Background: Gold has been a store of value for thousands of years, dating all the way back to ancient Mesopotamia and Egypt around 3,000 BC. In modern markets, it’s earned a different reputation: the ultimate safe haven when confidence in governments, currencies or financial systems starts to wobble. And right now, there’s plenty of wobbling going on.

What happened: Gold prices have smashed through $5,000 USD an ounce for the first time ever. Silver isn’t far behind on the drama either, breaking $110 USD an ounce, also a record. Gold is now coming off its best annual performance since 1979.

What else: While soaring prices are good for gold holders, they’re also flashing a warning sign. Investors aren’t piling into shiny metals out of excitement, they’re doing it out of unease. So it's no surprise that there's been a big jump in debasement trading.

What's the key learning

💡Debasement trading is an investment strategy where investors shift their capital from fiat currencies and traditional assets into hard assets like gold.

💡When governments borrow heavily and rack up massive debts, investors worry that currencies will lose purchasing power over time. With US debt now sitting at $38.5 trillion USD, many believe inflation will be used as a way to reduce the value of this debt.

💡That fear is showing up clearly in prices. Gold is up roughly 80% over the past year, while silver has surged 240%. So it's a reminder that when trust in money weakens, hard assets tend to shine brightest.