Gold prices could hit a record high if the US revalues reserves
Tavi Costa - macro strategist, partner of Crescat Capital, commented at the 2025 PDAC Conference in Toronto that the rare convergence of gold demand from the East and West is pushing gold prices up, while silver is expected to have a strong increase to return to an all-time high.
He believes that history may be repeating itself and a re-evaluation of gold is entirely possible. According to Costa, if we consider historical data, gold prices could increase to unprecedented levels if the US re-evaluates its gold reserves against the amount of government bonds in circulation.
Currently, the amount of US government bonds in circulation is about 36 trillion USD, while the value of the country's gold reserves only accounts for about 2% of that figure. For comparison, in the 1970s, this rate was 17%, but in the 1940s, this number was up to 40%.
"If the US returns this rate to 17%, gold prices could reach $25,000/ounce. If it returns to 40%, gold could reach 55,000 USD/ounce" - Costa analyzed.
He stressed that these are not price targets, but numbers that reflect the possibility that gold could be revalued based on economic factors.
Costa also pointed out a noteworthy point: central banks are accumulating gold at the highest rate in 50 years, while US gold reserves are at their lowest level in 90 years.
This could put pressure on the US to reconsider its policy on gold, especially in the context of the USD being over Valued.
USD is at peak, may enter a weakening cycle
One of the factors that can strongly affect gold prices is the fluctuations of the USD. According to Costa, the greenback is currently overvalued against other currencies and is likely to peak.
"Looking back at history, every time the US dollar reaches its peak, a cycle of weakness will take place, leading to major changes in the financial market. Investors need to ask: if the USD weakens, what should I do?" - Costa commented.
He compared the current situation to periods when the US dollar depreciated strongly in the past, such as the Plaza deal in 1985 or the financial crisis of the 1930s. If this scenario repeats, the weakening of the USD could pave the way for many other assets to break out, especially emerging markets and natural resources.
Silver prepares to break out to an all-time high
Not only gold, silver is also facing the opportunity to increase prices strongly. Costa believes that the silver market is forming a notable uptrend and could soon return to an all-time high.
"We could see silver increase sharply and close precious at the highest level in many years. If that happens, silver could hit $40 an ounce," Costa predicted.
He also pointed out an important technical signal: the "cup and handle" model - one of the models that signals a price breakthrough in technical analysis.
In addition, silver supply is tightening, while demand is increasing, especially from the industrial and investment sectors. This is an important factor that can push up silver prices in the coming time.
