Veteran strategist unveils updated gold price forecast
Veteran strategist unveils updated gold price forecast originally appeared on TheStreet.
Nervous investors have flocked to gold as a safe haven against inflation, geopolitics, and, most recently, tariff turmoil, and they have been well-paid for their move this year. Now, those same investors are anxious about whether the precious metal's run can continue.
Gold is up nearly 30% this year, after gaining more than 25% in 2024; it's up 44% over the last 12 months.
The three-year annualized average return on gold, as measured by SPDR Gold Shares () , is 21.4%, well above its historic averages; from 1971 to 2024, the annualized return on the shiny stuff was just under 8%.
Great runs like this don't last forever, so fearing a regression to the mean is normal.
Calm the nerves; one of the world's leading gold strategists says record price levels will be broken regularly through the end of the year.George Milling-Stanley, chief gold strategist for State Street Global Advisors, said in a recent interview on 'Money Life with Chuck Jaffe' that gold will continue to make sense for investors for its attributes and potential.
'We still have a lot of geopolitical turbulence, and gold historically has tended to perform well during periods of geopolitical turmoil,' said Milling-Stanley.
Milling-Stanley has spent some five decades overseeing gold's fit into investment portfolios and helped develop GLD, the world's first gold-backed ETF. Clearly, he knows a thing or two about the yellow metal.
'We still don't know where we stand with interest rates. … We don't know what the outcome of that is going to be. We still have an enormous amount of uncertainty on the macroeconomic front, as well as geopolitical shock.
'When faced with uncertainty,' Milling-Stanley added, 'I've always turned to gold in the past and I think it's served me well.'
Gold's run-up over the last few years has coincided with higher inflation, but that hasn't fueled the run, according to Milling-Stanley. He says it only serves the role of an inflation hedge when the economy is 'suffering sustained high inflation,' which he defines as two or more years when prices rise persistently by 5% or more.
That hasn't happened since the 1970s, so even if price hikes continue at their current pace—higher than the Fed's 2% target—gold isn't likely to respond to inflation.It's the uncertainty that Milling-Stanley says gives gold more upside potential than downside risk.
'The higher the uncertainty, the higher the upper limit,' he explained, noting that emerging tariff policies and the pall they've cast on global markets have forced the team at State Street to revise forecasts made last December, intended to last the whole of 2025, several times already.
'I guess the most important thing to say is it looks very much as if we've established a new floor in the gold price, somewhere above $3,000 an ounce,' Milling-Stanley explained. 'The floor last year was at $2,000 an ounce. That is a huge leap.
With a new floor in place—gold didn't sustain a breach of the $2,000 level until February 2024 but has been higher ever since—and with the huge gains in the last 12 months, Milling-Stanley said he would not be surprised or even disappointed if gold consolidated a bit, trading in the $3,000 to $3,500 range for a while, simply holding value if market turmoil causes other asset values to drop.
But, he noted, 'our bullish case suggests that we could actually take out whatever resistance is available at the $3,500 area, and possibly even trade as high as $3,900.'
By that best-case forecast, gold would gain more than 15% from current levels, on top of its huge gains of the last two years.
While price performance has been glitzy, Milling-Stanley noted that a gold allocation makes sense in most portfolios for its non-glamorous, protective attributes:Diversification, thanks to 'a zero relationship' to the movement of both stocks and bonds.
Protection from stock market calamity. Milling-Stanley isn't predicting disaster, but said that macroeconomic uncertainties make it impossible to eliminate the potential for something catastrophic.
'If you look at, Black Monday in 1987, if you look at the bursting of the dot.com bubble in 2001-2002, you look at the global financial crisis of 2008, you look at the advent of Covid in 2020, equities took a significant downturn and gold performed very, very well,' Milling-Stanley said.
Milling-Stanley notes that gold's momentum hasn't carried over to gold miners; he favors owning the physical metal, particularly because of concerns about market swings. Miners historically have sharply underperformed metals in big downdrafts.
Gold typically holds up against weakness in the dollar. The value of the dollar is off roughly 9% this year, and it lost about 4.5% in the wake of the Liberation Day tariff announcements.
Inflation protection in the unlikely event that tariff policies hit home harder and longer than anticipated with the Fed losing control on price hikes.
'I think people are still looking to gold for its protective attributes, rather than necessarily hoping that the price will go up so they can sell at a profit tomorrow or next week,' Milling-Stanley said.
Still, he acknowledged that those timeless attributes shine brighter when attached to gold's enhanced profit potential now.Veteran strategist unveils updated gold price forecast first appeared on TheStreet on Jun 3, 2025
This story was originally reported by TheStreet on Jun 3, 2025, where it first appeared.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Miami Herald
an hour ago
- Miami Herald
Young workers face stark Social Security reality
If Congress doesn't act, Social Security benefits will face a 23% across-the-board cut in 2033, according to the 2025 Social Security Trustees' Report. That's because the Social Security trust fund is projected to be depleted by that year. In other words, less money will be coming in than going out to pay 100% of total scheduled benefits owed to current and future beneficiaries. If the past is prelude, Congress will act at the last minute to make changes – but likely changes won't affect those in their 40s or older or those with income below certain thresholds. Don't miss the move: Subscribe to TheStreet's free daily newsletter That's sort of what happened in the 1980s. In 1983, Congress enacted reforms that were designed to address Social Security's short-term crisis and provide solvency for the next 75 years. They achieved this primarily through a combination of increased revenue (higher taxes, taxation of benefits, expanded coverage) and modest benefit reductions (delayed COLA, higher retirement age). So, let's say some brave souls rise to address Social Security's deficit between now and 2032, and let's say Congress, instead of doing what it did in the 1980s, just cuts benefits that will affect those in their 20s or younger, as well as those not yet born. Well, as an experiment, I made the assumptions below and then asked Google's AI (Gemini) to run the numbers. Assumptions and key data points Starting Year: 2025Current Age: 25Starting Earnings: $100,000Retirement Age: 70Life Expectancy: 95Historic Average Wage Index (AWI) Growth: Approximately 4.5% (based on historical data, though this can fluctuate significantly).Historic Average Cost-of living-adjustment (COLA): Approximately 3.8% (since 1975).Discount Rate for net present value (NPV): We'll use a real discount rate, which accounts for the time value of money beyond inflation. A common assumption for long-term real discount rate is 2.5% to 3%. We'll use 2.5% for this Retirement Age (FRA): For someone born in 2000 (25 in 2025), their FRA is Retirement Credits (DRC): For those born in 1943 or later, DRCs are 8% per year (or 2/3 of 1% per month) for delaying beyond FRA up to age Security Maximum Taxable Earnings (Bend Point for Earnings): For 2025, this is $176,100. This amount also grows with the AWI.2025 PIA Bend Points:90% of the first $1,226 of AIME32% of AIME between $1,226 and $7,39115% of AIME above $7,391 And here's what Gemini calculated. Without a 23% cut in benefits, the estimated monthly benefit for a 25-year-old today would be $25,232.26 in 2070 dollars. And the net present value of that stream of benefits to that 25-year-old in 2070 would be $5,392,977. Related: Social Security faces huge threat sooner than you think If, however, that very same 25-year-old experiences a 23% cut in benefits come 2023, here's how their benefit and the net present value of their benefits would change. Their estimated monthly benefit at age 70, in 2070 dollars, would be $19,428.84, a cut of $5,803.42. The net present value of those benefits would be $4,151,592, a difference of $1,241,385. By way of background, in January, Social Security estimated the average monthly benefit to be $1,976 for all retired workers, $3,089 for a retirement-aged couple with both receiving benefits, $3,761 for a widowed mother and two children, and $1,832 for a retirement-aged widow(er). In April 2025, people in the United States received Social Security benefits, according to the Pew Research Center. This represents more than one-fifth of the U.S. population and includes retired workers, their spouses and children, survivors of deceased workers, disabled workers, and those receiving Supplemental Security Income. Typically, Social Security represents about 14% of total income in retirement for those in the highest income quintile and 64% for those in the lowest income quintile. To be fair, there are multiple levers Congress can pull to address the deficit. As they did in the 1980s, Congress could increase taxes and reduce benefits. More Personal Finance: Social Security student loan garnishment sparks alarmThe most tax-friendly states for your retirement incomeSALT income tax deduction takes critical step forward "If policymakers chose to preserve benefits for older workers and retirees by placing the burden on younger workers through benefit cuts rather than increasing taxes (either by increasing the tax itself or by increasing the level of Social Security earnings subject to the tax), that plan wouldn't work soon enough to fix the problem with the next seven years," said HLS Retirement Consulting President Heather Schreiber. "However, on some level, the changes necessary to bring about meaningful change are likely going to be on younger generations, whether that comes through a combination approach of reducing benefits, as in your example, and some faster revenue raiser like increasing cashflow into the funds to avoid imminent benefit reductions to OASI recipients," Schreiber said. For the sake of argument, let's say Congress pulls only one lever in the future: They just cut benefits for younger and not-yet-born workers. What advice do experts have for that cohort? For his part, Jim Blankenship, a certified financial planner with Blankenship Financial Planning, said the advice for this cohort remains the same, even in light of the potential reduction in future Social Security benefits. "If you're still many years away from retirement, the key is to start saving early in retirement accounts. By doing so, you'll benefit from the power of compounding over time," he said. To maximize your savings, Blankenship said look for ways to reduce discretionary spending now. Related: How the IRS taxes Social Security income in retirement "The goal is to build enough of your own resources so that you're not dependent on Social Security - and therefore not vulnerable if those benefits are reduced from what's currently projected," he said. "If you take these steps and rely primarily on your own savings, any Social Security benefits you receive will simply be a bonus." And Schreiber offered the following thoughts. Start saving earlier and more aggressively. Maximize opportunities to save, especially in tax-efficient accounts like designated Roth accounts, if offered inside their employer's 401(k) or 403(b). Max fund health savings accounts (HSAs) if available in conjunction with participation in a high-deductible health plan; encourage young workers to refrain from spending the funds for current qualified health care expenses and instead earmark the account for post-retirement health care expenses. A 23% cut in lifetime Social Security benefits can't be ignored, but its impact can be mitigated if young people are encouraged to start saving early and should incorporate lower projected benefits into projection models to better prepare for the worst-case scenario. Incorporate other sources of guaranteed income to bridge the gap, such as deferred income annuities or laddering younger workers to not focus exclusively on the accumulation "number" but to also determine how much that wealth will generate in future income, and incorporate the potential impact of taxes into the conversations. Start conversations early about tax efficiencies during retirement to avoid even further reductions to the net income received from Social Security due to unintended federal income taxes and Medicare premium surcharges, or costly health care/LTC with a benefit cut, younger workers should still understand that Social Security is not going" broke" and that, with life expectancy on the rise, particularly for this cohort, the benefit of waiting to claim as late as age 70 will help mitigate the benefit cut, assuming a slightly below-average to average life expectancy. Related: Senate proposes big change to Social Security, SALT income tax deduction The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Miami Herald
2 hours ago
- Miami Herald
Major supermarket chain closing 60 locations
We're in the midst of very strange economic times. On the one hand, unemployment is low, and the economy is supposedly in good shape. Inflation is also cooling. Don't miss the move: Subscribe to TheStreet's free daily newsletter So then why are so many people facing higher costs than ever and struggling to keep up with their bills? Related: Walmart makes bold move to help inflation-battered consumers Part of the problem stems from the fact that while inflation isn't horrendously elevated these days, it's been sitting at higher-than-average levels for years. And as a result, a lot of people have been paying more for essentials since 2021. Unfortunately, tariff policies could make matters even worse as the year progresses. Right now, there's a pause on tariffs. But once it ends, we could see the price of all sorts of products increase. And one key category that's likely to rise is food. This stretch of pesky inflation has changed the way a lot of people spend their money. These days, many can't afford to shell out extra for restaurant meals, so they're turning to their neighborhood supermarkets for groceries instead. Related: Costco quietly pulls popular product, upsets fans This trend is clearly bad news for the restaurant industry. But it's good news for grocery chains. Even if food costs increase once tariffs take hold, consumers will have no choice but to stock their pantries and fridges. And as it gets even costlier to dine at restaurants, the demand for groceries could increase. Given these trends, you'd think grocery stores these days would be making plans to open their doors, not close them. And to be fair, some of them are. Aldi, for example, is working on an expansion strategy that will add 225 stores to its lineup by the end of 2025. But one major supermarket chain is doing the opposite. Kroger, one of the largest supermarket chains in the country, is making plans to close 60 stores in the next 18 months. Related: Costco, Trader Joe's have one huge problem customers hate The Cincinnati-based grocer says it's specifically looking to shutter locations that have been underperforming. The move should free up money on Kroger's balance sheet to move forward with other plans, such as remodeling existing stores in need of a refresh. The company said earlier this year that it's looking to invest in an improved customer experience. Kroger is also looking to expand its selection of private-label products. At a time when consumers are looking to conserve funds as much as possible, offering up store brand products at competitive prices makes sense for Kroger. So does shuttering less profitable locations, to a degree. But if demand for groceries picks up, Kroger could end up regretting the decision to close some of those stores, especially if it means losing customers to competitors. At the end of its most recent fiscal year, Kroger operated over 2,700 stores across 35 states. The 60 planned closures represent just a small portion of the company's overall footprint. More Retail: Walmart CEO sounds alarm on a big problem for customersTarget makes a change that might scare Walmart, CostcoTop investor takes firm stance on troubled retail brandWalmart and Costco making major change affecting all customers The company did not state specifically which stores are targeted for its upcoming round of closures, so customers will have to keep an ear out for more information. Related: Costco brings back huge perk members have missed The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Miami Herald
2 hours ago
- Miami Herald
Fannie Mae chief Pulte sends savage one-word message to Fed's Powell
There's mounting tension in Washington, D.C. over the Federal Reserve's interest rate policy. After cutting interest rates by 1% late last year, Fed Chairman Jerome Powell has taken a decidedly different tack in 2025, holding interest rates steady, and frustrating many, including President Donald Trump, who wants rate cuts now. President Trump has called Powell a "numbskull" for not reducing the Fed Funds Rate, and "Mr. Too-Late" because of the risk that the Fed's hesitancy will put it behind the curve, possibly causing stagflation or worse, a recession. Don't miss the move: Subscribe to TheStreet's free daily newsletter The Fed's dilly-dallying on rate cuts means homebuyers will have to wait for lower mortgage rates, a fact that hasn't been lost on housing market experts, including Fannie Mae Chairman Bill Pulte, who is also director of the Federal Housing Finance Agency (FHFA). Pulte knows a thing or two about the housing market, given he's the grandson of the founder of the mega homebuilder PulteGroup and formerly served on PulteGroup's board of directors. This week, Pulte targeted the Fed's monetary policy, delivering a harsh rebuke and curt message to Chairman Powell that has raised eyebrows. Image source: Bartkowski/Getty Images The Federal Reserve has an important mission to encourage low inflation and unemployment by raising or lowering the Fed Funds Rate. The FFR is the rate that banks charge each other when lending excess reserve balances overnight. Unfortunately, its dual mandate is easier said than done. Often, low inflation and unemployment are contrary goals. Higher rates lower inflation but increase job losses, while lower rates decrease unemployment but increase inflation. Related: Fed interest rate cut decision resets forecasts for the rest of this year We've witnessed that dynamic in real time over the past five years. At risk of surging unemployment due to the Covid pandemic, the Fed doubled down on its zero-interest rate policy of low rates. The move worked, helping the U.S. avoid a recession or worse. However, low rates (and stimulus payments) caused inflation to spike in 2021. At the time, Fed Chair Powell initially and infamously referred to inflation as 'transitory;' however, he was forced to switch gears and embark on the most aggressive rate hikes since the 1980s after inflation skyrocketed to 8% in June 2022. The higher rates have sent inflation below 3%; however, they've done so at a cost, given emerging cracks in the jobs market. The U.S. unemployment rate has moved up to 4.2% from 3.4% in 2023, and over 696,000 layoffs have been announced this year through May, up 80% year over year, according to Challenger, Gray, & Christmas. There's also increased evidence that the economy is weakening. ISM's latest manufacturing and services PMIs, which measure economic activity, were below 50, suggesting contraction in May. A concerning job market and potential economic slowing aren't great recipes for consumer and business spending, yet the Fed has kept its finger off the rate cut trigger, citing inflation uncertainty amid recently enacted tariffs. Related: Major housing expert predicts huge change to mortgage rates in 2026 Since February, President Trump has placed 25% tariffs on Canada, Mexico, and autos, a 10% baseline tariff on all imports, and stiff tariffs on China, a significant trade partner that supplies just about everything from clothing to car parts. While China's tariffs have retreated from a sky-high 145% in April that effectively shut down trade, they remain at 30%. Worries that tariffs may cause inflation to reassert itself in the coming months have Fed Chair Powell a bit boxed in, given that rate cuts to shore up the economy may add to possible inflationary fires this year. Fed Chair Powell argues that a wait-and-see approach makes sense, given that unemployment is historically low and the economy, while showing some worrisome signs, is still expected to grow by 3% this quarter. Related: Forget tariffs, Fed interest rate cuts may hinge on another problem "The effects on inflation could be short-lived - reflecting a one-time shift in the price level. It is also possible that the inflationary effects could instead be more persistent," said Powell after holding rates steady on June 18. "Avoiding that outcome will depend on the size of the tariff effects, on how long it takes for them to pass through fully into prices, and, ultimately, on keeping longer-term inflation expectations well anchored." The worry over tariffs isn't shared by Fannie Mae Chairman Pulte. After Powell held interest rates at their current 4.25% to 4.50% range, he blasted Powell, calling for immediate interest rate cuts to lower mortgage rates and support the housing market. "Jerome Powell is a main reason for the Housing Supply Crisis in this Country," wrote Pulte on X. "By improperly keeping interest rates high, Jerome Powell is trapping homeowners in low-rate mortgages and choking off existing home sales - directly fueling the housing supply crisis. He must lower rates." Pulte is, at a minimum, correct anecdotally that the housing market is in a crisis, especially with first-time homebuyers who struggle to come up with enough money for a down payment, given supply shortages have propped up home prices, and can't afford monthly mortgage payments. More Economic Analysis: Federal Reserve prepares strong message on long-term interest ratesMassive city workers union approves strikeAnalyst makes bold call on stocks, bonds, and gold Mortgage rates typically run 2% to 3% higher than the 10-year Treasury note yield, and the Fed Funds Rate highly influences the 10-year yield. As a result, 30-year mortgage rates have risen to roughly 6.8% from 2.7% in early 2021 before Powell raised rates to fight inflation. In April, the median price for a new home exceeded $407,000, up from $310,000 five years ago. Meanwhile, according to Bankrate, the average mortgage payment doubled to $2,207 in 2024. With housing affordability so challenging and the Fed firmly in the "no cut" camp, Pulte sent a powerful message to Powell. "Americans are sick and tired of Jerome Powell. Let's move on!" wrote Pulte. "Funny thing is Jay Powell is talking right now about the housing market - he has no clue what he can do for the housing market. And he's not listening to the people who help lead the housing market." His blunt advice to Powell? "RESIGN," said Pulte. Related: Veteran fund manager who predicted April rally updates S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
