Brian Conneely
Precious Metals Advisor
Brian Conneely is a Precious Metals Advisor at Scottsdale Bullion & Coin. He's worked in the precious metals market since 2009, trading commodities and futures before moving into physical gold & silver investing.
Todd Graf
Precious Metals Advisor
Todd Graf is a seasoned Precious Metals Advisor at Scottsdale Bullion & Coin. He has a decade-long career in finance, previously at Morgan Stanley and Vanguard. He is Series 7 licensed and has extensive experience in traditional and defensive assets, providing clients with solid investment strategies.
Stocks stumbled this week as artificial intelligence (AI) —the market’s golden child and a major driver of recent gains—took a hit after China unveiled a competitive model with a leaner budget. The fallout sent shockwaves through Wall Street, forcing investors to rethink their exposure in a market overleveraged in a suddenly fragile sector.
In this week’s The Gold Spot, Scottsdale Bullion & Coin Precious Metals Advisors Brian Conneely and Todd Graf discuss the AI shakeup, what it means for investors, and how diversification in physical gold and silver can hedge against these sudden and detrimental shocks.
DeepSeek Rattles US Markets
The idea of America’s AI supremacy suffered a major blow last week when Chinese startup DeepSeek unveiled its newest technology. Reportedly, the R1 model rivals the world’s leading AI tools, including ChatGPT and Gemini, on a dramatically lower budget. DeepSeek claims to have spent only $5.6 million, a fraction of the billions Silicon Valley giants have poured into AI development and research over the past few years.
DeepSeek’s release spooked investors, triggering a massive sell-off that wiped out over $1 trillion from the S&P 500 and caused the index to drop 3% in a single day. This sharp decline underscored how dependent the broader market is on the Magnificent Seven: Apple, Microsoft, Alphabet (Google), Amazon, Meta (Facebook), Nvidia, and Tesla.
These tech giants, the largest US companies by market cap, account for about 34% of the S&P 500. With all of them deeply embedded in AI research, development, and implementation, the market and most investors were left overexposed to DeepSeek’s unexpected sucker punch. Alone, Nvidia fell by 17% as $600 billion was swiped from its evaluation.
The Hidden Threat to US Investors
This setback is a wake-up call for investors who assumed their portfolios were adequately diversified. While ETFs, mutual funds, and index funds offer convenience, the stock market’s heavy reliance on a handful of companies leaves investors more exposed than they might realize.
You think you’re diversified, but, really, the heaviest weighting is in the Magnificent Seven companies.–
More than half of US households are invested in ETFs or mutual funds, most of which are likely overly exposed to a handful of tech companies. To make matters worse, many investors tie these funds to their retirement plans, putting their nest eggs at greater risk.
“An IRA is not a place to be speculating. That's…where you want to be planning for your future in something…safe, secure, and reliable.”
Brian Conneely
Precious Metals Advisor
Gold’s Response
Although markets have somewhat steadied following the DeepSeek upheaval, leading voices suggest this problem runs deeper. Jamie Dimon, CEO of JP Morgan, describes the market as “inflated”, indicating that further volatility and losses are on the horizon. A billionaire investor who successfully predicted the dot-com crash urges people to be “on bubble watch” as the stock market far exceeds its inherent value.
This market-wide fallout is pushing investors toward safe-haven assets such as precious metals to shore up their portfolios. When the stock market reveals cracks in its foundation, people start looking for investments with stable price action and inherent value to anchor their wealth. For millennia, gold has faithfully served this role, keeping pace with inflation and preserving wealth.
Gold’s performance following the dot-com bubble and the COVID pandemic—two of the most recent massive economic crises—demonstrate the yellow metal’s tendency to rise as the broader economy falls.
Gold has performed well during big retractions in stock value. As time goes on, there’s usually a flight to safety. Gold has been that safer asset for thousands of years regardless of the country or the currency.–
✨ Gold Hits New All-Time Highs!
Following the latest market-wide sell-off, gold prices surged to new all-time highs this week, surpassing the $2,800/oz threshold. On Friday, January 31, 2025, spot gold reached an intraday record of $2,817.23 an ounce. Furthermore, analysts are targeting the yellow metal to rally past $3,000/oz soon as Trump 2.0 gears up to disrupt global markets. In fact, gold forecasts for 2025 look healthy across the board, suggesting the metal has plenty of room to run as economic uncertainty and volatility increase.
Shield Your Retirement Portfolio
Contrary to popular belief, a retirement plan doesn’t have to be relegated to ETFs, hedge funds, and other stock-focused investments. Through a precious metal IRA, investors can expose their nest egg to physical gold and silver assets while maintaining the tax advantage of conventional retirement plans.
With AI stocks revealing the fragility of the stock market, investors can’t be too cautious about their retirement portfolios. If you’re worried about the exposure of your nest egg, physical precious metals might be able to provide the protection you want.
We’ve put together a comprehensive video explaining how gold and silver can help investors optimize their diversification. Watch our Gold IRA video today to get started. To learn even more, request the free Precious Metals Investment Guide.
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