Hi! We have a bunch of new subscribers this week, so I thought I’d take a minute to say hello! This is our weekly news roundup, which is co-written by me, Purse founder Lindsey Stanberry, and Alicia Adamczyk, our senior editor. Each week we dive into economic news and try to explain how it might impact your life. If you’re new here, you should definitely check out our recurring series Home Economics and Division of Labor. And if you have any questions or ideas, please feel free to respond directly to this email. I try my best to answer everyone (though I’m not perfect)! -Lindsey
Geopolitical tensions, economic jitters, falling interest rates, and the decline of the U.S. dollar have converged to generate a 2025 gold rush, spiking prices of the precious metal higher and higher. Unfortunately, that could be another signal of a weakening economy.
Gold prices surpassed $4,200 per ounce for the first time this week, as investors flock to bullion as a hedge against inflation and general uncertainty. (Gold also holds up well when rates are low because it doesn’t pay interest.) In fact, they piled nearly $10 billion into commodities-focused funds including gold in September, the most since April 2020, according to Morningstar. You may recall that was another time when fear permeated the economy.
It’s worth it to take a step back to put into context how crazy gold’s price run has been. It first crossed $1,000 back in 2008 (when the timing aligns with another financial crisis). It didn’t hit $2,000 until the Covid pandemic, some 12 years later. It hit $3,000 earlier this year, due to President Donald Trump’s tariff mayhem. And now, just a few months later, it’s over $4,000, with some analysts claiming $5,000 per ounce by year end, if not next, is possible. That’s a 33% increase this year alone.
Whether a larger market contraction is imminent has been hotly debated for, well, years. But investors driving up the price of gold certainly isn’t an indicator of a sound economy. The trade war with China, the president meddling with the Federal Reserve’s independence, a growing national debt, and the ongoing government shutdown are all contributing to the rally.
So, should you be investing in gold? The Purse doesn’t give specific investment tips. But if my friends asked, I’d typically tell them to avoid the hype, especially when many analysts see a correction coming. If everyone’s talking about a specific investment, that’s usually the worst time to buy. The meteoric rise should give anyone pause.
But very little about this year’s economy has made much sense. JP Morgan Chase CEO Jamie Dimon says it’s one of the few times in his life when “it’s semi-rational to have some [gold] in your portfolio.” Meanwhile, Citadel CEO Ken Griffin calls the investor turn to gold “concerning.” For Griffin, it’s alarming that more people are investing in gold rather than something like U.S. government bonds, which would signal faith in the future of the country’s economy.
If you’re considering it, you don’t need to shell out thousands at Costco for a one-ounce gold bar. And don’t consider hawking your grandmother’s gold jewelry. It’s much easier—and cheaper—to invest in gold- or silver-backed ETFs.
When could the price fall back down to earth? According to Bloomberg’s Jack Ryan, when there is more peace in the world, like an easing of tensions between Ukraine and Russia. “More good things and less bad things, if you’re willing to take that bet,” Ryan says.
-Alicia
Gold in the news
- Gold, silver, and platinum are measured in troy ounces, a special unit of weight used for precious metals that dates to medieval trade markets, according to the Wall Street Journal.
- When gold prices spike, people will often try to sell family heirlooms or other jewelry. But during this modern gold rush, consumers are also buying more coins and bars to stash away—showing just how worried they are about the future.
- Remember the infamous Costco gold bars? They are still a top seller for the retailer, according to Business Insider. But they sell out quickly when they’re restocked, meaning it’s not likely you’ll be able to snag one whenever you want.
- CNBC Make It breaks down the fees and tax implications of selling your gold jewelry or bars. The current spot price is simply a starting point for negotiations with dealers—you’re likely to get less. And then you’ll pay taxes on any gain.
- When Lindsey was working at CNBC Select this spring, she edited a piece on the top gold and precious metal IRAs. Make sure to do your research before investing in these kinds of accounts.
- Platinum and silver prices are increasing at rates even faster than gold so far this year.
- Needless to say, people are trying to cash in on the soaring price. Those who are making the most? The Journal reports: “Like gold rushes of yore, the surest path to making money often comes from selling mining gear. In a more modern twist, there’s also social-media gold: the biggest YouTube accounts devoted to prospecting boast more than half a million followers.”
What else we’re talking about
- I loved this piece by Heather and Doug Boneparth at The Joint Account. Everything does, indeed, cost $1,000!!!! - Alicia (and Lindsey co-signs!)
- I’m such a huge fan of Susan Orlean, and I’m excited to read her new memoir, Joyride. I really enjoyed this interview she did with New York’s Madeline Leung Coleman. -Lindsey
- This is the best thing I’ve read about Taylor Swift’s new album. Only four of the songs work for me, and none are all-timers. And that’s okay! I have 11 other albums full of songs I love. - Alicia
- “Women have been underwriting the world’s goodwill economy for generations.” I so related to this piece by Susan Dabbar about retiring from giving our time away. I need to do this! -Lindsey
How do you think tariffs might impact your holiday season?
On our radar
- I’m doing another piece for Yahoo, and I’m looking for people to share how much they spend on their kids’ birthday parties. It’s anonymous! Fill out the form here! -Lindsey
- It seems like everyone is talking about the new Rose Bryne movie, If I Had Legs I’d Kick You. I’m curious but also a little scared. What do you think? -Lindsey
The best money we spent this week
- I didn’t spend much money this week (aside from Ireland-related travel expenses), but I did get a $45 check in the mail from a class action lawsuit I joined. It’s the little things! - Alicia
- I finally chose winners for some outstanding sweepstakes, including last May’s prize, which was supposed to be a $25 gift card to a coffee shop, $25 gift card to a bookstore, and $25 donation to the charity of the winner’s choice. The winner, a frequent Purse reader and commenter, asked that all $75 be donated to the charity of her choice, the Goodman Community Center’s food pantry. I rounded up to $80 and paid the extra credit card processing fees of $3.16, for a total of $83.16. In the big scheme of things, it’s a small expense, but it felt good to make that donation. -Lindsey
