Proponents of bitcoin have been calling it “digital gold.” Both the cryptocurrency and the precious metal are impossible to value because they don't pay any interest or dividends. Bitcoin is digital, making it potentially vulnerable someday to hacking by quantum-computing algorithms, while gold needs to be stored in a vault. Bitcoin's supply is limited, while the potential demand for it is from everyone on Earth. The same can be said of gold’s supply and demand, though its rapidly rising price will incentivize more mining, potentially adding to available supply. There are lots of cryptocurrencies besides bitcoin, which tends to influence the prices of its cousins. Gold's cousins include other precious metals, which can influence gold's price.
Bitcoin holders have had a wild ride in recent years (chart). The price of bitcoin stayed mostly under $10,000 from 2017 to 2019. Then it took off in late 2020, rising close to $70,000 in 2021. It was back down just below $20,000 in late 2022. But then, with the help of Wall Street and the Trump administration, it soared to a record high of almost $125,000 in late 2025. Now it is back down to around $90,000.
Could the price of gold also increase about 10-fold from its level in March 2024, which is when it broke out decisively from a multi-year consolidation pattern to new highs above $2,000 per ounce (chart)? That’s when we turned bullish on gold. The price of silver broke out of its multi-year consolidation pattern shortly later, in early May 2024, when it was around $27 per ounce. The prices of gold and silver have increased 2.5x and 3.7x since their breakouts.
Since the gold price rose above $3,000 in early 2025, we've been projecting it will increase to $10,000 by the end of the decade (chart). That would be a five-fold increase from its breakout to new highs in 2024.
President Donald Trump has been a strong supporter of cryptocurrencies. Now he seems to be doing more to boost the gold price, albeit inadvertently; gold soared to yet another record high today after he said "the dollar is doing great." That was in response to a reporter who asked the President if the dollar had fallen too much (chart). He made it clear that he welcomes a weaker dollar.
A weaker dollar is bad for bitcoin because it depresses bitcoin's value in other currencies. That may cause overseas investors to take their gains or cut their losses by selling their bitcoin. Some of them might be moving into gold instead. A weaker dollar may put upward pressure on US inflation, which would also boost the price of gold.
A weak dollar also boosts the gains for US investors in overseas financial markets. It certainly supports our recommendation to overweight emerging markets stocks (chart).
Meanwhile, back in the US, the Consumer Confidence Index survey was weak in January, as fewer respondents (23.9%) said jobs are plentiful (chart). Most of the month's decline showed up as an increase in the jobs-available response (48.2%). The jobs-hard-to-find response remained relatively low at 20.8%.
The regional business surveys conducted by five of the 12 Federal Reserve district banks suggest that we’ll see a slight improvement in the national M-PMI during January (chart). The economy remains in good shape, in our opinion.
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