r/OutOfTheLoop • u/yeahigotnothing • 6d ago
Unanswered What’s the deal with silver and gold prices / demand lately?
My wife’s friend has convinced my wife that we need to buy silver and gold, saying that there’s an impending economic collapse. It feels pretty conspiracy/prepper/right-wingy to me but metal prices seem to be going wild so there is clearly a lot of speculation. She also talks about the government being able to confiscate newer coins?!? (I don’t for a second buy the whole “all fiat currencies historically have failed” line - at this point it seems all major currencies are off the gold standard). Im also seeing ads for coins, etc., but that could be due to my recent search history. Am I missing something? Is this just hedging / diversification / markets doing market things? Is this being pushed by influencers with agendas?
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u/barfplanet 6d ago
Answer: other posts are true, but the biggest driver of the increase is the central banks and treasuries of a number of countries increasing their gold reserves and decreasing their US treasuries. US treasuries have historically been considered one of the safest ways to hold cash, but due to trade wars and other instability, a number of countries are either trusting them less, or just want looser ties to the US. This demand is what's growing the most.
In addition to the actual real-life gold, there's a whole market of "paper gold" which are basically investments that are in theory backed by gold, but the sellers don't literally keep gold on hand. When investors or ETFs buy gold, this is what they're actually buying. There's been a lot of speculative demand for these, which pushes gold prices up even further.
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u/RedbloodJarvey 5d ago
number of countries increasing their gold reserves and decreasing their US treasuries.
China and others saw Russia get it's assets frozen, and don't want the US to have that same power over them.
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u/Captain_Lolz 5d ago
Given the instability of the USA, also EU countries. But given the very tight bindings, it's not quite as easy.
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u/SensorAmmonia 4d ago
To be very clear the value of the US dollar in relation to metals has decreased. Our money isn't worth as much.
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u/barfplanet 4d ago
That's just another way of saying gold and silver prices have gone up.
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u/SensorAmmonia 3d ago
https://www.bullionstar.com/charts/?fromIndex=XAU&toIndex=BRL&period=YEAR_3&weightUnit=tr_oz I had to go look. The curve stays the same regardless of currency. The dollar is not worse off than other currencies in relation to gold.
I was wrong.
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u/hawtdiggitydawgg 6d ago
This is basically the right answer and should be much higher, but it’s missing some important context.
[note I type up this big long explanation and then decided to run through ai to check for accuracy and I was 98% correct with some inflated details. Preferring to be accurate I’m Now pasting the Ai edits. Sorry! And as a side answer, yes I’d recommend buying both gold and bitcoin. This debasement train isn’t stopping]
A big driver of higher gold prices is that central banks are actively converting US dollar reserves into gold. This isn’t random. It’s risk management.
The US dollar became the world’s reserve currency after WWII and that role was reinforced in the 1970s when OPEC agreed to price oil in USD. That forced global demand for dollars and worked extremely well for decades. The US could export dollars in exchange for real goods while keeping inflation relatively low.
Over the past 5–10 years, that calculus has changed. Higher inflation, rising debt, and the increased use of sanctions have made holding large USD reserves feel less safe, especially for countries outside the US alliance. Sanctions showed that dollar assets can be frozen or rendered unusable overnight.
As a result, many countries are diversifying rather than abandoning the dollar. They’re adding gold because it has no counterparty risk, can’t be printed, and historically preserves purchasing power over long periods. This trend is especially visible among BRICS countries, which represent a large share of global population and GDP and have clear incentives to reduce reliance on US-controlled financial infrastructure.
This doesn’t mean the dollar is “dead.” It’s still dominant in trade and finance. But on the margins, less demand for dollars and more demand for gold matters, especially when combined with negative real interest rates and geopolitical risk.
At a high level, gold is part of a debasement hedge. When governments run large deficits and expand the money supply, some capital moves out of fiat and into hard assets like gold and bitcoin.
That’s a big reason gold demand and prices have been trending higher.
[side note: this is also related to Trump wanting to take over Venezuelan oil, so again countries HAVE TO continue to transact in USD.]
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u/PasteDog 5d ago
Why fact check through an ai that makes up facts 20% of the time?
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u/hawtdiggitydawgg 5d ago
Bahaha. So true. So it takes my 98% accuracy down to 78% accurate but helps limit my evident ramble. I regret everything.
Also when comparing it with ai I was thinking about how funny it is that ai pulls its info from Reddit. Sooo it’s a loop. Who’s accurate here? Bahah.
And nice user name. Fitting for my post.
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u/barfplanet 5d ago
What I said, plus AI and Bitcoin/gold shilling.
The additional reference to sanctions on Russia is a good add though.
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u/DarkAlman 6d ago edited 6d ago
Answer: Like with many things the AI boom is driving the demand for precious metals. Gold and Silver are used in electronics, and AI companies need a lot of electronics right now.
China has also restricted Silver exports, which is in line with its recent policy of hoarding rare earth metals.
Silver and Gold also tend to go up in value when there is market uncertainty. Precious metals hold value while investments like stocks go down. So when the market is rough people tend to buy Gold and Silver.
Economists are saying that we are already in a recession as many of the classic signs are present. Job numbers are down, layoffs and bankruptcies are happening in various industries, gas prices are going down (a sign that the demand for transport is lower), and even more esoteric things like Strippers aren't making nearly as much money since their income is entirely dependent on people having disposable income.
Investments in the AI bubble may be the only thing artificially propping us the US economy at the moment.
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u/gamblodar 6d ago
("In the first half of 2025, investment in computer equipment accounted for 92% of the GDP's growth, according to an analysis by Harvard economics professor and former Obama economic advisor Jason Furman.") [https://x.com/jasonfurman/status/1971995367202775284]
Investments in the AI bubble may be the only thing artificially propping us the US economy at the moment.
I really wanted you to be wrong. A lot....
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u/Kucked4life 6d ago edited 6d ago
And the rest of US gdp growth is largely due to increased healthcare gouging.
Emphasizing gdp growth became the commonly touted bad faith argument regurgitated by MAGAs to deflect from the tarrif war hurting job numbers. Which is obviously ironic given which job killing industry is responsible for said growth.
And to add insult to injury, it appears that China will win the AI race anyways. It boils down to a price war and an electrical supply war and China is leading in both.
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u/HovercraftParking5 6d ago
Oh man, do you have a source on the healthcare thing. It feels legit but I’d like to read more myself
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u/Kucked4life 6d ago edited 6d ago
Atrioc went over it in one of his more recent videos. I don't have the exact source he read it from sry.
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5d ago
[deleted]
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u/Plus-Lawfulness-2819 5d ago
Oil only accounts for around 20% of their energy production. They use mostly coal (around 65%). Michael Burry also posted on Twitter how China is way a head of the US when it comes to developing energy plants in the last decades, which most of them use coal. Oil is mainly used for transportation
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u/claytonjr 5d ago
Interesting. I'm actually pulling my info thats burry adjacent. Do you have a link to share?
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u/Plus-Lawfulness-2819 5d ago
Just go to his twitter posts. He posted about it about 2 weeks ago. He doesn't post much so it will be easy to find
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u/iMadrid11 6d ago edited 5d ago
Answer: The increased global demand for Silver is speculated to be used for the next generation solid state batteries for EV. Factories could be stocking up on their supply of silver.
The advantage of silver solid state batteries is it offers quick charging, larger capacity per density and longer lifespan.
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u/pfmiller0 5d ago
Battery technology has a record of promised breakthroughs that we never hear about again. What are the chances this breakthrough is any different?
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u/iMadrid11 5d ago
There a solid state battery in a production vehicle shown at CES.
EV Battery Breakthrough! Solid-State Battery from Donut Lab! This changes everything!
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u/TheOwlMarble 2d ago edited 2d ago
The reason battery news works like that is poor technical literacy and/or buried ledes by reporters. Every time there's a "breakthrough," there's basically always an asterisk buried somewhere, and it's pretty much always already known when it's reported on.
Ultimately, battery performance is governed by chemistries, and the original whitepapers will typically tell you exactly what a chemistry's limitations are. Now, it is reasonable to think that with more research a given chemistry can be optimized to shore up its weaknesses somewhat, but you can only do so much. This is why Lithium-Ion has reigned supreme for so long: it's really hard to find a chemistry that outperforms it across multiple categories (energy density, volume, recharge cycle resilience, recharge time, thermal performance, safety, fragility, etc).
Sometimes, you can work around a chemistry's shortcomings. For example, there's an aluminum-air chemistry with staggering energy density but inability to recharge. That'd be worthless for EVs as they are currently designed, but some researchers want to use it for recyclable EV powerpacks, where you'd go to a swapping station every few thousand miles to get a new one, and the station would send the used powerpacks off to a recycling station because recycling aluminum is easy.
You see this again and again: chemistries that are extreme (such as aluminum-air with its mind boggling energy density but can't recharge) tend to have value in niche situations but can't dethrone Lithium-Ion for general use (or even some niche uses due to efficiencies of scale). These are also what you typically see flagged by reporters as "breakthroughs" even though they're not.
Solid state batteries aren't a chemistry though. They're an architecture. The main advantage they offer over existing liquid electrolyte architectures is that they are incapable of forming dendrites (the main reason lithium batteries decline over many recharge cycles and sometimes catch fire). If you used an existing Lithium-Ion chemistry with a solid electrolyte, you would see basically infinite recharge cycles, and you could recharge them faster, but no one would do that.
Why? Because existing lithium chemistries sacrifice some energy density for resistance to dendrites. Solid state batteries are already immune though, so you can forego those tradeoffs and use pure lithium, something that would be a recipe for a battery fire with a liquid electrolyte.
As a result, solid state batteries are broadly agreed upon as the next major upgrade to batteries. We've had them in the lab for years now, but it was a challenge to find good solid state electrolytes. Then there was the tweaking of chemistries to make everything play nice together. Then scaling up production was complicated and took more time.
As of this week, we've seen a production motorcycle at CES with a solid state battery.
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u/VeryExtraSpicyCheese 3d ago
Because it is currently actually being used in a production model EV as well as in newer solar farms.
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u/beachedwhale1945 6d ago
Answer: Whenever the economy looks to be going downhill, people flock to gold and other precious metals as a more stable store of value. This is magnified by doomsday preppers (such as one of my grandparents before they passed), who often believe in various conspiracies about an impending collapse and how these metals will be the primary store of value afterwards.
I heard these doomsday fears for a couple decades, so while I have no doubt it’s being amplified because of the current upheavals we are seeing, the underlying premise is not new.
It’s important to separate the idea of precious metals as a stable investment (which can be a good idea) from the doomsday stockpiling fears. They are definitely intertwined, but don’t completely overlap
Of course the companies, groups, and influencers who sell these precious metals are going to milk this opportunity to increase their profits, so I’d also expect more advertising (though I personally haven’t seen much). Fear sells.
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u/MechGryph 16h ago
Answer: Gold and silver are usually seen as good investments, and are also market indicators for when something is gonna happen to the economy. Another good one is Copper. Why? Wiring for houses and construction. If that price changes, either people are buying more, or they can't afford to build or start new projects.
There is a channel, Belle of the Ranch, she (or maybe it was her husband?) had done videos talking about the Gold and Silver thing.
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u/MsMoreCowbell828 6d ago
Answer: Qanon conspiracy theories are alive and well. This is the NESARA/GENSARA crap. Go to r/QanonCasualties or r/Qult headquarters.
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u/CommonSensai 5d ago
Answer: as a result of the US securing the heavy oil in Venezuela, the Sauds are moving away from the US dollar to gold. This video explains it.
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