Gold, Silver, and Copper Surge Into 2025 - New Metals Bull Market Begins

An Exciting Week In The Metals Markets

This week has been action-packed for the metals markets. Copper, gold, and silver have all broken out of key technical patterns, but while the charts are lighting up, there’s more to the story. Let’s dive into the catalysts driving these moves, the risks that remain, and what it could all mean for 2025.

Copper Leads the Way

On January 8th, copper broke free from a months-long downtrend, with a bullish MACD cross confirming the breakout just two days earlier. This move wasn’t just about technicals—it was fueled by:

• Tariff Fears: With Trump’s inauguration on Monday, industrial users are scrambling to get copper and silver into the U.S. ahead of potential trade disruptions.

• China Stimulus Expectations: Markets are anticipating stimulus measures to offset the economic drag of a trade war with the U.S.

While RSI suggests copper may be nearing overbought territory, the fundamentals look strong for now.

Gold: The Sanction-Proof Asset

Gold broke out of a symmetrical triangle this week, bolstered by weaker-than-expected core CPI data. Lower inflation gives the Fed more wiggle room to ease monetary policy—a bullish signal for gold.

But that’s not the only story here:

• Central Bank Buying: China’s PBOC added more gold to its reserves in December, and the World Gold Council expects central banks worldwide to continue stacking gold in 2025.

• The Sanction-Proof Asset: With U.S. sanctions freezing Russian assets, central banks are shifting to gold as a way to protect their reserves from geopolitical risks. Goldman Sachs notes that gold is no longer tightly correlated to interest rates because, for many nations, it’s about security, not yield.

The U.S. just announced a new round of sanctions against Russia, reinforcing the idea that gold’s role as a neutral reserve asset isn’t going away anytime soon.

Silver Joins the Party

Silver finally broke out of a falling wedge pattern that dates back to October 2024. A strong close above $31 would confirm this move and set silver up for further gains.

Key drivers for silver include:

• Tariff Fears: Just like copper, silver demand is surging as buyers anticipate trade disruptions.

• Technical Momentum: A bullish MACD cross and plenty of room on the RSI make this breakout one to watch.

The Caveat: Is a Market Crash Looming?

While metals are setting up for a potentially strong bull market in 2025, there’s one elephant in the room we can’t ignore: the risk of a major market crash.

Here’s why the system feels fragile:

• Rising interest rates, trade wars, and rising inflation are straining the global economy.

• Extreme levels of market optimism suggest complacency in the face of these risks.

If a crash happens, metals will likely crash along with everything else. But here’s the kicker: historically, the Fed has responded to crashes with aggressive intervention and massive money printing. That kind of liquidity injection would likely send metals prices soaring to new heights.

So, while keeping some dry powder is always smart for such an event, being entirely in fiat paper carries its own risks. The current levels of uncertainty make diversification critical. If a market crash is avoided, metals appear primed to enter a new bull market for 2025.

The Bigger Picture: Debt, Inflation, and Monetary Policy

Lower CPI data may give the Fed cover to ease, but with debt levels skyrocketing, the long-term picture looks shaky:

• Fiscal year 2025 is already running a $711 billion deficit, with projections pointing to an annual deficit exceeding $2 trillion.

• The Fed may need to pivot sooner rather than later to manage the U.S.’s ballooning debt burden.

This combination of weaker dollars and soaring deficits creates a perfect storm for higher metals prices in the long term.

What Does This Mean For Us?

Gold and copper are both trading near their all-time highs, but silver remains incredibly undervalued by comparison. Despite increasing demand from both investors and industrial users, retail investors are largely oblivious to the opportunity silver presents right now.

One clear indicator of this complacency is the current pricing of physical silver bullion—particularly 90% silver coins. These coins, with their inelastic supply, are a key bellwether I watch for systemic concern. During the March 2023 banking crisis, premiums on 90% silver coins soared far above spot price as fear gripped the markets. Today, those same coins are selling for close to spot price with very low premiums.

To me, this reflects a high level of market complacency. Retail investors aren’t paying attention, but stackers can take advantage of this lull by acquiring more physical silver at these attractive prices. When the next crisis hits, premiums could skyrocket again, making this a smart time to add to your stack.

Stay Tuned

We’re in the middle of a fascinating moment for the metals markets, and the story is far from over. Keep an eye on these charts, the macroeconomic drivers, and the geopolitical developments we’ve highlighted.

If you enjoyed this newsletter, please share it with your friends & colleagues on social media to help spread the word about sound money and hard assets. As always— stay safe and happy stacking!