Measuring the Impact of Silver versus Gold in Your Portfolio
Posted onMuch of the time, gold steals all the headlines and the spotlight. But, there is another precious metal in the background—that offers a less expensive entry point for accumulation—yet still offers the same portfolio diversification and risk reduction benefits. That’s silver of course.
Historically, silver has proven its value during economic and geopolitical crises. In ancient and modern times, silver has acted as a store of value, an asset to preserve and grow wealth, a hedge against inflation, currency devaluation and even systemic financial instability.
Of course, both gold and silver offer investors safety during crisis periods—including the 2008 Global Financial Crisis.
“Looking back to the Great Financial Crisis which morphed into the European Debt Crisis ( the period from 2007 to 2012) silver prices rose by $40 – a 495% increase from the underlying trend. (Gold prices rose by $1100, or 238%, over the same time period,) according to The Silver Institute’s November 2024 research report.
Silver Performance during Covid
More recently, consider recent silver performance during the Covid crisis. The price of silver more than doubled as governments and central banks flooded the financial system with liquidity. Silver soared from $12.00 an ounce in March to $29.20 in August 2020.
Then, silver moved into a trading range for several years between roughly $18.00 and $26.00. Silver shot to the top of that range several times due to investor safe haven demand, notably when Russia first invaded Ukraine and then when the Silicon Valley Bank collapsed.
Earlier in 2024, silver advanced even higher on expectations for the Federal Reserve to begin reducing interest rates (which it has) and amid rising geopolitical tensions on several war fronts.
Silver vs Gold’s Performance to Geopolitical Events
In recent years, silver’s response—and price increase—to geopolitical events has been greater than gold’s reaction. Let’s look at a very geopolitical events and the impact on silver and gold with the percent change to the peak.
| Event | Date | Silver | Gold |
| Russia Invades Crimea | Jan to Dec 2014 | 14% | 13% |
| North Korea Missile Crisis | Jul to Dec 2017 | 17% | 10% |
| Iran Tensions and Attack on Saudi Oil Facilities | Jun to Dec 2019 | 25% | 12% |
| Russia Invades Ukraine | Jan 2022 to May 2022 | 17% | 13% |
| Hamas attacks Israel | Oct 2023 to Feb 2024 | 18% | 10% |
Data source: Silver Institute November 2024 report, LSEG, Reuters and Capitalight Research.
Silver Has a Dual Demand Stream
In addition to silver’s value as a monetary metal, silver is also widely used in manufacturing and industry, with new applications being discovered every day. Global silver demand is forecast to reach over 1.2 billion ounces in 2024, according to The Silver Institute. Silver is seeing increased demand from electronics, renewable energy, and the automotive sectors.
Silver as Part of Your Investment Strategy
“Integrating silver into an investment strategy not only capitalizes on its industrial utility but also leverages its historical role as a safe haven asset, ensuring a balanced and resilient portfolio,” The Silver Institute said.
Owning silver comes with the same diversification properties as gold. However, at its current price point, it is more accessible than gold at $2,670.50 an ounce. If you’ve been looking for a way to scale your exposure to the safety of precious metals, investing in silver is a cost-effective way to increase your wealth protection. Explore your options today with silver coins and bars.
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5 Historic Shipwreck Coins from the Maravillas Treasure
Posted onThe Nuestra Señora de las Maravillas sank in 1656, taking with it a magnificent trove of Spanish colonial wealth. Over centuries, the Nuestra Señora de las Maravillas shipwreck treasure has unveiled spectacular artifacts. These finds offer a vivid glimpse into the opulence of Spain’s Golden Age. Here, we will focus on the coins found among the wreck, highlighting:
- The historical significance of the pieces recovered from the Maravillas wreck
- The remarkable preservation state of many Maravillas coins
- Where collectors can acquire Maravillas treasure coins and more
Watch this story of the Nuestra Senora de las Maravillas come alive in this fascinating video:
Facts about the Maravillas treasure ship
During Spain’s colonial era, countless ships were lost to perilous seas, many loaded with immense riches bound for Spain from the Americas. Among these shipwrecks, the Maravillas stands out. These key facts help illustrate why this particular vessel continues to captivate our imagination.
Size and appearance of the Nuestra Señora de las Maravillas ship
The Maravillas ship was a two-deck galleon, built to impressive specifications in keeping with the grand naval architecture of 17th-century Spain. Measuring over 650 tons, the ship was designed to carry valuable cargo, as well as a sizable crew, armed with defenses against pirates and other threats common to the high seas.
The ship’s design followed the classic Spanish galleon configuration, featuring multiple decks organized to balance cargo with the heavy cannons that protected its bounty. It featured a distinctive high stern castle that rose dramatically above the main deck and three tall masts which dominated its profile. The mainmast, the tallest of the three, likely reached a height of over 100 feet above the waterline. Along the ship’s sides, gun ports lined the hull, housing bronze and iron cannons for protection.
As a royal galleon, Maravillas bore ornate carvings, intricate detailing, and gold embellishments, especially near the stern and the figurehead, a characteristic mark of Spain’s proud fleet during its Golden Age. The ship’s name, which translates to “Our Lady of Wonders” was likely displayed prominently on the stern.
Nuestra Senora de las Maravillas ship route
The Nuestra Señora de las Maravillas sailed as part of Spain’s famed treasure fleet, which followed a well-established and highly strategic route from the New World back to Spain. This fleet would typically depart from ports in Central or South America, such as Cartagena (Colombia) or Portobelo (Panama), loaded with precious metals and goods gathered from various Spanish colonies. These cargoes included silver, gold, and other valuables bound for Spain, vital to support the country’s wealth and power during its colonial period.
The galleons often traveled up to Havana, Cuba, a critical stop where ships would reassemble to form a convoy before making the long and dangerous journey back to Spain across the Atlantic. This route was designed to minimize the risk of pirate attacks and to navigate the complex currents and weather patterns of the Caribbean and Atlantic, though it remained perilous due to the presence of reefs, storms, and the threat of enemy ships.
On the Maravillas’ final voyage in 1656, it followed this route but met tragedy shortly after departing Havana. Near the Bahamas, a navigational error led to a collision with another ship in the convoy, causing extensive damage to the Maravillas. To make matters worse, the galleon drifted into a coral reef, further compromising its hull.
Despite desperate efforts to save the vessel, the Maravillas quickly sank, scattering its precious cargo across the seafloor and marking one of the most significant losses in Spanish maritime history.
Maravilla shipwreck location
The Maravilla shipwreck location is near Little Bahama Bank, a vast bank of coral and sand off Grand Bahama Island’s northern edge. The primary wreck site sits approximately 50 kilometers from the island, but the ship’s remains are not concentrated in a single location. Over centuries, storms and ocean currents spread the ship’s precious cargo across the ocean floor, scattering artifacts and treasure over miles.
This widespread dispersal pattern is similar to that of other famous Spanish colonial shipwrecks, such as the Nuestra Señora de Atocha coins discovery site in the Florida Keys, where treasures were found scattered across a vast underwater expanse. This widespread dispersal has made the wreck both challenging to locate and complex to explore.
Since it was first discovered in the early 1970s, the Maravillas has become one of the Bahamas’ most famous historical shipwreck sites. However, the wreck’s complex location has significant implications for salvage rights and archaeological oversight. Modern expeditions must navigate not only the physical challenges of the site but also strict regulatory requirements.
Maravillas shipwreck coins for sale
The Nuestra Señora de las Maravillas has yielded a fascinating assortment of artifacts. Among the discoveries are colonial silver reales and gold escudos, many in remarkable condition due to their preservation in the sandy, reef-protected seabed of the Little Bahama Bank.
Like the El Cazador wreck, whose silver coins helped document Spain’s monetary influence in colonial Louisiana, the Maravillas’ numismatic treasures offer crucial insights into colonial Spanish America’s economic systems. Here are five significant coins that showcase the diverse numismatic treasures recovered from this legendary shipwreck.
1. Philip IV 4 Reales from the Maravillas wreck
A silver 4 reales minted in 1655 during the reign of King Philip IV in what was then New Granada (modern-day Colombia), this cob-type coin represents the vast silver wealth that flowed through the Spanish colonial empire. Cob coins like this were hand-struck on irregular planchets, giving each piece its own unique character while maintaining the standard weight and silver content required by the Spanish Crown. Their survival after centuries underwater in the Nuestra Señora de las Maravillas shipwreck adds to their intrigue, capturing the fascination of treasure enthusiasts and history buffs alike.
Philip IV 4 Reales
- Metal: Silver
- Year: 1655
Photo by Heritage Auctions
2. Bolivian 8 Reales from the Maravillas shipwreck
Produced in Potosí, Bolivia, this 8 reales coin from the Nuestra Señora de las Maravillas wreck is significant for its historical value and distinct craftsmanship. Hand-struck in 1650, this piece represents the height of Spanish colonial silver production, with Potosí being the most important mint in the Spanish Empire.
The 8 reales was the largest silver denomination of its time, equivalent to today’s silver dollar. Collectors prize these 8 reales for their unique shape, which combined with their proven wreck provenance, makes them compelling artifacts of Spain’s colonial empire and its vast silver trade network.
Philip IV 8 Reales (Bolivia)
- Metal: Silver
- Year: 1650
Photo by Heritage Auctions
3. Mexican 8 Reales from shipwreck Maravillas
This Mexican 8 reales coin from the Nuestra Senora de las Maravillas ship is another prized artifact of Spanish colonial history. This large silver coin, often referred to as a “piece of eight” was the primary currency of the Spanish Empire and circulated widely across Europe, Asia, and the Americas due to its consistent weight and purity.
Minted in Mexico City, one of Spain’s most significant colonial mints, renowned for processing precious metals from Mexico’s rich silver mines, these coins bear the iconic “MO” mintmark. Each coin was hand-struck, leading to subtle variations that enhance their uniqueness.
Philip IV 8 Reales (Mexico)
- Metal: Silver
- Year: 1621-1656
Photo by Heritage Auctions
4. A counterstamped coin from the Nuestra Señora de las Maravillas ship
The 7 1/2 reales counterstamped coin from the Nuestra Señora de las Maravillas treasure is a unique piece that highlights an unusual moment in numismatic history. Originally an 8 reales piece, this coin was officially reduced to 7 1/2 reales value through counterstamping, a common practice in the Spanish Empire to adjust currency values. The counterstamp, which often bore symbols or marks from the Spanish Crown, was applied to revalidate or alter the coin’s denomination in response to changing economic needs or as a quality assurance measure.
The Maravillas 7 1/2 reales is particularly rare, as coins with unusual denominations and counterstamps are less common, and tells a fascinating story of colonial Spanish monetary policy, speaking to its adaptability.
Philip IV Counterstamped 7-1/2 Reales
- Metal: Silver
- Year: 1651-1652
Photo by Heritage Auctions
5. 2 Escudos from the Maravillas treasure ship
This 2 Escudos coin recovered from the Maravillas shipwreck treasure found in the Bahamas represents one of the highest denominations in colonial circulation. Known as a “doubloon” and distinguished by its “R” mint mark, indicating its Colombian origin, the 2 Escudos coin was among the most prestigious coins of the Spanish colonial era.
It was primarily used for large transactions, international trade, and prestigious payments within the vast Spanish Empire. The purchasing power was significant: in the 17th century, a 2 Escudos coin could buy a fine horse or support a family for several months.
Philip IV 2 Escudos
- Metal: Gold
- Year: 1627-1629
Photo by Heritage Auctions
To browse more rare coins, beyond the Maravillas shipwreck treasure, click here.
Where to buy rare coins
The Nuestra Señora de las Maravillas represents far more than just another Spanish shipwreck discovery. Its diverse cargo of colonial coinage provides crucial documentation of Spain’s complex monetary system and trade routes. The exceptional preservation of many Maravillas coins, protected by the Bahamas’ sandy banks, offers collectors specimens that surpass typical shipwreck yields in both condition and historical significance.
If these treasures inspire your interest in rare coins and historical artifacts, consider buying from Blanchard. As a trusted leader in numismatics, Blanchard offers unparalleled expertise and a curated selection of coins that capture the stories of the past. Whether you’re a seasoned collector or just beginning your journey, Blanchard’s knowledgeable team is ready to help you find exceptional pieces that enrich your collection. Contact Blanchard today for Maravillas shipwreck coins for sale and more.
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5 Questions and Answers about Collecting Mercury Dimes
Posted onThere’s a reason that collectors—even beginning numismatists—go after the satisfying goal of sourcing and owning an iconic Mercury Dime set—it’s fairly easy to complete. The cost can range from about $2,500 up to nearly $850,000, depending on your budget, your goals and the grades you choose.
Q. Why should you consider building a set of Mercury dimes?
A. It’s exciting and can be profitable too. Many collections of rare coin sets have sold as a whole for more than the total value of the individual coins.
Q. How do you build a set?
A. Coin investors typically follow one of two sets: “type” and “series.” A type set is comprised of all of those coins sharing a single specific characteristic such as a design, designer or denomination. A series include one coin from each date and mint of a particular type.
Other coin collecting strategies include collecting by mint mark, by individual year, or first and last year of the issue of a coin.
Q. What is the Mercury Dime?
A. The Winged Liberty Head Dime, popularly known as the “Mercury” Dime was struck from 1916 until 1945. Renowned sculptor Adolph A. Weinman designed this highly sought after coin. Even during its years of production, collectors clamored to own these coins for their collections.
As a coin group, Mercury dimes aren’t rare. A whopping 2.5 billion were struck from 1916 through 1945. Mercury dimes were last struck in 1945, when a new dime was created to feature Franklin D. Roosevelt, following his passing.
During the depths of the Great Depression, no dimes were struck from 1932-1933. Today, rare coin collectors classify Mercury Dimes into “early dates” (1916-1931) and “late dates” (1934-1945) categories. Nearly all late dates are common and can be easily acquired.
The Mercury dime is struck with 90 percent silver and 10 percent copper and the coin contains just over .072 troy ounces of silver.
Q. Why do we call it the Mercury dime?
A. Early on, the public was a bit confused about the obverse design. Lady Liberty is wearing a winged helmet which led to comparisons between her and the Roman god, Mercury. Because of this, the moniker “Mercury Dime” stuck.
This cap was intended to represent the “Liberty of Thought.” Weinman’s monogram, “AW”, sits on the right of the Liberty’s neck. The reverse features an intriguing design: a fasces depicting unity and strength, and an olive branch symbolizing peace.
The metal content is 90% silver and 10% copper. The mints include Philadelphia, Denver and San Francisco.
Q. What are some of the interesting and hard to find Mercury dimes?
A. Within the Mercury Dime series, there are only a few absolute rarities and there is only one that is hard to find.
The 1916-D is the scarcest major key date and rarity within the Mercury Dime series. Only 264,000 were struck. You may be wondering why the 1916-D Mercury Dimes had such a low mintage of only 264,000. Good question! Production of this coin was halted after the U.S. Treasury department entered an urgent order late in the year for 4 million quarter dollars.
Advanced collectors strive to acquire a 1916-D Mercury dimes for their collections in part to its low mintage and also because of their unique status as first ‘year-of-issue’ type coins. Some type collectors only acquire first-year coins.
Other Mercury dime key dates include 1921 and 1921-D and 1942-1 and 1942 -1D. The latter key dates show “overdates” with the number “2” struck over the number “1.”
Another interesting “error” coins involved a 1943 Mercury dime. The 1943 Lincoln penny struck over a struck 1943 Mercury dime is a remarkable and rare double denomination error coin and is one collectors avidly seek. How did this happen? This error coin was created when a dime was mistakenly fed into a printing press coining cents. This highly sought after error coin combines the three-pronged popularity of the Lincoln cent, the Mercury dime and its 1943 date, caused by the desirability of the famous 1943 copper cents.
If you are interested in building a Mercury dime set or are looking for that one hard to find coin to complete your set—call Blanchard today—we’re here to help.
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D. Brent Pogue Collection: One of the Most Valuable in Numismatic History
Posted onIn 1974 in Dallas, a successful real estate developer named Mack Pogue brought home a gift for his 10-year-old son Brent—a bag of Lincoln wheat pennies.
Mack had bought the bag of coins from his brother Jack for $100 and wanted to encourage an entrepreneurial spirit in his son. So, he gave his son Brent an “option” to buy the bag of pennies from him for $110 within one week.
Brent dutifully took the bag along with a copy of the coin Guide Book and began examining the pennies one by one. He soon came upon a shiny 1915 cent that looked bright as new. Brent discovered in the Guide Book that it was worth $65!
“I was immediately hooked,” Brent said later.
That also opened the door to his interest in exploring American and numismatic history. “My first thought, since there was no mintmark, was ‘How did this penny make it from Philadelphia to Dallas? Then I asked myself ‘who was the president of the United States in 1915? What else was happening that year?’” Brent said.
He quickly told his father that he would “exercise his option” and purchased the bag of pennies. From there, the rest is numismatic history as a true genius followed his passion.
Over the next 35 years Brent Pogue amassed an extraordinary collection of over 650 early American federal coins from 1792 to the late 1830’s era in the best available condition. Simply put, numismatists believed his collection was the finest-ever. Brent himself described it as “a collection representing our country’s economic birth.”
Brent became a student of numismatic history, conducting in-depth research about each U.S. coin series in an effort to absorb as much knowledge as possible. Brent moved far beyond the Guide Book in his research efforts and built an extensive reference library of numismatic books and catalogues to support his ongoing education.
Outside of coins, Brent followed in his father’s footsteps and made a career in real estate. He used many of his finely tuned negotiation and entrepreneurial skills from the business world in his numismatic pursuits.
“You have to be opportunistic, and you have to have guts,” Brent said. At one auction Brent bid $4.1 million on the legendary 1804 silver dollar—in the finest condition of eight known. At that time, that amount was twice as much as had ever been paid for any coin at auction.
While Pogue passed in 2019, his collection lives on in the numismatic world today. Through a series of sales that began in 2015, his collection of high caliber, rare U.S. coins has fetched over $140 million.
The extensive and impressive Pogue collection included an excellent selection of early American coins from half dimes to quarter eagles to half eagles to three-dollar gold pieces to silver dollars to large cents and even early American paper money. The sheer size and scope along with the high-quality of the Pogue collection is unmatched in numismatic history.
A renowned numismatist said at the time of his death that “Brent was the very definition of an extraordinary numismatist, a connoisseur. A careful student with a fine library at hand, he researched every coin he hoped to add to his collection.”
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U.S. Treasury Bonds or Gold: Which Are Safer
Posted onU.S. Treasury bonds have long been seen as the gold standard for safety. In times of financial crisis, war and recessions, investors around the globe turned to
the perceived safety of U.S. Treasury debt.
After all, Treasuries are backed by the full faith and credit of the United States federal government.
Simply put, our government has promised to pay back lenders with interest.
Yet times are changing.
Analysts at Bank of America recently raised this question—U.S. Treasury bonds or gold: which are safer—in a research note to clients.
It’s a fair question.
The U.S. national debt is soaring. There is zero focus or political will on debt reduction. The many tax cuts that have been recently proposed are only expected to increase our debt in the years ahead. There is no relief in sight for our federal debt.
So, where do we stand now and what does this mean for investors?
The U.S. national debt currently stands at $35.8 trillion and as a percentage of our gross domestic product is nearly 125%.
What’s more, our nation’s policymakers have been willing to gamble with the full faith and credit of our nation’s word that we will pay back our debt. When people or institutions lend money, they want confidence that they will get their money back.
Investors with long memories will remember the dog days of August 2011. That’s when Congress held the debt ceiling hostage in a full blown fight over raising the debt limit—and our elected officials took our nation to the brink of defaulting on our debt.
What happened then? Gold soared to its then all-time high above $1,900. Global investors turned to gold as a safe haven. Standard & Poor’s downgraded the U.S. credit rating. And, the stock market tanked.
The key thing with debt is that you have to pay it back. Otherwise, people, countries, corporations around the globe who buy Treasury debt aren’t very willing to do it in the future. Or, if they are willing to risk their investment, they will demand higher interest rates to lend their money.
Are we at a watershed moment when investors are realizing that gold is safer that U.S. Treasury debt? Could be.
Gold broke through the $2,700 an ounce barrier for the first time ever recently. The number of firms that now project gold gains to $3,000 an ounce are too many to count.
Gold’s role as currency and as an asset to protect, preserve and grow your wealth has lasted for centuries and shows no signs of losing its appeal.
As the national debt keeps rising, that means the Treasury will need to issue more and more bonds. However, there are real questions about whether investors will keep buying them at the pace the Treasury needs to sell them.
So, what did Bank of America analysts say about this question?
“Rising funding needs, debt servicing costs, and concerns over the sustainability of fiscal policy may well mean that gold prices could increase, if rates move up.”
Here’s what Bank of America concluded:
“Indeed, with lingering concerns over U.S. funding needs and their impact on the U.S. Treasury market, the yellow metal may become the ultimate perceived safe haven asset,” the analysts said. “Ultimately, something has to give: If markets become reluctant to absorb all the debt and volatility increases, gold may be the last perceived safe haven asset standing.”
Here’s what we say:
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Fed cuts rates, gold bounces higher after election dip
Posted onFed Cuts Interest Rates for Second Time in 2024 
As expected, the Federal Reserve delivered its second interest rate cut of 2024 on Thursday. The central bankers updated their policy statement saying: “The Committee judges that the risks to achieving its employment and inflation goals are roughly in balance.” The Fed cut its key interest rate by 0.25 percentage points to 4.50-4.75%.
How did markets react? Gold traded $32.50 higher Thursday afternoon at $2,703.30. Silver also traded higher on the day, up .74 at $32.03. The stock market generally rose in lackluster trading, Treasury yields fell, and the U.S. dollar slid lower.
What about the election? Reporters asked Federal Reserve Chair Jerome Powell about the elephant in the room: will Donald Trump’s election victory shape future Fed decisions? At the post-meeting press conference, Fed Chair Powell pushed back on those ideas.
Powell said the election will have “no effect” on the Fed’s policy decisions near term. “Many things affect the economy,” Powell told reporters. “We don’t guess, speculate or assume” what the potential economic impact of what the next administration could be.
What could lie ahead? On Thursday, the central bankers were essentially following through on the interest rate cut they signaled at their September meeting. But economists are warning the future interest rate cuts may not be as speedy or deep as previously expected. Some of President-elect Trump’s policies like rising tariffs could potentially reignite inflation. According to a recent Barron’s Big Money Poll, the resurgence of inflation was the number one risk over the next six months.
Recent economic reports have shown red flags. The October jobs report revealed only 12,000 new jobs last month, well below expectations for 105,000 jobs created. The most recent inflation data shows higher prices are still sticking around – especially when you factor in food and gas. The Fed’s preferred inflation gauge, the personal consumption expenditure (PCE) rate, revealed a 2.7% annual increase in September.
What does this mean for gold? Investors swiftly bought the election dip in gold and precious metals are climbing on Thursday afternoon. Gold and silver are turning out double-digit gains in 2024 as investors turn to the safety and security of precious metals. With new questions on the horizon about the potential resurgence on inflation, gold will continue to have the wind at its back.
Gold broke through the $2,700 an ounce barrier to a new record high for the first time ever recently. The number of firms that now project gold gains to $3,000 an ounce are too many to count.
Gold’s role as currency and an asset to protect, preserve and grow your wealth has lasted for centuries and shows no signs of losing its appeal. If you have been thinking about increasing your allocation to gold, there’s never been a better time. It’s easy to increase your wealth protection, why not do it today?
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Trump Wins! What Does This Mean for Precious Metals?
Posted onAmericans across the nation were sitting on the edge of their seats waiting for results on election night. We didn’t have to wait long. In the wee hours of the
morning Wednesday, the AP called the election for Donald J. Trump after it became clear he won enough of the key battleground states to tip him over the 270 Electoral College votes needed to clinch the victory. Republicans also gained control of the U.S. Senate.
What does this mean for precious metals, the economy and your investments? Let’s take a look.
Initial Market Reaction
- Gold: The precious metal tumbled over $70 Wednesday in an initial knee-jerk market reaction to the swift victory. Gold had priced in some expectations that the election results would be drawn out and contested and could even trigger social unrest. Gold fell Wednesday as the market de-priced those concerns.
- Stocks: The U.S. stock market surged higher driven by expectations of deregulation and tax cuts that could increase corporate profits.
- Treasuries: The yield on the 10-year Treasury note climbed on expectations that Trump’s proposed tax cuts will add more to the deficit.
- Dollar: The U.S. dollar jumped higher on the Trump victory news amid ideas that inflation will move higher under his proposed tariff policies. The market dialed back expectations of future interest rate cuts—if the Fed needs to continue its fight against a renewed inflationary surge—which boosted the dollar.
These reactions however—are just that—initial reactions. In fact, gold already reclaimed half of Wednesday’s loss by Thursday morning. There are many longer-term ramifications from potential Trump policies that could positively impact precious metals—especially gold.
Why Trump’s Policies Will Be Good For Gold
There are three major buckets of Trump policies that long-term will be positive for gold.
- Trump’s proposed tariffs—which could lead to slower economic growth and higher inflation. Positive for gold.
- Trump’s proposed tax cuts—which could lead to a higher deficit. Positive for gold.
- Expectations for a changing world order—which could lead to increased safe-haven demand for precious metals amid geopolitical conflict. Positive for gold.
Why Tariffs Are Inflationary and Positive for Gold
President-elect Trump campaigned extensively on using tariffs in his second term. He used tariffs as president targeting a variety of imported goods from China. This time, Trump has proposed a 60% tariff on all goods imported from China and up to 20% on everything else America imports.
How tariffs work:
- In the U.S., there are 328 ports of entry across the country. At these ports, the Customs and Border Protection agents collects the tariffs.
- The American companies—those that are importing and bringing those goods into the country—are responsible for paying the tariff to the Custom and Border Protection agents.
- Those funds are then sent to the U.S. Treasury.
The American companies doing the importing typically pass these higher costs along to their customers in the form of higher prices—or more inflation.
The economic impact from tariffs—lower economic growth and higher inflation.
- Trump’s main tariff proposals, which are expected to encourage retaliation from the targeted countries are expected to trim economic growth by over a full percentage point by 2025 and increase inflation by more than 2 percentage points higher, according to the non-partisan Peterson Institute for International Economics.
Gold impact: If Trump enacts these tariffs, gold will continue to gain in price as the Fed will be fighting rising inflation and falling economic growth.
Why Tax Cuts Are Positive for Gold
On the campaign trail, President-elect Trump proposed a variety of tax cuts from eliminating taxes on tips to removing the taxes that some seniors pay on Social Security checks to lowering the corporate tax rate. Also, the Tax Cuts and Jobs Act of 2017 expires at the end of 2025 and Trump is expected to keep many of these tax cuts in place.
Gold impact: Eliminating these taxes would mean a loss of revenue for the federal government and an increase in the federal deficit. Concerns over the ongoing rise in the record-breaking federal deficit has been a key reason many investors have been piling into gold in 2024. Experts are warning that if the U.S. continues to increase its debt, the only solution is for currency devaluation. A paper currency devaluation would be extremely positive for a physical tangible asset like gold.
Why A Changing World Order is Positive for Gold
President-elect Trump will return to the White House with two escalating regional wars underway. A new authoritarian axis is arising which includes Russia and North Korea partnering in the war against Ukraine. China is providing support to Russia, North Korea and Iran—while it prepares its military for a potential invasion of Taiwan, which China has publicly told it’s military to be ready for by 2027. Israel’s war against Hamas has expanded with an invasion of Lebanon and direct missile strikes against Iran.
The chess pieces are moving around on the global stage and the role of America is expected to change—with perhaps a withdrawal of support for Ukraine.
As countries make new partnerships amid growing military conflict, the traditional role of American support for European security may be shifting in a second Trump administration.
The chess game has many moves left and there will be unexpected twists and turns in the months and years ahead. But, the changing world order has several deadly military conflicts still smoldering with the potential for new military conflict over Taiwan and economic trade wars in the months ahead.
Gold impact: Precious metals will continue to attract central bank, institutional and individual buyers as gold is a safe-haven currency that is beholden to no country or government. As a time-honored safe-have investment, gold will gain amid an increasingly unstable geopolitical world.
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View from the Street: Money Managers Make the Case for Gold
Posted onWith gold up 31% since the start of the year, you may be curious, what do professional money managers think of gold and its outlook ahead?
Barron’s recently published its exclusive Big Money Poll: What’s Ahead for Stocks, Bonds and the Economy and money managers articulated the case for gold.
With many money managers voicing concern that the stock market is overvalued with the S&P 500 currently trading at 21 times 2025 estimated earnings, above its 5-year average—physical assets like gold stands out in today’s environment.
A Safe Haven
Gold was seen as a better haven than U.S. Treasuries for investors.
Steven Cucchiaro, CEO and chief investment officer of 3EDGE Asset Management told Barron’s: “I don’t think long-term bonds are a good hedge for market volatility,” adding that gold tends to be less correlated with stocks and bonds over the long-term.
Rising National Debt
It’s not just gold’s value as a safe haven, money managers highlighted the escalation of the U.S. national debt—which continues to rocket to new record highs, and currently stands at $35.8 trillion—as a reason to invest in gold.
Digging Deeper: The ratio of U.S. debt to gross domestic product is nearing 125%. What does this mean?
- “The debt-to-GDP ratio is a metric that compares a country’s public debt to its gross domestic product (GDP). It reliably indicates a country’s ability to pay back its debts by comparing what the country owes with what it produces,” according to Investopedia.
- “The higher the debt-to-GDP ratio, the less likely it becomes that the country will pay back its debt and the higher its risk of default.”
- “High debt-to-GDP ratios could be a key indicator of increased default risk for a country. Country defaults can trigger financial repercussions globally.”
“It’s math,” Rob Medway, managing general partner with MFLP told Barron’s. “Over time, if any country—even the U.S., the world’s dominant fiscal power—continues to increase its debt, the only solution is for currency devaluation.”
A paper currency devaluation would be extremely positive for a physical tangible asset like gold.
Inflation
According to the Barron’s survey, the resurgence of inflation was the number one risk facing the stock market over the next six months. Medway sees gold eventually climbing to $5,000 an ounce if inflation fears continue. Short-term, Medway sees runway for gold to hit $3,500 an ounce.
Other top risks for the stock market ahead include geopolitical turmoil, economic slowdown/recession and excessive stock market valuations.
With so many risks on the horizon, it’s no wonder so many investors are turning to the safety and security of gold today.
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Legendary $50 Gold Piece: A Piece of Exciting California Gold Rush History
Posted onDuring the rough and tumble times of the California gold rush, people in the west desperately needed coins to buy everyday goods and services. Sure, large
quantities of gold dust and nuggets were being discovered every day in the early 1850’s. Yet, there was no way to turn these newly discovered riches into coins in the west at that time. After all, the first California branch of the U.S. Mint didn’t open until 1854.
During the California gold rush and the ensuing economic boom, people were forced to use pinches of gold dust to pay for things. However, you surely can see how this method lacked uniformity. And the fat fingers from one merchant’s pinch could easily cost you more than expected!
Despite proposals to use paper currency to ease the coin shortage, Californians firmly rejected that idea. In fact, Article IV section 34 of the 1849 California Constitution outlawed the right for any bank to “make, issue, or put in circulation, any bill, check, ticket, certificate, promissory note, or other paper, or the paper of any bank, to circulate as money.”
Bottom line? Californians wanted hard currency.
Private coiners opened up
This created opportunity for enterprising businessman in the private coinage space. Samuel C. Wass and Agoston P. Molitor, Hungarian immigrants who had studied metallurgy in Germany, saw the opportunity and jumped on it.
Wass and Molitor opened an assay office on Montgomery Street in San Francisco in October, 1851.
It didn’t take long before the hardworking Wass and Molitor developed an extensive smelting operation and assay laboratory that was publicly lauded in the local newspapers for its modernity.
The public quickly embraced Wass and Molitor’s coins, which included $5, $10, $20 and $50 gold pieces. Their coins were considered good quality and miners who brought in nuggets and gold dust received fast service – their ore was turned into coins within 48 hours! Their gold pieces demanded a premium in circulation and were eagerly accepted in trade.
The end of an era
The San Francisco Mint began operations in 1854, which halted private gold coinage. But delays were seen in the western mint’s production. In March 1855 a group of prominent merchants and bankers petitioned Wass, Molitor & Co. to resume its coining operations.
Shortly after, Wass, Molitor & Co. resumed its coinage business and produced $10, $20, and round $50 gold pieces. The firm made the decision to replace the unpopular octagonal Assay Office slugs, which had sharp edges that pierced people’s pockets, with a round $50 gold piece.
The 1855 $50 Wass and Molitor gold piece is the largest coin their firm it had ever made – indeed it is a weighty, round $50 gold coin. This giant of the private coinage era is thought to be the only $50 denomination minted by a private firm that was used in circulation.
The round $50 gold pieces remained popular and widely circulated until the San Francisco Mint began striking federal coins in a consistent fashion. By the end of 1855, the private coin firms were no longer needed and Wass, Molitor & Co. shut down.
Once the U.S. Mint finally opened in California, many of these $50 gold pieces ended up in the melting pots due to their high intrinsic value. We have just one of these historic beauties. See it here.
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Why Over One Third of Germans Buy Gold
Posted onIt is widely known that Chinese and Indian citizens have bought gold for centuries. Accumulating and owning precious metals has been a cornerstone of those societies approach to wealth preservation and wealth building. What is less widely known is the healthy appetite for gold on the European continent. A new
survey from the World Gold Council revealed that German investors place great value in gold’s role as an inflation hedge and a portfolio diversifier.
And they plan to buy more of it.
Thirty seven percent of German investors have invested or held gold at some point, the World Gold Council found. Gold is the third most popular investing option behind savings accounts and stocks.
German investors buy gold for the same reason that central banks, pension funds and family offices buy the precious metal. “The top motives for investing [in gold] are that it protects against inflation, is easy to buy and sell, gives a better long-term return than cash held in a savings account, and helps to spread risk and diversify their portfolio,” the survey found.
Gold offers a safe haven and a safety net to those who own it, which is why here in North America, 29% of financial advisors in North America plan to increase allocations to gold over the next 12 to 18 months, according to a June 2024 report from State Street Global Advisors.
Gold has climbed 24% since January in a record-setting year, and inflation still remains higher than the Federal Reserve’s target rate.
In September, the consumer price index (CPI) rose 0.2% to 2.4% annually—coming in higher than economists had expected. The latest data reveals that the battle against inflation isn’t over yet and the Fed still has a fight ahead to tame and tamp down rising prices.
Inflation is just one of the many reasons investors buy gold. Gold has proven track record as way to store wealth and preserve purchasing power, unlike paper currency, whose value is eroded by inflation. Research shows that gold has kept up with rising prices by delivering positive returns during periods of rising and especially during times of extreme inflation.
In the midst of the current economic, political and geopolitical uncertainty we face today, gold has become the safe haven of choice of today’s modern investors. Gold has a 5,000 year track record of preserving and growing wealth. It’s no surprise that citizens around the world today continue to place their trust in a strategic asset like gold.
Circling back to the World Gold Council survey, it also found that German gold investors tend to be loyal, repeat buyers. What about you? Do you feel confident in your ability to preserve, protect and grow your wealth? Do you plan to be a repeat buyer of gold? If you’ve got questions, call a Blanchard portfolio manager today for a complimentary, confidential portfolio review. We’re here to help.
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