SPEAKER_00 0:00

The views expressed in this video are those of the panelists and do not necessarily reflect the views of U.S. Money Reserve.

SPEAKER_01 0:10

Welcome to America's Gold Authority Podcast. My name is Mike Barnes. Gold hit an all-time high back in January, but since then dropped up by as much as 30%. Experts say it's coming back, though. Is it time to buy the dip? Let's talk to a noted expert and find out. Philip Deal, the 35th Director of the United States Mint, President of U.S. Money Reserve, and Philip, I know some inside information that you are very sure gold is coming back.

SPEAKER_02 0:37

Yeah, I'm very confident about that, and it's not just me. I uh I follow a lot of the top gold uh analysts, the banking analysts and the independent analysts. Uh I don't really follow people in the gold industry. I uh I pay attention to what they have to say, but my interest is really in what the independent expert analysts are saying and what their expectations are. And uh I like to compare uh those expectations and the performance of gold over the last several decades versus the SP 500, because one of the things that uh I really like to do is I like to bust myths. Uh, and there are so many myths around gold, and I reject most of them. Uh I just uh I have too much experience at the United States Mint in the U.S. Treasury dealing with the Federal Reserve. That doesn't mean I'm not a critic. I am definitely a critic of a lot of the policies in the past and especially today. Uh and I have inside relationships with the Federal Reserve and the Treasury Department, and I've watched them make decisions. So, you know, I'm not a neophyte about this, but um I I think so many of the stories around gold that uh that buyers, stock investors, and others have been sold, have been not only wrong, but they've been wrong for a really long time, as much as 20 years in some cases, about the comparative performance of gold versus uh stocks and bonds. So that's one of the things that I really like to do. And I'm a person who is motivated and really driven by empirical evidence. I want to see the data, and lots of times I want to run the data myself. You have to rely on people who really have an independent view. They especially, you don't want them to have interest, certainly not direct interests, in what they are advising that so that they may profit from it. And so these the facts that I'm going to be giving today and really in any of these podcasts are based on hard research and what I am convinced are facts. There are no guarantees, of course, about any advice I give. It's just like anybody else, anybody else who tells you they're certain that such and such is going to happen, and you should uh invest based on their certainty, you need to turn around and walk away. There is no such thing as certainty in this business. So, but there is confidence, and I have confidence in some of the numbers that I'm gonna present. And the reason is because they come from a broad uh cross-section of opinions and analysts who are these independent analysts. And what I'm gonna do is I'm gonna talk about how uh how those analysts see gold over the next six months, five months through the end of the year, and compare that to the SP 500, what the independent analysts say they expect about stocks. And then we're gonna kind of zoom back and look longer term, and that makes sense for our buyers because they're not trading gold, they're they're buying for the long term. So I want to look at the long term and see how uh see what those same analysts expect uh over the long term.

SPEAKER_01 4:32

Who knew that Philip Deal was a myth buster? But he's gonna bust those myths today. And we have those graphs. We're gonna start off with the the short-term projection for gold. And I think that this is amazing, not only the difference between some of the experts, but it's all very positive, Philip.

SPEAKER_02 4:48

Yes, what we're gonna look at here is a graph that has uh forecasts through the end of this year from uh eight of the top uh analysts. Uh all of these happen to be with banks uh that have forecasts that actually name specific numbers. There are other forecasters, but they don't name specific targets. And in the next graph, we'll get it to a wider range of uh not just banks. But these eight banks and their analysts have come up with this range of targets for the end of the year, and they range from $4,500 an ounce. Remember now, gold prices when we did this chart were uh just over $4,000. So they're forecasting from a low of $4,500 to a high of uh $6,200. And so we're talking about a huge increase that they are expecting by the end of the year. This ranges from about an 11% increase to about a 53% increase. That's not an annual increase, that's over the course of five months. Now, these analysts and other analysts with the same banks, they're expecting stock prices to increase by the end of the year from the current level only 7.7%. So we've got stocks at 7.7% and gold estimated by these eight banks between 11.4% and around 53%. So gold has this huge advantage over the short term. And the reason really why that's relevant to our clients is that even though our clients don't buy gold, they're not buying gold now and expecting to sell it by the end of the year. But what they are doing is they typically are holding stocks in their portfolio, and stocks have performed so well recently that they hate to give up the chance of those returns in the future. And what this is telling us is that by selling stocks and buying gold, you are not giving up gains. In fact, you are adding gains to your portfolio. And that's just so important. That's the first myth I want to bust is that by selling stocks at this stage of the game, uh, that you're giving up returns by buying gold. And it's simply not the case. Also, we know by looking back over 20 years, when you have a balanced portfolio that includes 60% stocks, 20% bonds, and 20% gold, you perform better, much better, over the course of 20 years. This is not a short period of time, than if you held the traditional portfolio of 60% stocks and 40% bonds. And the reason why 20 years is important is that we've seen virtually every economic condition uh here in the United States over those 20 years. We've seen a global financial crisis, we've seen the Great Recession, we also saw a short recession around the pandemic, we saw a gold bull market during the Great Recession, and then a bear market for gold. Uh, and then, of course, we saw the recent inflationary period, and we've seen this incredible run-up in gold prices and especially stock prices because of the uh of the AI investments. Gold has uh, as a part of a balanced portfolio, has outperformed the stock bond portfolios for 20 years. And it's only been recently where advisors, financial advisors have begun to recognize that fact to investors, and you really have to ask the question why it took them so long to finally begin telling their investors that they're better off with a substantial allocation to gold, 20%. And the the average allocation to gold in the U.S. is maybe one and a half to two percent. So people are way below underinvested in in gold uh than what these numbers and what the Chief Finan uh Chief Investment Officer Morgan Stanley have recently acknowledged.

SPEAKER_01 9:35

Those numbers are amazing when you look at that graph, especially when you consider the end of the year is less than five months away. But there may be a doubting Thomas out there. Philip, what do you tell them about what needs to happen for gold to increase by that much?

SPEAKER_02 9:50

First of all, as you noted at the beginning of the program, gold has already been uh almost already reached 5,600. And it ran up so fast over the course of two years or so up uh to January when it reached its peak at that level, that it wasn't sustainable uh in the period of time, really from November of last year to the peak in January. It just shot up and it was inevitable there was going to be a correction during that period of time. If you look at what happened to gold prices between November uh 2023 and November 2025, so two years, gold prices doubled. It was an incredible performance. Then between November of last year and January, late January, when we uh uh reached the peak, gold had tripled uh by that time. So that acceleration from November to January just wasn't it wasn't sustainable. So one of the things I tell people is if you look back and you kick yourself because you didn't buy gold during that big run-up and uh or you didn't buy more gold, uh, this is your second chance because prices now are back to where they were back in November of last year. And I'm I'm persuaded now that we've uh now that we've had this correction, all the really all the drivers are in place for for gold uh to rally. There are a number of things that are gonna spark a rally, but the thing that is gonna put a jet fuel in gold prices is gonna be uh the sign that uh the Federal Reserve, certainly the Federal Reserve looks like it might cut rates, but right now the expectation is that the Federal Reserve will raise rates between now and the end of the year. For example, I just saw this morning that the uh head of Bank of America is expecting three rate increases, a full 75 basis point by the end of this year. If the market expectation for uh rate cuts begins to come back down, I think that in itself could rally gold substantially. Interest rates are uh are really what are holding gold back. That's not a new story. It's a story as old a time as time, and it's been very much the case really since oh probably December of 2022 when this when this rally really began to take off. Uh as the ebb and flow of expectations about Federal Reserve decisions about interest rates have uh changed, then gold prices have have moved. But despite that uncertainty, like I said, gold doubled in price uh by last November. And I think as these numbers show, the broad opinion is that gold is headed back up this year. But for our clients, what's really important because they buy and hold, is what is the uh what is the scenario for gold over a longer period of time?

SPEAKER_01 13:25

Let's look at a long term, and not that long. We're not going to talk about 20 years like you've been talking before, just to 2030, which surprisingly is only 41 months away, and you see good things for gold in this next graph.

SPEAKER_02 13:38

Yeah, I I do, and I would go longer out uh in an analysis if I could, but uh these analysts don't go beyond uh 2030. So I I can't go out and look at what the forecasts are uh to 3035 or you know 20 years out, and they weren't be worth anything. Forecasts that long out just don't mean much. But what you can do is do qualitative analysis, and I'll do some of that, but uh quantitative analysis is is silly beyond that period of time. Four years is long enough. Um, so looking at this graph, we see that we again have eight firms that are forecasting incredible increases in gold prices. We're looking at $10,000 an ounce in four years. And you can really see the percentage increases of the prices very clear on this graph of these eight uh banks and analysts, uh, all of whom I respect some more than others. I'm not gonna name names, but all of them have tremendous credibility. And this graph shows the stark difference between the forecasts for gold, which are indicated in gold bars, and the forecasts for the S P 500, which are indicated in blue bars. And the gold just you know overwhelms this graph. So it shows the confidence that these forecasters have in the long-term performance of gold over the next four or four and a half years. These forecasts often go through the end of 2030. And the average, if memory serves correctly, is that the expectations for gold prices are an increase of about 108%. And the SP, the expectations for this SP are only about 64%. So expectations for gold are about 50% better uh as a return over that period of time. Now, why is that? Well, one reason is because stocks have been so strong over the last five years that uh the historical record shows that there's what's called a reversion to the main. Uh, stocks are not expected to perform as well uh in the future as they have in the past, whereas gold is expected to be on a long-term bull market. Part of the reason why expectations for gold are so strong is the factors that are at work in the world today. Uh, the threat of inflation, especially the threat of stagnation, uh stagflation. Stagflation is a terrible economic condition in which you have economic weakness, often a recession, at the same time that you have inflation. It really puts the Federal Reserve in a bind about which to fight. And um, it's very hard to break. And that's exactly where we're headed right now. We have a Federal Reserve that just um just was it just last week made a decision not to increase interest rates when I think it was incredibly important to increase rates at that time in order to uh in order to give markets confidence that this uh reserve, Federal Reserve was going to fight uh fight inflation. And now there's growing doubt about the willingness of uh the Federal Reserve to do that. Uh and so they're gonna have another opportunity in September, mid-September. Man, if they miss that opportunity, it uh it's really going to set back the credibility of the Federal Reserve in its fight against inflation. Also, we're seeing an a weakening in the economy. Uh it's not weak at this point, but it's certainly headed that way. GDP has been revised downward, employment has dropped. Uh, I I saw a number uh just this morning that only uh 44,000 jobs were created in uh last month. And uh I remember it wasn't that long ago where 220,000 jobs, 250,000 jobs um would be created. So, you know, the economy's getting weaker, and so we're in danger of entering a stagflationary period, which uh uh traditionally has been uh a case where gold has responded very well because people are uncertain. And then we have the situation in the global conflicts in which things are getting worse in the Middle East, it's getting worse in Ukraine and Russia. Uh the attacks are becoming more violent and spreading over the course of those wars, and the US is running short on its key armaments. This is just an incredible situation and incredibly dangerous because it's those armaments that uh deter aggression by the Chinese toward uh Taiwan and the South China Sea, and also deter the Russians and the Iranians uh from uh aggression. So there is increasing geopolitical uncertainty, and not just uncertainty, but danger in the world. And that's been one of the factors that has driven gold prices for time immemorial, really. So I think that's one of the reasons, along with the incredibly high uh debt that uh not just the United States but governments all over the world are running. This broad consensus about the forces that are driving gold prices are reflected in this graph uh that shows uh far outperformance by gold over the next four years compared to stocks. So again, this goes back to my myth busting that clients give up returns by uh by selling stocks and buying gold. Now, lots of times clients don't have to make that choice, they don't have to sell stocks, they they they are deciding, you know, with a clean slate whether or not to buy gold. So the in that situation the decision's a lot easier. But if you've been writing the stock market and been doing really well over the last several years, uh I think it's very important to know when to take your gains and uh and move them elsewhere. And I think gold is a crucial place to consider for that purpose.

SPEAKER_01 20:55

Philip, you make some great points. And someone like me who has gold in their IRA portfolio, that is good news on the short term and on the long term. But during that long diatribe you had, you had the R-word in there once. Recession. And that scares a lot of people. Is it going to be okay if we own gold and a recession hits?

SPEAKER_02 21:15

Yeah, absolutely. Well, we have a strong record on that. We've had three recessions over the last uh 26 years, 25 years. Uh and gold has really surged in price while uh stock prices had plummeted. And this next graph here shows that. You see, gold has has increased in value uh every one in every one of those recessions. Now, the first one is the dot com recession that followed the dot com crash. Then there's the Great Recession uh that you see that we all know. Uh, and then there was the short recession that was part of the much Longer pandemic era. So during all three times, you can see that gold remained positive, and most cases really surged very strongly while stock prices plunged. And this is a record we could go back another 20 years or more. And every major crisis that we look at has this same pattern where gold strongly outperformed stocks. And uh and in the case of the uh Great Recession, it took stocks many, many years before they returned on a nominal basis, even, to uh where they had been before the recession. Whereas gold, while it went up and then came back down, it stayed well above where it had been before the Great Recession.

SPEAKER_01 23:00

I love the graphs that you've had today. I'm going to finish with a simple question and answer because I know a lot of people watching are probably thinking this as well. Should I do something with my stocks and bonds right now and buy gold as I prepare for the future?

SPEAKER_02 23:14

Well, yes, I think you absolutely ought to be looking at your portfolio, especially if you have the old traditional 60-40, 60% stocks, 40% bond portfolio. And you ought to be asking your advisor about what are the prospects for bonds in particular. The market is pessimistic to very pessimistic about uh the future of bonds because there is so much enormous government debt, not just US but around the world, and now AI debt that's being issued. And when all that debt hits the market, then uh then it really crushes bond prices. So uh, and bonds in particular, you ought to be talking about those. Uh, and you ought to be definitely looking at a shift out of bonds from 20% to 20% gold. So it's a 60-2020 uh portfolio in that case. And the record of that, as I said, is over 20 years. It may go back further than that. I didn't look. Uh, but over the course of 20 years, that portfolio has uh has well outperformed the 6040 portfolio at lower risk. That's one of the things that's crucial. It is given uh investors more security than the 6040. I think they also should be looking at selling stocks, and the numbers here that I presented are absolutely clear that the prospects for gold are far better short-term and long term than for stocks and at less risk, I believe. So the answer to that is yes. Now, here's a caveat. You often find financial advisors who are behind the times on this question. And I'm gonna raise a couple of reasons why. Number one, they're not trained to sell gold. They are, they all go through training, you know, they represent one company or another. Uh, I have a financial advisor like that. Uh and so, uh, and they're just not trained in gold. They don't know these facts. You could easily walk in the door and educate them about gold if you do a little bit of homework. They don't know it. And and if you try to bust myths, they're gonna tell you it's not true. Yeah, you need to really come in armed. And I hope I have uh armed you some to do that. Now, the other reason, and this sounds cynical, when you take 20% of a portfolio and you put it aside long-term for gold, that's 20% of a portfolio that your financial advisor doesn't re you know, doesn't get fees on. It's it just sits there. And of course, uh moving funds around is uh is how they uh make a living. So they're not enthusiastic about seeing somebody with a with a portfolio as significant money with them uh setting 20% aside uh in gold. So those are just things to bear in mind as you talk to your financial advisor, and and I really recommend that that people call, if you want to get educated, they could call U.S. Money Reserve and get educated, or go to our website. Our website is chock full of educational material and more so than any other site you'll see. And uh so I I think there's lots of opportunity for educating yourself there.

SPEAKER_01 27:08

Philip Deal, you have busted a lot of myths today. Thanks so much for all of your expertise. Thank you, Mike. I think we've learned today that short term, even by the end of the year, things look good for gold. Long term, things look good for gold. And even if a recession hits, things are gonna be okay. That's all the time we have for today's episode. On behalf of all of us here in the U.S. Money Reserve Studios, thank you for tuning in. If you have any questions or you want to learn more about today's episode, you can call the number in our episode description and speak with one of our friendly account executives. They're going to be more than happy to answer any questions you may have about precious metals and the strategic role they can play in achieving a secure and comfortable financial future. I'm Mike Barnes. We will see you next time on America's Gold Authority Podcast.

SPEAKER_00 27:57

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