Key Takeaways:
- U.S. economic “death spiral” is happening now.
- Ray Dalio says expect a fiscal “heart attack” in next 3 years.
- U.S. deficits may average $2.1 trillion annually through 2035.
- Dalio says all of this, including debt defaults, lifts up gold.
Gold has continued to display remarkable resilience as economic and market uncertainty grows day by day. Owners of gold, including gold IRAs, are reassured by uncertainty because it has always tended to hold its own during difficult economic periods.
In early March 2025, famous money manager Ray Dalio warned readers about fiscal uncertainty, even as the markets were already dealing with tariff uncertainty.
The latest bout of economic uncertainty began with President Trump’s first wave of tariff announcements in February. They caused the Dow Jones Industrial Average to fall about 5 percent. The Nasdaq fell more than 8 percent. But gold rose almost 3 percent.
It’s just the latest in a long line of gold’s strong performances over the last three years that have added up to one of history’s best asset successes.
Gold Strength: Qualities That Make It a Safe Haven
Since 2022, gold prices have risen nearly 60 percent—far ahead of paper-based equities indexes.
It appears that this rise is due to geopolitical uncertainty (wars) and even greater economic and market uncertainty than we saw before.
It’s no wonder Americans are seeking assets – such as the gold IRA – to provide some peace of mind through diversification with assets that are uncorrelated to paper-based assets. In fact, some say, it’s the combination of these two uncertainties that is providing especially strong drivers for gold.
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Current Market Climate May Boost Gold and Silver
After examining recent events, some analysts are speaking out about the potential for gold prices to continue growing and why.
- David Merger, director of metals trading at High Ridge Futures, confirmed that safe haven products like gold and silver do well with pressure from market uncertainty.[1]
- Ole Hanson of Saxo Bank, said central bank demand could add a gold driver and stuck by a previous projection that gold could reach $3,300 per ounce.
- Central bank demand is projected to go over 1,000 metric tons for the fourth straight year in 2025.
Hansen explained: “The outlook for gold remains supportive, particularly given the limited depth of the latest correction, which signals strong demand despite selling pressure from technically focused traders.”[2]
National Debt Could Rise 63% in Next 10 Years
Understanding the growing national debt and the national deficit is crucial for navigating market uncertainty. For a detailed analysis of these fiscal challenges, see an in-depth breakdown on the Augusta Precious Metals blog. (Link at bottom of this page.)
- The Congressional Budget Office (CBO) issued eye-opening projections regarding the debt and deficit[3]:Gross federal debt is projected to go up about $60 trillion by 2035.
- The ratio of federal debt to GDP could spike up 120% by the end of 2035.
- Annual deficits may average more than $2.1 trillion per year through 2035.
With these forecasts, financial minds are weighing in on what this could mean for the economy—and for gold.
Market Uncertainty Could End in Fiscal “Heart Attack”: Dalio
Among other concerns and projections, Dalio, founder of the world’s largest hedge fund Bridgewater Associates, recently made the following points about market uncertainty on Bloomberg “Odd Lots” podcast[4][5]:
- The U.S. could face a debt crisis within a few years.
- Rising debt is like plaque in the arteries, and unchecked borrowing could lead to a financial “heart attack”.
- Gold is a crucial asset in this era of uncertain fiscal policy.
- The nation is spiraling into what economists call a “debt spiral”— specifically defined by borrowing just to cover existing obligations.
- A projected deficit-to-GDP ratio of 6% is “extraordinary,” at a level that usually only has been seen during severe economic downturns or war.
Dalio urges action—higher taxes, lower spending, and even a potential debt restructuring—to prevent a worst-case scenario. But will policymakers act?
(For deeper insights, check out Augusta Precious Metals' full report—link below.)
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"Few Are Likely to Be Spared”: Gundlach Weighs in on Potential Market Upheaval
Renowned analyst Jeffrey Gundlach, founder of DoubleLine Capital, has raised serious concerns about the future of the U.S. economy. In an interview with The Economist, he warned that a “quasi-default by the Treasury” is a real possibility.
He said: “Few are likely to be spared.”
Realistically, it’s difficult to say how markets will react to the economic trouble that could be coming according to these analysts. The CBO pointed out last year that “financial markets do not always fully reflect all potential risks,” so we shouldn’t rest too easy when a fiscal crisis is not immediately apparent.
Market Uncertainty Supports Gold
Dalio suggests that investors would do well to meet all this uncertainty with a plan that could include gold, “a non-debt-backed form of money.”[9]
Even just speculation by these analysts suggests uncertainty. So, many investors are seeking more information about gold and silver to see if it makes sense to add them to their portfolios. Market uncertainty could be a strong driver of gold — and a viable asset for many who want to be prepared.
For deeper insights on this topic, check out Augusta Precious Metals’ full article.
Resources:
[1] CNBC.com, “Gold rises on weaker dollar, trade war fears after Trump tariffs” (March 4, 2025, accessed 3/6/25).
[2] Neils Christensen, Kitco, “Saxo Bank expects the global trade war to drive gold prices above $3,000” (March 4, 2025, accessed 3/6/25).
[3] Congressional Budget Office, “The Budget and Economic Outlook: 2025 to 2035” (January 2025, accessed 3/6/25).
[4] Alexandra Canal, Yahoo Finance, “Ray Dalio: Debt crisis could cause ‘economic heart attack’ for US economy in the next 3 years” (March 3, 2025, accessed 3/6/25).
[5] Joseph Adinolfi, MarketWatch, “Ray Dalio warns U.S. could face a surprise debt-crisis ‘heart attack’ within three years” (March 3, 2025, accessed 3/6/25).
[6] Jeffrey Gundlach, The Economist, “America’s debt cannot keep stacking up, says Jeffrey Gundlach” (December 13, 2024, accessed 3/6/25).
[7] Congressional Budget Office, “The Long-Term Budget Outlook: 2024 to 2054” (March 2024, accessed 3/6/25).
[8] Michelle Fox, CNBC.com, “The U.S. national debt is rising by $1 trillion about every 100 days” (March 4, 2024, accessed 3/6/25).
[9] Ray Dalio, LinkedIn, “Do You Have Enough Non-Debt Money?” (April 18, 2024, accessed 3/6/25).
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