Summary
- Gold has technically broken out ahead of other precious metals, signaling a strong, enduring bullion bull market.
- Historically, gold revalues higher in cycles, and the current global conditions suggest a similar revaluation is on the horizon, but on a worldwide scale.
- Central banks, aware of this revaluation trend, have been purchasing record amounts of gold, with no signs of slowing down.
- Countries like Poland and India are increasing their gold reserves, with Poland aiming for 20% and India consistently adding more.
- Unlike the 1980 gold rally, today's market faces a looming sovereign debt crisis, exacerbated by unfunded liabilities and a devaluing fiat currency.
- Recent US market trends saw gold remain steady despite a rise in the US dollar index (DXY), showing resilience against fiat currency fluctuations.
- Platinum made headlines as Costco began selling 1 oz PAMP Suisse platinum bars, highlighting platinum's undervalued status relative to gold.
- Silver is also in a stealth bull market, with its current price significantly below its 1980 and 2011 highs, and industrial demand for silver continues to grow, driven by solar panels and electronics.
- India continues to be a major silver consumer, importing over 45.6 million ounces in August 2024 alone, with the wedding season expected to increase demand further.
This is a full fiat currency era chart of Gold, Silver, Palladium, and Platinum in fiat US dollars from 1970 until now in 2024.
As you can clearly see gold has broken out versus other precious metals on a technical spot price basis. It is a healthy sign for in a legit long lasting bullion bull market, gold leads other precious metal values lag until catch up rallies later on.
In a few minutes we will look into some recent news regarding both silver and platinum markets, but we begin with gold, their clear leader at the moment.
We can go back with over 800 years of financial history with one the world's once dominant reserve currency empires. And see the simple fact that over time, gold eventually stair steps higher in revaluation cycles. This gold rerating higher will be a historic rhyme in time, but this time it will be on a simultaneous worldwide scale.
On a collective net basis government central banks know this, and that is why they have been buying record volumes of official gold bullion reserves in record size the last few years with little to signs of slowing down.
Poland is moving toward having a prudent 20% gold reserve allocation, they have reached 16% currently. Eastern nations like India are consistently buying gold bullion too.
Perhaps the most important difference between the 1970s-1980 western driven bull and this current 21st Century world wide version.
Is that the 1980 Gold price re-accounting higher didn't have a western sovereign debt crisis as we are low-key hurling towards.
Yes the US bond market at the time was relatively crazy with interest rates spiking towards 20% but a legit question of overall sovereign solvency was not as real as it will eventually become in our future.
The 1980 gold revaluation wasn't propelled by currently growing Unfunded Liability piles in USA and Western World either estimated in the hundreds of trillions in promises coming due, not saved for either. Historically it is the fiat currency being devalued that becomes the release valve for such occasions.
Tomorrow Saturday, China is reported to declare yet another stimulus package on top of the one from only just over a week ago. Estimates range from another $283 billion to up to $1.4 trillion of additional stimulus.
Only a matter of time before we begin akin in the west. Ballooning the fiat Federal Reserve's balance sheet multifold and likely moving towards yield curve control and further bank consolidations.
In terms of US debt to GDP, we crossed the rubicon only a few years back. Basically the 2008 GFC changed the trend and we've been papering things over ever since.
In terms of additional debt piles to come, it won't matter right or left, ballooning debt levels is the road we will continue on until we run into further walls ahead.
On a recent anecdotal basis, just to show you how trends have changed in the gold market. Fiat US dollar bulls were out this week celebrating a pop in DXY which measures fiat US dollars versus fiat Euros and other major fiat currency unit relative values.
As you will see soon, the spot gold market in fiat US dollars basically shrugged it off on a pull back and finished the week flat.
Stick around, we dive into further gold, silver, and platinum news next.
The spot silver and gold markets had a mixed week in fiat US dollars given its recent relative strength versus other also further devaluing fiat currency units.
Both spot prices fell midweek only to rally into the week's closing price trades.
Spot silver finished just over $31.50 oz bid and the spot gold price closed just over $2,650 oz bid.
The relative strength by gold over silver this week pushed the spot gold silver ratio up to close at 84.
Costco made Platinum headlines this week as they began retail selling 1 oz PAMP Suisse platinum bars to their members in the USA.
On a historic basis, you have to go back into data before the 20th Century began to find an era in which gold so out valued platinum on a relative basis. Gold is currently over 2.7Xs more costly than platinum at the moment, and likely climbing higher as we hurl towards a sovereign debt crisis era.
That said, I'm still a long term bull on platinum bought at these depressed fiat spot price levels near $1000 oz. Gold is simply leading, eventually all the other 3 precious metals will move into catch up rallies later on.
This is a recent YouTube short seen by over 10 million likely younger western viewers. Here we have an obvious trend change. Swiss gold refiners had no idea how to market their product brands. That is quickly changing in the global bullion bull market.
Turning finally to the current global silver market, the price is nearly 40% lower than its 1980 and 2011 nominal price high of $50 oz.
Apparently the masses don't currently care that silver is currently in a stealth bull market. I suspect once its nominal fiat US dollar price nears and clears its seemingly ancient $50 oz nominal record price high, mainstream financial headlines and new market entrant wahoos will help get the bull word out and eventually mania will begin again.
On a current full fiat currency era quarterly silver spot price chart. We can see that currently silver is nudging up against some key resistance levels between $32 and $33 oz, the next technical price hurdle after that will likely be around $38 oz looking backwards and projecting forward.
The key difference between now in silver 2020s into the 2030s, and silver back in 2011 or in 1980 is the underlying fundamentals driven at the moment by industrial demand mainly by insatiable growing solar panel and climbing high end electronic input demands.
All the silly old solar panel demand projections years and decades prior were proven to be too low. And it turned out too that instead of thrifting silver inputs out of panels, the latest cutting edge versions use more silver than they once did.
Leading silver mining nations like Mexico and Peru appear to have peaked in output about a decade ago. And we have yet to get hammered with coming investment demands that will likely lead to persistent shortages ahead unless or until the spot silver price gets rerated exorbitantly higher than the dressing levels it is currently still at today.
Any long term silver stacker who has done their homework knows silver is relatively still dirt cheap at the moment. The vast majority of silver ever mined is sitting in old electronics and garbage landfills, unlikely to be recycled at these spot price points or anytime soon.
Finally to close this week's bullion market update. After importing over 45.6 million oz in August 2024, I learned this week that India literally eats over 3 million ounces of silver every year. Wedding season is coming up and India is surely going to be hungry for more silver imports to come.
That is going to be all for this week's SD Bullion Market Update.
As always to you out there.
Take great care of yourselves and those you love.
