March 2025 – Week 3 Edition
Gold Tops $3,000 For the First Time
On Friday, March 14, 2025, gold topped $3,000 for the first time and it has stayed above $3,000 on Monday, St. Patrick’s Day, and into Tuesday. A year ago, gold was only $2,150 an ounce, so gold has gained nearly 40% in the past 12 months. In the five years since the nation began locking down its businesses and schools in terror when COVID-19 struck in mid-March 2020, the price of gold has doubled in price.
“Terror” is the correct word, since on Monday, March 16, 2020, the Dow Jones index careened down 3,000 points (-13%) in one day, and gold fell from $1,675 to $1,485 in the week ending March 16, 2020. Both gold and stocks quickly recovered by late March, but today we see gold soaring and stocks stumbling badly on renewed fears of recession over trade wars and tariffs.
There has been a drop in the sales gold and silver bullion sales from the U.S. Mint, so what is causing this huge gain over the last year? It seems to be ETF and central bank buying.
Gold ETF Buying is Fueling Gold Price Growth
According to the latest update from the World Gold Council, North American investors accumulated a net 72.2 metric tons of gold — worth nearly $7 billion at almost $3,000 gold — in the month of February, the largest one-month inflow since July 2020. That was in the midst of the COVID-19 crisis, and that level of ETF buying fueled a gold bull run that first pushed gold over $2,000 per ounce in August of 2020. Gold ETF buying then tailed off but has picked up recently and it shows no signs of slowing down. This past week, another 32.7 metric tons of gold ETFs were bought, of which 22.6 tons were in North American gold ETFs.
Some of the reasons for investors selling a portion of their U.S. stocks to buy gold ETFs were the unexpected continuation of the two ongoing wars in Ukraine and the Middle East, plus a new series of wars beginning – trade wars with nearly every major U.S. trading partner. These wars are fueling a wave of new demand for gold among investors. There is also more central bank buying, especially from the developing nations, as they diversify from paper currencies into gold.
Central Banks are Establishing a New Gold Standard
Central bank gold reserves have increased by more than 1,000 metric tons each year from 2022 to 2024, after seldom rising by much more than 500 tons in any previous year. Additionally, central bank demand is on pace to continue that trend this year, although it is too early to make any full-year projections. The world’s long-term reliance on the U.S. dollar as its global reserve currency has been slowly fading. It won’t disappear overnight but the world’s nations are slowly voting for a new Gold Standard over the 80-year-old U.S. Dollar Standard, drafted at Bretton Woods in 1944.
The dollar standard worked fairly well for about 25 years, due to U.S. economic strength and mostly balanced budgets until Britain (in 1968) and then America (in 1971) removed all gold backing to their respective currencies and let them float (sink) in terms of gold.
In the first two weeks of March 2025, the U.S. Dollar Index (DXY) is down 3.9% and the U.S. dollar is down 4.8% so far in 2025. Since 1971, the dollar has lost nearly 99% of its value to gold. When gold rises from $35 to $3,000, that means the dollar’s value has fallen by 98.8%.
Before the dollar falls further to gold (that is, before gold rises further), be sure to call your representative and do what central bankers have long been doing: Start your own Gold Standard! Consider that gold is like a bank that never fails. Two major banks, Citi and Bank of America, both see gold at $3,400 an ounce or higher in 2025.
Gold has traded over $3,000 since last Friday, yet there have been very few headlines about this epic landmark. That’s good news. This tells us that gold is not in a “bubble” market in the minds of the public. We have strongly recommended that you buy gold routinely! Taking St. Patrick’s Day as a mark of a particularly lucky day, we note gold’s price on March 17, 2000, was $1,477 and in 2023 it was $1,969. In 2024, the price of gold was $2,157 an ounce, so gold has doubled in five years, gained 52% in two years and 40% in the past 12 months.