Record high debt = record high gold price

Barrick Mining Corporation—one of the world’s largest and most established gold producers—just reported its third quarter earnings yesterday— and it was an absolute blowout.

The company reported third quarter profit of $1.3 billion, nearly triple last year’s Q3 earnings.

And for the first nine months of 2025, Earnings per Share is up a whopping 132% over the same period last year. Free Cash Flow is up an astonishing 176%.

The company further announced that they’re raising the dividend by 25% and expanding the company’s share buyback authorization by an additional $500 million, after already repurchasing $1 billion worth of shares under the prior program.

And what’s perhaps even more striking is that these record profits were based on an average gold price of $3,200. This means that the company’s Q4 earnings (which we’re nearly halfway through) should be MUCH higher given that the gold has averaged $4,041 so far this quarter.

Our readers won’t be surprised to hear any of this; we’ve been saying for the past few years that gold was going to go much higher— specifically because foreign governments and central banks have been buying gold by the metric ton to diversify their strategic reserves away from the US dollar.

This trend isn’t going away.

Between the government shutdown fiasco, the rising $38+ trillion US national debt (up $500 BILLION just in the last six weeks), extreme political dysfunction in Congress and the courts, etc., foreign governments and central banks are continuing to literally buy tons of gold, even at record high prices.

We also wrote that gold companies (including miners like Barrick) would benefit substantially from rising gold prices.

So, just as we predicted, Barrick (among other gold miners) is raking in record profits, and its stock price has doubled this year alone— outpacing gains from Oracle, Nvidia, Palantir, and pretty much every major large cap company in the market.

But here’s what’s really amazing— despite such stellar performance, many of these gold companies are still cheap.

Barrick stock, for example, is near its all-time high. Yet the company is still valued at less than NINE times forward earnings— and that’s assuming gold doesn’t go up further from here.

(And even if the gold price tanks, Barrick will still be a profitable, dividend-paying, modestly valued business. Remember, Barrick’s record profits are based on $3,400 gold!)

Smaller gold companies— the ones that we focus on in our premium investment research— are even cheaper.

One of the gold miners we’ve featured is already up 4x this year. Yet it still trades at just 3.5 times forward earnings. The company is extremely shareholder-friendly and has a pristine balance sheet with zero net debt. Oh, and did I mention they pay a substantial dividend?

The gold price could collapse to less than $3,000 and this company would still be wildly profitable.

Could that happen? It’s possible. Even during the 1970s when gold rose from $35 to $850, gold suffered a major pullback in 1975. The pullback was temporary, and gold rose over 8x from there.

That’s because the fundamentals driving gold’s rise during the 1970s hadn’t really changed.

After Richard Nixon formally ended the Bretton Woods system in August 1971, foreign governments and central banks rapidly began selling their US dollars for gold.

As the decade progressed, foreigners became increasingly concerned about US deficits, government dysfunction (Watergate in 1973), global instability, waning US power, and more.

And despite a brief pullback in gold prices, this trend continued until the early 1980s, when the election of Ronald Reagan restored confidence in America’s might and fiscal discipline. It was only at that point that gold prices started to fall.

This same trend is unfolding today, and it’s not hard to understand: the record high US national debt = record high gold price.

Foreign governments and central bank remain deeply concerned about America’s fiscal condition, and gold is one of the few assets available for them to diversify their US dollar holdings.

Just like in the 1970s, we expect this trend to continue until Congress proves that it can act like  grownups and be fiscally responsible.

In the meantime, we anticipate gold— and gold companies— to continue to perform very well. Again, many are posting record profits yet are still insanely undervalued. We do not expect this anomaly to last.

PS– We write about our investment research because we’re extremely proud of what we do.

This is enormously high quality research and the results speak for themselves. Four of our precious metals companies are up 3 and 4x, even after recent pullbacks. Another seven are up 35-150%.

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Source

Simon Black is an international investor, entrepreneur and permanent traveler. His daily letter is both educational and entertaining, and we suggest that those who want unbiased, actionable information about global opportunities sign up for Sovereign Man’s free, actionable newsletter at http://www.SovereignMan.com.

From Simon Black of SovereignMan.com

Source: https://www.schiffsovereign.com/trends/record-high-debt-record-high-gold-price-153870/