Fed Rate Cuts Loom, Geopolitical Tensions, and China’s Gold Demand Drive Precious Metals Higher
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Fed Policy Shift – Jerome Powell signaled likely rate cuts next month, prioritizing jobs over inflation, sparking a surge in silver and gold prices.
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Market Reaction – Silver closed just under $39/oz and gold near $3,370/oz, with the gold-to-silver ratio ending at 86—levels that caught investor attention.
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Geopolitical Tensions – U.S. military deployments near Venezuela highlight how global resource struggles—especially for oil and minerals—can shape economic risk and opportunity.
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China’s Resource Push – China is aggressively securing resources, importing record levels of gold, silver, and platinum, and deepening ties in Latin America and Africa.
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Canadian Gold Exports – In 2024, Canada exported over $25 billion in gold bullion to China—ten times the amount publicly reported—showing how gold quietly flows across borders.
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Shift in Chinese Demand – Once dominated by jewelry buyers, China’s gold market now favors bullion. Investment-grade metals are overtaking adornments as a preferred store of wealth.
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Gold Accumulation Plans – Chinese banks and ETFs are promoting “gold savings” programs, but physical ownership still offers more direct control over value.
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Global Resource Scramble – With world powers vying for oil, gold, and minerals, investors are reminded that tangible resources remain central to economic security.
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Speculation vs. Stability – While derivatives markets now mimic sports betting, the underlying theme remains clear: real assets like gold and silver provide grounding in volatile times.
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Investor Takeaway – Precious metals are not just commodities; they’re strategic assets in a world of shifting policies, rising geopolitical risks, and intensifying demand from global powers.
As the Fed signals rate cuts in September, U.S.–Venezuela tensions rise, and China accelerates bullion buying, gold and silver gain ground as global powers compete for real resources.
Coming rate cuts next month were signaled today by fiat Federal Reserve chairman Jerome Powell speaking from the annual central banker meeting in Jackson Hole , WY this morning Friday Aug 22, 2025.
This is the same annual meeting that six years ago announced the "Go Direct" policy amongst the world's largest central banks who flooded their respective currency system supplies months ahead of the Covid 2020 pandemic and set off the largest global price inflation suffered since the 1970s.
Here is a brief clip from Jerome Powell's speech this morning.
This shift in likely coming rate cut policy basically tosses concerns of inflation aside citing concerns over the weakening US job market as being paramount in the near term.
Precious metals, especially spot silver popped on this morning's announcement.
Swinging away from Jackson Hole, to the current US Administration's growing move to use US military in the fight against drug cartels many of which are now legally deemed terror networks allowing of the use of outright military action.
This week news that the US military has deployed major military carriers, equipment, with thousands of Marines and service members off the coast of Venezuela has the Maduro regime on edge.
That the current administration is now offering up to a $50 million reward to capture the alleged head of the VZ drug cartel called De Los Soles.
Long time Venezuelan opposition leader against Hugo Chvez and now Nicholas Maduro, Ms. María Corina Machado spoke out this week with pointed accusations and hope for what the ending of the Maduro regime could mean for the nation of Venezuela.
Onlooking US imperialism cynics are quick to point out the spoils of such regimes change are likely aligned with Venezuela having the largest proven reserves of crude oil in the world. Be it a heavy hard to refine oil, there is no denying the amount of wealth the nation has in potential resources.
Speaking in early 2024, critics of President Trump were quick to clip this sound bite.
Interesting this VZ US military news followed right after President Trump met with Russian President Putin. Of course, China is publicly condemning this news.
I suppose authorities in China want many to believe only the west raids the global south for resources, while somehow their often illegal mines covering now three continents should not be considered in these ratcheting resource scrambles amongst major hemispheric powers.
Stick around on the flip side we will focus in on China and the major changes afoot in its world leading gold demand market.
How is China bullion buyer different now in the 2020s from those who bought the global gold price crash of 2013?
The silver and gold markets closed strong on the week, given today's news out of Jackson Hole.
The spot silver price looks likely to close just under $39 oz bid while the spot gold price looks to be closing near $3,370 oz bid.
The spot gold-silver ratio finishes this week at 86.
Filing this week's Bullion Market Update a bit early today as I get out on the road. We're going to run through a juxtaposition regarding a few precious metals related headlines and news reports from this week.
Levered derivative exchange the CME Group announced they have partnered with a increasingly ubiquitous sports gambling outlet in the hopes of offering gamblers the ability to wage daily bets as small as $1 fiat USD in stocks, gold, oil, crypto, and other short term speculations.
No thanks, I'll do like central bankers and buy the bullion instead.
After all, news headlines this week are increasingly pointing out that we live in an age where the powers that be are scrambling for real resources.
Peru is increasingly sending its gold ore directly to China to the tune of China already importing more in the first half of 2025 than the gold they imported in all of 2024 from Peru.
Turns out for our Canadian neighbors up north, gold bullion hallmarked out of Canada was their number one export to China for all of 2024. More than ten times the tiny number Canadian customs reported to their citizens in terms of Canadian gold that flowed into China in 2024, around $25 billion notional in gold bullion to China.
Halfway through this year 2025, China has also already imported about the equivalence of 1/3rd of all new line mined platinum per year. Typically the platinum bullion that goes into China, never leaves.
World reserve estimates dating back to 2010, suggested that Latin America, Africa, and Southeast Asia were prime targets for ongoing resource extraction. So seeing these current trends is no surprise.
What is difficult to deduce is just how much in terms of resources have and will continue being extracted given the size and scale of many of the continents under target.
For instance, the continent of South America is just a bit larger than the entire land mass of Russia. Good luck policing it and getting clear accurate data records of what is being extracted.
Uber wealthy Chinese know this, and are getting in on the global south resource extraction arbitrage.
Overpriced gold jewelry in China has been losing market share versus lower premium gold bullion buying market share.
In China, what was once a gold market dominated by 70% gold jewerly demand vs 30% gold bullion buying has since flipped in the opposite direction with the likely reversing of that order in the years ahead.
That has not stopped some higher end gold jewelry sellers in China to posture as if what they are selling is worth much more than its actual gold melt value.
Banks in China have also stepped into the unsecured Gold savings plan void offering a variety of GAP or gold accumulation plans which they often claim can be redeemed or converted into physical metals.
As well large unsecured gold ETF buying in China also suggests the ongoing switch from merely wanting to own gold in high grade gold jewelry formats, to instead more as a store of value holding.
Of course, any studied bullion buyer knows the end of the rainbow doesn't actually have bullion waiting for you.
Instead you'd better get and own your bullion outright and in hand while you still can and the world increasingly scrambles for it.
That will be all for this week's SD Bullion Market Update.
And as always, take great care of yourselves and those you love.
REFERENCES:
Asia’s Richest Families Are on a Gold Hustle
https://www.youtube.com/watch?v=-GYywf-FqQY
China's Laopu Gold Selling 'Royal' Designs Defies Economic Slump
https://youtu.be/tVviEdbuPgk?si=ohl_Wzfb4Sh9duUF
