The $2 trillion Cares Act was signed on March 27, 2020. The $1.9 trillion American Rescue Plan was signed on March 11, 2021. The Inflation Reduction Act of 2022 was signed on August 16, 2022. Signing three economic rescue bills within three years to provide $4.7 trillion in funding is extreme.
The last time two economic rescue bills were passed was when the $152 billion Economic Stimulus Act of 2008 was signed on February 13, 2008, followed by the $831 billion American Recovery and Reinvestment Act of 2009 that went into effect on February 17, 2009. On February 17, 2009 gold futures closed at $967.50 and moved up to a high in the futures market of $1923.70 on August 5, 2011. Silver futures closed at $14.03 on February 17, 2009 and moved up to a high in the futures market of $49.56 on April 28, 2011.
A similar series of events took place between 1975 and 1977. In 1975 the $23 billion Tax Reduction Act was signed on March 29, 1975. This was followed by the Economic Stimulus Appropriations Act of 1977 that was signed on May 13, 1977. Following the approval of these two bills, gold futures hit a closing high of $909.9 on January 22, 1980 and silver futures closed at $41.50 on January 21, 1980.
The source of funding many of these bills goes back to August 15, 1971 when Nixon closed the gold window and stopped the international convertibility of U.S. Dollars to gold. On August 15, 1970 the Economic Stabilization Act of 1970 was passed to stabilize prices, rents, wages, salaries, interest rates, dividends, etc. as part of a price control program. On July 12, 1971 Nixon signed the $2.25 billion Emergency Employment Act of 1971. After closing the gold window on August 15, 1971, Nixon expanded the size of the next stimulus bill by signing the $15 billion Revenue Act of 1971 on December 10, 1971. Gold futures then went from $44 on December 10, 1971 to $179.80 on April 3, 1974. Silver futures went from $1.43 on December 10, 1971 to $6.29 on February 26, 1974.
The impact of approving very large rescue plans through consecutive stimulus bills has historically been followed by significantly higher gold and silver prices within 9 to 11 calendar quarters of the last bill being approved. In this case it would be the $739 billion Inflation Reduction Act signed on August 16, 2022. Based on this timeline the next peak in gold and silver is expected to occur between November 2024 and May 2025.