While the stock market has seen a big tumble this year, gold and silver have shone brightly, up 26% and 17% year-to-date, respectively. In a recent interview with Financial Sense (see Gold Surge Just Starting?), Cris Sheridan sat down with precious metals expert Alan Hibbard to look at what could happen to gold and silver if we see a replay of the 1970s bull market.
The Big Picture on Gold
Hibbard isn’t one for short-term predictions. “It’s very hard to predict the short term,” he admits, pointing to the market’s sensitivity to news like tariff announcements or policy shifts. Instead, he zooms out, focusing on trends spanning decades. “Gold and silver are absolutely in a bull market,” he declares, predicting they’ll outperform stocks for years to come. This confidence stems from his analysis of capital flows, which he sees shifting from centralized assets like stocks to decentralized ones like gold. Why? Because trust in institutions—governments, corporations, and fiat currencies—is eroding.
The Dow-Gold Ratio: A Century of Capital Shifts
One of Hibbard’s most striking insights comes from the Dow-gold ratio, a metric comparing the Dow Jones Industrial Average to the price of gold since 1900. “What this shows is how capital flows from the centralized part of the economy, stocks, to the decentralized part, gold,” he explains. Historically, stocks dominate when trust in leaders and companies is high. But every 30-40 years, distrust sparks a flight to gold.
Hibbard highlights the 1929 crash: investors who held stocks for 29 years saw massive gains, but those who stayed in after the crash were worse off than if they’d avoided stocks entirely. Today, the Dow-gold ratio is dropping from 16.5 to 13.5, signaling gold’s outperformance. Hibbard predicts it could revert to a much lower number, meaning the Dow and gold prices align—potentially with gold at $10,000 and the Dow halved to 20,000.
Echoes of the 1970s: A Bull Market Blueprint
Hibbard draws a vivid parallel between today’s market and the 1970s, when gold skyrocketed. “The bull market we’re in right now does bear a striking resemblance to the bull market of the 1970s,” he notes. Back then, gold doubled in just 42 days at the peak, a “vertical move” fueled by scarcity and panic. Hibbard sees similar dynamics today, with 90% of the current bull market already behind us but the biggest gains potentially still ahead.
“The price of gold could roughly triple in the next two and a half years,” he projects, potentially hitting $9,000-$10,000 per ounce. This isn’t blind optimism; it’s rooted in structural factors like central banks hoarding gold and nations reducing dollar holdings. The 1970s ended with a monetary shock—Nixon closing the gold window. Hibbard believes a modern equivalent, a “monetary reset,” is brewing, driven by a radical reshuffling of the current global order, de-dollarization, and distrust in fiat systems more broadly.
Silver: The Underdog with Explosive Potential
While gold grabs headlines, Hibbard is equally bullish on silver, calling it “the poor man’s gold.” Silver’s industrial uses—think solar panels and electric vehicles—mean it’s often overlooked as a monetary asset. But when inflation spikes and gold feels pricey, investors flock to silver, sparking explosive moves. “In the 1970s, gold returned 25x, silver did 39x,” Hibbard says. Today, with silver at $34 versus its 2011 peak of $50, he sees room for growth. The gold-silver ratio, currently around 100 (meaning 100 ounces of silver buy one ounce of gold), is historically high. If it reverts to its long-term average of 15-16, “silver would outperform gold by roughly a factor of six.” A structural deficit in silver supply, now in its fifth year, adds fuel to this fire, creating a “positive feedback loop” where scarcity drives prices higher.
Structural Forces: Inflation and Inevitability
Hibbard’s thesis hinges on structural realities no policy can easily undo. The U.S. faces ballooning debt and entitlement obligations, with roughly 80% of spending locked in. Efforts like Trump’s DOGE initiative to cut waste are, in Hibbard’s view, “chopping at the branches, not taking an ax to the root.” Inflation, he argues, is the only way to erode this debt’s real value.
“You’ve got to create a whole bunch of dollars [to pay for mandated services] … the dollar price of assets like gold is going to go through the roof,” he believes. Global trends reinforce this Alan says: BRICS nations are de-dollarizing, central banks are buying gold, and even Bitcoin’s rise reflects distrust in fiat. “The dollar’s days are numbered,” Hibbard asserts, predicting a sound money standard will emerge, boosting gold and silver further.
The Road to Euphoria: Where Are We Now?
Hibbard sees bull markets in three waves: smart money, institutional money, and retail euphoria. “I don’t see euphoria yet,” he says, but the signs are there. Friends and family are asking about gold and silver, and goldsilver.com is fielding $100 million orders from institutions. Central banks are also piling in, signaling the institutional phase. Retail investors, however, have not yet entered the market en masse. Hibbard estimates the euphoric peak could hit around 2026-2027, aligning with the 1970s analog. “The ingredients are in place,” he says, citing tariffs, policy shifts, and structural debt as catalysts. Yet, he cautions against precise timing, urging patience over speculation.
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