With wars and , why is lower? Short answer: Gold is only lower short-term, as the looks like they will keep rates high, and algorithmic traders say this hurts gold and stocks, but anything can change at any time, for patient investors. To wit, we’ve seen three gold “buys on dips” since October:
- On October 20, 2025, gold peaked at $4,336 and fell 8.5% to $3,966 a week later before soaring to $5,000.
- On January 29, 2026, gold fell 13%, from $5,318 to $4,622 in three days, but then soared back to $5,294.
- On March 2, 2026, gold fell 15%, from $5,294 to $4,482 last Friday, a third buying window in five months.
The Wall Street Journal prefers shorter-term views, writing on Friday (in “Sell-off in Precious Metals Accelerates”) about gold and silver’s “worst daily declines on record Thursday,” but certainly not the worst declines, like the 80% drop in silver and -50% gold in three months in early 1980. They also failed to mention the two examples (above) of savvy investors buying on dips rather than chasing new highs.
Being a gold bug often demands long-term patience. Both gold and stocks are vital portions of any portfolio, with stocks claiming the majority position and leadership role. Gold is more of a currency hedge than a stock market hedge, but it so happens that gold has beaten most market indexes over most holding periods since the 1960s.
Whenever fans of stocks try to bash gold, they invariably show gold charts starting during a gold bubble peak – either that single day in January 1980 when gold hit $850, or the $1,900 peak in 2011, both following 10-year surges and peaking in a buying frenzy. Gold bugs tend to do the same thing, starting their charts at a market peak, like 2000, when gold was low.
There’s an old axiom (“charts don’t lie”), but biased advocates use charts all the time to warp results in their favor. Disraeli (British statesman and former prime minister of the U.K.) reportedly said, “There are three types of lies: Lies, damned lies, and statistics.”
If you chart gold vs. stocks since 1998, instead of 1980 or 2011, gold is the clear winner. Gold’s average price in 1998 was $294, so even with its recent correction to $4,500, it is up 1430%, while the is up about one-third as much, +480.
Gold has beaten every historic currency over time. Most past currencies were inflated out of existence. Of those that remain, all are off 90% or more to gold in our adult lifetimes, since the 1960s. Gold is up 140-fold vs. the U.S. dollar since 1971, so today’s dollar is worth less than a 1971 penny, in gold terms.
Why Gold Has Soared Since 2000 – and Especially Since 2020
When measured against paper currencies, gold has had some long slumbers. The dollar outperformed gold for most of the 1980s, but that was a time of strong market growth, a strong dollar and strong American global leadership. This winning streak continued for most of the 1990s – but then came Y2k and 9-11.
In looking back to the dawn of this century, the first thing to address is our national myopia. We survived Y2k and the “dot com” bomb in 2000, so our leaders figured it would be smooth sailing from Year 1 on, but the 9-11 crisis caused two decades of seemingly paranoid and endless “wars against terror,” including high-security regulations at home, but before the 9-11 attack, we enjoyed a budget surplus winning streak.
For four consecutive fiscal years, 1998-2001, we ran a federal budget surplus, with both Parties joining forces to share the credit – President Clinton and his Republican-controlled Congress. Then, in 2001, the non-partisan Congressional Budget Office (CBO) predicted (in January) this winning streak would go on forever and we would pay off the entire national debt within a decade, by 2011. Specifically, the CBO’s early 2001 report projected a cumulative surplus of $5.6 trillion for the decade from 2001 to 2011.
Instead, deficits in that 10-year period reached $6.1 trillion, a negative swing of $11.7 trillion. They failed to anticipate those three Black Swans flying into the World Trade Center and Pentagon, and the bloated costs of Bush’s “War on Terror” after September 11, 2001, resulting in 20-year wars in Afghanistan and Iraq, then a real estate bubble, followed by bloated TARP bailouts to save big banks. From the CBO’s document, here is their guess, and miss:
All that is pretty much ancient history by now, but the endless wars, the Fed’s panicky reaction to 2008 (with zero-interest rates for the following eight years – effectively, the entire 8-year Obama presidency), led to massive deficits from the end of that crisis until today, especially in the post-COVID years.
These massive debts clearly demonstrate the major cause of gold’s 18-fold rise since 2001. This is a single-shot graphic on why gold has soared since 2000:
Here is my colleague Gary Alexander’s own chart of gold vs. stocks, from our weekly gold letter:
Gold is the clear winner so far this year, and since Y2k, out-gaining the S&P 500 by 4-to-1, +1,478% vs. +343%, while silver is a more recent winner, since 2020 (3-fold over stocks) or 2022 (a 5-fold edge).
I realize the dates here are cherry-picked, but there are a lot of other dates we could use to show gold’s superior gains. I just wish other chart-makers would also admit they choose their starting dates and ending dates to prove their case.