The Decibel - What record gold and silver prices tell us about the stock market

Episode Date: October 23, 2025

The prices of gold and silver have been climbing quickly this fall, with both precious metals setting a new high for per-ounce price. Why is this happening?Columnist and reporter Tim Kiladze explains how central banks, Trump and even AI factor into it.Questions? Comments? Ideas? Email us at [e-mail] Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Gold prices have recently surged to historic highs. On October 22nd, gold was selling for over $4,000 U.S. per ounce. That's up over 50% since the start of the year. And gold's less flashy cousin silver is also on a tear. It's grown in value by almost 70% this year. Prices for precious metals like these can have these roller coaster cycles. Even right now, while gold has been really hot, there was a big sell-off on Tuesday. And while we've seen these up and down cycles before, what's happening this time seems different.

What we're really seeing now, I liken to neemstock pandemonium during the pandemic, where all of a sudden something just takes on a life of its own. Gold isn't usually like that, same thing with silver, but they're just transforming into something different. And it's very strange. Tim Kallad is a columnist and reporter for the Globe's report on business and globe investor. He's going to explain what's happening with gold and silver prices and how central banks, Trump, and even AI, factor into it in ways you might not have expected. I'm Cheryl Sutherland, and this is the decibel from the Globe and Mail. Hi, Tim. Great to have it back on the show.

Hey there. Okay, so Tim, I love to have you on when there are weird things happening in the market. Weird things are happening in the market. So thanks for coming on the show. Happy to be here. Happy to try to break it down. I love when you break it down. So can we start by talking about why we're seeing this growth in gold and silver prices?

Like, let's start with gold. What's behind the rise in this particular moment? So there's a few things going on, and it started with a very legitimate form of demand or interest. Effectively, of the last few years, there's been more central bank demand for gold. And it gets kind of technical and you probably don't need to get into it too much. But all you need to know is that central banks around the world tend to hold gold as a form of kind of like a safety asset, something that they know will not or shouldn't deplete in value quickly over time. Can you get into why is it a safety asset? A large part of it, honestly, is historical.

And it's a very hard thing to create mine out of the ground. And there's only so many reserves around the world of gold. So the idea was that it's kind of this, like, fixed asset that you can't create out of nowhere in the same way that you can with, say, paper money or digital money. So it had this kind of long-term store of value is the term that people use. But gold is kind of funny because it's never really had that many real world uses. You contrast that with something like copper, which is actually known as Dr. Copper because it's a bit of an indicator of where the global economy is going at times. coppers are used in so much. You think about copper wiring

and it's now used in things like EV batteries and things of that sort. So it's just used in a lot. So if there was a lot of demand for copper, it tended to mean that people were buying it to create things. And that was good for the economy. Gold never really traded like that.

And the same thing was silver. So what you're saying is that central banks are driving up the demand in gold and that's affecting the price? That's what started it. And so if you look at kind of who's actually been buying, it's been Poland, China, a few others.

it's kind of more a lot of non-Western countries. And part of that is because, you know, in the West, we tend to hold a lot of U.S. dollars as kind of like reserves in our central bank. They're kind of worried about the U.S. positioning in the world. And so maybe they're moving away from it a little bit, buying more gold. Interesting. So they're going from, instead of using the U.S. dollar, they're going to gold instead. Yeah, that's the best way to kind of think about it at a high level.

So that was real, like, legit demand is how I'd put it. but then it has just morphed to something that's kind of crazy. Like I've been saying, it's like this meme stock effect. And more and more people are paying attention to it now. And the point that I think we're at or how I make sense of it is that, you know, historically you knew something was in a bit of a bubble or in some crazy land because you'd get into a taxi and a taxi driver would tell you about like some stock they bought. It happened to me a few years back during the pandemic.

I had a painter in at my house and they were talking about some meme corner. they bought. And I was like, no, no, no, no, don't touch that. If you want to, like, play with Bitcoin or something, fine, but don't touch that. And that's kind of where we are right now with gold. People just want to know and then FOMO sets in. Interesting. Yeah. And nowadays, you see retail investors kind of like average people can really drive something higher because you can now buy gold through an ETF, which is like a low cost fund. You don't have to, like, buy the physical gold anymore and start an vault, et cetera. Yeah, very heavy. So interesting, you're talking about bubble territory here, and I want to get into that in a bit.

But let's talk about kind of the timing about how this gold is soaring right now. So when did the price start to rise? I'm thinking about this. Is it around after when Trump won or is it after his, like, quote-unquote liberation day? Like, set the timing for me. It's funny how this narrative is formed because the Trump effect is real. And that is partly why people are moving away from the U.S. dollar. But gold's rally really started, I would argue, in the start of 2024.

And so since then, gold's basically doubled. and price is up 100%. And year to date, it is now up around 50%. And is that an unusual thing? Because gold does go up and down, but is that something that's like really unusual? Yeah. Like to have it happen that quickly. And the weirdest thing is no one really knows why now. Like there is this chaos going on. That's definitely a huge part of it. But, you know, if you look at the value of the U.S. dollar relative to kind of other global currencies, it's dropped, but it's down, say, 15% this year, whereas gold is up like 50%. So it's not this equal. kind of reaction. And at the same time, in other periods of strife or however you want to think

about it, gold went up, but often not this quickly. And in periods when gold should have gone up, for instance, during the 2010s, so when literally the U.S. was printing trillions of dollars to kind of stabilize the global financial system, that would be the time for gold to shine. And it shined for like two years and then it crashed. So that's what gets into this weird situation of like, well, what is gold really good for? Why do people actually really own it? And I think right now, my takeaway is that no one really cares. It's like everyone is seeing everyone else making money off it. And it's like, you're getting rich. Well, I'm going to get rich, too. Okay. The fomo. So we do tend to see gold rise in times of uncertainty, which you've

talked about here. Why has gold become this kind of barometer of geopolitical and global economic uncertainty? A lot of that's historical reasons. gold kind of became what the U.S. dollar was backed by. And it didn't kind of become. It actually was. There was actual like a fixed ratio. And the idea was that the U.S. couldn't print too much money and get kind of untethered from this reserve, which was real physical stuff.

In the 70s, that all changed for various reasons. The U.S. just couldn't make that exchange rate work anymore, basically. And so they broke the gold currency reserve rules. And the thinking has always been as, you know, governments get wild and print too much money and, you know, get reckless, that gold will kind of shine in terms of something that people can still trust. But there's so much uncertainty right now. China's economy is hurting. And so no one really knows who's going to take leadership on the global stage. And so that is partly what has fueled gold rally again.

It's like, ah, it's something we can trust. It's something that has endured centuries. So interesting how gold is like always looking at it's like this trustworthy thing that people go back to. Well, Central Banks that go back to you. Yeah. And one thing I would add to that I think is important is that, you know, in business, we have this group of people called gold bugs. Yes. Which are people that have always basically said gold is the answer. You know, like something's gone wrong in the world, by gold. It's like a religion for them. And for a long time, you get kind of sick of hearing it because it just has become the answer for everything. And they've been wrong a lot, too. that's a key point. Lately, though, given all the uncertainty of the world,

their thesis, their big motto and mantra, whatever, is playing out. And so the gold bugs are winning. For now, right? I want to come back to the central banks for a second. Is the Bank of Canada, are they also buying up gold? So historically, Bank of Canada had a lot of gold reserves. They've actually been selling those down over time. And it kind of happened quite rapidly after the U.S. changed its rules around

and having the U.S. dollar backed by gold. We kind of replaced that reserve of gold with the U.S. dollar. And so potentially it could actually become a bit of a problem, longer term, if the U.S. loses its influence. At the same time, the U.S. is so entrenched in the global financial system that it would take a lot to make that change. It's kind of like moving the Titanic around in the ocean. You know, like you can't change these things on a dime. Okay. Let's move on to gold's not so flashy friend.

silver, but it's getting a little bit flashier. Silver has also seen substantial increase in its price. Does silver always rise alongside gold, or is this unusual? It's funny because some people try to lump them together. Yeah. I never thought

that you can. Silver's demand or use case is different from gold. It's actually used in a bit more kind of industrial production. You can conduct electricity better, whereas gold is really more of an investable asset. And it's used for things like jewelry. And if you track kind of gold rise since the start of 2024, it became kind of

more unhinged, you know, wasn't as tied to silver. And silver is just caught up quite quickly lately. And so now there's all this interest in silver. And I think if I had to make sense of it, I would say people who missed out on gold rise are looking at silver and they're saying, I can get in on that one, you know? And so now there's been so much demand for silver, coupled with an actual shortage in production for various reasons and other parts of the world that silver has soared. It's really hard to make sense of it all.

And that doesn't mean that there aren't real cases or real demand there. But going back to my meme stock analogy, it's like these things have taken on a life of their own. And when that happens, you can have wild swings in price because no one really knows what the value should be. It's just like everyone's been buying

because others have been buying and everyone could sell quickly when they realize that people are getting out. Yeah. So the Trump administration put out a draft list of minerals and metals. It was going to tariff. And silver was on that list. That was back in April. So you don't think that that might have an impact on the price? The Trump policies have changed so much that it's really hard to know.

And they do have impact on prices. And you've seen this recently, you know, President Trump has said that he wants the U.S. to mine more rare earth minerals. which are coming really short supply, but they're used for a lot of, like, defense applications and magnets and things of this sort. And so, you know, there'll be one announcement where, you know, the U.S. is going to collaborate with Australia on rare earth production. And stocks jump like 15% knowing absolutely nothing. It's just, it's just chatter. And that's where we are in the market right now. Like, everyone's just trading on the possibility is how, is how I'd put it. And no one knows how demand for any of these things will shake out over the next few years. And I'll tell you

an anecdote from just this morning. I was on Instagram going through some stories and someone I went to high school with posted their like trading screenshot and they had made $20,000 on their silver bet. You know, he's a buddy of mine that I, you know, I grew up with not a market expert. I put it to you like that. Just ride in the wave and good for him. But there's a lot of people riding waves right now. Coming up, why Tim thinks everything is a bit of a bubble right now. Let's get into this market hype or the vibes that are happening right now. What do you mean when you say kind of there's a lot of hype happening in the stock market

right now? Like what is different than any other time? Because isn't that what the market is? It's a lot of hype always. It is. It's just, it's gone on for so long. and there's so much uncertainty in the world with Trump's trade war, with China, the second largest economy, you know, really hurting and being in a trade war with the U.S. Here in Canada, we were definitely hit by the trade war.

Maybe it hasn't been as bad as people feared, but also our banks, for instance, which are deeply tied to our economy and just growth in general, keep soaring or they have been soaring. And so people are kind of saying, like, where is the pain showing up? Yeah. And it certainly is showing up in certain areas like autos, for instance, but it's like everybody is seeing through or ignoring all the negativity, all the negative news and just pricing in or hoping that the best is going to happen. When that plays out, the second that pain actually does hit or you feel it, people can cash out their positions because they're like, okay, I roll the wave. I'm feeling good. I want out. And nobody wants to stay around kind of for the long term.

And at the same time, there's lots of questions, like long-term fundamental questions about what do we care about in the economy? And that sounds kind of nerdy and wonkish. But I'll put it to you like this. So President Trump gets elected, passes a budget that is going to add to the deficit. The U.S. is already running every year about a $2 trillion deficit. I keep saying the U.S. is a fake economy because it actually can't afford a, how it's living or how people are living.

And it just keeps churning along. And so that ties into the stock market when it's like, okay, well, are we ever going to get serious about this? Because if we don't, maybe the market just keeps going up until who knows what. But if we are going to get serious about it, it means you have to cut somewhere and that's going to affect companies and jobs and that kind of stuff. And that ties back to this idea of no, no one really cares right now. Everyone's just like, you know what?

I'm just going to ride it. Well, I mean, Tim, you're making me thinking about this, like the fact that money is an illusion, but let's probably for a bigger conversation, not for today. But is this moment right now, is this just about people anticipating the pain will come later, or is it also that our sense of value in companies is off? It's really hard, and this is why I think it keeps going on, because there is not just a kernel of realness, there is a real element to certain sectors having profit, like tech, which is why these big tech companies, like Meta and Microsoft and Apple now dominate so much of the market.

This is about AI as well? Is this coming kind of in this as well? Yes. I mean, that's driving economic growth now because they're spending so much money to develop data centers that could then fuel the AI machines, LLMs, basically. Large language models. Yes. But I'll put it to you this way when it comes to AI and tech.

There's so much money being spent. But the tech CEOs have literally already said, like there's no conjecture here. They've said the risk of staying out of this race and not spending the money is way higher than being in the race and overspending. Because, you know, if there's four companies spending on data centers and all this kind of stuff, and say there's four companies that could and only three do it and you're the fourth one out and you miss the boom, you're done. You know, you could have missed the next technological revolution. But no one also knows if we're going to need all this data center demand. And it's getting really confusing because a lot of really smart investors

are backing these plans and they're buying the debt being raised to fund this expansion. But, you know, technology has shown over time that it evolves. And you tend to, you know, do things in a more efficient way. So you think about computers.

Back in the day, computers had these like mainframes of these big like servers, basically, you know? And then over time it morphed into like a laptop that you can just type on. We could have huge overcapacity of these data centers. But no one cares right now. It's just like... And we just don't know.

We just don't know, exactly. So we are hearing a lot of talk about whether AI is a bubble right now. Before I get your thoughts on that, we should probably understand what a bubble means. So what is a bubble exactly? Yeah, it gets thrown around quite loosely. The way I think of a bubble is that when you're in this crazy territory where you're melting up, usually you think about melting down.

The melt up is when it goes kind of parabolic. It's not like linear growth anymore. All of a sudden, it's just like rising out of nowhere. And I always think of it as when something branches out from financial circles into something that people talk about, say, like a family barbecue. You know, when your auntie is asking you about like, hey, Tim, should I buy silver? Or your painter, as you said. Yes. That's when you're in bubble territory.

Okay. And nowadays, we tend to call it FOMO. but there's also just people basically want to feel like they got in on something good before someone else. So it's not even like you got rich and I didn't. It's like I saw it coming. I got in early, you know? It makes you feel special in a way.

And then you kind of get all this widespread attention. And then it just pops. And when it pops, it's always hard to tell. And that adds the fascination because you think like, oh, there's another 30% it could make. It literally just morphs into betting. That is how I describe it. And that ties into the culture today because betting has become a huge thing. Sports betting is huge now.

If you look at in the U.S., there's Robin Hood, which is kind of a new investing platform that really caters to early stage investors, basically younger people. They've gamified investing. You know, you get like pop emojis and things of that sort when you have a big win. And so does value matter? Like this is the... What is value? What is money?

We're getting philosophical here today. We really are. Let's bring it back to gold and silver for a minute because you're saying that the price of gold and silver is rising, at least in part because everything is hot in the market right now. And you're saying that a lot of that momentum in the market is built around irrational expectations. Are you saying that everything is a bubble right now? I'll put it to you this way because I don't want to make some crazy declaration. but if gold is meant to be this, like, store of value and something that people want when there's maximum uncertainty, and things are bad, basically, that makes sense to me. I can understand why gold is up.

Okay. But gold is up at record highs, you know, over $4,000 an ounce, which is, like, crazy if you've tracked it for a while. And the stock market's also up. Yeah. And in debt markets, you know, this is really wonky now, but basically debt costs, like interest rates that companies have to pay are incredibly low. And so it's like, how is this possible? Like, how is everything great? Like, that's what doesn't make sense.

And so something's going to change. It's just that no one has any idea what it will be. I'm not going to lie that this all kind of sounds concerning. It is in the sense, you know, that this is how it was in 2007 before the big financial crisis. And I'm not saying that we're anywhere close to that right now in terms of having all this secret debt that we didn't know about hidden in the system. But just more and more people are wondering, like, what is going on, and they're trying to make sense of it and can't. And counterargument, can you make the case that it might not be a massive bubble?

For sure. Okay. When it comes to, for instance, stocks, there have been real earnings. You know, like a lot of this is the tech companies that just make like tens of billions of dollars a quarter now, a quarter. So there's real money in certain pockets of the market. If you look at the TSX, like gold is why the TSX is out. performing this year. It's been both S&P 500 and also the NASDAQ, which is kind of the tech heavy exchange, which is incredible. And a big part of that is because gold miners in short

didn't raise their costs much over the last decade, but the gold price is soared. And so they're just making way more money per ounce. And that just flows effectively to shareholders. So there's like real, there is real money in certain parts of the market, but there's also a lot of insanity. Like for a lot of investments, there's a lot of twisting you have to put yourself into to still see the light. Interesting. Interesting and concerning. Okay, so just to end him, historically, gold prices tend to eventually come back down. So what have past upswings told us about how this may end? So like most commodities, gold has tended to be quite volatile. Goes up, comes down. And the last time this happened was

around 2012 when the commodity super cycle coming out of the 08 crisis burst. And when that happens, it tends to be paying for quite some time because it kind of takes a while for the market to kind of shake out all the badness that developed. But at the same time, you can make a positive case for it all right now because, you know, we've learned some of the lessons from that era and companies haven't over expanded like crazy to mine more of it. So that's kind of kept cost low and kept the amount of new supply coming onto the market low. But I would also say if you go back over centuries or, you know, at least decades, history often doesn't repeat, but it rhymes. And whenever you start to think that it's not going to rhyme again, that's when you get burnt. So, Jim, I've got to say I've been kind of holding out on you. I may have some ulterior motives to this episode.

I have one shiny coin. You can hear this. Want to take a look? Oh. It's in a beautiful case, too. Take a look. I used to get these from, or something like this from like my great uncle. Yeah, this was a gift from China from when my husband went for a business trip.

So this is 10 grams. And I know you can't, you know, give investment advice. But are you saying that I shouldn't sell my one gold coin that I happen to have right here? You could do it. You could make some money off this. But I would say for the vast majority of people, if you wanted to just kind of get in on the gold rush, the easiest thing to do is just buying an ETF. It's like a low-cost fund

that lets you kind of play the market. It's super legit. You don't have to go to some random pawn shop or gold shop on the outskirts of town. And I would like to add that for the first time in my life, I have bought gold. I always think the gold bugs, you know, were too deep in the game. They, you know, they were blind to other realities.

But in this new world, I think you need to kind of broaden your horizon and say, you know what? Maybe maybe things have changed a bit. You have to do it very rationally. Don't overexpose yourself. That's my investment advice. But the demand is real.

Like, you know, it's not, this isn't like some random cannabis stock that, you know, just got completely built up on hype. Yeah. I guess I'll keep my coin. Maybe I'll make it into a chain, but I have options now. So that's great. There you go. Tim, always a pleasure to have you on the show.

Thanks again for coming in. Always happy to be here. That was Tim Kallads, who is a columnist and reporter for the Globe's Report on Business and Globe Investor. That's it for today. I'm Cheryl Sutherland. Our producers are Madeline White, Michal Stein, and Ali Graham. David Crosby edits the show. Adrian Chung is our senior producer, and Angela Pichenza is our executive editor. Thanks so much for listening, and I'll talk to you soon.