Gold has been acting like a crypto token lately — wild 12% swings over just a few trading days, the kind of volatility that hasn’t shown up in precious metals markets more than once in the last 30 years. If you’ve been watching your gold position whip around and wondering whether to bail, here’s the number that should make you hold on tight: by 2036, more than a quarter of every federal tax dollar will go toward paying interest on debt. Not defense. Not healthcare. Not infrastructure. Just interest.
That data point comes straight from the Congressional Budget Office’s latest projections, and the full picture is even uglier. U.S. debt held by the public will cross 100% of GDP this year — a threshold last breached after World War II — and will blow past that wartime record by 2030. The annual deficit will exceed $3 trillion by 2036, hitting 6.7% of GDP. CBO Director Phillip Swagel didn’t sugarcoat it: “Our budget projections continue to indicate that the fiscal trajectory is not sustainable.”
Here’s why this matters to anyone with a brokerage account: when governments face unsustainable debt paths, there are exactly three options. They can raise taxes, cut benefits, or print money. None of those are good for your purchasing power. And the cruelest irony is that even if economic growth accelerates, the CBO notes that faster growth creates inflationary pressure and higher rates — which actually makes the deficit worse because the government is servicing such an enormous pile of debt. It’s a fiscal doom loop, and there’s no elegant exit.
So about that gold volatility. Historical data shows that when gold drops more than 12% over a 30-trading-day window — which has happened nine times since 1998 — the average rebound over the next four months is modest. Gold heals slowly. But stretch that timeline to one year, and the metal has historically regained its highs and added another 8% on top. This isn’t a get-rich-quick asset. It’s a don’t-get-poor-slowly asset — and in a world where 26 cents of every tax dollar is about to be lit on fire paying interest, that’s exactly what you want in your portfolio.
The takeaway isn’t to panic or to load up on gold futures. It’s to understand what’s happening underneath the surface. The U.S. government is running deficits that would make wartime planners blush, and the debt is compounding faster than the economy can grow. That backdrop has historically been the single best environment for hard assets — gold, silver, real estate — anything that can’t be printed into oblivion. If you already own precious metals, sit tight. If you don’t, the recent pullback might be the last discount you get before the fiscal math forces everyone else to figure this out.