Steve Rand
General Manager / Sr. Precious Metals Advisor
Steve Rand is the General Manager and a Sr. Precious Metals Advisor at Scottsdale Bullion & Coin. He brings over 20 years of experience in the physical precious metals markets.
Eric Sepanek
SBC Founder
Eric Sepanek is the founder of Scottsdale Bullion & Coin, established in 2011. With extensive experience in the precious metals industry, he is dedicated to educating Americans on the wealth preservation power of gold and silver.
The U.S. dollar (USD) is under threat from various fronts. Stock market losses, bearish unemployment numbers, and impending rate cuts rattle the domestic economy. From abroad, the growing coalition of BRICS nations challenges USD dominance.
In this week’s The Gold Spot, Scottsdale Bullion & Coin Founder Eric Sepanek and Sr. Precious Metals Advisor Steve Rand discuss how the economy is cooling, the growing de-dollarization block, and the importance of financial privacy.
Slowing Economy
Job openings dropped to the lowest level in over three years, according to a report from the Labor Department. The openings fell more than 5% below expectations, undermining the incumbent administration’s reassurances that the economy remains strong. This decline follows significant layoffs, particularly in the tech sector, as companies grapple with broad economic troubles.
These employment challenges have also been mirrored in Wall Street’s recent performance, with significant losses earlier this week. NVIDIA, often seen as a bellwether for the broader stock market, experienced the largest single-day loss of any U.S. company. The S&P 500 has already seen consecutive losses, reversing its record-setting growth earlier this year. Global markets have followed suit, with notable declines in Japan and Europe.
These weaknesses increase the likelihood that the Federal Reserve may adopt a more aggressive approach to cutting interest rates, which could weaken the dollar quicker than anticipated. Fed Chair Jerome Powell has made it clear that slashes are incoming, but investors are holding their breath in anticipation regarding the pace of those cuts. Generally, a declining economy triggers more decisive rate-cut measures.
BRICS Boom
The challenges facing the U.S. dollar are not confined to domestic issues. An increasing number of countries actively seek to decouple their economies from the dollar, viewing it as a liability rather than an asset. This shift is driven by mismanagement of the dollar through over-weaponization via sanctions and reckless spending, exemplified by the soaring national debt.
The BRICS nations – an increasingly tighter collection of growing economies – stand at the forefront of this de-dollarization movement. Representing 45% of the world’s population, this economic block is quickly turning from a thorn in the side of the dollar to the biggest threat to USD hegemony. Most recently, Turkey expressed interest in joining BRICS, highlighting the group’s expanding influence and appeal.
[BRICS] expansion is going to be catastrophic for the dollar.–
The flip side of this shift away from the dollar is a rush into physical gold. Central banks broke records in the first half of 2024, following a non-stop binge between 2022 and 2023. China, the block’s de facto ringleader, recently implemented gold-buying quotas. These moves into gold are intended to act as a reliable foundation in lieu of the dollar.
“Scary” Policy Proposals
Last-minute Democratic presidential nominee Kamala Harris has received widespread criticism for her controversial tax proposals. Namely, the current vice president’s plan to tax unrealized gains has alarmed investors who are scrambling to safeguard their wealth from these unprecedented and constitutionally questionable policies.
The proposal has sparked backlash, as mainstream publications have called the plan “dumb” and “scary.” This aligns with Harris’ previous comments about hiking the long-term capital gains tax to 28%. Regardless, these proposals have more people thinking about financial protection and privacy, not only growth.
Time to Sell Gold?
Gold prices saw a minor pullback last week after a record-breaking rally, but the yellow metal has quickly rebounded, now holding firm above the $2,500/oz mark. The brief dip left some investors questioning whether it was the right time to sell. However, a broader view shows that the underlying factors driving gold’s rise remain firmly in place.
When you look around at what’s going on in the world right now, it would be a hard time to say, ‘I want to sell my lifeboat right now.’–
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