I Called for $4,000 Gold. Now I See It Going (Much) Higher

by Frank Holmes of U.S. Global Investors, 9/30/25

It was a sleepy Sunday in the middle of summer. Most Americans were tuned in to Bonanza when President Richard Nixon interrupted the broadcast to announce that he was suspending the U.S. dollar’s convertibility into gold

At the time, the “Nixon Shock,” as it came to be known, may have looked like a simple adjustment to the global monetary order.

In reality, it was the day the U.S. traded fiscal discipline for a floating exchange rate.

Before 1971, every dollar in circulation was ultimately tied to something real and tangible. Thirty-five dollars could be exchanged for one ounce of gold. After 1971, “printed paper currency really had no value of its own. It was artificial, and anything that’s artificial is temporary.”

That’s from 1971: How All of America’s Problems Can Be Traced to a Singular Day in History, a new book on the subject that I strongly recommend readers pick up. Its authors, Paul Stone and Dave Erickson, argue that the unraveling of the dollar’s link to gold is at the root of America’s inflation and exploding debt, not to mention “unfettered moral decay, racism, rampant drugs, the destruction of the family, war and famine,” and more.

The Law of Intended Consequences

You’d be forgiven for challenging some of Stone and Erickson’s conclusions. There’s one thing, though, that we should all be able to agree on: Once the dollar was unpegged from gold, governments began to spend without limit. Politicians no longer had to make hard choices. Instead of cutting spending or raising taxes, they could simply run deficits and let the Federal Reserve finance the shortfall.

U.S. Deficit

That may have been the point all along! Stone and Erickson write that Nixon and his advisors believed the gold standard was hamstringing U.S. power, and that by severing ties with gold, they could outspend the Soviet Union, dominate the world and, I quote, “control everybody.”

Fast forward 55 years, and U.S. government debt now stands at a jaw-dropping $37.5 trillion, equal to roughly 124% of GDP. Globally, debt has ballooned to $324 trillion, more than 235% of world GDP, according to the Institute of International Finance (IFF). For comparison’s sake, when Nixon closed the gold window, U.S. debt was around $400 billion, not even 40% of GDP.

Meaning that in just over five decades, we’ve gone from a system of fiscal restraint to a free-for-all.

Real Money Is Finite

For years (decades?), I’ve argued that gold is the ultimate hedge against runaway debt and monetary mismanagement. Back in 2020, I went on CNBC Asia and called for $4,000 gold, a target that’s now within reach.

This year, the metal has surged past $3,700 an ounce, hitting all-time highs as the dollar has suffered its steepest decline in two decades. Traders are now pricing in multiple rate cuts from the Fed.

Meanwhile, central banks continue to trip over themselves to add bullion to their reserves, purchasing a net 200 metric tons in the first seven months of the year. That represents a modest 4% increase over the amount purchased during the same period the previous year, according to World Gold Council (WGC) data. Bank governors understand that fiat money can be printed at will, but real money—gold—is finite. You can’t print it, and you can’t sanction it.

I believe this is why gold is now the second-largest reserve asset in the world, behind only the dollar. But unlike the dollar, gold has no counterparty risk.

Don’t Sleep on the Other Precious Metals

It’s not just gold. Silver, platinum and palladium have also been on a tear this year. Silver is up more than 50%, platinum 65%, palladium 35%. Barron’s recently noted that palladium, still trading at a steep discount to gold and platinum, could be in the early stages of another run higher, with Bloomberg’s Mike McGlone forecasting a move back toward its all-time high above $3,400.

precious metals