Gold Prices Top $4k for First Time
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Gold prices have reached an all-time high above $4,000, sparking discussions about the implications for the economy, currency values, and investment strategies.
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Almost everything is performing well right now, which is why I don't think this is news, particularly.
Most of my savings was in SPX (S&P 500 ETF), but over the course of the year I've been progressively exchanging more of it for GLD (ETF).
It's been a good strategy for me so far.
Is there a way for a small individual investor to "exchange" shares in stock without doing a "sell A + buy B" for which the sale of A is subject to capital gains tax?
Some cursory googling points me to "exchange funds", but those seem to be designed for accredited investors.
The advice I see for someone like me who wants to "re-balance" is just to change allocations for any new investments, but I'm wondering if there's an effective way to shift existing allocations without incurring a tax penalty...
outside of that just rebalance only every other year is your best plan - but it means only buying things you can hold that long.
Facts:
- Gold has reached all time highs
- US debt (ie T-bills) selling at all time lows
- US equities are at all time highs
- USD falling day over day, month over month, year over year
All 4 of those facts cannot remain true indefinitely. The all time high equity prices are because it requires more USD(which is decreasing in value) to purchase them. Gold is at all time highs because USD is decreasing in value, and the flight to safety leads people to gold. US debt is falling in value because no one wants to buy it. At some point, equities will give up and crash, or gold will have to crash....and I don't think it's going to be gold crashing.
edit: formatting
Cash is a good way to lose money through opportunity cost:
* https://ofdollarsanddata.com/even-god-couldnt-beat-dollar-co...
If you're worried about risk and being able to sleep at night, you can dial back from 100% equities (S&P 500, Russell 3000), and do some bonds. Vanguard (e.g.) has funds that are fixed 80/20, 60/40:
* https://investor.vanguard.com/investment-products/mutual-fun...
This way you don't have to go through the effort of rebalancing yourself.
JFC, this is the dumbest possible advice given this thread.
If someone thinks equities are overpriced and one thinks the value of USD is decreasing, then 'cash in the bank' is an equally bad answer to 'buy equities now'.
The correct answer, given those beliefs, is 'buy commodities' (or scarce assets).
The thought seems to be that prices of everything are high, because the dollar itself has lost value. Makes sense. The conclusion then being a crash. But why? If the dollar is worth less and stops devaluing so badly, we'd just expect a stop in growth rather than a crash. Or are you projecting a strengthening of the dollar rather than just stabilization?
Thought process goes: (1) devalue dollar, (2a) make basic US industry more globally competitive, (2b) devalue US debt to "solve" it without having to implement austerity, (3) stronger US industry
Given that equity nominal values (read: future profits) will grow (to balance out the decreasing fiat value), purchasing power / wealth holds something close to constant and market numbers go up (which keeps voters from becoming unruly).
The only people who really get fucked are (a) people who aren't invested in the stock market (read: poor), (b) fixed income folks (read: retirees who will be dead before it fully plays out), and (maybe c) labor (if wage growth doesn't keep pace with purchasing power loss).
It's not the worst economic-political plan, other than the fact that no one is being honest with the public about it and some idiot ALSO picked the same time to drastically decrease the domestic labor supply (by sharply decreasing immigration and mildly increasing deportations) and increase tariffs. Both of which make completely offshoring labor more attractive.
* See also why Trump has such a bug up his ass about the Fed, as this becomes a lot harder if they don't play ball. Say, by following their mandate to fight inflation...
The main issue is how will asset prices be maintained when civil unrest makes securing physical assets so expensive that they can no longer yield positive returns. Until then the system is stable as the people with power are able to retain power, the increasing inequality helps intrench the power further.
People see a wealth tax as a way out, but if that happens the state is entirely dependent on the growing the wealth of the mega rich and will act in their interest in effect cementing their power even further.
This is a laughable premise.
A huge amount of government revenue has always come from the wealthy, yet there is consistent pressure to reduce their taxes in the US government. Why? Because the IRS doesn't run the US government, politicians do. Why would a wealth tax based government be any less likely to try and reduce their tax burden?
A rich person's power comes from being rich: From controlling significant resources, things like communication channels, important industry, bribes/kickbacks/whatever you call them
It has nothing to do with government revenue.
That said there are many billionaires who advocate for greater taxes, Patriotic Millionaires and Proud to Pay more. Including but not limited to Warren Buffet, Bill Gates, George Soros, and Abigale Disney. Bill Gates, as an example, goes to incredible lengths and uses shady Caribbean methods to minimize the tax he pays.
It’s important to make a distinction of weighting the wealthy by numbers vs wealthy by wealth, the higher the inequality the bigger the difference. The wealth is dominated by an increasingly small minority.
I’m making a prediction of what I strongly believe will happen, not what has happened. There are examples in history where there were unexpected emergent behaviors created out of perverse incentives. One of my favorite is the selling of indulgences by the Catholic Church to pay for St Paul’s cathedral, meant the Catholic Church made more money if people sinned more, which created some problems.
Instead I think the only argument that matters is that P/E ratios are really high even though interest rates are high and you can see that it's hard to justify the equity prices using present value of dividends and that sort of thing.
[1] https://www.youtube.com/watch?v=da6hMy5sp1M
All of inflation-adjusted US spending growth has come from those in the top 20% income bracket ($175k+) and especially the top 3.3%.
So not Boomer spending, but wealthy spending. (Which overlaps but isn't completely the same thing)
[0] https://fortune.com/2025/09/17/economy-reliant-on-wealthy-co...
Debt selling at lower market prices is equivalent to higher interest rates. Peak interest rates for US debt where around 1980, not now.
this is true
> US debt (ie T-bills) selling at all time lows
this is not true unless you’re doing some kind of adjustment. For t bills, us03m yields were much higher 30-40 years ago.
> US equities are at all time highs
this is true
> USD falling day over day, month over month, year over year
if falling means inflation, yes in banal way. If falling means relative to other currencies, that’s the last 9 months or so. Previously the USD was quite strong
> US debt is falling in value because no one wants to buy it
this appears to be the hinge of the argument? It is not true. 10y yields have been down / flat since beginning of 2025 (i.e., price up). also tsy auctions remain well-subscribed / within historical range
I just moved my son's "kid retirement plan" (giving him matching and compounding interest, he can access it at 18) into a custodial account, and put his money into a few stocks and ETFs (including PHYS, a gold ETF). So far in the last week it has gained $140 on $940 investment. I've warned him: This is fun to see these gains, but we can't expect it to always happen, we just need to protect our gains by using stops.
I also had him pick a stock that is something he likes and thinks will go somewhere. He picked Roblox. My FIL had given me the advice to take a little bit of your money, "pocket change", and invest in something you like, to keep it fun. My first investment following that advice went from $7K to $200K, so I was a big fan of that. ;-)
What is the root cause of all of this? BRICS has an alternative to SWIFT (not identically but functionally).
If you feel that the multipolar world is a fad, sure, gold will come down. I somehow doubt it.
Why? Is it some law of nature that the USD can't itself crash. It would then be sensible investment to buy both Gold and Equities. I sometimes wonder if we are seeing the USD unfolds on the equities and commodities market before it does for food and transport.
The inflation-adjusted price of equities is still near all time highs. See the Shiller PE Ratio. [0]
[0] https://www.multpl.com/shiller-pe
edit: I am mostly in bonds with some gambles here and there, but that was my position since the begining of this year.
you have to be careful about predictions in financial areas.
Remember if people are guarenteed right they would be investing money. In most cases talking about a truth will cause the market to change harming your ability to capitalize on it. Thus anyone talking is unlikely to have insight.
You would think "that can't go on forever" but so far workers have failed to organize or support reforms that could correct it. The "hack" to maintain this in perpetuity seems to be distracting workers with get rich quick gambling schemes and culture war xenophobia.
So I would be far more concerned on the impact of gold price going high on other currencies that are not backed by as much gold before worrying about the US.
For example a 2% increase in rate on 1T in 30Y treasury issuance over 30 years is $600B.
One of the fascinating things happening in this market is that there’s a massive disconnect between the spot price of gold ($4000), which is driven and set by massive trades and hedges on international commodities exchanges, and the supply and demand for actual physical gold - the kind that’s sold at Costco in bars or by the US mint in 1oz coins.
Since so much activity is driven by futures contracts online (without physical settlement), this disconnect means that the average consumer more or less is either holding physical gold they already have or selling physical gold they already have to cash out at these historic levels. There just aren’t a lot of regular people out there who are saying “yeah I want lots of gold at $4000/oz”.
So brick and mortar dealers are being flooded with gold in their shops these days, and the supply chain looks pretty wild - tons of that physical gold is going to refineries who are melting it down and shipping it off as physical collateral for the futures contracts - but the big buyers out there don’t actually want or need all this expensive physical gold. The price spike isn’t because all of a sudden there’s increased demand for physical gold - it’s just a financial instrument at this point that happens to have a physical counterpart.
None of this is to say there’s a problem with this - it’s just fascinating that net result of this huge spike is lots of jewelry and old coins being melted into bricks of gold that will sit quietly in secure warehouses and vaults around the world.
So inflation has almost nothing to do with the current price of gold and the grandparent post’s speculation about the futures market running hot is far more likely. The price of gold isn’t attached to the dollar and hasn’t been for over 50 years.
A quick sanity check of my own house would show that it would cost something like 75 ounces of gold. It was built in the 70’s and originally sold for 45,000, or well over 250 ounces of gold in gold prices from around then. Doesn’t seem right…
But how can you untangle an objective production price from the fiat / economy it's produced out of?
If that were the case, you'd expect scarce but still produced assets (e.g. housing) to have both increased in price (due to fiat inflation) and decreased in price (due to production technology efficiencies).
Which one dominates to what degree likely depends on the asset.
It fluctuates a fair bit but starts and ends at ~150oz/house
And the US https://www.longtermtrends.net/real-estate-gold-ratio/
Note well: This is my impression. I have not tested this hypothesis against historical data.
Gold was absolutely flat between 2012 and 2022:
* https://www.apmex.com/gold-price
but USD money supply was increasing during that decade:
* https://fred.stlouisfed.org/series/M2SL
See also flatness of gold prices from 1982 to 2002 with an increasing money supply. An older article:
> Sure, there were periods when gold was rising in tandem with the money supply, e.g. in the 1970s and 2000s. However, the yellow metal was in a bear market during the 1980s, 1990s and since 2011, despite the rising money supply (as indicated by the orange rectangles). The price of gold has fallen since 2011 by more than one-third, while the monetary base has increased by half and the M2 supply has risen by more than 25 percent.
* https://www.goldpriceforecast.com/explanations/gold-money-su...
There is little correlation between the two.
Hmm, even the kerning on my browser makes them look fairly similar.
F-I-A-T versus F-L-A-T
Hope this helps!
I did not. The data I linked to shows that there is no historical, long-term correlation between M2 and gold prices.
The gold price drastic increase and USD worst decline is to be be expected, and it's mainly due to the end of petrodollar agreement discussed on HN last year [1]. Somehow the Nasdaq news link is dead now but the Firstpost news is a similar one [2]. The top comment is a golden example of denial (pardon the pun), "This is itself inconsequential" [3]. This can be another Dropbox comment moment of HN. The comment also predicted that "Things will keep running as today probably for the next 20 years", and here we are in just after a year.
The negative effect to USD due to the end of petrodollar is imminent and the writing is on the wall for the gold price to increase sharply when there is no more petrodollar.
[1] U.S.-Saudi petrodollar pact ends after 50 years (325 comments):
https://news.ycombinator.com/item?id=40673567
[2] What was the US-Saudi petrodollar deal that lapsed after 50 years?
https://www.firstpost.com/explainers/what-was-the-us-saudi-p...
[3] U.S.-Saudi petrodollar pact ends after 50 years (top comment):
https://news.ycombinator.com/item?id=40674911
Massive inflation has reduced the value of all currencies, giving the illusion that everything has gone up in price. Well everything except for salaries that is.
This isn’t always true. For one thing, the amount of fiat in ‘circulation’ isn’t just a matter of “count up all the bills printed”, but is affected by how much leverage exists in the world and many other things.
Second, even how much a fiat dollar is worth is also a factor of how much productivity there is in the world. To understand what I mean, let’s imagine a super simple economy with only fiat dollars and wheat. Every dollar is only used to buy wheat.
Say there is $1000 in bills and 1000 pounds of wheat. Each dollar is worth 1 pound of wheat. Then, we print an extra $1000 in bills; that would be inflation, and now you can only buy 1/2 pound of wheat for a dollar. That is what people imagine when we talk about printing more money causes inflation.
But what if new technology gains means we are able to produce 4000 pounds of wheat for the same amount of work; now, each $1 can buy 2 pounds of wheat. Even though we printed more money, the economy grew even faster than we printed extra money, so we didn’t get inflation and instead prices went down.
Inflation is always (generally) about the ratio between currency production and economic output growth. You can’t just look at one side of the equation.
So evidently, there is healthy retail demand for gold at these price points. Futures markets can get weird, but they're ultimately rooted in demand for commodities. I can't sell you futures on something that no one is willing to buy.
For example, one dealer I know last month sold $5m in physical gold coins (to consumers who wants gold) but they bought $30m in physical gold coins to be shipped off and melted. They, like APMEX, make money on both sides so they're plenty happy. But a 6:1 buy:sell ratio is pretty wild.
The next logical step in that process would then be for the price to further increase as the actual amount in circulation decreases, right? Doesn't this create a sort of vicious cycle?
At any time someone could take delivery on their futures contracts and receive a shipment of the gold from the warehouses it is stored at.
Mining and smelting gold requires quite a bit of electricity. But Bitcoin the network undoubtedly uses more.
As for small denominations, Bitcoin goes down to a single unit of Satoshi (1/100 millionth of a btc) and since its digital, subdivision is trivial.
So despite this, there are far more retail and commercial opportunities to exchange your btc for goods and services, where as I don't know of any place I can trade gold coins for things.
A creative thief (or, y'know, scriptwriter) must be thinking about how to exploit that disconnect. If it's never been a better time to "own" gold, but not to "hold" gold... then surely this is also the best time to steal gold?
And I'm further supposing that in such a situation, the people who end up with the actual junk to be stored are probably going to find ways to cheat and store it poorly, in e.g. a warehouse and not a fortress.
Much of the gold in vaults doesn’t even move once it gets there, even through multiple successive owners. China takes physical ownership of its gold, though, so recently there has been a lot of gold moving overseas.
Germany and Italy have recently considered repatriating their physical gold, as they are no longer sure about leaving it in overseas vaults: https://www.ft.com/content/e39390cc-ea02-4197-843a-1e4c24242...
Which is to say, you don't know either. What I'm saying is that this huge boom in gold value has not been matched by an equivalent change in gold storage paradigms. And that... probably has some bad externalities.
We actually saw this in the 1990's. Intel had built its business on the back of regular shipping practices, sending pallets of chips to a small list of electronics manufacturers as needed on commercial vehicles. But as the PC market matured and the parts became more easily liquidated on a global gray market, people suddenly realized that you could hijack a truckload of 486's and dump the multi-million-dollar cargo into Taiwan at almost no risk. And there was a rash of chip pirates for a while.
This smells similar.
It’s not like the quantity of gold available has increased. With China buying and repatriating large amounts of gold, the big secure vaults surely have more space than usual. Some retail gold traders are concerned about issues in the paper gold market, as the total dollars traded is much higher than the total amount in existence, but this concern is just a misunderstanding about how the futures market works. Even so, to me it seems more realistic to worry about some kind of shenanigans in this often opaque “paper gold” market than a sudden outbreak of gold piracy.
Sorry, what? I don't shop at Costco because I don't really need anything in the volume they sell it at... but is this a real thing?
The only real use case for these is occasional chemistry usages.
But very very very very ignorant people still insist gold is some sort of useful store of value for the apocalypse or something.
People with large gold reserves in 1930s Germany did no better than any other Germans in an environment with failing fiat currency. Primarily because they were being put into camps and their gold was confiscated by a criminal regime.
Then you provide protection, nourishment, and medicine to all the people in your community who have costco gold and jewelry.
- In 217 BC, to survive the Second Punic War after Cannae, Rome passed the Lex Oppia requiring citizens to surrender gold and jewelry to the state treasury.
- In 1307, to survive debts from the Flemish War, Philip IV of France arrested the Knights Templar and seized their treasury, disrupting credit networks used by merchants and pilgrims.
- In 1536, to survive the Great Matter (his divorce) and break with Rome, Henry VIII dissolved the monasteries in order to melt down their gold and silver chalices, crosses, and shrines.
- In 1666, to survive the Second Anglo-Dutch War costs, Charles II "borrowed" gold deposits from London goldsmiths through the Stop of the Exchequer and never returned them.
- In 1797, to survive the French Revolutionary Wars, Pitt the Younger demanded "voluntary" Loyalty Loan gold contributions from British citizens, backed by threat of forced requisition.
- In 1917, to survive WWI and the October Revolution, Lenin's Decree on Gold confiscated all gold coins, bullion, and objects from "non-working classes."
- In 1933, to survive the Great Depression banking crisis, FDR signed Executive Order 6102 requiring all Americans to give up their gold.
- In 1934, to survive monetary reform, the Gold Reserve Act let the US Treasury profit $2.8 billion by revaluing confiscated gold from $20.67 to $35/oz (basically stealing 41% of the value)
- In 1959, to survive the US trade embargo, Castro's Revolutionary Government Law 851 seized all private gold holdings in Cuba, including jewelry and coins.
- In 1966, to survive foreign exchange crisis, India's Gold Control Act under Indira Gandhi banned private gold ownership above tiny amounts, forcing surrender to the state.
It's a wonder of our modern age that this classic form of expropriation is now happening through voluntary means: high paper prices drawing physical gold from millions of small holders into the vaults of institutions, without any guns, goons, or executive orders required.
Retail does not have the financial power to move any large market. The responsible parties, in either direction are institutional buyers. So your final point is worth consideration. Could it simply be diversification from US Treasuries? Or are there other geopolitical factors?
> “We estimate that if 1% of the privately owned US Treasury market were to flow into gold, the gold price would rise to nearly $5,000 an ounce, assuming everything else constant,” the analysts said. “As a result, gold remains our highest-conviction long recommendation in the commodities space.” https://archive.is/2WjSc#selection-1491.0-1494.0
In terms of geopolitics, a lot of the demand has been driven by Asia, such as the Reserve Bank of India. The end of the petrodollar pact with Arabia hurt. https://archive.is/t2Ttm When USD went off the gold standard, that pact gave it oil as a leg to stand on. Now that's gone as of 2024. In 2020 the fractional reserve requirements for banks went to zero too. The only thing that gives the USD value is a faith in the American people, which is aged population that flouts its fiduciary duty to debt holders by debasing everyone's currency to fund their own retirements.
Upper classes paying for unusual/emergency expenses of the state. Unthinkable now.
Amateurs:
* https://www.mint.ca/en/shop/coins/2025/lunar-year-of-the-hor...
* https://www.mint.ca/en/shop/coins/2025/heart-diamond-pure-go...
More 'pedestrian' items are available as well:
* https://www.mint.ca/en/shop/categories/gold
> but the big buyers out there don’t actually want or need all this expensive physical gold. The price spike isn’t because all of a sudden there’s increased demand for physical gold - it’s just a financial instrument at this point that happens to have a physical counterpart.
The reason is well understood: Central banks around the world are increasing their supply of Gold. In particular, the one in China: https://tradingeconomics.com/china/gold-reserves
And no, big buyers expect deliveries: https://www.ft.com/content/86a5fafd-603e-4ee1-9620-39b5f4465...
Not really "around the world". There's been a huge influx of physical Gold from the rest of the world into the US this year. It kind of fucked over Switzerland, because the gold refining capacity of the world is really concentrated there. So they've been working 24/7 on the not particularly appealing business of importing gold in one size from London, re-casting it as bars of a different size, and exporting to the US.
And why is this a problem? Because this anomaly single-handedly made it look like Switzerland had a massive trade surplus with US, so they got punished for being the middle-man on the Gold exports with crushing tariffs on everything else.
I think whats happening is china is buying up all the physical supply in the global markets.
Each of these came very close for a major market depression (except 911).
The fact that none did only instilled in lots of people's brain to take an incremental bit more insurance in the form of gold (if you were to replay Covid or GFC today, what odds do you put that it won't lead to a great depression?)
Also you can argue that the gradual rise is tracking almost exactly the gradual geopolitical paradigm shift from unipolarity to multipolrity.
Gold hits all time high (goldprice.org)
https://news.ycombinator.com/item?id=45417805
(7 days ago, 88 points, 134 comments)