Precious metal prices plummeted on Friday. Gold had been on a run, appreciating 64% in 2025, and an additional 24% in January. Including a 10%+ pull back on January 30th, gold posted its strongest monthly performance in over 40 years!

The other side of this coin, the U.S. dollar, has weakened about 11% over that same period.

We’ve talked at length about the debasement trade. The trade, which includes owning gold and cryptocurrencies, is a hedge against a U.S. dollar devaluation. The U.S. dollar has struggled against a macroeconomic backdrop of rising debt, challenges to Federal Reserve bank independence, tariffs, and during 2025, a government shutdown.

Where do we go from here? Whether you own gold or not today likely comes down to why you may have held it in the first place. At year end, we spoke with two sets of investors we admire. One, a macro trader, purchased gold as a hedge to equities and exited their position in January into strength and volatility. The second, a strategic investor, has held on. Viewing gold as a hedge against inflation, this investor maintains the risks they’re hedging persist and warrant a more durable position. Exploring a third option – periodic rebalancing – a long-term, strategic investor would have been able to maintain a durable hedge throughout 2025 while actively managing the size of the position and its associated tax burden. The right solution, of course, depends on the investor.

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2025

Tide Cycle Resources (Tide Cycle) is an investment advisor registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. A copy of Tide Cycle’s Forms ADV Part 2 and Form CRS are available without charge upon request. The opinions expressed are those of Tide Cycle. The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. Forward-looking statements cannot be guaranteed. Nothing contained in this document may be relied upon as a guarantee, promise, assurance, or representation as to the future. This should not be taken as specific investment advice. We recommend consulting an investment/tax professional before making financial decisions based on any information provided.

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