Happy Sunday, GoldBuzzers!

Unless you’ve been holidaying on a desert island this week, you’ll have seen the extensive news coverage about Wednesday’s Fed rate cut.

I had an email this week from a reader asking why there was so much coverage about it and why it’s significant for gold. So, in today’s Deep Dive I’m going to address that very question!

Let’s jump in.

Gold crushed it again this week, climbing to $3,684 per ounce on Friday and notching its fifth consecutive weekly win. 🔥

The yellow metal hit a brief intraday record of $3,707.40 on Wednesday following the Fed's first rate cut of 2025 - a 25-basis-point reduction that sent gold bulls into full celebration mode - before pulling back from those highs amid some volatile trading.

The Fed's dovish pivot is the story here, with lower interest rates reducing the opportunity cost of holding non-yielding assets like gold. Fed officials are already signaling that labor market concerns could justify further rate cuts ahead (highly likely in my opinion - they're basically telegraphing it at this point).

With gold now up 42% year-to-date and repeatedly smashing new records, this bull market is looking increasingly impressive as we cruise towards the final quarter of 2025.

The Fed just cut rates for the first time since President Trump took office, dropping them to 4%-4.25%.

While a lot of the financial press is talking about real estate and tech stocks, I want to look at something else entirely.

Gold and gold mining companies.

Every major Fed rate cutting cycle since 1970 has been rocket fuel for gold prices.

Look at 1976-1977: gold doubled from $100 to $200. Then 2001-2004 happened and gold jumped from $270 to $450. The big one was 2007-2008 when gold rocketed from $650 all the way past $1,900.

The pattern is consistent. Lower rates make holding non-yielding assets like gold more attractive relative to bonds and savings accounts.

Mining stocks are where things get wild though.

When gold prices rise, mining companies don't just follow along. They explode higher.

Remember 2008-2011? Gold went up 170%. Sounds good, right? Major mining companies returned over 300%. Some of the smaller guys? We're talking 500% to 1000% gains.

The numbers are simple. If it costs a miner $1,200 to extract an ounce of gold, and gold trades at $1,500, their profit margin is $300 per ounce. But if gold hits $2,000, that margin suddenly jumps to $800 per ounce.

Gold goes up 33%, but mining profits can double or triple. It's leverage without the margin calls.

The current environment has some unique characteristics that could benefit gold even more than usual.

Inflation is running at 2.9% while the Fed just cut to 4.25%. When real rates go negative like this, gold usually takes off.

The Trump administration wants rates 2-3 points lower than where we are now. If that happens, we're looking at a much longer cutting cycle.

And the job market? August added just 22,000 jobs. Turns out the Bureau of Labor Statistics overcounted employment by nearly a million jobs from Mar 24-Mar 25. Oops.

When economic uncertainty rises alongside monetary easing, gold becomes both a hedge and a beneficiary.

Not all gold miners are created equal in a rate cut environment.

The big guys like Newmont and Barrick are boring but safe. They'll track gold prices without too much drama.

Mid-tier miners with decent balance sheets are where I look first. They can ramp up production when gold rises without going broke trying.

Junior miners and exploration plays? That's where the 500%+ gains happen. Also where you can lose everything if you pick wrong.

Pick your poison based on how much volatility you can stomach.

The Fed has projected two more quarter-point cuts this year, with another in 2026.

If jobs keep disappearing while prices keep rising, the Fed might cut faster than they're telling us.

Gold has already been mentioned as a likely winner in this environment, but I think the market is underestimating the potential magnitude.

Gold has already exceeded most price targets this year and is realistically eyeing $4,000+ in the foreseeable future. Of course, there will be corrections along the way, some of them significant, but gold’s ultimate destination is looking to be much higher over coming years.

Mining stocks at those gold prices? We could see some serious money made by people who get positioned now.

The main risk to this thesis is if the Fed successfully brings inflation down quickly without triggering a recession.

Inflation has gone up since tariffs were announced in April, not down. From 2.3% to 2.9%.

More likely? The economy keeps weakening and forces the Fed to cut more aggressively. That's exactly when gold and mining stocks tend to go nuts.

Every time the Fed has cut rates while inflation stayed above their target, gold investors made money.

We're probably just getting started here.

Your Goldmine of must-read stories from around the web this week:

Some of Wall Street’s biggest names - Ray Dalio, Jeffrey Gundlach, David Einhorn - are all pushing gold as the go-to hedge right now amidst inflation, debt concerns, and shaky faith in other safe havens. Business Insider

Jesse Colombo's calling it: market volatility could send gold to $4,000 and silver above $50 – basically, buckle up because precious metals might be about to go parabolic. Kitco News

Gold ETFs are absolutely crushing Bitcoin funds in 2025, with GLD posting a 24.4% year-to-date return versus Bitcoin's 14.5% - turns out the OG safe haven is schooling digital gold right now. ETF.com

China's central bank extended its gold-buying streak for a 10th straight month in August, joining the global central bank gold rush that's pushing prices to the moon. South China Morning Post

A whopping 95% of central banks expect global gold reserves to rise over the next 12 months, with a record 43% planning to boost their own stash - de-dollarization is real, folks. Yahoo Finance

Cora Gold just struck major gold mineralization at Senegal's Madina Foulbé mine, with four key zones at Tambor and two high-grade zones at Tombolo South lighting up like a Christmas tree. Energy Capital & Power

Chinese miners discovered what could be the world's largest gold deposit in Hunan Province – we're talking 1,100 short tons worth about $83 billion at current prices, potentially rewriting the record books. Daily Galaxy

A collection of 15,000 rare gold coins hidden underground for over 50 years just resurfaced with a $160 million price tag - the "Traveller Collection" was stashed from the Nazis and is now hitting auction blocks worldwide. Indian Defence Review

Talk about a golden retriever moment - 12-year-old Rowan and his dog sniffed out a 1st-century Roman gold bracelet on an English stroll. Popular Mechanics

Last Sunday, we asked how the upcoming Fed announcement would affect the gold price. After the announcement, the price briefly spiked higher before retreating significantly by the end of the day, since when it has gradually regained the lost ground.

So, I’m going to say that the 45% of you that voted “already priced in” were on the money. Congrats!

We’ll have another poll for you next Sunday, but in the meantime - that's a wrap on another wild week in the gold markets!

Remember: in a world of paper promises, gold remains the ultimate honest money. Stay stacked, stay informed, and we'll see you Tuesday for more market insights.

Before you go, please take a moment to rate today's newsletter and tell us how we did.

Rick Adams
Founder, GoldBuzz
rick@goldbuzz.com