Precious Metals Rally as Fed Signals Rate Cuts and Dollar Weakens -

The latest episode of the Money Metals Midweek Memo, hosted by Mike Maharrey, explored why gold and silver are surging to historic highs, how inflationary pressures are building, and why central banks are moving away from the U.S. dollar. 
Maharrey also examined investor psychology, media bias, and even sensational claims about a massive gold discovery in Uganda.
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<h2>Gold Hits Record Highs, Silver Breaks Through Resistance</h2>
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Gold made history this week, closing above $3,500 per ounce for the first time and <a href="https://www.moneymetals.com/gold-price">reaching $3,562 in early Wednesday trading</a>. Silver also rallied strongly, topping $41.15 per ounce, its highest level in 14 years. Analysts now see a realistic path toward $50 silver before year-end, especially since the $40 resistance level has been broken.
The rally was sparked by Federal Reserve Chairman Jerome Powell’s dovish speech at Jackson Hole, which hinted at a likely September rate cut. 
While Wall Street framed this as bullish for metals due to lower opportunity costs, Maharrey emphasized that rate cuts are inherently inflationary—adding more monetary fuel to an economy already burdened by years of loose policy and money-supply growth.
<h2>Why Safe Havens Are Back in Demand</h2>
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Beyond Fed policy, other forces are driving metals higher. A federal judge recently ruled much of former President Donald Trump’s tariffs illegal, injecting uncertainty into the economy. Instead of rushing to Treasuries, investors bought gold and silver. Treasury yields actually rose, signaling that U.S. debt is <a href="https://www.moneymetals.com/news/2025/08/28/the-us-debt-bubble-why-it-matters-and-how-to-protect-yourself-004298">losing its traditional safe-haven appeal</a>.
Analysts such as Jim Grant argue this is the beginning of a secular bear market in bonds after decades of artificially low rates. Maharrey pointed out that near-zero interest rates were the historical anomaly, not today’s 4–5% levels.
Seasonal patterns are also in play. India’s wedding and festival season has <a href="https://www.moneymetals.com/news/2025/09/02/indian-officials-consider-pension-rule-changes-that-could-further-boost-gold-etf-investment-004307">historically boosted gold demand</a> in September and October, while U.S. stock markets often weaken in the fall. This adds another layer of support for metals.
<h2>Inflation Already Baked In</h2>
Maharrey stressed that inflationary forces were in place long before Powell’s speech. 
The money supply has been expanding for more than a year, and rising prices—whether consumer or asset-based—are symptoms of this monetary inflation. 
He argued that adding further rate cuts will amount to “inflation on top of inflation,” making gold and silver vital hedges for investors looking to protect themselves against fiat currency devaluation.
<h2>U.S. Investors Sitting Out the Rally</h2>
Despite gold and silver being among the best-performing assets of 2024, U.S. investors have largely remained on the sidelines. 
According to the Silver Institute, U.S. retail silver investment is down 30 percent year-over-year, even though silver itself is up more than 30 percent. By contrast, Asia—especially India—and Europe are fueling demand.
Maharrey attributed this to cultural differences and media neglect.
In places like India, gold is deeply ingrained in tradition and wealth preservation. 
In the U.S., mainstream outlets such as CNBC and Fox Business either ignore gold or frame it only in comparison to Bitcoin. He noted that during <a href="https://www.moneymetals.com/news/2025/09/03/gold-silver-officially-confirm-their-breakouts-004311">gold’s record-breaking surge</a>, CNBC’s social media feed mentioned the metal only once—and even then, in the context of Bitcoin.
This neglect, he argued, may be more than accidental. U.S. financial culture and government policies are built on sustaining confidence in the fiat system. Downplaying gold serves to reinforce the dollar’s role, even as its purchasing power erodes.
<h2>Central Banks Favor Gold Over U.S. Treasuries</h2>
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One of the most significant developments is that for the first time since 1996, central banks now hold more gold than U.S. Treasuries.
<ul>
<li style="font-weight: 400;" aria-level="1">Central bank gold buying has exceeded 1,000 tons annually for three consecutive years—more than double the 2010–2021 average of 473 tons. </li>
<li style="font-weight: 400;" aria-level="1">The dollar’s share of global reserves has dropped to 57.8 percent, its lowest since 1994, down from 72 percent in 2002. </li>
<li style="font-weight: 400;" aria-level="1">U.S. national debt recently surpassed $37 trillion, raising concerns about fiscal sustainability worldwide. </li>
</ul>
Analyst <a href="https://x.com/TaviCosta/status/1960908250980999436" rel="noopener noreferrer" target="_blank">Tavi Costa of Crescat Capital</a> called this shift “the beginning of the most significant global rebalancing in recent history.” 
Maharrey agreed, stressing that the <a href="https://www.moneymetals.com/news/2025/08/31/massive-surge-in-golds-share-of-international-q1-2025-004306">dollar’s privileged reserve status</a> has enabled decades of borrowing and spending that would be impossible otherwise. Its gradual erosion is like “water wearing away rock”—slow, but eventually transformative.
He likened U.S. fiscal policy to “a drunk uncle with a gambling problem,” noting that foreign creditors are increasingly hesitant to keep funding America’s deficits. 
Even modest de-dollarization could <a href="https://www.moneymetals.com/news/2025/08/28/for-first-time-in-nearly-30-years-foreign-central-banks-hold-more-gold-than-us-treasuries-004301">push dollars back into the U.S. economy</a>, creating a glut that intensifies inflationary pressures.
<h2>The Ugandan “Gold Discovery”</h2>
Maharrey also addressed a sensational story making the rounds on social media: <a href="https://www.moneymetals.com/news/2025/08/29/is-there-really-a-12-trillion-gold-deposit-in-uganda-004303">reports of a Ugandan gold deposit worth $12 trillion</a>. The government claimed the find contained 31 million tons of ore yielding 320,000 tons of refined gold—56 percent more than all gold ever mined in world history.
Experts quickly debunked the claim. 
The ore grade would need to average more than 10,000 grams per ton, compared to the best modern mines averaging under 30 grams per ton. 
Maharrey suggested the story may have been exaggerated to attract foreign investment, especially since Uganda’s 2022 mining law gives the government a mandatory 15 percent stake in all mining operations.
He linked the story to a broader pattern of “gold abundance” narratives—asteroids supposedly full of gold, or scientists “making” gold in labs—that often surface to cast doubt on gold’s scarcity and value. 
In reality, global mine output has flatlined for a decade, and some analysts believe we may be approaching “peak gold.”
<h2>Gold and Silver as Real Money</h2>
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Maharrey concluded by emphasizing that fiat currencies are designed to lose value over time. Even the Fed’s two percent inflation target represents purposeful devaluation. 
Gold and silver, by contrast, are <a href="https://www.moneymetals.com/news/2025/08/22/evidence-shows-silver-and-gold-were-used-much-earlier-than-originally-thought-004285">real money with 5,000 years of history</a> backing their role as wealth preservers. 
He reminded listeners that investors can even hold physical metals in self-directed IRAs, providing long-term protection against fiat erosion in retirement savings.
<h2>Conclusion</h2>
Maharrey closed by encouraging listeners to take action, whether through direct purchases or self-directed IRAs, warning that those who wait too long may miss a generational opportunity as fiat currencies continue their slow but steady decline.

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