The gold price has reached an all-time high of $3,660 per ounce in the world’s most important currency. It has broken through key resistance levels that had kept the price of the yellow metal in a sideways trend since April 2025. The price of gold is now up 45 per cent year-over-year and has risen 90 per cent over the past two years; and the price of silver has also surged, reaching $41.35 per ounce—a 45 per cent increase year-over-year and an 80 per cent gain over the last two years.
The reasons for the remarkable price increase in precious metals have been consistently outlined in previous issues of Dr. Polleit’s Boom & Bust Report. For subscribers, the latest rise in precious metal prices should be unsurprising in view of the current economic environment.
That said, it’s not the direction of the price movement that’s puzzling. Rather, it’s the speed of the price increases for gold and silver that deserves attention. As an investor, one might ask: Are gold and silver prices rising too quickly, climbing too steeply in too short a time?
When examining gold’s price relative to its long-term trends, it seems that gold is currently rather “expensive.” The same applies to silver, though its deviation from its long-term trend is less pronounced.
For example, based on a linear trend since the beginning of the 21st century, the gold price is 42 per cent (or $1,550 per ounce) above trend. Even with an exponential trend line, it remains 30 per cent (or $1,100 per ounce) above its trend value.
For investors betting on “mean reversion,” the current price development of gold and silver may indeed raise concerns, as they have to expect a downward correction. But is the mean-reversion-assumption correct in this context?
Long-term trends should not be dismissed lightly or assumed invalid simply because prices temporarily deviate from it (often delighting investors in the process). However, under certain circumstances, long-term trends can become obsolete. This is particularly plausible for gold and silver.
These metals are not only in demand for industrial purposes but also serve as “near-monies,” traded in a money-like manner in the market. Especially during times of stress in the global fiat money system, gold—and to a lesser extent, silver—is seen by many investors as a “safe haven.”
Currently, there are compelling reasons for investors to turn to gold and silver: the prospect of continued central bank interest rate cuts; increasing tensions in the international economic and financial system; and growing doubts about the creditworthiness of many governments.
These factors raise questions about the reliability of fiat money, discourage investment in bonds, and drive demand for gold and silver—especially as the likelihood of improvement in the global financial situation remains low.
In this context, holding gold and silver continues to make sense for investors, even if current prices are significantly above long-term trendlines. But what explains the particularly strong price surge in gold over the past two years?
One factor is the rising “insurance premium.” Given the environment of increasing investment risk, investors are valuing gold and silver more highly as a hedge: The premium investors are willing to pay to hold these metals for protection has increased.
And it is the shift to a “new valuation regime” that may explain why the short-term price trend for gold has become so steep over the past two years, leading to a significant deviation from its long-term trend. This surge may not be an “exaggeration” destined to reverse but rather a permanent adjustment.
It corresponds to the unravelling of the Western world: Over-indebted governments are increasingly losing trust in capital markets; economic productivity is slowing or even declining; and the temptation to run the central bank’s electronic printing press to pay outstanding bills is growing, leading to much higher inflation in the future.
Gold has outperformed other precious metals in recent decades, more than fulfilling its role as a store of value. It has protected its owners from the loss of purchasing power in fiat money and achieved real value appreciation. From January 2000 to September 2025, the average annual price increase for gold was 10.7 per cent in U.S. dollars, just under 10 per cent in euros, 12 per cent in Japanese yen and 9.8 in Chinese renminbi.
While it’s possible that the steep price trends for gold and silver since late 2023 could continue—pushing gold to $5,500 per ounce and silver to nearly $80 per ounce by the end of 2026—, this may not be the most likely scenario.
Instead, the steep upward trend may flatten out after reaching significantly higher levels, with growth rates normalizing to align with the average over the past 25 years. However, it’s plausible that gold could soon reach $4,000 per ounce (a 9 per cent increase from its current price) and silver could hit $48 per ounce (a 17 per cent increase).
Speculating on how quickly or severely the financial and economic situation might deteriorate is complex. In the euro area, for instance, the situation is becoming increasingly precarious: Germany’s economy is nearly in free fall, France is heading toward an open debt crisis, and the euro faces its next serious test, raising questions about its resilience. Shocks in the euro area will likely have negative global repercussions.
Against this backdrop, significantly higher gold and silver prices may be expected. However, long-term investors should view gold and silver not as short-term speculative instruments but as insurance for their wealth portfolio. History clearly shows that gold and silver protect against the loss of purchasing power in fiat money and safeguard against the risk that governments and banks may fail to meet their obligations.
In this sense, gold and silver are indeed made for times like these.
For detailed guidance on what investors can and should do now, refer to Dr. Polleit’s Boom & Bust Report, written for those who aim to protect and grow their capital. Visit www.boombustreport.com for more information. Thank you for your attention, and I look forward to your visit!
