To those who are not economically inclined, predicting how and when the Federal Reserve will raise or lower interest rates might seem next to impossible — despite those rates dictating so much of the average American’s financial well-being. However, bestselling author and investment expert Grant Cardone believes he has a surefire bellwether to indicate the trends of the Fed and its relationship to interest rates: gold.
For You: How To Get a 10% Return on Investment (ROI): 10 Proven Ways
Read Next: 4 Low-Risk Ways To Build Your Savings in 2025
As Benzinga has reported, Grant has charted on X that the value of gold has skyrocketed in 2025, with the investor noting that “gold is acting like we are in a depression. Rates will drop like a rock.” Gold is currently valued at nearly $3,500 per ounce; conversely, it was only worth $2,000 per ounce at the end of 2023.
Here’s why this matters: During times of economic uncertainty, when the U.S. dollar is considered weak, investors will turn to precious metals — such as silver and gold — rather than trust the dollar and equities. Therefore, the ascendancy of gold typically equates to financial insecurity and a weakening dollar. Grant’s supposition is that, as the dollar weakens, the Federal Reserve will have no choice but to cut interest rates. So the higher the value of gold, as Grant sees it, the more likely the Fed is to drop rates.
Check Out: I’m a Financial Advisor: 4 Investing Rules My Millionaire Clients Never Break
Something very similar happened in 2019. After then-President Donald Trump began a tariff-based trade war with China in 2018, which caused the dollar to weaken and inflation rates rose (as did gold value), the Fed then cut interest rates in August, September and October of 2019. Given that America is once again locked into a similar (and more expansive) tariff-based trade war and gold’s value is on the rise again as faith in the dollar decreases, Cardone’s assertion seems rather sound.
That said, Cardone’s theory isn’t 100% guaranteed. If the dollar continues to weaken but the Fed chooses to increase rates as a means to control inflation, America might face stagflation — a situation in which the country would have both slow economic growth and high inflation as well, leading to high unemployment.
Investors would likely do well to have a balanced portfolio in uncertain times. Rather than abandon the dollar wholesale for gold (further exacerbating the situation), a varied portfolio with investments in both equities and precious metals alike could be the safer bet.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
More From GOBankingRates
5 Types of Vehicles Retirees Should Stay Away From Buying
6 Subtly Genius Moves All Wealthy People Make With Their Money
4 Things You Should Do if You Want To Retire Early
7 Wealth-Building Shortcuts Proven To Add $1K to Your Wallet This Month
Source:
Benzinga, “Grant Cardone Shares A Chart That Indicates The Fed Will Drop Rates: ‘Gold Is Acting Like We Are In A Depression’“
Grant Cardone, X
This article originally appeared on GOBankingRates.com: Grant Cardone: Rates Will Soon ‘Drop Like a Rock,’ Thanks to Gold — Here’s Why
