Gold (GC=F) is up nearly 30% this year as investors rush into safe havens and the US dollar (DX=F, DX-Y.NYB) weakens.

Yahoo Finance Markets and Data Editor Jared Blikre, who also hosts Yahoo Finance's Stocks in Translation podcast, explains what historic breakout patterns could signal about where gold prices are heading next.

Twice a week, Stocks In Translation cuts through the market mayhem, noisy numbers and hyperbole to give you the information you need to make the right trade for your portfolio. You can find more episodes here, or watch on your favorite streaming service.

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Video Transcript

00:00:00 Jared Blikre

Gold is on a tear and 25 up nearly 30% so far this year, torching stocks and bonds as investors scramble for a safe haven, watching the dollar head lower. I'm Jared Blikre, host of Stocks and Translation.

00:00:15 Jared Blikre

We're going to start here with a century of gold in a second here, but I wanted to define the gold standard. And this is something that went away 90 years ago. The the gold standard is a monetary system where dollars can be swapped for a fixed amount of gold.

00:00:34 Jared Blikre

And here's that chart. Way back in the day, you go back to 1920s, you used to be able to swap in your gold for $20.57 $20.57 per ounce, but that came to an end right here in 1934.

00:00:55 Jared Blikre

That's when FDR ended gold convertibility, also made it illegal to hold gold and basically stayed at this price for a long time. You'd have to get to Nixon in 1971, that was when he closed the gold window and we had the era of free-floating currencies. So this was beginning of the foreign exchange era.

00:01:20 Jared Blikre

And then we saw a quick rise, about 350% in the price of gold into the 1980s, but that was when Volcker raised interest rates all the way to about 20%, and that caused a peak in gold that would not be seen for decades.

00:01:41 Jared Blikre

Now four is when we had 9/11, that was early 20 or late 2001. We also had China joining the WTO, which meant that it was going to be consuming a lot of metals.

00:01:57 Jared Blikre

And so we saw a rise from here into this QE area. Number five is when Ben Bernanke, uh, at the Federal Reserve basically said, QE forever and also lowered interest rates to near zero. So that was the beginning of the zero interest rate policy era.

00:02:21 Jared Blikre

Now, in six, we saw a peak of gold in about 2012 with China. Then we had a dip into seven, that was the beginning of negative interest rate policy. So no NIRP that we saw in Switzerland and Japan, and gold ended up tracing out this very big cup pattern into eight.

00:02:48 Jared Blikre

That was the beginning of the pandemic. And of course, then we had huge stimulus, and we had a little bit of a handle here. And then by the time gold broke out into the nine, that was 2022, 2023. We saw a bit of consolidation when we had that big period of twin deficits, really in the public consciousness.

00:03:15 Jared Blikre

But with Trump 2.0 and tariffs, we have taken off yet again, and we have hit $3,500 per ounce, and that leads us to where we are today.

00:03:30 Jared Blikre

Now, here in this chart, I have, uh, two of the biggest gold breakouts of all time. That would be 1972 and 2005, and also 2025. That's in white right here. You can see we're just getting started.

00:03:47 Jared Blikre

But the really interesting line is to is 1972. And as I was saying before, that's when Nixon ended the gold convertibility for nations, and that was the beginning of the forex era. That was a the basically the breakout of a 110-year base, and we saw significant price appreciation for the next couple decades after that, or at least next decade after that.

00:04:22 Jared Blikre

So I guess the bottom line here, uh, we're I think that we're seeing gold in the early innings based on the size of some of these historical breakouts. So we'll have to see what comes of that, but as Ralph Alkempora, uh, CMT, also known as a godfather of technical technical analysis has said, the bigger the base, the higher in space. So we'll have to see what that means for gold prices.

00:05:03 Jared Blikre

All right, also stick around for the, uh, next episode of Stocks and Translation. New episodes drop every Tuesday and Thursday right here on Yahoo Finance. So, uh, get them wherever you get your podcasts and on our website as well.  Related Videos

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