May 2026 - Week 1 Edition
U.S. Public Debt-to-GDP Ratio Now Surpasses 100% or Is It 125%?
The financial press is making a big deal about the fact that the U.S. Treasury’s “public debt,” which is the debt owed to the public, surpassed the nation’s annual GDP (Gross Domestic Product) at the end of the first quarter. Specifically, as of March 30, 2026, America’s publicly held debt was $31.265 trillion, slightly above the GDP of $31.216 trillion over the previous 12 months. Dividing public debt by GDP yields 1.002, meaning public debt makes up 100.2% of the GDP. This marks the first time since World War II that this scenario has occurred.
“We’re headed toward uncharted territory,” said Marc Goldwein, senior vice president of the Committee for a Responsible Federal Budget. “There’s no magic of 100% vs. 99% but it’s a scary place to be.”
Actually, the debt level is worse, at nearly 125% of the annual GDP, since the official number only counts the debt owed to the American public: individuals and institutions. That is evident in the keyword – “public” debt. However, if you add in all the debt held by foreign interests, the debt-to-GDP ratio is 125%.
According to the official U.S. debt clock, the current federal debt is $38.97 trillion. If you divide that number by our $31.216 trillion GDP, the ratio is at 124.8%!
Using that more accurate debt figure, the U.S. has had a debt-to-GDP ratio above 100% since 2015!
Please check our website every week or so to see where the U.S. debt clock stands now. With $39 trillion in debt coming soon, that means each of us owes $117,000 or something like $470,000 in debt per family of four. And the more we see Congressional overspending continue at an annual rate of $2 trillion per year, the more the U.S. dollar will be devalued and the more gold will rise, since you can’t “print” more gold.
April and Year-to-Date Market Review
Stocks rallied in April over the possible end of the conflict in Iran and the prospect of lower oil prices and cheaper gasoline at the pump – all in advance of mid-term November elections.
Here is the performance of precious metals in April, with the Platinum Group Metals rising a bit, and gold losing only 0.7%, with gold still leading the way at the end of the first four months, up almost 6.7%.
Silver is trending higher again and Bank of America predicts silver to hit $135 an ounce or higher in 2026 as overall demand outpaces supply for the sixth straight year.
The three major stock indexes gained an average 10% in April and 5.3% year-to-date but we will also note that gold surpassed both the Dow and S&P 500 year-to-date through April 30th.
The only major investment to rise spectacularly in price this year is obviously crude oil, up over 50% in March and 83% year to date, due mostly to the back-up of oil shipments coming out of the Persian Gulf.
Bank of America Raises Its 2026 Forecast for Average Gold Prices
Despite gold’s recent small decline in the face of uncertain monetary policy under new leadership at the Fed, plus the uncertain resolution to the conflict in Iran, commodity analysts at Bank of America stood by their long-term forecast of $6,000 gold within 12 months – a 33% gain from the current $4,510 range and as we reported last week, they also gave it a 30% chance of reaching $8,000 by the end of 2027.
What we have seen over the years with significant moves in gold and silver, either up or down, is that about one in six people who buy into gold or silver bullion and regularly engage with coin dealers will move into rare coins. That move helps support and drive up the rare coin market when the bullion market recedes.
Writing to their clients last week, Bank of America stated, “Gold has hit an air pocket, as the yellow metal and oil have been inversely correlated over inflation concerns and the Fed’s reaction function. This apprehension still lingers, but continued uncertainty over US economic policy, including an elevated fiscal deficit and a weak US Dollar, should keep a bid on the metal.” In this report, Bank of America also raised its average 2026 gold price forecast to $5,093, up from its previous $4,988 forecast.
Gold fell almost $100 on Monday, May 4th, due to concerns about rising oil prices up to $113 a barrel at one point and uncertainty over future Fed policies. The dollar firmed up a bit over the weekend and a stronger dollar tends to push prices lower in dollar terms. On Monday, spot gold initially fell by more than 2% or by $97 to $4,515 an ounce. On the futures market, gold for June delivery fell 2.1% to $4,548 but the volume was light, as markets in China, Japan and the UK were still closed for the “May Day” holiday weekend. By Wednesday, gold had already surpassed $4,700 an ounce and silver blew past $77 per ounce.
Metals Market Report Archive >
Important Disclosure Notification: All statements, opinions, pricing, and ideas herein are believed to be reliable, truthful and accurate to the best of the Publisher's knowledge at this time. They are not guaranteed in any way by anybody and are subject to change over time. The Publisher disclaims and is not liable for any claims or losses which may be incurred by third parties while relying on information published herein. Individuals should not look at this publication as giving finance or investment advice or information for their individual suitability. All readers are advised to independently verify all representations made herein or by its representatives for your individual suitability before making your investment or collecting decisions. Arbitration: This company strives to handle customer complaint issues directly with customer in an expeditious manner. In the event an amicable resolution cannot be reached, you agree to accept binding arbitration. Any dispute, controversy, claim or disagreement arising out of or relating to transactions between you and this company shall be resolved by binding arbitration pursuant to the Federal Arbitration Act and conducted in Beaumont, Jefferson County, Texas. It is understood that the parties waive any right to a jury trial. Judgment upon the award rendered by the Arbitrator may be entered in any court having jurisdiction thereof. Reproduction or quotation of this newsletter is prohibited without written permission of the Publisher.
