Summary
- Gold price: Gold price saw its fourth consecutive all-time high closing price, reaching $2500 per ounce. This is seen as a bullish breakout and could attract more investors.
- Gold prediction: Bloomberg Intelligence predicts a gold price target of $3,000 per ounce due to potential stock market weakness.
- Gold vs. Stock Market: Gold will outperform the stock market in the coming decade due to a potential stock market bubble.
- Global Central Banks: Central banks have been buying record amounts of gold in the past few years.
- Silver Price: Silver price also closed high this week at $29 per ounce.
- Silver Prediction: Silver has the potential to outperform the stock market by a factor of ten due to increasing demand.
- Silver Demand: Silver demand is on the rise due to its use in new technologies like electric vehicle batteries.
- Mexico's Silver Production: There is a threat to Mexico's silver production due to potential legal changes.
- Future Outlook: The financial system is headed for a collapse and recommends gold and silver as a way to store value.
In almost all markets, the Friday closing price is typically the most significant price point of the week.
The reason for this is multifold.
One is simply weekly price chart candles.
Think about it, traders around the world finally get enough time outside of normal trading hours on quiet Saturday mornings for instance, to do looking around financial markets for trading ideas and or markets that illustrate a potential move up or down soon.
Here's a year to date weekly price chart for how gold closed this week.
Looks like a bullish breakout, no?
Gold just finished its fourth consecutive all-time Friday high price close in fiat US dollars.
Passing and closing above the psychological $2,500 oz price point and doing so out of the congestion zone gold has been trading in the last few months will surely catch increasing attention from traders around the world.
Watching the spot gold price trade today, the current levered gold longs seem pretty savvy judging by the way that $2500 spot gold was slowly inched up to and patiently methodically passed on the close over the day. It seemed professionally executed.
Add on the fact that spot gold tends to front run fiat Fed rate cuts and next week's Jackson Hole major central bank meeting in Wyoming. Gold has the potential for some real action and price volatility coming up to close Q3 in Q4.
Bloomberg Intelligence's senior macro strategist Mike McGlone is still out here banging the table on a not too long from now gold price target of $3,000 oz, but more important are some of his reasons as to why. Have a look and listen.
Volatility could push gold to $3,000 per ounce: Strategist
https://youtu.be/y6hRXFsglTk?si=nUIH5Knohs_fphZy
To his point about stock market volatility and weakness relative to gold bullion already ongoing and coming further.
Markets before they begin to tank typically want to load in everyone and their Uber driver shoeshine boy inside before shearing the largest amount it possibly can from those wrongly positioned.
Cut to this recent data illustrating US stock ownership is now at record high levels of participation, this latest stock market bubble surpassing the 2000 version in terms of everyone and their mother thinking they are a genius day trader.
Measured by gold with an eye focused on financial history, this latest stock bubble has merely been a dead cat bounce off the 2000 internet bubble measured by gold.
And as you can see on the S&P 500 / Gold spot price chart here, it has been rolling over of late. Judging by this chart I could easily make a case for gold bullion outperforming the S&P 500 by a factor of more than 4 times by the time we get into the next decade, the 2030s.
Just look at how far it plunged downward in the last 1980 gold bull mania phase versus now.
Back in the early 1980s, most investors spat on stocks given their terrible underperformance versus gold from the closing of the London Gold Pool rigging in the late 1960s through the stagflationary 1970s until the early 1980s.
That was obviously a generational opportunity to buy stocks and go long, long term.
Until the average investors I know start scoffing at the idea of owning stocks, I am going to stay heavily weighted bullion.
Similar but even more bullish side of this situation for silver as currently measuring this stock market bubble era by silver bullion, we are still almost as high as we got in the early 2000s back when gold was bottoming near $250 oz.
Very easy to make the case for silver bullion outperforming the S&P 500 by a factor of ten or more as we move through this decade into next before this bullion bull mania phase peaks out.
You can see just how spiked and dive crazy it got in 1980, it wouldn't surprise me to see a similar pattern repeat sometime in our future decade unfolding.
And no, gold is not going straight up to the moon like come price chartists like to post and pump online.
It will be volatile and a wild ride most certainly.
But current trends in gold are resoundingly sound. Globally central banks on the net have been buying record volumes the last 2 and 1/2 yrs ongoing.
Major economies like China have yet to come clean with just how much actual gold bullion they have squirreled away only to be declared when the time perhaps suits them best.
Major financial institutions, pensions, and high net worth family offices in the west have not even begun to take part in this building gold bull. Perhaps after $3,000 oz gold gets passed in time, they will begin to understand the market dynamics unfolding and increasingly participate spurring on positive feedback loops in price action.
Western citizens aside from those with trace but dying generational recollections of fiat currencies gone hyperinflation bad, on the average have about 2.5 grams of gold to their name. Less than a 14k gold wedding band, or in other words normies in the street are still relatively clueless about gold.
The largest asset class in the largest gold buying market China continues to flounder and disappoint while relative yuan strength of late has perhaps cooled local buying.
The authorities in China are making concessions for the next round of major gold importing by banks after a recent pause in the action.
And price action for gold in China looks every bit as bullish as recent price action here in the western world.
On the other side of this break we are going to get into some important silver trend news coming out of Mexico this week as well as other technologically silver industrial demand focused news items of importance that are worth our taking time to examine. Stick around, I'll be right back.
The spot silver and gold markets traded up through the week with a solid close respectively.
The spot gold price finished at 2,506 oz bid and the spot silver price closed at $29 oz bid.
The spot gold silver ratio fell slightly on the week to a still historically high level of 86.
A closer look at the spot Gold Silver Ratio in this 21st Century, I am already seeing people groaning that silver is not playing catch up to gold.
Let gold lead.
Eventually silver will play catch up surely with the momentum traders who will inevitably come flooding back in, and the ridiculous fundamental news stories we are about to cycle through from this week.
International Banker asked the question this week.
Does soaring industrial demand in 2024 signal a new era of higher silver prices?
I am not going to bore you with the decent article's details but instead backlink the link in the show notes if you are new here. We have been hammering the table here on virtually everything covered in the article.
Suffice to say, the answer is yes.
Silver in seemingly ancient sub 1980 price high levels, those days are numbered and shrinking like available silver bullion float from stockpiles.
China knows this, and over the last 4 months between spot price points ranging from just below $26 to as high as $32.50 oz. They have been importing recently at a record pace based on trailing data all the way back to the 2008 GFC.
Reports in recent weeks of a Samsung Solid State EV Battery that has a 600 mile range, 20 year life span, and has ability to fully charge within 10 minutes.
Of course the infrastructure to charge that fast is nowhere yet to be found at scale, and this is still early days but that didn't stop some silver bulls from extrapolating and publishing figures of 1 kilo of silver per battery per car mass adoption projections.
In 2020 it was reported of a breakthrough with new silver-carbon battery designs with the potential to blow away Lithium-Ion battery performance.
Obviously they have come a long way since 2020.
Silver is simply exceptional and we're learning new things about how it can enhance our lives everyday. Rather than thrifting out of industrially, trends are leaning into its use in terms of applications and sizes required to help make the world advance.
But don't get too optimistic on me yet silver bulls.
Mexico is politically threatened by congressional committee advancement to constitutionally reform laws that could shut down open pit mining.
Massive selloffs in Mexican based silver and gold mining shares understandably ensued such headlines and news to close this week.
Mexico is by far the world's largest silver producer churning out over 200 million ounces a year into a silver market that is already in somewhere of a 200 to 300 million demand outweighing new supplies deficit.
So yea, that all happened this week.
Look, the destruction phase of this collapsing financial structure and order is just getting underway.
For me, for now, it remains a physical bullion over myriad risk laden miners.
This is about storing value and getting to the other side of major changes upcoming.
International Banker Silver Demand 2024 vs Price:
That will be all for our weekly SD Bullion Market Update.
And as always to you out there, take great care of yourselves and those you love.
