Special Report
In Gold We Trust Report 2025 - The Big Long
Sprott is proud to sponsor Incrementum's 2025 edition of its annual In Gold We Trust report.
Key Takeaways from Incrementum
The 10 most important reasons for The Big Long.
The gold price is in a secular bull market
The gold price has risen sharply since its low; but according to historical cycle analysis, we are only in the middle phase of the uptrend. Corrections are possible at any time, and the "drop height" has increased significantly in view of the rapid price rise, especially in absolute terms.
Fodder for the continuation of the gold bull market
More-than-priced-in interest rate cuts by the Federal Reserve, a relaunch of QE (quantitative easing), the incipient economic downturn, and a possible revaluation of gold reserves are supporting the rally. Additionally, the explicit political desire to weaken the U.S. dollar is eroding confidence in the greenback.
Central banks have been constant buyers of gold
The significant increase in demand for gold from central banks since 2022 is consolidating at a high level and appears to be forming a stable pillar of demand. These purchases are relatively price-independent and underpin gold’s role as a strategic, politically neutral reserve asset.
From contrarian asset to mainstream investment
Gold may be changing from a niche investment to a mainstream portfolio component. After four years of outflows, physically backed gold ETFs have recorded consolidated net inflows of USD 21.1bn (226 t) since the beginning of the year. This was the second-highest figure in U.S. dollars after Q2 2020.
Silver, mining stocks, and commodities follow suit
Silver, mining stocks, and commodities typically follow the gold rally with a time lag and now show disproportionately high catch-up potential. After years of underperformance, Incrementum's analysis suggests a relative undervaluation and outperformance compared to gold.
Stagflation risk growing, possibly even recession on the horizon
The U.S. economy is cooling down, and the unfolding trade war is further weakening the economy, while inflation remains stubbornly above 2%. This makes a stagflationary scenario more realistic, an environment that has historically proved supportive for the gold price.
From DragonBear to EagleBear1 – geopolitical upheavals
Trump is questioning old alliances in the implementation of his America First policy, while the BRICS+ states are testing new currency and trade routes. The EU is caught between these fronts and is struggling with an increasing loss of importance.
Physical demand: Let’s get physical
The Fort Knox audit, rising repatriations, and high physical inflows in Asia reflect mistrust in the gold market. The most recent spike in lease rates signaled a very tense supply-demand imbalance for physical gold.
New gold playbook under Trump and Bessent
Gold is increasingly becoming the focus of the U.S. financial architecture. Whether through the possible revaluation of U.S. gold reserves, gold-backed bonds, or stricter sanctions, gold will likely continue to gain in importance on both geopolitical and monetary policy levels.
In Incrementum's "shadow gold price" terms, gold remains cheap
Despite numerous new all-time highs, Incrementum still views gold as undervalued in relation to monetary aggregates, government debt, and the currency reserves of central banks. The idea of a remonetization of gold is increasingly gaining ground.
Additional Resources
Footnotes
| 1 | "DragonBear" refers to the combined economic, geopolitical, and strategic influence between China (the Dragon) and Russia (the Bear). "EagleBear" refers to the potential emergence of similar cooperation between the US (Eagle) and Russia. |
Investment Risks and Important Disclosure
Relative to other sectors, precious metals and natural resources investments have higher headline risk and are more sensitive to changes in economic data, political or regulatory events, and underlying commodity price fluctuations. Risks related to extraction, storage and liquidity should also be considered.
Gold and precious metals are referred to with terms of art like "store of value," "safe haven" and "safe asset." These terms should not be construed to guarantee any form of investment safety. While “safe” assets like gold, Treasuries, money market funds and cash generally do not carry a high risk of loss relative to other asset classes, any asset may lose value, which may involve the complete loss of invested principal.
Past performance is no guarantee of future results. You cannot invest directly in an index. Investments, commentary and opinions are unique and may not be reflective of any Sprott entity or affiliate. Incrementum's views and opinions as presented in the In Gold We Trust Report and summarized above are separate and distinct from those held by Sprott. Forward-looking language should not be construed as predictive. While third-party sources are believed to be reliable, Sprott makes no guarantee as to their accuracy or timeliness. This information does not constitute an offer or solicitation and may not be relied upon or considered to be the rendering of tax, legal, accounting or professional advice.