Christmas Eve Gold Rush: $4,500 Gold, $70 Silver -

Mike Maharrey kicks off this Money Metals Midweek Memo a day early, calling it <a href="https://www.moneymetals.com/news/2025/12/22/silver-gold-andpeppermint-004565">a “Christmas Eve Eve” episode</a> and warning up front that it will be shorter and more informal.
But even in holiday mode, he says he can’t ignore what’s happening in metals right now, because the move is getting hard to dismiss as “just another rally.”
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<h2>Gold Over $4,500 and Silver Above $70: Bubble, or Something Else?</h2>
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As he preps the show, Mike says gold is over $4,500 per ounce, and silver has nudged above $70. Gold slips slightly while he’s preparing, but he still frames it as another record-level moment.
The big question: are gold and silver surging because we’re in a speculative bubble, or because they’re <a href="https://www.moneymetals.com/news/2025/12/22/all-precious-metals-zooming-sharply-higher-what-the-heck-is-happening-004564">signaling something deeper</a>, possibly a monetary paradigm shift that most investors haven’t fully recognized yet?
<h2>The October Pullback Was Real, but It Wasn’t a Breakdown</h2>
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Mike acknowledges corrections are normal in a bull market, and points to the late October pullback as a recent example.
He notes that the late-October correction <a href="https://www.moneymetals.com/news/2025/12/15/falling-prices-are-bad-for-you-004552">trimmed about 9.8% off gold’s record</a> at the time. It was shallow in magnitude and short in duration, followed by a fast recovery into new highs.
That resilience, he argues, doesn’t prove there can’t be deeper corrections ahead. But it does raise the possibility that this isn’t classic bubble behavior either.
<h2>Why the 1970s Comparison Only Goes So Far</h2>
Some commentators compare today’s gold trajectory to the late 1970s, especially 1979, which preceded gold’s major decline after the 1980 peak.
Mike reminds listeners what made that era different. Paul Volcker drove interest rates up to about 20% to crush inflation, and after the 1979 peak, gold gave up nearly two-thirds of its price during the long bear market that followed.
His point is simple – this isn’t the early 1980s, and he doesn’t see a “Volcker” waiting in the wings. If anything, he expects the next Fed chair to be more inclined toward easy money than Jerome Powell.
<h2>A Reuters Columnist Says the Quiet Part Out Loud</h2>
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Mike anchors the “paradigm shift” argument to an article by Reuters columnist Edward Chancellor, calling it significant that this isn’t coming from fringe commentary.
He highlights Chancellor’s view that gold tends to <a href="https://www.moneymetals.com/news/2025/12/18/is-the-gold-market-a-bubble-or-is-something-else-going-on-004558">“reset” under changing monetary regimes</a>, citing shifts after the credit collapse of the 1920s, during the 1970s inflation, and again after the Fed cut rates in the early 2000s.
Mike then adds his own connective tissue: the pandemic-era response included roughly $5 trillion in quantitative easing, followed by tightening once the Fed conceded inflation wasn’t “transitory.”
<h2>Gold’s Unusual Behavior Since Late 2022</h2>
Conventional wisdom says gold should move inversely to real interest rates, meaning the stated rate minus inflation. Rising real yields should pressure gold because it’s non-yielding.
Mike says something changed in late 2022. Gold began advancing even as inflation pressures eased and inflation-adjusted bond yields rose. That’s atypical.
He cites the idea, also reflected in market commentary, that gold has evolved from a rates-sensitive trade into a fiscal risk hedge. That means it can rise with higher long-term rates when those rates represent sovereign stress.
<h2>Sanctions, Seized Assets, and the “Weaponization of the Dollar”</h2>
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Mike argues the divergence has a clear catalyst – the U.S. and allies' sanctioning of Russia after the invasion of Ukraine.
He focuses especially on the spring of 2024, when the Biden administration threatened to liquidate and sell about $300 billion in frozen Russian assets.
That, he says, broadcast a message to other countries. If reserve assets can be seized, it’s rational to shift toward something that can’t be confiscated, namely gold.
<h2>Central Banks Have Been Buying Over 1,000 Tons a Year</h2>
Mike emphasizes the scale. Central banks have reportedly <a href="https://www.moneymetals.com/news/2025/12/02/central-banks-ramped-up-gold-purchases-again-in-october-004517">bought over 1,000 tons of gold</a> for three straight years.
He contrasts that with the prior baseline. Between 2010 and 2021, central bank reserves increased by an average of about 473 tons annually.
Even if buying slowed at points during record prices, he argues it remains strategic and relatively price-insensitive, and he notes that the last two months have shown the strongest central bank buying of the year.
<h2>Why This Doesn’t Look Like a Mania</h2>
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Mike leans on Chancellor’s observation that <a href="https://www.moneymetals.com/news/2025/12/18/is-the-gold-market-a-bubble-or-is-something-else-going-on-004558">the usual mania signals aren’t obvious</a>.
He notes that speculators are distracted by cryptocurrencies and AI themes, while gold ETFs, despite record spot prices, are still about 10% below their 2020 pandemic peak.
That’s not the profile of everyone piling into gold at once, which is what you’d expect near the top of a classic bubble.
<h2>Debt, Deficits, and the Case for De-Dollarization</h2>
Mike says the U.S. fiscal picture is radically different from the late 1970s.
He cites Chancellor’s comparison. U.S. government debt was around 30% of GDP in the 1970s, but today it’s nearly four times higher. He also notes that over the past three years, the U.S. fiscal deficit has averaged roughly 6% of GDP, which he describes as about four times higher than the budget shortfall in 1979.
He adds a contemporary example that the federal government posted a $173.28 billion deficit last month, even with a major <a href="https://www.moneymetals.com/news/2025/12/18/federal-budget-deficit-narrowed-in-november-thanks-to-tariffs-but-large-spending-gap-persists-004556">increase in tariff revenue</a>. That undercuts the claim that tariffs will quickly close the fiscal gap.
<h2>“Inflation Is Here to Stay,” and Rate Cuts Are the Tell</h2>
Mike argues the Fed is determined to cut rates even in what he calls a persistent inflation environment, because the system can’t function <a href="https://www.moneymetals.com/news/2025/12/20/gold-standard-explained-7-fiat-myths-debunked-004561">under sustained higher rates</a> given the scale of debt.
He <a href="https://www.moneymetals.com/news/2025/12/21/november-cpi-data-was-basically-just-made-up-004562">dismisses the November CPI report</a> as misleading and insists inflation is not an accident. It’s policy. Even “controlled” inflation, he says, still means planned currency devaluation over time.
His bottom line: the fiscal, financial, and geopolitical uncertainties pushing gold higher aren’t going away.
<h2>The Portfolio Shift: From 60/40 to “60/20/20”</h2>
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Mike says the central bank shift hasn’t been matched by everyday investors, especially in the U.S., who often have little or no gold exposure.
He cites a claim attributed to Goldman Sachs – an “optimal” portfolio over the last 10 years would have held 50% of its assets in gold.
Then he points to what he calls a seismic shift in mainstream allocation thinking. Morgan Stanley CIO Michael Wilson is proposing a 20% allocation to gold, describing a “60/20/20” approach. That is <a href="https://www.moneymetals.com/news/2025/11/20/as-the-602020-portfolio-strategy-gains-traction-gold-becoming-a-core-allocation-004495">60% equities, 20% bonds, 20% gold</a>, with gold replacing half of the traditional bond sleeve as a more resilient inflation hedge.
Mike stresses the mechanical implication. If typical portfolios currently have under 1% in gold, even moving to 2% or 3% would be enormous incremental demand, let alone 20%, stacked on top of central bank accumulation.
<h2>Holiday Wrap: A Gift Fit for a King</h2>
Mike closes with a seasonal pivot. If you’re still shopping, he suggests gold and silver as gifts fit for a king, pointing listeners to <a href="http://moneymetals.com">MoneyMetals.com</a> gift ideas and encouraging them to call 1-800-800-1865.
He also describes a monthly accumulation <a href="https://www.moneymetals.com/programs/monthly-program">option starting at $100 a month</a>, plus alternatives like online chat or direct checkout, and mentions the ability to store metal in their facility.
He signs off thanking listeners, asking for shares and reviews, wishing everyone a Merry Christmas, and promising to return next week to wrap up the year.

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