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Are Morgan Silver Dollars a Good Investment? What Investors Should Know - Money Metals

Mon, 13 Apr 2026 00:00:00 EST

Are Morgan Silver Dollars a good investment? For most investors, no. While Morgan Silver Dollars have historic appeal and some collector value, common-date coins often carry high premiums, wide resale spreads, and less upside than standard https://www.moneymetals.com/buy/silver";>silver bullion.

That does not mean Morgan Dollars have no value. Certain rare dates and high-grade examples can be valuable. But for buyers focused on https://www.moneymetals.com/investment/investing-in-silver";>silver investing, liquidity, and preserving purchasing power, Morgan Silver Dollars are usually better collectibles than investments.

However, more often than not, Morgan Silver Dollars are numismatic collector's items. They are not investment-grade silver bullion, which is often what silver investors purchase. These coins are not eligible for a precious metals IRA, and most of their value comes less from their silver content and more from their condition.

What that means for investors is that Morgan Silver Dollars often sell at high markups over their silver value. When investors go to sell their coins, they cannot always recover those premiums. More often than not, buyers are paying for a connection to history, not the metal. That can make common-date Morgans far less practical than standard bullion products or even pre-1965 90% silver coins.

The Short Answer: Collectors May Benefit, Investors Usually Do Not

If you are an experienced coin collector who understands dates, mint marks, grading, rarity, and dealer spreads, certain Morgan Silver Dollars may deserve a place in your collection.

If you are a typical precious metals buyer looking for liquidity, lower premiums, and straightforward pricing, Morgan Silver Dollars are usually the wrong place to start. Common examples often trade with wide buy-sell spreads, and those spreads can eat up a large chunk of your money before silver prices move at all.

So, why might a Morgan Silver Dollar be attractive to buyers? To understand this, we have to take a look at the history of the Morgan Silver Dollar.

What Are Morgan Silver Dollars (And What Is Their Appeal)?

The Morgan Silver Dollar was first minted in 1878, and it came at a remarkable time.

In 1878, the US was midway through the Wild West era. The country was expanding across the continent. It was a time of incredible growth, optimism, and adventure.

The Morgan Silver Dollar came to be held as a symbol of this exciting period. Many numismatic collectors love these coins for the tangible link they provide to American history.

The Biggest Problem: High Premiums Over Melt Value

https://www.moneymetals.com/buy/silver/silver-dollars/morgan-dollars";>Morgan Silver Dollars have an enduring legacy and retain popularity. So, why do they often make bad investments?

The problem comes from the premium on the coin.

A Morgan Silver Dollar contains about 0.7734 troy ounces, not a full ounce. However, many online sales pitches encourage buyers to compare the coin's price to a one-ounce silver product. This trick makes a steep premium look smaller than it actually is.

For investors, premium matters because it affects break-even.

The more you pay above a coin's intrinsic value, the more silver has to rise before you can even break even.

Example: Why a Morgan Dollar Premium Can Be Misleading

A Morgan Silver Dollar contains about 0.7734 troy ounce of silver, not a full ounce. At a silver price of $25 per ounce, the coin's melt value is about $19.34. If a dealer sells a common-date Morgan for $32, the premium is not a modest 28% over silver. It is actually about 65% above melt value.

Now assume that same dealer, or another buyer, would only pay $21 to $23 for the coin on resale. Even if silver prices stay flat, the investor could lose a meaningful percentage immediately because the original markup was so high. That is why common Morgan Silver Dollars often work better as collectibles than as low-premium silver investments.

Wide Buy-Sell Spreads Can Crush Returns

Let's say you find a Morgan Silver Dollar that is priced fairly by numismatic standards. Does that make the coin an efficient investment?

Not necessarily. Common-date Morgans can involve large spreads between what you pay and what a dealer will offer when you sell. The first draft noted that the spread on common Morgan Dollars can be around 30% or more, while standard bullion products often trade with much narrower spreads.

That means two things:

You may need a major https://www.moneymetals.com/price/why-is-silver-price-rising";>rise in silver prices just to break even
You may discover that resale is far less favorable than the original sales pitch suggested

For someone buying silver primarily as a store of value, that is a serious drawback.

Most Morgan Silver Dollars Are Not Rare

This is where many investors get into trouble.

Some Morgan Dollars are absolutely scarce and desirable. Certain years and mint marks can make Morgan Dollars extremely valuable, especially if they're in good condition. As an example, the 1893-S Morgan Silver Dollar has sold for over $2 million dollars. This coin was graded at MS-65, placing it in gem uncirculated.

However, most Morgan Dollars are not especially rare, nor are they in good condition. In fact, you can find many Morgan Silver Dollars at ordinary precious metals exchanges. You can often find them for modest retail values in ordinary collectible ranges.

That is why the phrase “rare coin” can be misleading when applied to ordinary Morgan Dollars.

A coin can be old without being rare. It can be collectible without being a smart investment. Worse, it can carry a premium without offering a good upside for a buyer who does not fully understand the market.

Graded Morgan Dollars Add Another Layer of Risk

A huge part of numismatic coin prices comes from its grade/condition. A high grade coin can be worth a lot of money. So, why would graded dollars add risk to your purchase?

Most dealers sell Morgan Dollars in certified holders with grades from third-party https://www.ngccoin.com/";>grading services like the NGC. In theory, that grading helps standardize coin quality. In practice, it also adds complexity for inexperienced buyers.

Two coins that look similar to a newcomer may have very different values based on:

Date
Mint mark
Strike
Eye appeal
Certified grade

Grades can make a coin's price seem more authoritative than it may actually be. This does not mean buying graded Morgan Dollars is inherently a bad idea. The problem is that many investors are asked to pay a large premium for a graded coin, not understanding how hard it could be to recover that premium later.

When Morgan Silver Dollars Might Make Sense

Morgan Silver Dollars can make sense in a few limited situations. They may be a reasonable choice for knowledgeable collectors who understand key dates, mint marks, grading, and dealer pricing.

They may also appeal to buyers who care more about history than efficiency and are willing to pay a higher premium for the coin's age, design, and connection to the past.

In addition, truly scarce dates or exceptional high-grade examples can be very different from generic circulated Morgans, since their value depends more on collector demand than on silver content alone.

When Morgan Silver Dollars Are Usually a Bad Investment

Morgan Silver Dollars are usually a poor fit for buyers who want the lowest-premium silver possible, since standard bullion and pre-1965 90% silver coins are often more cost-effective.

They are also less attractive for investors who want easy resale, because wide buy-sell spreads can make it harder to recover the original purchase price. And if the case for buying depends heavily on sales language like “rare,” “private,” “non-reportable,” or “can't lose,” investors should treat that pitch with caution.

Morgan Silver Dollars vs Bullion: Which Is Better for Investors

https://www.moneymetals.com/buy/silver/silver-dollars/morgan-dollars";>Silver bullion is generally a better investment than Morgan Dollars.

Bullion products are typically priced much closer to melt value. They are easier to compare, easier to value, and easier to resell. Common Morgans are often worth little more than their melt value despite what rare-coin dealers may imply.

This table shows the practical differences between the two commodities:

Product Type	Main Value Driver	Premium Level	Resale Simplicity	Best For
Common Morgan Silver Dollars	Silver content plus collectible premium	Often high	Moderate to difficult	Collectors, niche buyers
Silver bullion coins and rounds	Metal value	Usually lower	Generally easier	Investors, stackers
Pre-1965 90% silver coins	Metal value	Often competitive	Generally easier	Budget-minded silver buyers

For a buyer focused on ounces, liquidity, and minimizing markups, standard bullion is the better asset for your portfolio.

What to Ask Before Buying Morgan Silver Dollars

Before you buy Morgan Dollars, ask these questions:

What Is the Actual Silver Content?

Do not compare the price to a full one-ounce coin unless the silver content is actually one ounce. A lower-premium silver product typically gives investors more efficient exposure to silver prices, since more of the purchase price goes toward metal value rather than collectible markup.

Is This Coin Genuinely Scarce, or Merely Old?

Age alone does not create rarity.

What Is the Dealer's Buyback Price Today?

The spread matters more than the sales story.

Is the Premium for Collector Value or Metal Value?

Know which market you are entering.

Am I Buying a Collectible or Making a Silver Investment?

Those are not the same decisions. You must know what you're looking for before you purchase a numismatic coin.

So, Are Morgan Silver Dollars a Good Investment?

For most investors, no.

Morgan Silver Dollars are usually better collectibles than investments. Common-date examples often carry high premiums, wide resale spreads, and too much room for dealer hype. That makes them a risky place for beginners to put serious money.

For experienced https://www.money.org/official-grading-standards/";>collectors who understand grading, rarity, and pricing, select Morgan Dollars can still have merit. However, that is a specialized market, not a simple silver https://www.moneymetals.com/investment";>investment strategy.

If your goal is to buy silver efficiently, reduce your downside, and preserve liquidity, standard bullion products are usually the smarter choice.

FAQ: Are Morgan Silver Dollars a Good Investment?

Are Morgan Silver Dollars worth more than their silver content?

Some are, especially better dates or higher-grade examples. But many common Morgans are worth only modestly more than melt, despite aggressive marketing.

Are Morgan Silver Dollars good for beginners?

Usually not. Beginners are often better served by simpler bullion products with clearer pricing and tighter spreads.

Are graded Morgan Dollars a better investment?

Not necessarily. Grading can add value, but it also adds complexity. Buyers who do not understand the market can still overpay.

What is a better alternative for silver investors?

For many investors, silver bullion coins, rounds, bars, or https://www.moneymetals.com/buy/silver/junk-silver";>pre-1965 90% silver coins are more cost-effective choices.

What makes one Morgan Silver Dollar more valuable than another?

A Morgan Silver Dollar's value depends on its date, mint mark, rarity, condition, and whether it has been professionally graded. Coins with lower mintages, stronger collector demand, and higher grades usually command much higher premiums than common circulated examples.

Are common-date Morgan Dollars better than junk silver for investors?

For most investors, common-date Morgan Dollars are usually not better than junk silver because they often carry higher premiums and wider resale spreads. Junk silver is typically a more cost-effective way to gain silver exposure, especially for buyers focused on metal value rather than collectible appeal.

Chinese Sulfuric Acid Export Ban Could Exacerbate Physical Silver Shortage

Sat, 11 Apr 2026 00:00:00 EST

A move by China could exacerbate already tight silver supplies.

Chinese officials have indicated they will stop exports of sulfuric acid beginning next month. The ban could last through the rest of 2026.

According to Mining.com, “Some sulfuric acid producers in the country recently received notifications about the change, and one large buyer has been told about it by their Chinese supplier, according to people familiar with the matter, who asked not to be identified discussing confidential information.”

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You’re probably wondering what this has to do with silver.

Well, sulfuric acid is a key input in copper mining. Miners pour the acid over crushed ore to dissolve out the copper. A significant shortage of sulfuric acid, or even spiking prices, could impact copper output.

You’re probably thinking, OK, Mike. But copper isn’t silver.

Here’s the catch. About 70 percent of the annual silver mining supply is a byproduct of copper production.

Blue Line Futures Chief Market Strategist Phillip Streible summed it up succinctly.

“Less copper mined means less silver produced.”

Iran War Logistics Problems

The Iran conflict has squeezed global sulfuric acid supplies, and prices have skyrocketed in recent weeks. The Middle East produces about one-third of the world’s sulfur, and the closure of the Strait of Hormuz has limited outbound shipments.

According to Mining.com, “That squeeze will hit the copper-mining industries in key producers such as Chile, the Democratic Republic of Congo and Zambia.”

China will reportedly stop exports of the acid to protect its domestic supply.

Chile ranks as the world’s top copper producer. Sulfuric acid prices in the South American Country have already spiked by 44 percent in the last month. Chile buys around 1 million tonnes of acid from China annually.

According to an acid analyst quoted by Mining.com, “the loss of Chinese volumes will be difficult to offset, given the parallel shortage of sulfur feedstocks.”

Even with some apparent progress in resolving the conflict, some analysts say the damage to the sulfuric acid supply is already done, and China will likely keep the export ban in place for an extended period.

Silver Market in a Multi-Year Supply Deficit

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This comes at a time when the silver supply is already under significant pressure.

https://www.moneymetals.com/news/2026/02/12/silver-market-expected-to-run-sixth-straight-supply-deficit-this-year-004686";>Silver demand is forecast to outstrip supply for the sixth straight year in 2026, driven by a 20 percent increase in physical investment offtake.

Based on preliminary data compiled by the Silver Institute, silver demand outstripped supply by about 95 million ounces last year, leading to the fifth straight market deficit. Including last year’s shortfall, the 5-year market deficit will climb above 800 million ounces, an entire year of mining output.

When silver demand exceeds the supply generated by mining and recycling, users are forced to tap into above-ground stocks. This generally requires higher prices to incentivize those holding silver to release it into the market.

Persistent supply shortfalls have taken their toll on above-ground stocks. https://economictimes.indiatimes.com/markets/commodities/is-silvers-150-rally-fueled-by-fear-or-is-a-real-supply-squeeze-underway/articleshow/126202857.cms"; target="_blank" rel="noopener">According to the Economic Times of India, “Inventories across COMEX, London vaults, and Shanghai have steadily declined over recent years, reinforcing concerns about tightening physical availability.”

London Bullion Market Association vaults have lost around 40 percent of their holdings over the last five years, while COMEX registered inventories in the United States are down nearly 70 percent. Meanwhile, Shanghai inventories have fallen to their lowest level in a decade.

The shortage of metal was a factor in the https://www.moneymetals.com/news/2025/12/29/silver-squeeze-20-drives-price-over-80-004576";>two recent silver squeezes that drove the price to over $100 per ounce.

It’s unclear just how much China’s move will impact copper mining and silver production by extension, but it is definitely worth watching. It is yet another factor pressuring the persistent silver shortages.

CPI Spikes on Energy Prices But That's Not the Real Inflation Story

Sat, 11 Apr 2026 00:00:00 EST

The expected surge in prices due to the Iran War showed up in the March CPI data. However, it doesn't tell the real inflation story.

Without a doubt, price inflation is up. The cost of the basket of goods the BLS uses to calculate the CPI rose 0.9 percent month-on-month, https://www.bls.gov/news.release/cpi.nr0.htm"; target="_blank" rel="noopener">according to the data released Friday. That was the largest single-month jump since the height of the post-pandemic surge in 2022.

The big monthly rise in prices pushed the headline annual CPI to 3.3 percent. The last time it was that high was March 2024.

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Both numbers were in line with forecasts.

The surge in CPI was almost entirely due to skyrocketing energy prices. The energy index rose 10.9 percent month-to-month. That was driven by a 21.2 percent monthly increase in gasoline prices.

However, stripping out the more volatile food and energy prices, core CPI was relatively cool, rising just 0.2 percent from month to month. Annual core inflation nudged up slightly, from 2.5 percent in February to 2.6 percent in March.

As CNBC noted, based on the CPI, underlying inflation is “relatively tame.” (It is not -- a point I’ll get to in a moment.)

It’s important to point out that core CPI remains above the Fed’s stated 2 percent target and has been mired in this range for well over a year.

https://www.moneymetals.com/uploads/content/annual-cpi-march-26.png"; width="500" height="374" class="mx-auto p-3" alt="" />

Digging deeper into the data, we find that many indices showed no price increases at all. For instance, food prices were unchanged from February to March. Service prices were also relatively tame, rising by 0.2 percent month-on-month.

https://www.moneymetals.com/uploads/content/cpi-detail-march-26.png"; width="800" height="366" class="mx-auto p-3" alt="" />

As I mentioned, any time I report on government CPI data, it’s important to take this (and every) CPI report with a grain of salt. It is still factoring in https://www.moneymetals.com/news/2025/12/21/november-cpi-data-was-basically-just-made-up-004562";>November data that they basically just made up. And the constant https://www.moneymetals.com/news/2026/02/12/the-government-job-eraser-strikes-again-004689";>revisions to the labor data should also make you skeptical of government numbers.

You also need to remember that the CPI data understates price inflation by design. The https://www.moneymetals.com/news/2024/01/15/the-cpi-lie-price-inflation-is-even-worse-than-advertised-002930";>government revised the CPI formula in the 1990s so that it understated the actual rise in prices. Based on the formula used in the 1970s, CPI is closer to double the official numbers. So, if the BLS used the old formula, we’d be looking at CPI closer to 6 percent. And using an honest formula, it would probably be worse than that.

However, this government data drives decision-making, so we need to pay attention to what it tells us.

The Real Inflation Story

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As https://www.moneymetals.com/news/2026/03/30/whats-the-real-inflation-rate-004797";>I reported last month, the CPI doesn’t tell the full inflation story. It simply reflects the price movements of a basket of goods made up out of thin air by the number crunchers at the BLS. Yes, this does give some indication of the trajectory of price inflation. However, it tells us little to nothing about the inflation https://www.moneymetals.com/news/2024/01/12/common-definition-of-inflation-you-hear-today-is-wrong-government-propaganda-002925"; target="_blank" rel="noopener">trajectory as historicallyhttps://www.moneymetals.com/news/2024/01/12/common-definition-of-inflation-you-hear-today-is-wrong-government-propaganda-002925";> defined by economists.

Inflation is not “rising prices.” Increasing consumer prices are one symptom of inflation, defined as an increase in the supply of money and credit. Rising consumer prices are a symptom of this monetary inflation.

And if we look at the money supply, we find that inflation is heating up, with or without an oil shock.

In fact, if we use the economic definition of inflation as an increase in the money supply, the inflation rate is much higher – double the CPI.

Based on the Fed’s M2 data, the money supply has increased from $21.61 trillion in February 2025 to $22.67 trillion in February 2026.

https://www.moneymetals.com/uploads/content/money-supply-feb-26-2.png"; width="700" height="373" class="mx-auto p-3" alt="" />

That represents a 4.9 percent increase.

In other words, we have an actual inflation rate of nearly 5 percent.

After peaking in April 2022, the money supply began to decline as the Fed hiked rates that year. The money supply bottomed in October 2023 and began increasing again. The money supply is now well above the pandemic peak.

And money creation has accelerated over the last several months.

We also know inflationary pressures are increasing because the Federal Reserve is once again expanding its balance sheet.

https://www.moneymetals.com/uploads/content/fed-balance-sheet-Aprl-26.png"; width="700" height="564" class="mx-auto p-3" alt="" />

While you’ll never hear anybody at the Fed utter the term, https://www.moneymetals.com/news/2025/12/18/the-fed-restarted-qe-without-saying-it-004555";>the central bank relaunched quantitative easing in December. That means they are once again buying U.S. Treasuries using money created out of thin air.

Ultimately, this monetary inflation will work its way through the economy. It will either manifest in rising asset prices or rising consumer prices. Ultimately, it is devaluing your money (by design).

If the U.S. and Iran can negotiate a permanent end to hostilities, this oil shock will quickly pass. The pundits and prognosticators will claim the inflation problem is gone. It won’t be. As long as the government keeps creating money, the inflation problem will persist.

Plan accordingly.

Gold, Geopolitics, and Volatility: Insights from Joe Cavatoni

Sat, 11 Apr 2026 00:00:00 EST

In a rapidly shifting geopolitical environment, gold continues to demonstrate both its resilience and its complexity as a financial asset.

In a recent episode of the Money Metals Podcast, host Mike Maharrey spoke with Joe Cavatoni, https://www.gold.org/goldhub/gold-focus/author/joseph-cavatoni"; target="_blank" rel="noopener">Market Strategist for North America at the World Gold Council, to unpack gold’s behavior amid the Iran–U.S.–Israel conflict and broader macroeconomic uncertainty.

Recorded against the backdrop of a potential ceasefire and volatile global headlines, the discussion explored gold’s recent price movements, investor behavior, and the evolving role of the metal in modern portfolios.

(Interview Starts Around 6:35 Mark)

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Gold’s “Unexpected” Behavior Was Actually Expected

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Despite widespread confusion among investors, Cavatoni emphasized that gold has behaved largely as expected during the conflict. While many questioned why gold appeared to “tank” during a geopolitical crisis, he explained that the real anomaly occurred earlier in the year.

Gold surged roughly 30% in January to near-record levels around $5,500, driven largely by momentum and speculative activity. This was followed by a logical correction of about 20%, setting the stage for subsequent volatility.

When the Iran conflict escalated, gold initially reacted as a classic safe-haven asset, spiking https://www.moneymetals.com/news/2026/04/04/war-headlines-shook-prices-but-the-bigger-silver-story-is-still-intact-004813";>approximately 3–5% in a single day. However, as markets began assessing the broader implications, particularly the impact of oil shocks on global economies, gold retreated. Investors shifted into a “get-to-cash” mindset, selling assets, including gold, to meet liquidity needs and margin calls.

Cavatoni noted that gold’s decline to around $4,100–$4,200 reflected both earlier profit-taking and this liquidity-driven selling. As geopolitical tensions eased with ceasefire discussions, gold began climbing again, resuming its longer-term upward trajectory.

Safe Haven Doesn’t Mean “Never Sold”

A key takeaway from the discussion is that gold’s role as a safe haven includes being a source of liquidity. Investors often misunderstand this dynamic, expecting gold to rise continuously during crises.

Cavatoni explained that during periods of stress, investors frequently sell gold precisely because it is a reliable store of value. This behavior was evident not only among private investors but also at the institutional level.

Countries like Turkey reportedly liquidated portions of their gold reserves to manage economic shocks, while Poland explored using profits from its expanding gold holdings to support government spending. These actions highlight gold’s dual function as both a defensive asset and a financial resource in times of need.

The Era of “Regime Uncertainty” and Rising Volatility

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The conversation also addressed what Maharrey described as “regime uncertainty,” referring to unpredictable policy shifts and https://www.moneymetals.com/news/2026/04/09/gold-jobs-and-the-story-behind-frances-move-004823";>geopolitical developments. Cavatoni agreed that unpredictability is now a defining feature of the market landscape.

He emphasized that investors should expect sustained volatility across all asset classes, including gold. Contrary to its historical reputation as a “boring” asset, gold now trades within wider price ranges and is increasingly central to both institutional and retail portfolios.

Despite short-term fluctuations, Cavatoni maintains a bullish long-term outlook. He suggested that gold could deliver annual gains in the range of 10% to 20%, with potential upside as high as 30% under current macroeconomic conditions. As of early April, gold was already up approximately 8–9% for the year.

ETF Flows Reveal Diverging Global Strategies

Gold-backed ETFs provided another lens into investor behavior. While North American funds experienced notable outflows following the January peak, Asian markets showed continued inflows through much of the first quarter.

Cavatoni attributed this divergence to differing investment approaches. In North America, ETFs such as GLD and IAU are often used as tactical trading instruments, leading to more pronounced inflows and outflows.

In contrast, Asian investors are https://www.moneymetals.com/news/2026/04/09/etfs-dumped-gold-in-march-except-in-asia-004825";>increasingly adopting ETFs as long-term portfolio holdings, reflecting a structural shift away from physical gold and jewelry toward financial instruments.

He also noted that ETFs represent less than 10% of the overall gold investment market, underscoring their importance as a transparent but limited indicator of broader trends.

The Rising Influence of Eastern Markets

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A major theme in the episode was the growing influence of Eastern investors on gold demand. Cavatoni highlighted a “decoupling” between gold prices and traditional drivers like U.S. interest rates and the dollar, largely due to increased demand from Asia.

He explained that cultural and economic factors shape this demand. In many Asian markets, gold is viewed as a generational store of wealth and a hedge against currency instability. This contrasts with the U.S., where investors often rely more heavily on financial instruments like Treasuries and equities.

At the same time, European investors have remained relatively quiet, though Cavatoni expects this to change as fiscal pressures, rising deficits, and currency concerns intensify across the region.

Modeling Markets in an Unpredictable World

From a professional standpoint, Cavatoni acknowledged that the current environment poses significant challenges for market modeling. Traditional frameworks struggle to fully capture the momentum-driven and globally interconnected nature of today’s gold market.

He stressed the importance of continuously recalibrating models and maintaining humility in analysis. Drawing on past crises such as the 1997 Asian financial crisis, he noted that excluding key historical events can lead to flawed assumptions and missed risks.

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The World Gold Council, he said, is actively refining its approach to better account for political uncertainty and momentum-driven price movements.

Gold’s Expanding Role in a Complex Global Economy

Ultimately, the episode underscores that gold is no longer a passive asset sitting on the sidelines of the financial system. It is deeply integrated into global markets, influenced by everything from geopolitical conflicts and oil prices to logistics, https://www.moneymetals.com/news/2026/04/09/central-bank-gold-buying-has-slowed-but-the-bullish-case-remains-004827";>central bank policies, and technological shifts.

https://www.linkedin.com/in/josephcavatoni"; target="_blank" rel="noopener">Joe Cavatoni’s outlook remains clear. While short-term volatility is inevitable, the long-term fundamentals supporting gold remain strong. In an era defined by uncertainty, gold’s role as both a store of value and a source of liquidity ensures its continued relevance.

For investors, the message is straightforward. Understanding gold requires a global perspective, an appreciation for its multiple roles, and a willingness to look beyond short-term price movements.

What Causes Gold Prices to Drop? Key Factors Investors Should Know

Fri, 10 Apr 2026 00:00:00 EST

Gold is supposed to rise in uncertain times. So why does it sometimes fall right when investors need it most? What causes gold prices to drop?

Dropping gold prices do not mean that gold is a bad investment. Instead, it indicates that gold can have a volatile market in the short term. Several factors cause gold prices to drop in the short term, including central bank policies, dollar value trends, and speculation.

Sometimes, gold may also perform differently in a financial crisis. This performance often depends on the economic circumstances surrounding the crisis.

Investors benefit from understanding the market. Discover why gold prices fall in this guide!

Quick Answer: What Makes Gold Prices Go Down

Gold prices drop primarily due to rising interest rates, a stronger U.S. dollar, falling inflation expectations, and reduced investor demand. These factors increase the opportunity cost of holding gold and shift capital toward yield-producing assets.

The Drivers Behind Falling Gold Prices

Gold is influenced by several factors, including macro, monetary, and psychological forces. It's important to understand that prices rarely move for just one reason.

We'll look at macroeconomic considerations first, starting with rising interest rates and bond yields.

Rising Interest Rates and Bond Yields When Gold Prices Drop

Gold does not compete primarily with inflation: instead, it competes with real interest rates. It does so through the opportunity cost.

The opportunity cost of holding gold is the interest income or investment returns (like dividends or bond yields) an investor sacrifices by holding gold instead of income-generating assets. Gold produces no yield, so its opportunity cost is high.

Gold has an inverse relationship with high interest rates. During times of high real rates, stocks and bonds offer much higher yields and dividends to investors.

Real interest rates are crucial, as they measure the real purchasing power of their returns. This separates an investor's actual accrued wealth from their nominal gains.

As you might expect, many investors run to these high-yield investments in the hope of building more wealth.

What happens to gold in the meantime? The short answer is the price drops due to a lack of demand. When investor interest in gold declines, so too does the price.

Rising interest rates have historically put serious pressure on gold prices, especially during Federal Reserve tightening cycles. For example, in the early 1980s, Paul Volcker led the Fed's aggressive rate hikes. These caused gold prices to fall sharply after peaking, as investors shifted capital into high-yield Treasury securities.

A similar pattern emerged between 2015 and 2018, when gradual rate increases coincided with periods of gold price weakness. These episodes highlight a consistent dynamic when the cost of holding non-yielding assets rises, gold often struggles in the short term.

US Dollar Strength and Currency Dynamics

US dollar strength plays an important role in the price of the dollar. Gold and the dollar have an inverse correlation: the stronger the dollar becomes, the more the gold price drops.

The reason behind this is straightforward: when the dollar becomes strong, it gains more purchasing power. A dollar with more purchasing power brings prices down, as the dollar is capable of buying more.

The next step is that there is less international demand for gold, which actually makes gold more expensive for foreign buyers. The reduced demand lowers prices domestically.

Conversely, a weak US dollar usually makes gold cheaper for international investors, which drives up demand and prices.

So, how can you keep track of the US dollar and its strength? That's where the https://finance.yahoo.com/quote/DX-Y.NYB/?guccounter=1&;amp;guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAFoWxRgQIIeYIaLBJ_cB4NELJl9uut85vzZR_ADwNJ2sTPJTZ2sh-mj2ajnahQnNl2RtGMdEnwBn2lXogRDaai8c_Zj95GQtYasTQMJJL7FCvASnVCvM0jgRvhGp-xQPuD-Q07huUgDpnqspglAQRjwJ2Yabi5jkElC5FTYFmfqu">US Dollar Index (DXY) comes in.

The DXY is a benchmark that measures the value of the US dollar against a basket of six major foreign currencies:

The Euro
Japanese Yen
British Pound
Canadian Dollar
Swedish Krona
Swiss Franc

Monitoring the US Dollar Index can give you a strong idea of where the dollar's value is. That's an excellent tool for investors, as it can help you track price and “buy low, sell high.”

Inflation Expectations vs Reality

There is a real distinction between inflation expectations and reality. This is where many investors get gold wrong. Gold doesn't react to inflation itself: it reacts to where inflation is headed next.

If inflation cools, the demand for gold often weakens. The market looks forward to the imminent future far more than it accounts for the current conditions.

In short, gold often falls when inflation is high but expected to decline. The market has shown this particular dynamic play out a few times, most recently in 2022 and early 2023.

During this time, inflation remained elevated but began to show signs of peaking. Even though consumer prices were still high, markets anticipated that inflation would cool when the Federal Reserve raised interest rates.

As a result, real interest rates moved higher and expectations shifted toward tighter monetary policy. Gold prices, which had surged earlier on inflation fears, began to pull back during several periods as investors priced in declining future inflation rather than reacting to current data.

This response emphasizes our point: gold responds to expectations. When investors believe inflation has peaked and will fall, demand for gold often weakens, even before inflation itself meaningfully declines.

Central Bank Policies and Monetary Tightening

We have alluded to the role of the Federal Reserve, but have not addressed it directly yet. While the Federal Reserve does not set the gold price, its policies play a role in investor demand.

The Federal Reserve has two main actions that often cause gold prices to drop:

Rate hikes
Quantitative tightening

When the Federal Reserve raises interest rates or engages in quantitative tightening, it essentially pulls liquidity out of the financial system. Less liquidity means less cash flowing into alternative assets like gold.

Simultaneously, higher rates increase yields on bonds and savings instruments. That gives investors a compelling reason to move money out of non-yielding assets.

This dynamic has played out repeatedly in modern markets. During tightening cycles, gold often struggles; investors prefer to invest in income-earning assets through interest-bearing assets. Just as important, central bank messaging shapes expectations.

When policymakers signal a commitment to fighting inflation through higher rates, markets anticipate stronger real yields and adjust accordingly. These trends place pressure on gold prices before policy changes fully take effect.

The contrast is straightforward. Loose monetary policy includes low rates and stimulus, which tends to support gold by weakening currencies and boosting liquidity. Tight policy does the opposite.

For investors, understanding this relationship is essential. Gold's price is often less about current conditions and more about where central bank policy is headed next.

Investor Sentiment and Market Psychology

Gold is partly driven by fear cycles. This is because gold is primarily a safe haven asset meant to protect your assets. People naturally run to safe haven assets during fear cycles.

“Risk-on” and “risk-off” environments have different effects on gold prices as a result. In risk-on environments, stock markets rise and economic confidence rises high. As a result, investors tend to move capital into equities and other growth assets.

In short, people do not feel the need for a safe-haven asset. That causes gold to decline as demand weakens.

Conversely, during “risk-off” periods marked by uncertainty or market stress, gold typically benefits from increased demand. However, this relationship is not always linear. Speculative activity in futures markets and flows into or out of gold-back ETFs can amplify price swings. Those swings can go in either direction.

Large institutional movements can push prices lower, even without major changes in fundamentals. All of this demonstrates that gold is driven partially by fear cycles. When fears subside, gold can lose momentum. Gold prices are not just a reflection of economic data, but also of investor sentiment, expectations, and crowd behavior.

Gold Supply and Mining Production

Supply and demand are major drivers of economic markets. That includes the gold market.

That's why gold mining production plays a role in determining gold price. Increased gold production leads to a heightened supply of gold. When there's more gold to go around, it leads to downward pressure on the gold market.

The result is that gold can deflate. However, there are some other factors to consider.

First, gold's supply is often secondary. One reason for that is gold recycling.

Gold and other precious metals like silver can sometimes be recycled. This is particularly true for their uses in the industrial sphere.

When gold can be recycled, it can slow down the need for a heightened gold supply. Similarly, when gold production does increase, it can continue to inflate the gold available. All of that drives demand down, and prices with it.

Geopolitical Stability (Or Lack of Fear)

As a safe haven asset, gold prices tend to rise during times of geopolitical uncertainty. When the geopolitical situation stabilizes, or else reaches a point where investors are not economically concerned, gold prices tend to fall.

Specifically, prices generally fall when:

Geopolitical conflicts ease or end
Markets stabilize

However, it is worth noting that not all crises boost gold equally. A recent example of a crisis that did not have a huge impact on gold price was the 2022 invasion of Ukraine by Russia.

Initially, gold spiked at the outbreak of war due to the geopolitical uncertainty it brought. However, the conflict dragged on far longer than anticipated. As time went on, the markets adjusted to the risk and found a “new normal.”

That change brought with it a renewed emphasis for central banks on aggressive tightening and rising interest rates. Despite ongoing geopolitical tensions, gold prices struggled to maintain upward momentum. In fact, they even declined at various points throughout 2022. You can track that fluctuation with this table:

Period (2022)	Gold Price Trend	Key Event	Market Reaction
Jan–Feb (Pre-Invasion)	Rising	Escalating tensions between Russia and Ukraine	Safe-haven demand increases as uncertainty builds
Late Feb–March	Sharp Spike (Peaked near $2,050)	Russia invades Ukraine (Feb 24, 2022)	Gold surges on geopolitical shock and panic buying
April–June	Declining	Federal Reserve begins aggressive rate hikes	Rising yields and strong dollar pressure gold prices
July–September	Continued Weakness	Ongoing war, tightening monetary policy	Markets shift focus from war to inflation and interest rates
October–November	Stabilizing / Rebound	Slowing rate hike expectations	Gold recovers as dollar strength eases
December	Uptrend	Cooling inflation signals	Gold gains momentum despite ongoing conflict

Once again, this demonstrates that not all crises affect the gold price in the same ways. When a crisis becomes prolonged or becomes overshadowed by stronger economic forces, gold can weaken.

Short-Term Drops vs Long-Term Trends

There is a crucial distinction investors must understand when it comes to the gold market: short-term volatility does not reflect long-term trends. The table below shows this relationship:

Factor	Why Gold Falls	Short-Term or Long-Term Impact
Rising Interest Rates	Increases opportunity cost	Short-Term
Strong U.S. Dollar	Reduces global demand	Short-Term
Falling Inflation Expectations	Reduces safe-haven demand	Medium-Term

The precious metals market can be a volatile one. Although gold has more stability than other assets, such as silver, it remains unstable in the short-term. Gold constantly undergoes price corrections as the market adjusts to accommodate current investment realities.

However, short-term price corrections are not enough to cause structural declines in gold. Over time, gold has seen a largely positive growth. It continues to serve as a powerful hedge against inflation and currency devaluation, even if it has short-term negative spikes.

The point investors must understand is that gold is not a get rich quick asset. There is an opportunity cost with gold. However, even that cost is an investment in your future financial security.

Understanding gold's role in a portfolio can help investors figure out allocations and financial strategies. Part of that understanding does involve monitoring short-term drops. We'll explore that further in the next section.

What Falling Gold Prices Mean for Investors

Falling gold prices generally signal something called a “liquidity flush.” Times like these prompt investors to sell their gold holdings to raise their cash holdings. This usually happens because of the following factors:

Increased dollar strength
Higher interest rates
Reduced safe-haven demand

The liquidity flush can benefit sellers by increasing their cash revenue. However, it also presents opportunities for investors who want to increase their gold holdings.

When prices fall, it gives investors a chance to buy gold at its reduced price. This way, their gold holdings can benefit from the eventual gold price rally.

Falling gold prices reflect the short-term volatility common to much of the precious metals market. However, the key takeaway for investors is that gold is not a short-term asset. Instead, it is a long-term investment meant to secure your wealth from inflation down the road.

Investors do not need to panic and sell their gold when they see the price drop. Long-term investors do better to wait out temporary trends to gain future benefits.

Frequently Asked Questions About Why Gold Prices Fall

Q: What causes gold prices to drop when interest rates rise?

Rising interest rates increase the opportunity cost of holding gold, since investors can earn yields from bonds or savings accounts instead. As capital shifts toward these income-producing assets, demand for gold weakens and prices tend to fall.

Q: Does a strong US dollar always make gold prices go down?

A stronger US dollar typically puts downward pressure on gold because it makes gold more expensive for foreign buyers. However, other factors like geopolitical risk or inflation expectations can offset this effect in certain market conditions.

Q: Why does gold sometimes fall during a financial crisis?

Gold can decline during a crisis when investors sell assets to raise cash, a phenomenon often called a liquidity crunch. In these moments, short-term selling pressure can outweigh gold's long-term safe-haven appeal.

Q: Is falling gold a good buying opportunity?

Falling gold prices can present buying opportunities for long-term investors who believe in gold's role as a store of value. However, timing matters, and investors should consider broader economic trends before increasing their holdings.

Final Reflection on What Causes Gold Prices to Drop

Investors have several reasons for asking what causes gold prices to drop. Sometimes, they're worried about current market conditions and what they mean for their investments. Others simply want to know when they can expect a better buying cost.

It is always wise to pay attention to market trends for your investments. Understanding what causes prices to drop can help you discern good times to buy increased gold holdings. However, it does not necessarily signal a time to sell your holdings. Instead, it is better to trust in gold's long-term value.

If gold declines are driven by temporary forces like rising rates or a strong dollar, they often create entry points, not warning signs. https://www.moneymetals.com/buy/gold/coins";>Gold coins often offer higher liquidity for one ounce of gold, but charge higher manufacturing premiums.

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States Retreat from Gold Market Takeovers | Gold’s Moon Mission

Fri, 10 Apr 2026 00:00:00 EST

Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason.

Coming up, don’t miss an exclusive interview with Joe Cavatoni of the World Gold Council. Joe is a market strategist with over 30 years of financial services experience and helps us make sense of how gold has reacted and likely will react in the face of dizzying geopolitical and war headlines that seem to change day-by-day, if not hour-by-hour. Joe weighs in on gold’s role as a safe haven asset given the current backdrop and explains why the recent moves in the gold price shouldn’t really surprise anyone.

Mike Maharrey and Joe also discuss the historic rise in the gold price over the last two plus years, and assess where we are today and what the next move might be in gold moving forward as he aims to help investors cycle out all the noise in the market considering constant uncertainty and volatility.

So, stick around for that and a whole lot more during another wonderful conversation with the highly respected Joe Cavatoni of the World Gold Council, coming up after this week’s market update. And as a reminder please download, like, rate and subscribe to this podcast wherever you consume this content.

So, you’ve heard of people looking at the world through rose colored glasses, right?

Well, when astronauts finally walk on the moon again, they’ll be looking through gold-colored visors.

That gold coloring isn’t just a cool look. It has a very important function.

The face shields on the spacesuit helmets look gold because the precious metal is literally incorporated into their design.

The Oakley sunglasses company developed the visor used by the Artemis astronauts. And when you think about it, it makes sense. If you think the sun is intense here on Earth during a summer day, it's way more harsh outside the Earth's atmosphere.

On a related note, we will very soon be shipping our brand new https://www.moneymetals.com/nasa-artemis-ii-silver-round-1-troy-ounce-999-pure/3069";>NASA Artemis II - 1 Ounce Silver Round Commemoratives, so check out the https://www.moneymetals.com/buy/new-arrivals";>New Arrivals page at MoneyMetals.com if you are interested in grabbing some of these neat collectibles made of pure silver.

Now, in space, the sun apparently feels as if it's piercing through your eyes. So, astronauts need an exceptional visor system to protect their eyes and maximize visibility to enable them to work in the challenging lunar environment.

It turns out that gold’s electron structure can filter out both infrared and ultraviolet light. As NASA explained it, the movable sun visor and sunshades protect the astronaut from the sun’s strong rays, while still allowing a clear visual field.

To take advantage of these physical properties, the astronaut visors include a coating of 24-karat gold. To make these remarkable visors, they shoot an electron beam powerful enough to evaporate the gold. That atomized gold is then sprayed onto the lens, creating the perfect coating for the job.

And who says gold is just a useless pet rock?

In reality, gold is one of the most useful metals in the world. Due to its utility, coupled with its scarcity, gold is also one of the most valuable metals in the world.

In the first place, gold is strikingly beautiful. It has captured people's eyes for thousands of years. That’s why people all over the world love to wear gold. About 44 percent of gold demand is for jewelry production. About 1,550 tons of gold were used in jewelry fabrication last year.

But gold isn’t just pretty. As we’ve seen with the space helmet, the metal’s inherent physical and chemical properties make it useful in many industrial and technological applications.

This is why we see gold increasingly used in the tech sector. In fact, gold would probably be used even more if it weren’t so rare and expensive.

Last year, tech used 228 tonnes of gold, mostly in electronics. That’s because gold has excellent electrical conductivity and, unlike silver, doesn’t corrode. It is also malleable, making it excellent for tiny, precise connections.

The point is that gold is far from useless.

But fundamentally, https://www.moneymetals.com/podcasts/2024/02/28/gold-and-silver-are-real-money-003011";>gold is money. And everybody has a use for money – especially real money.

In other news this week, lawmakers in Tennessee have delivered another blow to the big-government “transactional gold” schemes proposed in numerous state legislatures this year.

The Tennessee legislature rejected a bill that would have created an entangling, government-run gold depository, investment, and payment system, putting the state in direct competition with private firms already successfully offering these services.

These damaging bills have been pushed by individuals associated with a self-interested European vendor seeking a contract to run a major government program that effectively turns a state into a bullion dealer, depository, and payment processor – while also allowing government bureaucrats to insert themselves right in the middle of people's private personal finances.

By abandoning this foolish and dangerous proposal, Tennessee joins a dozen other states that have done the same, including Georgia, Kansas, Arizona, West Virginia, Indiana, Kentucky, South Dakota, Idaho, Mississippi, Wyoming, and Michigan.

Well, before we get to this week’s interview, let’s take a look at the market action in the metals.

Gold, is up about $80 or 1.7% to come in at $4,769 an ounce.

Silver meanwhile is up nearly $3 or 4.0% on the week and currently trades at $76.67.

Platinum is up 3.3% and checks in at $2,063, while its sister metal palladium is up 1.1% to trade at $1,537 an ounce as of this Friday late morning recording.

Well now, for more on the recent action in the metals markets, let’s get right to our exclusive interview.

Mike Maharrey: Greetings, I'm Mike Maharrey and I'm joined today by Joe Cavatoni. Joe is a market strategist covering North America for the World Gold Council, and I'm very happy to get his insights today. How are you doing, Joe?

Joe Cavatoni: I'm great, Mike. How are you? Thanks for having me.

Mike Maharrey: I am outstanding and it's great to have you on the show. And we'll give folks a little bit of context because it's kind of necessary in a world where headlines are moving so fast, but it almost looks like maybe there's a ceasefire in the Iran-US-Israel conflict. I guess we can't really know what that's going to look like because everything changes minute by minute, but that's where we are today. So actually, gold is up a little bit this morning. So that's the context, but I wanted to start off and ask you just kind of your perception of how gold has behaved during this conflict. And if there's anything that you've seen in the gold market that has surprised you, a lot of folks are coming to me and saying, "Mike, I thought gold was a safe haven and it's tanked during this war. What's going on? " So I'm curious from your perspective as somebody who's watched the gold markets closely for many years, how you kind of see this.

Joe Cavatoni: So Mike, let me start by amplifying what you've said, which is headlines keep moving so fast. And I'm not sure about you or for your listeners, but for one thing for sure for me, is I don't think I put my phone down and I don't think I stopped watching social media for headlines twenty four seven. And it can be a little overwhelming, but I think that the thing that people need to understand, and I think they need to be keeping the context is actually gold is doing what we expect it to be doing. So what shocked me, and it hasn't been gold's performance during the war, what really shocked me early in the year was that excessive run up in the price to record prices of near $5,500, maybe a bit over that, and 30% return in January, which was followed by what we consider probably a very logical retreatment of 20%, which is factoring into some of the selloff of the year.

So, I think we need to keep it in context because that was a big moment in January, driven a lot by momentum and speculation. Now, fast forward into the Iran conflict, what we saw and expected from gold were what happened as an immediate response to a geopolitical conflict event, the price of gold spiked, but as the markets and investors are able to assess what the complications and outcomes of the conflict could be, we started to see that weigh in on the gold price and do what it usually does is it retreats back as people assess what the conflict is looking like. So that immediate reaction took us up about three or four, almost 5% on the day of the initial conflict. And we retreated back and actually people started to assess what it meant, meaning quite candidly, the price of oil was going to be significantly impacted.

Now, of course, everyone in the US looks at it from their perspective saying, "Oh gosh, now I'm going to have a $6 golden price at the pump." And then the market started to assess what it meant for global economies. And it's much, much more substantive in terms of its impact around the globe, meaning that emerging markets are energy dependent on oil and those economies were going to be likely severely impacted as a result of that. Those economies impacted inflation being an outcome of that. And actually in context, risk assets were being sold off pretty aggressively around the globe, particularly in those markets to start, then followed by risk assets around the globe as inflation was trying to be assessed as a consequence. And gold did what it does during those moments. People use safe haven assets during moments of conflict leading to outcomes that lead to need for liquidity.

So, you have to remember that there was a conflict where we saw the price move and then a consequence of the conflict where we saw what role gold plays – safe haven being utilized pretty aggressively. Profits were taken, I'm sure. I mean, you're talking about a near up 130% over the last 18 months. Margin calls were being made, liquidity get to cash mentality kicked in, and people were definitely taking money off the table, and gold was not immune to that. So the early selloff in the part of the year from the 30% up, plus the selloff that came as a consequence of get to cash during the outcome of assessing the war has taken us down to a low level of around 41, 4,200. And as you start to see that world looking clearer as a consequence of possible ceasefire in the war, you start to see gold moving its way back up, back on that steady long-term discussion we've had around why gold's going to keep climbing higher over the long term.

So, that's a very long-winded way of describing what happened, but hopefully it touches on everything. And to directly answer your question, we're not surprised by what gold has done outside of that 30% run in January. And actually over the course of the conflict, we actually think it's done exactly as we expected it would do.

Mike Maharrey: Yeah. Actually, that was not long-winded. That was a fantastic overview of what's going on and largely dovetails with a lot of what I've observed and what I've heard from folks that I've talked to as well. I think you make a really good point that folks use gold. I mean, we talk about it as a safe haven, but that means something, right? It does. And so sometimes you have to tap into that safe haven when need arises. I think maybe, and I'm interested if you agree with this, that Turkey is a really good example of that. They unloaded quite a bit of gold from their reserves. It looks like they've set it up to be a temporary kind of thing. Look, we have this situation, we have an oil shock, we need cash, we've got this gold, let's sell it, lease it, and then we can move on from there.

Joe Cavatoni: So, I think it's a great illustration of a central bank making use of the reserve asset that they need that they want. There's also been news around Poland, possibly using some of its gold reserves, which have actually grown faster and larger than they had budgeted for. So clearly they have profits and they're saying, "Look, we can use those profits." And through the mechanism that they have onshore in Poland, they can actually move those profits into the hands of spending in the hands of the government. But for investors, you're right, our use case we define as investment as a offset to risk assets, as a liquidity sleeve, as a safe haven asset. And guess what? When you're selling risk assets and you need to make margin calls or you need to have cash ready to hand and you need liquidity, that safe haven role triggers the sale of gold, and it's actually what we've been seeing.

Mike Maharrey: Yeah, absolutely. I think it's interesting when you kind of look at the war, it's almost a microcosm of life in the era of Trump, right? And I'm curious, just from your perspective as a market analyst, you're sitting here and you're trying to understand where markets are going and how they're moving. How do you deal with the level of, I like the term regime uncertainty, right? We have no earthly idea what is going to come out next on Truth Social or what's going to happen. How has that kind of affected your job over the last couple of years and how do you navigate that?

Joe Cavatoni: So, I think it's a great question and what we've been making sure that we are clearly communicating to people looking at any asset, including gold, is that the only thing that we can predict is the unpredictability of this new cycle. There's no crystal ball, there's no answer to what's next. And actually you just need to expect more uncertainty, more disruptive, potentially disruptive policies from the administration, and that's going to continue. It's having an impact, positive and negative on the economy, but ultimately you just need to expect it. As a result of that, I think all assets, including gold, have seen increased levels of stress on their levels of liquidity, but they've also seen increased sustained levels of volatility. And I think that that's something that people who have been looking at the gold market for a long time saying, "Oh no, this is meant to be a boring, stable asset. It's my safe-haven. I yawn when I think about it." Not the case anymore. It's an asset that's front and center with central banks. It's an asset that's front and center with investors and you should be expecting volatility, meaning the price ranging for gold to be a higher band than maybe you would've expected in the past. Now look, over the last four years, we've become much more pronounced in our role and in the portfolio in the investment landscape and a little bit less in the case of jewelry, but that's still a very large component of what's being consumed around the world as a gold mechanism. But at the end of the day, you need to expect higher levels of volatility and not be concerned about them because the strict and ruling of where gold's going to go over the long term is going to continue to take it higher because of fundamentals in the economy.

So, the noise is the noise and that's the tactical momentum and the strategic direction of gold continues to be what we would see as up 10, 15, 20% year on year while we're dealing with these types of conditions in global economies.

Mike Maharrey: Yeah. Yeah. It's a really good way to look at it. Has the war changed your overall calculus in terms of looking at a little bit midterm, long term? Has it kind of changed the way you're factoring some of those fundamental dynamics that you mentioned, or do you see it more as kind of a political blip on the radar?

Joe Cavatoni: Well, it definitely is a little bit more than a blip on the radar. I think what it has been for many people is a very quick and valuable learning lesson around how substantive one factor like oil could mean to a global economy. In terms of our modeling and in terms of our thinking, where we're recalibrating and trying to get more accuracy from our estimates is around how to judge the uncertainty of these political cycles. That's probably been the thing we've wrestled with the most in terms of our overall ability to kind of expect and call the markets. And look, we're not here to call a price on the market. We're just here to help people understand what the performance has been and why. And it's a little bit more challenging to call the momentum and the short-term tactical activities in the gold market. And quite honestly, it's actually a bit of a challenge in that regard.

And that's where we're rethinking and how we put factors into what drives the short-term tactical driver of gold. Because I look at our numbers and I think that we're accurate to a degree, but I think we're underestimating the amount of momentum that's been put in the gold. I think January amplified that for us. We still looked at the post-January momentum up and down, and then we looked at what our numbers were indicating in terms of the momentum drivers. And we were probably lower than I would expect in terms of the overall factoring there. But some of that challenge comes in the fact that gold's an over-the-counter market. Some of that factoring is difficult to get your hands on because it's global in nature. But look, I think overall, we're standing comfortably behind our estimates for the year in terms of the bull case for gold to grow, but I'd say 15, 20, maybe even 30% on the year.

And I think that that's reasonable for us to see. And we're on track for that as we are up. It's about eight, 9% here, and as we enter April.

Mike Maharrey: Yeah. From my perspective, watching your work over the years and of course tapping into your work quite a bit for what I'm doing, I feel like that you guys do a fantastic job considering all of the many factors that you have to weigh. And I think you make a really good point, and maybe this is something that we kind of need to emphasize. When you start looking at any market, we as human beings, we tend to tunnel vision, right? We've got a war. So, that's what we're looking at. And yet there's still all of these other things going on. And to really do good analysis, you really have to try to force yourself to step back, right?

Joe Cavatoni: You do.

Mike Maharrey: Is that kind of a challenge for you from a psychological standpoint sometimes, or have you gotten to the point that you're pretty good at it because this is what you're doing? How does that work from your perspective?

Joe Cavatoni: It's a challenge. You spend your entire career trying to be ahead of the game, ahead of the risk, ahead of the news cycle. And literally, as an example, I had an email exchange with someone we do some work with on the policy side in Washington, saw it, dealt with it, thought I was all over it. And then I realized I hadn't circulated it to our broader team outside of the US who had a lot of interest in it. And then I'm like, I'm looking at it and you're just always catching up. But I think that's a silly little example, but I think the bigger point is that if you use models, you need to always be calibrating and recalibrating models. They're never right perfect and set for good. You need to be dynamic in your assessment of markets. You need to be dynamic in the assessment of your models, and you need to have a little bit of humility to simply say, our model's good, but nothing's perfect and actually everything changes and you need to constantly reassess.

Now, I learned those lessons a long time ago living in Asia where we were looking at using quantitative models to drive big portfolios. And depending on how far back you wanted to look in terms of your data for testing markets, you had different outcomes in terms of positioning into the global financial crisis. You could have ignored 1997 for the Asian financial crisis and missed an entire shock to a market. So you have to have humility and you have to be putting your models in question constantly.

Mike Maharrey: Yeah. Humility is not something that's in large supply in this sector. And I guess that's just the nature of when you're trying to present a message. I mean, obviously we think we're right, right? I mean, and I don't mean that to be flippant. I mean, obviously we're not going to say things we don't think are true, but it is easy to cross that line into, well, I'm right and everybody else is wrong. I was curious about something that I've picked up on. I've been watching the ETF flows and of course, unsurprisingly with the selloff since January, we've seen outflows of gold from ETFs, but it's been dominated by North American funds. And I noticed that Asian funds actually were positive until the very last week of March. And so I'm curious if that's ... How do you see that difference of the way maybe the Asian market and the North American market are viewing things?

And how do you account for Asians were still flowing gold into funds in early parts of this world? How would you explain that?

Joe Cavatoni: Well, I think it's a great question. And first, I do want to make sure we put it into context that it is still a small component of the overall gold market. So it is a good, nice, transparent slice of the market, but less than 10% of the investment market for gold. And I think that what you're seeing is definitely a bit more profit taking, a bit more of a tactical mentality around the use of some of the exchange traded funds in the US market. Some of the larger, more liquid funds that get used for long, short trading positions like GLD and IAU, they've seen the lion share of the inflows and outflows. So it tells us that there's a little bit more momentum driven there, a little bit more tactical activity driven there. And I'd say that you should expect that kind of volatility in terms of the ETF flows in the US.

It still is the largest holding of global ETFs in terms of the overall percentage. It still has the most liquid instruments of any ETFs around the world, but they do get used more tactically as people move around the instruments. And interestingly enough, over the last couple of weeks, as you've highlighted, we're starting to see the flows coming back into the gold market. And there was really just a blip in March when it was really a big selloff in the US. So expect a little more tactical behavior that can be transparent in the ETF market, again, concentrated amongst the number of big ETFs that get used as trading vehicles.

Now, Asia, which is an interesting dynamic, is one where you've had a shift of people who would use physical gold or maybe jewelry and the adoption much more readily of regulated financial instruments like ETFs. So what we've been seeing is more of a shift to a more stable holding, more structural shift in their investment dollars as opposed to just speculating the gold price. And I think that that's actually been an interesting dynamic. It's still small relative to the overall holdings in both the Americas and also in Europe or EMEA, I should say. But at the end of the day, it's actually a shift that's continuing to take place. Moving away from physical gold or jewelry and actually using instruments like gold in a portfolio where you've seen challenges around portfolios that hold real estate, challenges around portfolios that hold equities and questions around big market economies like China, for example, and what it's going to do and how it's going to play out.

Mike Maharrey: Yeah. Yeah, absolutely. Very interesting to watch the different dynamics. I think sometimes as Americans, we forget that not everybody in the world thinks exactly like we do.

Joe Cavatoni: Correct.

Mike Maharrey: And actually- And I'm definitely guilty of that sometimes. It's easy to get myopic.

Joe Cavatoni: I mean, that's been something we've been hammering home for people on gold for better part of two and a half, three years now, which is just because the dollar and US interest rates haven't done what you would normally expect to see the performance of gold improving, this decoupling, so to speak, doesn't necessarily mean that there isn't a reason. The reason is that there's been the rise of the Eastern investor. There's been the rise of more consumption in Asian markets. It's actually really interesting to keep that global dynamic in mind. And to that end, one thing that I'm continuing to keep an eye on and having a real hard time just getting my head around is why European investors still haven't stepped in as much as I would've expected by now. And it's simply, I think, because the relative equity trade was cheap, I don't think that's the case anymore.

So, European equities versus US equities was cheap. I think that dynamic has changed. And I think that we should start to see more European ETF flows, more European flows into gold over the course of the year because spending's now on the radar for countries, deficits are going to continue to increase, challenges around Fiat currency, Euro, et cetera. And I think that you'll start to see that pick up. But let's see if that call is correct because it hasn't been something that I noticed that Europe's been notably quiet in terms of the transparent flows and ETFs.

Mike Maharrey: Yeah. Yeah, absolutely. I'm curious, it sounded like you alluded to the fact that you've spent some time in Asia, so you understand the Asian markets pretty well, I'm sure way better than I do. Can you give the audience a sense of ... I think there's a perception that Asian investors view gold differently than North American investors. Is that a fair assessment? And if so, what is that difference in thinking?

Joe Cavatoni: So I don't know if they ... Well, it's probably the role gold plays that they have a different appreciation for if I had to put it into context.

I think that we trust Treasuries, we trust the dollar to a certain extent, and we have a huge economy. And I think that it's not hard. Going back to a comment you made a little earlier, it's not hard to be very insular in the US. You've got a lot that you can look at. You get a lot you can work on. And innovation is just off the charts. I mean, in terms of financial market innovation, economies, just the way things happen here, and the pioneering spirit of the country is ingrained in all of us. Push it hard, throw caution to the wind, aggression, et cetera. I don't know if that's necessarily ingrained in a lot of the Asian markets. I think safety, saving, holding something that I know can transfer from generation to generation, which we have as well, but there's a lot longer history of the fear of currency devaluation and economies not having the same level of growth.

So, I think that's a fundamental difference there. And I guess as it translates into the modern era, having spent many years developing markets with a myriad of different firms and people that I've known over the years, it's been awesome to watch investment markets really go from fledgling to developed and in many ways just become mainstream. I had the opportunity to trade China A shares using the quota that the government would give to foreign entities, and that was a pretty exciting moment where you're actually trading something that many people thought would never happen. And over years, it developed into something that became much more easily accessible and transferrable, still not completely fungible across borders and free to trade, but where it started and where it is today, it's just a radically different place. And I think that that's been ... I always thought it was a very exciting dynamic of when I spent my years there, and it was literally 17, 18 years I spent in the region.

So, you're looking at a market that had 50 stocks listed, and then by the time you left, it was several hundred and you could short and you could do all kinds of different things. And it's really kind of fun and exciting. But I think it's a shift in that whole developing nation. It moved from emerging markets to developing nations in terms of how we even refer to them. And so I think even locally, more people are banked, more people have access to the markets, more people have access to trading. Digitization of different assets and online access to different things has changed the whole dynamic. People are banking without having to go into a brick and mortar bank anymore. So, it's a pretty amazing development. And I think at the heart of the Asian investor is still this mentality of saying, "What's the safest thing I can have in my wealth?

And it's something that doesn't lose its value that I can use when I need it in times of liquidity." Sound familiar? And they keep it and they hold onto it and they pass it down generation to generation.

Mike Maharrey: Yeah. Yeah. That's really good insight. I appreciate that. I want to get you out on a couple of just more personal questions. And the first is, how'd you get interested in gold? I always find it interesting how people get into this “barbaric relic” as some have referred to it.

Joe Cavatoni: Sure. Well, I always understood and managed around a bit the commodity category, but never directly involved in it until about 10 years ago, the World Gold Council approached me about an opportunity to help them in the US with the investment direction of education and helping our research team kind of put together its content and think about modeling and think about the different aspects of what's happening in the gold market. We also are the innovators of the exchange traded funds, and I had a pretty comprehensive background in that. And there was a bit of work to be done there to make sure that our overall involvement in the ETF landscape was well-managed. So, that's how I got into it. And what I liked about it, which was something that took me back to the very early parts of my career, coming into the World Gold Council, it got me the opportunity to be less chained to a trading desk and more opportunity to see the value chain from the mine site to the market.

So, we do talk with refineries. We talk to those that are in the mining space who are our members. We talk to the people who are in the transportation business and the logistics business and also the storage business. I was literally at a site visit yesterday. Someone wanted us to see their vault just outside of New York City and Comex approved vault, which was really an interesting site business, talking about what the business opportunity is. So, it was that that drew me in, which was the opportunity to see industry start to finish from production to consumption. And actually, it was a large enough market for me to say, "Hey, this has got some real legs to it." You think about the big two commodities, it's gold and Oil. And I said, "That's actually pretty interesting stuff. So let's see where it goes." Now it's opened my eyes to a whole bunch of other things which we could go on for hours on in terms of critical minerals, et cetera, but I mean, it's just been a fantastic run.

Mike Maharrey: Yeah. Yeah. It's interesting too. And you kind of alluded to something I think that maybe people don't really comprehend. It's just how big the gold market is in terms of all of the players in it. It's not just a guy sitting at a trading desk. And as you say, you've got miners, you've got explorers, geologists, bank. It's all of these different things that are kind of coming together, which is pretty cool.

Joe Cavatoni: I mean, just think about the simple impact that some of the logistical challenges we faced over the last five years between COVID shutdown, potential risk of tariffs. I mean, who would've ever thought that things like that could be impacting the gold market? If I hadn't taken the time to understand the gold market, I might not have. But then when you start getting there quickly, you realize, hey, logistics matter.

Mike Maharrey: Okay, here's the nerd question for you. Do you have a favorite gold coin?

Joe Cavatoni: Do I have a favorite gold coin? The short answer is no, I don't actually.

Mike Maharrey: You need to have a favorite gold coin. Come on.

Joe Cavatoni: I don't have a favorite gold coin. I just have Eagles, so I'm just sorry. So, I guess the ones that are in my possession are my favorite gold coins.

I don't have anything in the numismatic space. Although I did get a call this week from someone who says they have a friend who has a collection of coins that their grandfather passed down to their father to now to them, and they're looking for a little help with it. And I said, "Well, look, I know one thing for sure. If it's an eagle, then you can call your run of the mill dealer and see what you can liquidate if you want to. " But if there are any instances of numismatic value, which I don't dabble in the space, it's too complex for me to figure out and not one that I can protest to be an expert on. I said, be cautionary with that because you might be leaving a lot of money on the table without understanding what you've got.

Mike Maharrey: Yeah, that's very wise advice. I'm the same way. And I'll tell you what, there's nothing wrong with a nice gold eagle because as you say, you can offload that place anywhere. Everybody recognizes that what this is and what its value is.

Joe Cavatoni: So- I'll nerd out for you a little bit more here if you want.

Actually, and this is not an anti-crypto comment. This is actually a factual story. Many years ago, I have two boys who are now no longer young boys. They're grownups now. But I was on a trip to India and I bought them both a coin and then actually they've held onto it. And the older one asked me if we could buy some Bitcoin at the time, and we did. So, we bought gold and Bitcoin at the same time. And he's actually had a fun time just kind of learning the whole dynamic between the two, watching the whole story of crypto claiming to be gold and not. But he still holds both of those assets. My younger son, we had to tear apart his room because he claims he never got the coin I gave him. We had to go find it and we did eventually find it and he no longer holds either asset.

And actually my wife's been an active buyer through Costco.

Mike Maharrey: Nice, nice. Yeah. But those stories are fun. I gave both of my kids, and like yours, they're grown now, but I gave them both silver rounds. They're real pretty Irish silver rounds. They weren't actually coins, but they're 0.999 pure. And I got to tell them the other day, I said, "Hey, you remember that round I gave you?" Because when I gave it to them, silver was like $12, right? And so that round's worth about 70 bucks now. My daughter's eyes got real big. So, it is cool because it's a really tangible way to teach young people about markets and money, right?

Joe Cavatoni: It is.

Mike Maharrey: All right. So, before we go, I want to let you point folks toward the World Gold Council, if you want to give a quick overview of what you guys have to offer and where folks can go to avail themselves to all of the fine output that you have.

Joe Cavatoni: So, we've got a lot of information on the gold market ranging from market development work, market insight, research data. You can find our main gold page is gold.org. Within there, you'll have Gold Hub, which is where you can go get investment research and insights from people around the globe. And that's what's actually really cool about our site is that you can actually get insights from our team on the ground in China or on the ground in India. So, you can start to get a much, much better appreciation for the global nature of the gold market. And shout out to my co-host, John Reed for our unearthed podcast. We have a monthly that we do, and then we have regular production of podcasts as well, where we give insights ranging from all aspects of the market, like you said, the logistics side or the production side to the market side, and some really interesting commentary coming up in the next couple of months with those that have some very insightful views on the investment landscape.

Mike Maharrey: Yeah. And I just want to emphasize fantastic work that you guys do. I couldn't do my job if it wasn't for you guys doing your job. I visit the World Gold Council literally every single day. That's one of the go- to stops because there is so much great data, not just current news, but a lot of historical data that you can dig up if you're doing research. 100%.

Joe Cavatoni: And thank you for that, and that's why we're here.

Mike Maharrey: Yeah. And we really appreciate it. And I really appreciate you taking a little bit of time out of your day. I know you're on the road traveling and that's always a hassle. And so I appreciate we managed to get this done early in the morning before I'm normally doing anything. So I think I've been remarkably cogent, which is good. But I really do appreciate it, and I thank you so much, and would love to have you back on again as things unfold in the future. That sounds great,

Joe Cavatoni: And I welcome the opportunity. All right.

Mike Maharrey: Well, thank you again.

Another great interview there and it was wonderful to have Joe Cavatoni from the World Gold Council join us once again, and we certainly enjoyed hearing his very studied and informed view on what he’s been seeing in the gold market of late.

Well, that will do it for this week. Be sure to check back next Friday for our next Weekly Market Wrap Podcast. And remember to tune in as well to the Money Metals Midweek Memo, hosted by Mike Maharrey.

To check out any of our audio programs just visit https://www.moneymetals.com/podcasts";>MoneyMetals.com/podcasts or find them on Spotify, Apple Podcasts, Google Podcasts, or wherever you listen to your favorite podcasts. And as a big help to us we would ask you to please like, subscribe, download and rate our podcasts. Doing so helps us extend the reach of this material.

Until next time, this has been Mike Gleason with Money Metals Exchange, thanks for listening and have a wonderful weekend everybody.

Astronauts Looking Through Gold-Colored Visors

Fri, 10 Apr 2026 00:00:00 EST

I’ve got a good story for the knuckleheads who run around claiming “gold is useless.” Yes, people really do say that.

So, you’ve heard of people looking at the world through rose colored glasses?

Well, when astronauts finally walk on the moon again, they’ll be looking through gold-colored visors.

Growing up in the 1970s, I wanted to be an astronaut. In fact, I think most kids in my generation had that dream at some point in their childhood. It was the era of the Apollo missions, and news about space travel and moon trips was ubiquitous. Heck, I drank Tang because that’s what astronauts drank.

I even got to see the last Apollo rocket launch with my own eyes. We lived in Ormond Beach, Florida, at the time. I was only 5, but I still vividly remember how the sky lit up as bright as day when Apollo 17 fired its rocket.

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All that to say that the Artemis II mission and all the amazing images beamed back from the moon by the crew have reawakened my childhood fascination with space travel.

Well, the other day, I ran across an article about the spacesuits astronauts will wear when they walk on the moon during the Artemis III mission. As I looked at the photos, it struck me that the gold visors on the helmets look pretty rad. (My daughter would probably say the helmets “slay.”)

Well, that gold coloring isn’t just a cool look. It has a very important function.

The face shields on the spacesuit helmets look gold because the metal is incorporated into their design.

Oakley developed the visor. Yup – the sunglasses company. And when you think about it, it makes sense. If you think the sun is intense here on Earth on a Florida summer day, it’s got nothing on the harshness of the sun in space.

Axiom Space designed the space suits and subcontracted the visor design to Oakley. The company’s chief technology officer, Koichi Wakata, was an astronaut himself. He flew five missions – three aboard the Space Shuttle, one on the Soyuz, and one on the Crew Dragon. He logged over 500 days in space, so he knows what it’s like.

"In space, the sun is really harsh; it feels as if it's piercing through your eyes. We need an exceptional visor system to protect eyes and [offer] maximum visibility to enable [astronauts] to work in the challenging lunar environment.”

The Oakley website explained it this way:

“In the extreme environment of space, clarity and protection are paramount. Now, we're bringing decades of innovation in optics, honed in the world's most demanding sports and adventure settings, to a new arena: the vacuum of space.”

But why gold (besides that it looks super cool)?

Gold filters out infrared and ultraviolet light. As NASA explained it, “The movable sun visor and sun shades protect the astronaut from the sun’s strong rays, while still allowing a clear visual field.”

I’m not a science guy, so ChatGPT helped me with a little research. I learned that gold’s electron structure interacts with UV and IR photons in a way that prevents them from passing through.

In simple terms, gold has a lot of free and loosely bound electrons. When IR light hits the metal, those electrons absorb the energy and begin oscillating. Instead of letting the light pass through, the metal reflects it.

Gold blocks UV light with a similar process. However, because UV light produces higher levels of energy, it causes more intense electron oscillation. Some UV light is reflected, and some is absorbed. However, little gets through to the astronauts’ eyes.

To take advantage of these physical properties, the astronaut visors include a coating of 24-karat gold.

The visor also features a scratch-resistant outer coating that can withstand lunar dust. There's also a flip-down visor that completely blocks light from the upper portion of the visor during super-harsh conditions. The helmet even has a small foam block inside that astronauts can use to scratch their nose (and close their nasal passages to aid with pressure equalization in the ears).

Oakley's head of R&D, Vincenzo Spremulli, said they were looking for something specifically oriented for the reflection of infrared light.

“This is what gold is. Gold is a known material. It’s a precious metal, so it doesn’t undergo any transformation. It can reflect IR radiation away from itself. It doesn’t absorb it. It just reflects it away.”

So, how do they get the gold layer thick enough to stop UV and IR light, but thin enough for the astronauts to see through?

They shoot a beam of electrons at the gold, powerful enough to evaporate the metal. It is then sprayed onto the lens, creating the perfect coating for the job.

And did I mention it looks super cool?

https://www.youtube.com/embed/pJ1LVKtpBvE?si=L_hQRGag_aodDAlU"; title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen="allowfullscreen">

Warren Buffett once said, “Gold gets dug out of the ground in Africa or someplace. Then we melt it down, dig another hole, bury it again, and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.”

I even once heard a commentator on a major financial network claim gold is a "useless rock."

This is obviously a ridiculous take, as we’ve just seen.

In fact, gold is one of the most useful metals in the world. Due to its utility, coupled with its scarcity, gold is also one of the most valuable metals in the world.

But gold isn’t just pretty. As we’ve seen with the space helmet, the metal’s inherent physical and chemical properties make it useful in many industrial and technological applications.

This is why we see gold increasingly used in the tech sector. In fact, gold would probably be used even more if it weren’t so rare and expensive.

Last year, the tech sector used 228 tonnes of gold, mostly in electronics. That’s because gold has excellent electrical conductivity and, unlike silver, doesn’t corrode. It is also malleable, making it excellent for tiny, precise connections.

The point is that gold is far from useless.

But fundamentally, https://www.moneymetals.com/podcasts/2024/02/28/gold-and-silver-are-real-money-003011";>gold is money. And everybody wants to have money -- especially real money.

Photo courtesy of Axiom Space

Central Bank Gold Buying Has Slowed But the Bullish Case Remains

Thu, 09 Apr 2026 00:00:00 EST

Central bank gold buying has slowed significantly in the last few months. However, analysts at Metals Focus think this is a temporary reaction to current factors and not the beginning of a new trend.

Demand from central banks was a key factor driving the gold price up over the last few years.

While central bank gold purchases declined to 863.3 tonnes last year, they were still well above the 2010-2021 annual average of 473 tonnes.

In fact, 2025 was the fourth-largest expansion of central bank gold reserves on record. The all-time high was set in 2022 (1,136 tonnes). It was the highest level of net purchases on record, dating back to 1950, including since the suspension of dollar convertibility into gold in 1971.

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In January, the gold price spiked to well over $5,000. Since then, there have been significant price pressures due to uncertainty created by the Iran conflict and worries about a surge of price inflation. As Metals Focus noted, gold sales by central banks, along with reports of “potential further disposals," have also weighed on investor sentiment.

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However, Metals Focus analysts said the selling is likely temporary.

“Indeed, even accounting for these sales, provisional data suggest that the official sector has remained a net bullion buyer this year-to-date. Elevated geopolitical risks should, if anything, reinforce the case for central banks to hold gold as a means of diversifying away from dollar-denominated assets.”

Turkey Leads Sellers

As we reported recently, https://www.moneymetals.com/news/2026/03/27/turkey-sells-60-tonnes-of-gold-to-backstop-lira-004792";>Turkey has sold a significant amount of gold over the last month to support the lira.

According to data analyzed by Bloomberg, Turkish gold reserves showed a 6-tonne decline during the week of March 13 and 52.4 tonnes the following week. Based on Metals Focus data, Turkish gold reserves have declined another 79 tonnes since then, bringing total sales to 131 tonnes.

Rising energy prices due to the war are straining the Turkish central bank’s ability to maintain its strategy of slow lira depreciation. As energy prices rise, it increases demand for dollars (given that most oil contracts are priced in the U.S. currency). This increases the downward pressure on the lira. By selling gold and intervening with dollars, the Turkish central bank can maintain lira strength.

More than half of the decline in Turkish gold reserves was the result of gold swaps. As Bloomberg noted, “It’s not uncommon for central banks to sell spot gold and simultaneously agree to buy it back in the future via swap agreements, effectively granting them cheap dollar funding using the precious metal as collateral.”

Meanwhile, Russia has been selling gold to support its economy as it struggles against aggressive sanctions due to its invasion of Ukraine. It sold 9 tonnes of gold in January and another 6 tonnes in February.

According to Metals Focus, “These sales are believed to involve the National Wealth Fund (NWF), with gold assets liquidated to help finance budget shortfalls.”

Ghana started selling gold before the chaos of the U.S.-Israel attack on Iran. The African nation’s gold reserves dropped nearly 50 percent from 38 to 19 tonnes between October and December of last year. Officials said the sales were for “portfolio rebalancing.” With the price of gold surging, gold exceeded 40 percent of the country’s total reserves.

Metals Focus put the changes in Ghana’s reserves into perspective.

“Purchasing domestic mine output and subsequently selling gold is not uncommon among central banks in gold-producing countries. Kazakhstan and Uzbekistan are notable examples, having been active on both sides of the market in recent years, albeit with a bias towards net accumulation. Looking ahead, as Ghana plans to expand purchases of domestically mined gold, more frequent two-way activity is likely.”

Poland has hinted at selling some of its gold holdings to finance defense spending. The country led all central banks last year, adding 102 tonnes to its reserves.

However, despite rumors that it might tap into its gold reserves, Poland was https://www.moneymetals.com/news/2026/04/02/central-bank-gold-buying-rebounded-in-february-004807";>the biggest buyer in February, expanding its reserves by another 20 tonnes. This lifted the country’s gold reserves to 570 tonnes, making up 31 percent of its total reserves.

The Case for Expanding Gold Reserves Remains Intact

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Looking ahead, even with a shaky ceasefire in place, uncertainty surrounding actions in Iran will likely continue. This will probably keep energy prices high and volatile over the next few months. Given this scenario, Metals Focus analysts said they cannot rule out more central bank gold selling and swaps to raise liquidity and support economies.

However, Metals Focus called these “short-term dynamics” and insisted that “the case for [central bank] portfolio diversification into gold remains intact, particularly for countries that are still underweight.”

In fact, the conflict with Iran could exacerbate some of the dynamics that have driven central bank gold buying over the last few years, particularly concerns about https://www.moneymetals.com/news/2024/02/29/could-weaponization-of-the-dollar-as-a-foreign-policy-billy-club-accelerate-de-dollarization-003013";>the weaponization of the dollar and the United States’s borrowing and spending problem.

“If anything, the Iran conflict, alongside U.S. intervention in Venezuela, may signal a shift towards a more unilateral U.S. foreign policy stance, potentially amplifying geopolitical uncertainty in the years ahead. Combined with a deteriorating fiscal outlook across key economies and concerns over central bank independence, this should continue to enhance gold’s appeal as a portfolio diversifier.”

Tennessee Rejects Dangerous Government-Backed “Transactional Gold” Boondoggle in Latest Sound Money Victory

Thu, 09 Apr 2026 00:00:00 EST

(Nashville, Tennessee – April 9, 2026) -- Lawmakers in Tennessee delivered yet another blow to government “transactional gold” schemes when the Legislature rejected harmful legislation today, joining more than a dozen other states, including https://www.soundmoneydefense.org/news/2026/03/27/georgia-rejects-big-government-transactional-gold-bill-joining-more-than-a-dozen-other-states-000659"; target="_blank" rel="noopener">Georgia, Kansas, Arizona, West Virginia, Indiana, Kentucky, South Dakota, Idaho, Mississippi, Wyoming, and Michigan in abandoning these schemes.

House Bill 2427 and Senate Bill 1813 would have created an entangling, government-run gold depository, investment, and payment system in the Volunteer State, directly competing with private firms that are already successfully offering these services in Tennessee and nationwide.

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These Tennessee bills, pushed by individuals associated with a self-interested vendor, attempted to establish a novel government program that would convert the State of Tennessee from a regulator to a direct market participant, while also entangling Tennessee government bureaucrats with the private personal finances of American citizens.

The American Legislative Exchange Council (ALEC) also played a role by publishing the Big Government “model bill” language introduced in Tennessee and several other states this session, raising questions about how the proposal aligns with the group’s purported limited government values.

Senator Shane Reeves (R-14) raised questions about the bill’s inoperability, while a representative from the Tennessee Department of Revenue explained that this massive new program would be outside the normal duties of the Department and highlighted that this proposal could lead to costs exceeding a whopping $17 million in FY 26-27 and more than $10.6 million in FY 27-28 and subsequent years if enacted.

Thanks to significant opposition from constituents and sound money experts, Tennessee lawmakers wisely decided to reject this dangerous Big Government transactional gold legislation and instead opted for further discussion on the topic at a later date.

Tennessee joins a growing chorus of policymakers rejecting these bills for the following reasons:

Gold Payment App Ploy to Obtain Special Government Blessing and Privilege –The public-private partnership concept is backed by individuals connected with gold payment apps who desire the imprimatur of state government endorsement to help attract new customers and overcome their competition. This is extremely disturbing considering the fact that these apps are already freely available for use in every state throughout the United States without a bureaucratic, convoluted state structure picking winners and losers.

False Tax Claims and Scare Tactics Used to Pry Customers Away From Other Businesses – Promoters have made false and irresponsible marketing claims that customers of a state-selected vendor could evade federal capital gains taxes… or that members of the public could face confiscation of their precious metals if they did not patronize the state-partnered gold vendor.
New Burdensome Regulations – Some variations of these bills would also force hundreds of small businesses (e.g., coin shops, mints) to register as Money Services Businesses or seek some other license, subjecting them to new, stringent regulatory and examination burdens (e.g., imposing elaborate bank-like signup processes on customers) for no discernible benefit. State regulators would be forced to take responsibility for overseeing the gold market and payment activities about which they lack experience or expertise.

Other reasons lawmakers are pushing back against these bills include:

Buying, Selling, Storing, and Transacting Gold Is Already Legal – Private services to buy, sell, store, and transact using gold/silver are already legal and widely available. There is no need to involve the state.

Lack of Industry Expertise & Understanding of Negative Business Impacts – These public-private partnership bills have been drafted with little apparent knowledge of precious metal depositories and dealers, the forms of precious metals that are available in the marketplace, and industry physical market practices for gold and silver coins, bars, and rounds. Most importantly, they have been drafted without sensitivity to the negative impact they would have on in-state businesses.

Absence of Public Demand – There is little to no demand among the public to pay taxes to the government in gold or silver, or for the government to become further involved in the purchase, use, sale, or storage of the metals. (It’s usually quite the opposite… the public does not want the government involved with their gold.)

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“It’s a shame to see legislators get sidetracked by ill-conceived Big Government transactional gold schemes when they could have been passing good legislation that removes taxes on precious metals, reduces onerous industry regulation, or simply empowers state treasurers to hold gold as part of state reserves,” said Jp Cortez, executive director of the Sound Money Defense League.

The Sound Money Defense League has worked to pass positive gold and silver laws this year in Idaho and Wisconsin, as well as stopping bills that would have imposed new taxes on precious metals in states like Nebraska and Colorado.

The League also worked on the introduction of federal legislation, known as the https://www.soundmoneydefense.org/news/2026/03/19/lawmakers-introduce-silver-act-to-de-risk-us-precious-metals-market-infrastructure-000657"; target="_blank" rel="noopener">SILVER Act, addressing longstanding geographic limitations on approved depositories for precious metals tied to regulated futures markets.

Img credit: “https://www.flickr.com/photos/doddsphotography/9782331925"; target="_blank" rel="noopener">TN Flag” by https://www.flickr.com/photos/doddsphotography/"; target="_blank" rel="noopener">Phillip Dodds, https://creativecommons.org/licenses/by/2.0/deed.en"; target="_blank" rel="noopener">CC BY 2.0

ETFs Dumped Gold in March Except In Asia

Thu, 09 Apr 2026 00:00:00 EST

Unsurprisingly, given the significant price corrections in January and after the onset of the Iran conflict, significant amounts of metal flowed out of gold ETFs in March. However, it was a tale of regions, with North American funds accounting for the bulk of those outflows and Asian ETFs actually adding metal during the month.

On net, 84.8 tonnes of metal flowed out of gold-backed funds valued at $12 billion. It was the largest monthly outflow in dollar terms on record.

In tonnage terms, ETF holdings charted their largest monthly decline since September 2022.

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Despite the sharp March outflows, ETFs globally added a net 62 tonnes of gold in the first quarter.

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Global gold ETFs ended the quarter with $606 billion in assets under management (AUM). That was 9 percent above FY25 levels.

Asia posted its largest quarterly inflow on record, with positive flows in March helping to offset weakness in North America.

North American ETF gold holdings fell by -87 tonnes valued at $13 billion in March. That ended a 9-month streak of inflows and gave North America the distinction of being the only region to report outflows for the quarter.

Notably, North American ETFs have only charted two periods with at least nine consecutive months of inflows – during the 2008 financial crisis and the COVID‑19 pandemic.

The World Gold Council pinpointed three factors that drove North American outflows:

Broader risk‑off conditions, triggered by Operation Epic Fury, weighed on most asset classes – except oil – and likely prompted US investors to raise liquidity by selling prior winners such as gold
Commodity Trading Advisors (CTAs) entered mid-March with elevated long positioning and appear to have amplified the downside price momentum, forcing weaker hands to capitulate
Opportunity costs rose as the US dollar and interest rates moved higher, while rate expectations shifted materially from potential cuts in 2026 to rates now expected to remain unchanged through September 2027, adding uncertainty and weighing on gold demand.

European funds also reported gold outflows, but not to the extent of North America. ETFs based in Europe decreased their gold holdings by -7.3 tonnes valued at $154 million.

According to the World Gold Council, Germany, Italy, and France led monthly selling, with flows closely tracking gold price movements. There were significant outflows during the second half of March as prices fell. However, modest inflows re‑emerged toward the end of March as prices rebounded.

Meanwhile, Asian ETFs kept adding gold.

Asian funds reported a 9.9-tonne increase in gold holdings in March valued at $2 billion.

Flows were positive until the last week of the month.

Chinese funds led the buying. According to the World Gold Council, heightened safe‑haven demand amid geopolitical risks, falling local equity markets, and a weaker currency, all incentivized Chinese investors to keep piling into gold even as Americans and Europeans were selling.

Dip-buying supported ETF inflows across the region. Indian funds reported a $177 million increase in gold holdings.

Funds in other regions, including Australia and Africa, reported a modest -0.4-tonne decrease in gold holdings. According to the World Gold Council, “Despite heightened gold price volatility, Australian and South African holdings remained relatively resilient, with only minimal outflows during the month.”

ETFs are a convenient way for investors to play the gold market, but https://www.moneymetals.com/news/2024/03/08/paper-gold-vs-real-gold-its-important-to-know-the-difference-003038";>owning ETF shares is not the same as holding physical gold.

ETFs are relatively liquid. You can buy or sell an ETF with a couple of mouse clicks. You don’t have to worry about transporting or storing metal. In a nutshell, it allows investors to play the gold market without buying full ounces of metal at the spot price.

Since you are just buying a number in a computer, you can easily trade your ETF shares for another stock or cash whenever you want, even multiple times on the same day. Many speculative investors take advantage of this liquidity.

But while a gold ETF is a convenient way to play the price of gold on the market, you don’t possess any gold. You have paper. And you don’t know for sure that the fund has all the gold either, especially when the fund sees inflows. In such a scenario, there have been difficulties or delays in obtaining physical metal.