Miner's take on the rise in gold prices, student loan wage garnishments to restart

Key Concepts

• Gold Surge (2025): Significant price increase driven by geopolitical uncertainty, central bank buying, and ETF demand.
• Manufactured Housing Renaissance: Potential growth in the sector due to affordability issues and regulatory changes.
• Home Equity Boom: Increasing trend of homeowners tapping into equity, fueled by low inventory and rising rates.
• Student Loan Wage Garnishment: Restart of enforced collections on defaulted federal student loans, impacting millions.
• Alamos Gold: A North American gold mining company experiencing rapid growth and focusing on safe jurisdictions.

Gold Market Analysis & Alamos Gold

Gold prices experienced a dramatic surge in 2025, increasing by over 65%. This rise was attributed to several factors including tariff uncertainty, robust demand from Exchange Traded Funds (ETFs), and substantial purchasing by central banks. Consequently, gold mining companies saw their share prices increase by over 100% within a 12-month period.

John McCluskey, CEO of Alamos Gold, described the current market as a “multi-year run,” noting that gold prices have been consistently increasing for the past decade, albeit not as dramatically as in 2024. He highlighted the company’s strategic acquisitions between 2015 and 2017, when gold prices hovered around $1,100 per ounce, as a key factor in their current success. These acquisitions have significantly boosted cash flows, which are now being reinvested into growth initiatives.

A significant driver of gold’s price increase, according to McCluskey, was the European Union’s decision to freeze Russian central bank assets. This prompted other central banks, particularly China and countries trading with Russia, to increase their gold reserves as a safeguard against potential asset seizure. He also cited heightened political risk and aggressive tariff policies from the new American administration as contributing factors. While central bank buying initially led the surge, investor participation is now increasing, suggesting further potential for price appreciation.

Alamos Gold currently operates four mines across three sites – the Island Gold complex (with two operations), Young Davidson, and Mulados in Mexico. They are also constructing a fifth mine, Lin Lake, in northern Manitoba, Canada. The company has strategically shifted its focus to Canada, prioritizing politically stable jurisdictions. McCuskey emphasized that 90% of Alamos Gold’s value is now derived from Canadian operations.

He projected a doubling of production between now and the end of 2028, a growth rate he believes is unmatched in the industry. This growth will be achieved in safe jurisdictions and at low costs, making Alamos Gold a compelling investment. McCuskey refuted the notion that many miners are diversifying away from Canada, stating that most companies are actively acquiring assets within the country, recognizing its political stability. He identified Canada, the United States, and Australia as the few countries offering both significant gold production and a secure political environment. He cautioned against operating in regions like Africa and Southeast Asia, citing the challenges faced by major companies like Barrick and Newmont.

Currently, Alamos Gold’s stock is up approximately 120% over the past year, with a unanimous “buy” rating from analysts (13 buys, 0 holds, 0 sells).

Housing Market Trends & Home Equity

Meredith Whitney, CEO of Meredith Whitney Advisory Group, discussed the challenges in the housing market, particularly regarding affordability. Despite potential interest rate cuts, she argued that affordability will remain problematic unless prices decline. A key issue is the limited housing inventory, with 60% of existing homes owned by seniors (over 60) who are increasingly choosing to age in place, reducing the number of properties available for sale.

Whitney highlighted a growing trend of homeowners tapping into their home equity, driven by affordability issues. She estimated that there is $36 trillion in total home equity, with $26 trillion being “tapable.” While historically, home equity was primarily used for renovations, it is now increasingly being used for cash management. She noted that in 2025, there were just over 4 million existing home sales, with estimates for the current year being only slightly higher. Consequently, the home equity loan market is experiencing a “renaissance.”

Whitney identified companies like SoFi and Rocket as potential beneficiaries of this trend. She recommended SoFi due to its “originate and sell” model, allowing it to generate higher margins. Both Rocket and SoFi saw significant stock gains in the previous year (85% and 75% respectively), partly due to the pipeline of home equity companies preparing to go public.

A particularly promising area within the housing market is manufactured housing. Whitney emphasized that modern manufactured homes are often high-quality and significantly more affordable than traditional site-built homes. She pointed to regulatory changes, specifically the potential repeal of a 1970s chassis requirement, as a catalyst for growth. Removing this requirement could lower manufacturing costs by an additional 25-50% and potentially increase shipments from 100,000 to 500,000 annually. Companies like Champion Home Builders, Sky, and CavCo are positioned to benefit from this shift.

Student Loan Repayment & Wage Garnishment

Millions of federal student loan borrowers are facing the resumption of enforced collections, including wage garnishment, after a period of pandemic-era relief. Mark Canterowitz, a student loan expert, explained that nearly 10 million Americans could be affected, including 3.4-4 million who have newly entered default and the rest who were already in default.

Wage garnishment can reach up to 15% of a borrower’s disposable pay, but the government must leave the borrower with at least 30 times the federal minimum wage per week ($217.50 at $7.25/hour).

Canterowitz provided several recommendations for borrowers potentially facing wage garnishment:

• Update Contact Information: Ensure the government has your current address to receive notices.
• Reduce Spending: Prepare for a reduction in take-home pay.
• Income-Driven Repayment: Consider switching to an income-driven repayment plan.
• Deferment/Forbearance: Explore economic hardship deferment or unemployment deferment (though these options are changing).
• Save Before Garnishment: Set aside funds to ease the transition.
• Bring Account Current: If possible, bring the account current before reaching 270 days of delinquency.
• Increase Income: Consider a part-time job to supplement income.

Conclusion

The trends discussed highlight a shifting economic landscape. Gold is experiencing a significant bull run driven by geopolitical and economic uncertainties. The housing market is grappling with affordability challenges, leading to increased reliance on home equity and a potential renaissance in manufactured housing. Finally, millions of student loan borrowers are facing the resumption of wage garnishment, requiring proactive planning and exploration of available options. These trends present both challenges and opportunities for investors and individuals alike, emphasizing the importance of staying informed and adapting to evolving market conditions.