Who would have guessed it? Here is the best performing asset in 2025.
July 1 (King World News) – James Turk: The results for the first half of the year are in, Eric, and the winner is the miners of precious metals. The XAU Index rose 43.8%, beating gold and silver at 24.3% and 22.1% respectively.
The S&P 500 Index gets all the media attention, but it was a lagger despite all the tech stock hype, climbing 5.7%. And then there is this year’s loser, which is the US dollar, down -10.6%.
I expect more of the same for the second half of the year, but I would like to point out a couple of things.
First, and I think most importantly, note on this chart the relative performance of gold and silver since the end of May.
KING WORLD NEWS NOTE: XAU Gold Mining Index Has Surged 53.11% In The First Half Of 2025
Silver
Silver has been climbing while gold is in a trading range. In other words, the gold/silver ratio is falling.
So for the past couple of months, silver has been outperforming gold. That’s usually a bullish indicator for the whole precious metal sector that often forecasts clear sailing ahead. It’s one of the reasons I expect the precious metals and the companies that mine them to do well over the rest of the year.
Second, the gains in gold and silver reflect two things. Money like every other asset can be undervalued, fairly valued, or overvalued. Both gold and silver remain undervalued, which is another way of saying that the US dollar is overvalued. To protect your wealth, the money to own is physical gold and silver, which brings up the last point.
Stock Markets Rise During Serious Currency Debasement
I also expect the general stock market to climb higher. Doing so is a normal reaction to debasing the fiat currency, and that is what is happening to the US dollar.
The stock market is not climbing because of a good economy. It’s climbing because investors are better off owning certain stocks when the currency is being debased.
The stocks to own are those with substantial tangible assets on their books, particularly those that are undervalued like the miners. The stocks to avoid are those that are reliant on financial assets generally and the US dollar in particular, like the banks.
The Germans Wealth Was Wiped Out
To explain the logic here as I see it, the purchasing power of the dollar and other fiat currencies will continue to erode because of more government deficits and central bank mismanagement. Weimar Germany and its ill-fated Reichsbank is my favourite example to explain this point.
If you owned Reichsmarks going into their collapse, your wealth was wiped out because the Reichsmark ended up in the fiat currency graveyard like dozens of other fiat currencies before it. But if you owned shares of Mercedes Benz, you still owned them after the Reichsmark collapsed.
Carl Benz and his management team steered the company through the monetary and financial turmoil of the time, which highlights the most important point of what I think lies ahead. If you decide to invest in the shares of a company, first and foremost make sure they have good management.
King World News note: Continue to use weakness to accumulate physical silver while it remains the cheapest hard asset in the world. And as Turk noted, the mining stocks are beginning to assert themselves but you haven’t seen anything yet. There is a massive breakout that is still in front of the mining stocks and when that upside break happens they will dramatically accelerate their upside gains. For those already positioned, patience is all that is required.
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