Why This Gold Surge Is Different (It’s a Revolt!)

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Gold doubles in two years – and forecasts still point higher

Bullion.Directory precious metals analysis 24 September, 2025
By Peter Reagan
Financial Market Strategist at Birch Gold Group

Normally, when an asset doubles over a short period, skeptics crawl out to predict an imminent reversal. (The way you get attention these days is to claim the consensus is wrong – no matter how the consensus changes, and no  matter how often you must contradict yourself…)

Instead, some of the biggest names among banks and brokerages are forecasting further gains:

• Deutsche Bank has raised its 2026 forecast to $4,000
• J.P. Morgan says prices could surge to $5,500 within the next six months!
• Jefferies’ Chris Wood argues the fundamentals already justify $6,600

Those are just the latest – joining Goldman Sachs, UBS, Société Générale and others who were much quicker to forecast this surge in gold price.

Asset prices move all the time, though. How is this different? First, let me point out that gold’s rise isn’t a speculative frenzy like crypto in 2018 or housing since 2020. No, gold’s price surge is rooted in fundamentals: Persistent global inflation, concerns of weakening economic growth, massive demand for physical gold and steadily declining currencies.

The Federal Reserve’s 25 basis-point interest rate cut last week, paired with projections for two more before year-end, shows just how quickly priorities are shifting. Policymakers are now “more concerned about weakening growth and the likelihood of rising unemployment” than inflation.

At the same time, though, the Fed’s Summary of Economic Projections (SEP) sees slow economic growth, elevated inflation and unemployment continuing to rise despite this rate cut. This is a frying pan vs. fire situation

So what does this have to do with the surge in gold’s price? The Fed is cutting rates even though inflation remains sticky – even though unemployment is well below its 80-year average of 5.8%.

Does this make a lick of sense to you? To me, it does not. Either the Fed sees economic risks they aren’t admitting to, or they’ve simply given up on targeting 2% inflation.

So which is it?

Economic risks? Well, safe-haven gold holds up well in recession (when prices of everything tend to crater).

Surrendering the 2% inflation target? Gold is arguably the most inflation-resistent investment. (If we use gold as our measure, the dollar has already lost more than half its purchasing power since 2023.)

For everyday Americans, that means the lucky few with $500 tucked away in savings can effectively afford what $250 bought just two years ago.

With that in mind, is it any wonder that gold demand is at a record, despite its recent price surge?

Ray Dalio: Not just the dollar, but unbacked currency itself

At the FutureChina Global Forum last week, Bridgewater founder Ray Dalio said “gold and non-fiat currencies will become stronger stores of value as U.S. debt mounts.”

[Note: “Fiat currency” refers specifically to currency with no intrinsic value (in other words, all modern currencies from the dollar to the yen. Fiat is Latin for “let it be so” – fiat currencies have value because a government or central banker says they do.]

Now, Dalio’s phrasing is quite careful. I mean, the man’s giving a speech in China – careful phrasing is the best way to make sure the secret police don’t escort you off the stage!

Even so, his point is clear: Every modern nation issues intrinsically worthless fiat currency. And every modern nation is facing the same pressures. Over the last few years, less than 10% of all nations worldwide ran a budget surplus! That means budget deficits, which means more debt, which (as we’ve seen first-hand in the U.S.) lowers our purchasing power.

Essentially, just about every country is trying to “inflate away” their debt at the same time. That leaves only two realistic alternatives: physical precious metals (especially gold), and to a significantly lesser degree, decentralized digital assets like bitcoin.

Joining him on stage, Avanda Investment’s Ng Kok Song warned: “[The unsustainability of U.S. debt] has reached the tipping point. We do not know when the crisis is going to unfold.”

Here’s the thing: Many would argue that the U.S. debt crisis is already unfolding. According to my own experience and Birch Gold customers, since the pandemic lockdowns nothing in the economy has felt normal. Official inflation reports downplay the pace at which food, housing, and medical bills have exploded.

Officials claim great economic strength (and have been for the last five years). Yet the evidence in everyday life says otherwise. As my grandpa used to say, “Who are you going to believe – me, or your lying eyes?”

The answer never changes – whether it’s my grandpa or the chair of the Federal Reserve asking the question.

So what should American families do today? Well, Dalio has long recommended a 10% gold allocation for investors (and the “All-Weather Portfolio” he put together for his family has a 7.5% gold allocation).

Which is right for you? I believe that only you can answer that question. Let me pinot out, though, that for working Americans whose income depends on a paycheck (or retired Americans living on a fixed income), Dalio’s logic may flip. Maybe dollars should be a 10% share of your savings, and the rest diversified among assets that can’t be devalued.

Gold dealers can go broke even in a bull market

When gold prices are soaring, you’d expect gold dealers and  jewelers to thrive. Especially considering inflation in Turkey (33% in August this year, the lowest since November 2021!) Demand for gold and silver has been so strong that Istanbul Gold Refinery released 1/2 gram gold bars and tiny 2.5 gram (0.08 troy oz) silver bars.

Citizens were absolutely desperate for stores of value – and these fractional bullion bars were small enough that just about everyone could afford them.

So the precious metals retail industry has been booming in Turkey. Even so, this month the nation’s iconic jeweler Inci Gold declared bankruptcy. (Others in the same industry are following suit.)

Why? Because the collapse of the lira has gutted the middle class. The same families who once bought jewelry as a form of tangible savings simply can’t afford to do so anymore. The customer base disappeared – and so will the businesses that depended on it. Those who once bought jewelry as “an investment” have turned to gold and silver bullion instead. Jewelry is not only more expensive per ounce than bullion, it’s also generally lower-purity and importantly much less liquid. That’s why here at Birch Gold Group, we don’t sell jewelry. And anytime you hear anyone discussing jewelry as “an investment,” trust me, they’re wrong. A jewelry purchase is consumption, just like buying a new TV or going on a vacation. Just because jewelry (like a TV) has some non-zero intrinsic value doesn’t make it “an investment.”

That’s the cautionary lesson. Don’t confuse financial assets like gold and silver bullion with displays of wealth like rings and necklaces.

Gold’s record run isn’t just about charts or forecasts. The price of gold is a referendum on policy failures, persistent inflation and currency decline. The Fed may insist things are under control.

But gold tells a different story – one that everyday families around the world can feel in their paychecks, grocery bills, and shrinking purchasing power of their savings.

This article was originally published here

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