Editor’s note: At Wide Moat Research, our usual beat is quality companies with reliable – and reliably rising – dividends. And as a humble commodity, gold doesn’t usually enter our coverage spectrum. But the metal has investors’ attention, and for good reason. The price of gold is up nearly 60% so far this year. Not since the 1970s has gold moved so high so quickly.
And so, to help make sense of gold’s latest surge, we’re sharing an essay from Nick Hodge, co-founder of Digest Publishing and Publisher of Daily Profit Cycle. As Nick puts it, even after gold’s historic run, the case for owning the metal is as strong as he’s ever seen it.
I’ve been investing in natural resources for a long time… and today, the argument for owning gold is as strong as I’ve ever seen it.
That’s not hyperbole. It’s just where we are.
Gold is trading north of $4,000 and is up more than 50% this year. So if you’re wondering whether you “missed the run,” I get it.
But the right question to ask is this: Have any of the reasons to own gold actually changed?
If the answer is no, then gold still deserves to be in your portfolio. And as I’ll explain, that’s the case now more than ever before.
The government is sitting on nearly $40 trillion in debt. It’s announcing budgets that will add between $2 trillion and $3 trillion to this debt every year for the foreseeable future.
And nobody’s fixing it… or even pretending to.
When you have that much debt, and spending keeps rising, the U.S. dollar gets weaker. That’s a powerful tailwind for gold prices.
And the truth is, President Donald Trump loves a weaker dollar…
During his first term, Trump ran up debts and deficits, printed money, and demanded his name be on stimulus checks. Those aren’t the actions of a fiscal conservative. That’s a president who wants a weaker dollar.
And that hasn’t changed now that Trump is back in office…
This year alone, gold prices have outperformed the U.S. dollar by more than 60 percentage points. Take a look…
If you’d gone a step further and bought some high-quality gold stocks, the performance would’ve been even better.
Now, I pride myself on being a simple guy with simple ideas. So I ask myself questions like these…
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Is the debt going down?
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Are we going to address it moving forward?
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Is money going to get more expensive?
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Are we going to see deflationary forces?
When the answer is “no” to every one of those, betting on gold continues to make sense.
As my good friend Rick Rule said recently, owning gold is likely going to be a good thing.
If you think you missed the run… I’d encourage you to ask yourself those same questions. As long as the answers haven’t changed, neither has the investment case for gold.
Lower interest rates are also good for gold. Federal Reserve Chair Jerome Powell’s tenure is almost up. The next Fed chair will be just as dovish, if not more.
But that’s not the only reason I’m bullish on gold…
Gold as a Critical Metal – and a National Asset
Let me be clear about something else…
Treasury Secretary Scott Bessent views gold as a critical metal. He’s thrilled to see the gold price rise because the U.S. holds a large amount of gold reserves. This helps the government’s balance sheet.
The current administration has actually been very strong when it comes to critical metals policy. It has fast-tracked permitting, supported the development of domestic mining, and made real efforts to secure independent supply chains.
This policy support puts real wind in the sails of what U.S. mining companies do.
It doesn’t matter whether you agree with the fiscal or monetary policy, or whether you support the current administration. Our responsibility as investors is simply to profit from it.
Again, it’s easy to look at the price of gold and think you missed it. But I’m telling you, you haven’t.
This isn’t the top. It’s a consolidation. The next leg higher could be even more powerful. And if the fundamentals haven’t changed – if the debt is still going up, if the Fed is still dovish, and if the government is still trying to give the economy a push – then the reason to own gold still holds true.
Gold isn’t just another commodity. It’s the signal. It tells you when something’s broken in the system. And right now, it’s screaming.
If all you do is take some of your dollars and use them to buy gold, you’re going to like the outcome… especially in a world where nothing else seems to add up.
Debt is growing, the dollar is weakening, and the money supply isn’t slowing down anytime soon. But gold? It’s just getting started.
Regards,
Nick Hodge
Editor’s note: Across Washington D.C., government insiders are moving money into a short list of stocks now considered “too critical to fail.” And just days from now, a surprising move from the White House could trigger 300 times more money moving into these stocks.
On Tuesday, November 18, a legendary investor with deep connections to the stocks involved in this story will lay out what’s at stake… and share exactly where to move your money to prepare. Plus, he’ll reveal the name and ticker of the one stock everyone will be wishing they owned in six months.
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