(Kitco News) - Gold was trading near $2,700 per ounce as 2025 began, while Bitcoin surged toward $100,000, positioning both assets at the forefront of a quickly evolving market. According to Bloomberg Intelligence Senior Commodity Strategist Mike McGlone, a correction in equity markets could be the catalyst that drives gold above $4,000 this year.
“Anything’s possible. I sure hope not, because the environment to get to $4,000 … it’s going to get there eventually—there’s an unlimited supply of fiat currencies and a limited supply of gold, just like there is for some things like Bitcoin,” McGlone said. “But the thing to get towards $3,000-$4,000, what I’m worried about the most is just some simple, normal reversion in the very elevated and lofty stock market.”
The stock market’s market cap-to-GDP ratio is about 2.2 times – “about the most in a hundred years,” McGlone noted. He warned that even a 10% pullback could give gold the momentum it needs. According to the World Gold Council, central banks purchased a record 1,250 tons of gold in 2024, with China resuming its buying spree after a six-month break in an apparent effort to reduce reliance on Western currencies.
Gold-backed ETFs have also shown renewed interest. Bloomberg data indicates that global gold ETF holdings peaked at around 110 million ounces years ago before falling to 80 million ounces by mid-2024. However, December 2024 saw the first net inflows since 2019, bringing total holdings back to approximately 84 million ounces. McGlone attributed this turnaround to shifting sentiment among institutional investors. “Gold ETF holdings… peaked at about 110 million ounces. It bottomed around 80 million ounces just this year, and it’s already heading upward,” McGlone said. “But what I think is happening is we’ve created so much massive wealth, most notably through cryptos and definitely in U.S. real estate and U.S. equities, that the diversification is tilting over to gold.”
He also noted that gold remains comparatively cheap when gauged against the stock market. “Take the S&P 500 divided by gold—that ratio, it’s like 2.2. It’s very high. Historically, it’s around one. So gold’s just cheap versus the stock market.”
Meanwhile, Bitcoin has captured the spotlight after rising more than 150% in 2024. According to McGlone, the cryptocurrency benefited from the U.S. approval of Bitcoin ETFs, a halving event, and President Trump’s endorsement of a national Bitcoin reserve. “2024 is about as good as it will go down in history—about as good as it gets for Bitcoin… We had the U.S. launch ETFs, we had the halving, the milestone of reaching $100,000, and then Trump's transmogrification to being a Bitcoin zealot… It’s not going to get any better,” McGlone said, warning that 2025 could see some reversion “as speculative excesses cool.”
According to McGlone, younger investors remain drawn to Bitcoin. “You can’t really hold gold anymore without some Bitcoin in that space—i.e., anybody under 30 doesn’t buy gold, they don’t really care,” he said. However, he also suggested that if crypto exuberance wanes, gold could benefit as capital flows back into traditional safe havens.
Macroeconomic factors may weigh heavily on both assets, with McGlone noting that $13 trillion was added to U.S. equities in 2024 alone—pushing valuations above what he considers sustainable levels. “Never has the U.S. stock market’s capitalization been greater versus GDP,” he said, underscoring the risk that even a modest correction could propel gold beyond $3,000.
Regarding silver, McGlone believes it has underperformed relative to gold, rising only about 28% last year—on par with gold rather than exceeding it. “Silver is basically stuck… It’s up about 28% on the year—that’s the same as gold. That’s a bad year for silver because silver is typically known as leveraged gold,” McGlone explained, citing China’s weaker industrial demand and deflationary pressures as factors dragging on the metal.
As 2025 progresses, McGlone sees both gold and Bitcoin poised at critical junctures. “Gold’s deep-pocketed buyers—central banks—aren’t going anywhere,” he said, but noted that Bitcoin’s emergence has established a “cornerstone asset for a new generation.” According to his outlook, today’s market optimism may not last indefinitely. “We’re at a point where markets are extremely stretched. Normal mean reversion is normal, and when you get this stretched above most means, you have to be careful,” he added.
Whether gold breaks $4,000 or Bitcoin maintains its staggering ascent could depend on how equity markets react to potential rate cuts, how swiftly major economies—particularly China—recover or slow down, and whether investors pivot away from risk assets.
For a detailed breakdown of McGlone’s analysis and projections for 2025, watch the full interview embedded above.
This video is sponsored by Matador Technologies Inc. – Bringing gold and real-world assets to Bitcoin. Visit https://matador.network.
