How the New Year’s tax deadline poses a risk for gold, silver and the Dow

The year’s biggest gainer investment is coming to a high-profile end. Silver SI00, gold GC00, Nvidia NVDA stock, and stock market indexes such as the Dow Jones Industrial Average DJIA, S&P 500 SPX, and Nasdaq Composite Index COMP all posted sharp gains in December, in some cases limiting significant gains.

Silver is up more than 150% this year and more than 4% the day after Christmas.

coincide? Maybe not. When there are more buyers than sellers, prices rise. Where are the sellers of these investments now? Who will sell before December 31st when they can wait until January 2nd and delay the registration of large taxable capital gains for a full year?

It’s human nature to put off bills as long as possible.

The end result is that these prices are artificially driven higher in the final weeks of the year as sellers go on strike and wait for the new year.

This means rational investors should consider locking in profits by selling immediately rather than waiting.

This is not a matter of market timing. Nor is it a matter of predicting future returns. It’s not about selling silver because you think it’s overvalued and the price will fall in 2026, for example. (That might be true, but then again, it might not be.) It’s just a matter of exploiting structural market irrationality. By definition, late December is a seller’s market for appreciating assets.

Is it really worth deferring those capital gains for a year? It may feel better, but the math gains may not be as great. The annual risk-free rate of return is less than 4% and is still declining.

As always, there are many considerations when it comes to taxes and personal finances. Everyone’s financial situation is different, including their financial needs and tax risks. This is just a general principle. But all else being equal, if someone holds silver and gold in a tax-sheltered account such as an IRA, the rational thing to do is to sell before the end of the year and buy again in January if they choose.

On the other hand, December also often presents opportunities to buy assets that have fallen sharply. This is because there are usually a large number of sellers eager to cash out their capital losses before the end of the year to make up for lost taxes.

Despite the apparent bull market, there are far more losing stocks than you might think. About 675, or 45%, of all large, mid- and small-cap companies in the S&P 1500 will see their share prices fall in 2025. About 450 companies, or 30%, saw their share prices fall by 10% or more. More than 200 stocks lost a quarter, 135 stocks lost at least a third, and 30 stocks lost at least half their value.

These include a number of well-known names—many of which are old economy stocks that have been left behind in the artificial intelligence frenzy. Companies that have fallen more than 20% this year include Wendy’s WEN, Clorox CLX, Campbell’s CPB, Harley-Davidson HOG, and Jack Daniel’s distiller Brown-Forman BF. B. Cheerio’s manufacturers General Mills GIS and Kraft Heinz KHC. Wendy’s stock fell by about half.

Whether these stocks will rise in the coming year, absolutely no one knows. But what we do know is that they are currently facing an unreasonable sell-off due to the December 31 tax deadline. All else being equal, this should mean their prices are now artificially depressed.