There’s something very curious going on in gold — and it says something about where the yellow metal might be headed. An easy way to play the coming move is through the SPDR Gold Shares ETF (GLD), writes Sean Brodrick, editor at Weiss Ratings Daily.
The first thing you need to know is that seasonally speaking, gold shouldn’t be rallying at all. This is the weak time of the year for gold, as you can see from this chart…
Gold usually doesn’t start making significant gains until April, if then. To be sure, this is an average, and every year is different. But this rally at this time of year is kind of a shocker!
So, what makes this year different? “Chaos as policy.”
First, I’m pretty sure President Trump and his team have set out to “break” the US government. That’s what Elon Musk’s Department of Government Efficiency, or DOGE, is all about. Their plan is to rebuild and restructure the government, only leaner. Trump says we’ll be much better off when it’s all said and done. In the short term, it’s chaos.
Meanwhile, the White House’s on-again, off-again approach to tariffs with our major trading partners is so chaotic, it can barely be called a policy. Chaos scares investors. And that is one of the major forces driving gold higher.
Second, this raises the odds of the Federal Reserve cutting benchmark interest rates this year. As recently as Feb. 12, the market was pricing in only one rate cut. While Fed Chair Powell said recently that the Fed wants to take it slow on rate cuts, the market is now pricing in three cuts in 2025, starting in June. Combined with the rate cuts that began last year, America is in a rate-cutting cycle.
Now, we don’t know exactly how much gold will run this time around. But odds are it’s going a LOT higher. If the past is a guide, gold will more than double. GLD has a Weiss Rating of “B-” and an expense ratio of just 0.4%, which is pretty cheap.
Recommended Action: Buy GLD
