tab, either through taxes or in the reduction of their dollars’ purchasing power. 

As these cracks continue to grow larger and become impossible to ignore, and as progressively more people become aware of the implications and begin taking action to protect themselves, their wealth and their future prospects, it will become abundantly obvious to the passengers — all who hold dollars, or fiat currency in general — that the ship is sinking; that the dollar-driven status quo cannot survive the storm. Consequently, price appreciation in the precious metals sector will accelerate as passengers abandon ship in favor of lifeboats. 

As it becomes clear that the dollar is sinking, it will cause a ripple effect worldwide, creating a wave of panicking dollar sellers rushing into the safety and shimmering appeal of precious metals: an asset class reasserting its place, expanding in its use cases, moving ever higher by the day, and proven to provide reliable shelter in times of economic despair; and, above all, an asset class affirming its role as sound money and, with each gain, exacting a real cost upon those ignoring the lessons of history — or, as it were, upon those failing to notice the bow’s position relative to the horizon, and the fact that, once the lifeboats are filled and gone, they’ll be left treading water in the icy expanse of the North Atlantic.