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Gold Record Price Era Arrives

Summary

  • Gold in fiat US dollars is reaching new all-time nominal highs, but there is a lack of widespread awareness or concern.
  • Only focused bullion stackers seem to be aware of this development, and the general public, particularly in the wealthy Western world, remains invested in historically overvalued asset classes.
  • A chart depicting the common financial bubble formation shows that US stocks and real estate are currently in a common bull trap position.
  • Outdated charts for silver and gold are mentioned, and the fiat financialized world, influenced by formidable derivative power, is seen as hindering the inevitable rise of precious metals.
  • The blog predicts an eventual mania for gold, followed by silver, and notes the absence of significant media coverage on gold despite potential hype.
  • A historical example of the US government's attempt to confiscate gold in 1933 is discussed, highlighting that a significant portion of the population ignored the unconstitutional edict.
  • Despite record-breaking central bank gold buying and gold prices hitting highs in various currencies, Western financial advisors show minimal allocation to gold.
  • Data on massively wealthy estates and global public pensions reveals a lack of exposure to physical bullion allocations, with a significant percentage reporting losses and expecting a global economic recession.
  • The blog touches on troubles in the US banking system, emphasizing the potential impact of a fiat Fed rate cut cycle.
  • The update concludes with a focus on silver and gold markets, including recent prices, technical levels, and the potential for a strong move in silver against gold in the future. The long-term outlook for bullion bulls is acknowledged, and the importance of gold leading in a bullion bull mania is highlighted.

Gold in fiat US dollars is at last seemingly breaking out to new all time nominal fiat price high levels.

Yet no, seemingly near no one cares yet.

Unless you are focused bullion stackers like ourselves, you wouldn't even know it.

For in the very wealthy on paper western world as most are still 'bull trap' clinging to historically overvalued asset classes like stocks or plowing 'hopium' record high mortgage payments into yet another unaffordable US real estate bubble.

This here is a chart illustrating the common financial bubble formation, citing the human psychological stages that investors typically must run through starting from left for dead undervaluation on the far left to the eventual building of a secular bull market that often ends in overvaluation bubbles.

US stocks, US real estate are both in the common bull trap position at the moment.

As for silver and gold at the moment, I pretty much stopped showing this out of date chart because the creator of it, Nick Laird at GoldChartsRUs website, likely made it in the early 2010s.

And the time scales and potential eventual fiat price points are out of whack and confuse onlookers.

This fiat financialized world, dominated by formidable derivative influence in the short and medium terms, has impeded the inevitability of what lies ahead.

An eventual mania for gold first and silver to follow.

Typically by now the bought and paid for fiat financialized media might be giving gold a few mentions of hype. 

But I looked this week and here are the few cuts that can clue an onlooker in on what bullion is building.

Half truism Cramer.

You see, the US government in 1933 decided to break the sanctity of private contracts under the guise of national security and attempted to tell the US Citizenry to turn in their gold coinage to branches of the now fiat Federal Reserve. But according to US Mint coin striking data to the year 1932 versus what they received after trying to nationalize the public's gold savings.

Turns out about 3/4ths of the gold coins outstanding at the time were never turned. Pretty sure no one went to prison for ignoring that unconstitutional edict by fiat decree either.

You can learn more about that original sin in US financial history by simply searching here for what is now one of our most viewed youtube videos entitled 'How much Gold was Confiscated in 1933?'.

Truly, the gold confiscation fear card and manipulation tactic is both hyperbolic and played out. 

Again, nearly 3/4ths of our US forefathers ignored FDR and his fraudulent edict and simply kept their gold coin savings for their long hauls.

Let's turn now to India for more savvy gold market coverage from this week. The final point after nearly a decade of price rigging will likely make you ironically sick to your stomach as well.

Even with record breaking central bank gold bullion buying the last few years, and gold prices in nominal fiat currency terms hitting record highs in nearly all the more than 150 fiat currencies around the world.

Western financial advisors still have near no allocation even to underperforming unsecured ETF slush piles.

Central banks in all but the Russian federation have so flagrantly abused and blown out their outstanding fiat currency supplies that even a 40% coverage of the fiat M0 pile, the literal monetary base at present, would require a current gold spot price closer to $10,000 oz and not this hologram suppressed $2,000 oz long term support level we likely be leaving behind in the coming years.

Central banks, the collective abuser in charge of this full fiat currency world run amok literally know this and that is why they are now buying gold bullion reserves at rates never before seen in financial history. 

The combination of much higher gold prices in our future will make the coming trend towards a 40% coverage target more realistic as the mania phase comes to fruition.

Let me quickly give you a few updates to the potential tsunami of capital flows that have all but not touched gold in even tiny portfolio allocations, yet.

Troubled commercial bank UBS published their latest 2023 Global Wealth Report illustrating how many massively wealthy estates there are in this fiat financialized world, much of which is of course on paper only.

There are over 243,000 known estates in the world with over $50 million in fiat US dollar net worths.

Half of which reside in the United States of America. These are the people who actually run the country.

What percentage of them do you think have any exposure to physical bullion allocations?

Probably looks something like this.

Now let's look at some recent data covering some of the world's largest Global Public Pensions.

Of the survey's responding sovereign funds, 47% suffered losses last year. Makes sense as both global stock markets and bond markets performed disappointingly. The vast majority of these funds have no gold allocations, yet.

Of the survey's responding pension funds, 62% reported losses last year. I would bet they have even less gold allocations than the former Top 50 sovereign wealth funds.

Between all surveyed, 53% expect a global economic recession in the next 12 months.

You know what asset class outperforms in recessions. That's right, gold, center stage.

Turning to the still teetering micro-fractionally insured US banking system.

Latest update on unrealized losses on their books recently blew out to near record levels.

Surely they have growing hopes of a fiat Fed rate cut cycle some time earlier the better next year 2024, so that perhaps some of their longer duration unrealized bond losses might get shrunk down as the fiat Fed returns to exploding its balance sheet wider in the next infinite QE cycle to come.

Stick around, after this break we'll get into a bit more silver focused outlook on what this all means longer term.

The spot silver and gold markets traded up and to the right this week.

The spot silver price closed at $25.43 oz bid. Getting through $26 and beyond back towards $30 is the next leg required for an eventual breakout.

The spot gold price closed yesterday at the end of last month, November 2023 at a record price high on the chart which means a lot to highly leveraged COMEX derivative momentum traders. 

Spot gold started this month with a run towards its all time nominal fiat US dollar price high which I believe spiked just over $2080 oz intraday on May 3, 2023 back when my former bank Pacific Western was on the edge of bankruptcy.

The spot gold silver ratio closed at 81, and the key technical level to keep an eye on for silver bulls is it breaching 75 at some point in the future.

So gold cynics and bears out there are likely hoping for a rug pull back below $2,000 oz but with rate cut gold bullishness beginning to foment will we see gold below $2,000 again is a question worth pondering.

There is a simplified monthly close line for 21st Century gold. 

Here is one for silver since it Covid bailout ramp starting in early 2020.

The current deviation above the 200 day moving average for gold is not near anything historically spiky suggesting there might be further support ahead to bust the $2,100 oz barrier.

A similar story on the silver side of the 200 day moving average throughout this full fiat currency era, suggesting a run at $26 oz is in the near term.

The wide base that silver has been building over the last few years suggests that when she decides to play catch up against gold the move will be strong, and $30 oz will get a run for its money.

There is still a long crazier road ahead for us bullion bulls, but we're going to end this week with a little piano concerto of the coming Golden Age breakout that the western world is still sleeping on.

And as the recently passed bond trading billionaire Scott Minerd warned us about in early 2020. Silver is still half off its all time nominal price high in many major fiat currencies. I don't want to talk about silver being near any semblance of fair value until at least it 3-4 folds in fiat Japanese yen from here.

In a bullion bull mania, gold leads, silver follows. And that is precisely how we're going to look ahead. 

That will 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.

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James Anderson
James Anderson
Senior Market Analyst & Content

A bullion buyer years before the 2008 Global Financial Crisis, James Anderson is a grounded precious metals researcher, content creator, and physical investment grade bullion professional. He has authored several Gold & Silver Guides and has been featured on the History Channel, Zero Hedge, Gold-Eagle, Silver Seek, Value Walk and many more. You can pick up Jame's most recent, comprehensive 200+ Page book here at SD Bullion.

Given that repressed commodity values are now near 100-year low level valuations versus large US stocks, James remains convinced investors and savers should buy and maintain a prudent physical bullion position now, before more unfunded promises debase away in the coming decades...

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