HOLTHE: Gold's incredible first quarter

Kris Holthe is a precious metals broker with Calgary-based New World Precious Metals

Hard money is a term given to valuable commodities such as gold and silver... tangible assets that can be used as collateral for loans or traded for other goods and services directly. Payment, in and of itself, with no worries about a lenders’ credit worthiness. Just payment in hand, a risk free exchange.

Gold and silver had a remarkable 2024, gold appreciated 27% in 2024 and silver 22%.

They will continue on their upward price appreciation in the years to come. To date in just the first three months of 2025, gold has appreciated 18% and silver 17%. The trend is your friend, as they say. Gold and silver are trending to the right and up, as they have been for several years now. Fundamentals are finally taking root.

Gold and silver have always been the enemy of fiat currencies because they indicate true inflation, or the loss of purchasing power in fiat currencies. There has for many years been an effort, by the defenders of fiat currencies, to dissuade investors to convert their fiat savings to hard currencies by keeping their true value artificially low.

The time is coming when the true value of precious metals will make itself known.

Record central bank purchases for the past four years are putting wings under gold. There are no signs of abated purchasing. Tariff concerns have added fuel to the fire. More than 2000 tons of gold have been imported into the USA from December 2024 to the end of February 2025.

To give context to this development, the United States, being the largest official global holder of gold bullion, has 8,133 tons on their Treasury balance sheet. Things are quickly shifting in the world in a way that will benefit gold owners now and in the future.

Four years of 200,000,000 oz-plus supply deficits in the silver market have also created a solid base for the price of the metal.

Total mining production of silver is 800,000,000 ounces per year but is in decline. Silver, being both a monetary metal as well as an industrial metal has seen a 60% increase in industrial demand in the past 10 years alone.

As technology advances, there will be an ever increasing need for the metal. It has properties that make it irreplaceable in manufacturing. Silver has more than 10,000 industrial applications. Once the general population becomes aware of the supply/demand fundamentals there will be a rush into the market. Since the silver market is so small, in comparison to the rest of the financial markets, it could lead to a drastic price appreciation as investors crowd in.

It is interesting to note that silver has been the leading monetary metal representing ‘money’ for the past 5,000 years. Gold has had its times of dominance but overall, it has been silver that has been the main form of money for the past 5,000 years.

In the last 200 years, gold has been the dominant monetary metal. The last vestige of silver being used as a monetary metal was severed in 1964 when silver was taken out of circulation by the US mint. Pre-1964 coins are prized and collected due to their 90% silver content. Owing to the supply/demand deficits, silver is quickly becoming a strategically important metal. As above ground supplies dwindle, pricing will begin to reflect its true value.

Since President Nixon took the US dollar off the gold standard in 1971, the US Treasury bond had been the new ‘gold standard’ putting a floor under the US dollar as the reserve currency of the world with fiat currency backed by military might and reinforced by the petro-dollar established in 1973. Most of the population of earth has forgotten the importance of gold in the financial system. If a new monetary system emerges, gold will most likely underpin the new system.

With global sovereign debt at levels impossible to repay, the collapse of the current monetary system is baked into the cake. 

The questions are when will the reset occur and what will the new monetary system look like?

Gold and silver have always played an instrumental role in monetary systems since they have all the qualities of ‘money’ and have one unique quality fiat currency does not have — the ability to retain their value. They are not a promise to pay but payment itself. There is no counter-party risk. All other forms of money within our debt based monetary system, in one way or another, are a promise to pay.

This is an excellent time to have your wealth protected by precious metals considering the risks associated with overvalued equity markets and housing, threats of war and tariffs... just to name a few.

Kris Holthe is a precious metals broker with Calgary-based New World Precious Metals.