Summary
- The US presidential election win by Trump caused a dramatic drop in gold and silver spot prices in the following 24 hours.
- This price intervention helped prolong the failing fiat US dollar system and allowed central banks to acquire physical gold at depressed prices.
- The COMEX gold futures market saw a record high trading volume spike after Trump's 2016 win, with a $100/oz intra-day price swing.
- After 2019-2020 events, the global gold market ranged between $1,100-$1,350/oz.
- The CME created a new 400 oz gold futures contract to appear to have more underlying gold supply than reality.
- There may not be enough physical gold available when demand surges.
- India's central bank repatriated 102 tons and bought 27 more tons of gold recently.
- Over 75% of the author's YouTube poll respondents are still actively adding to their bullion stacks.
- The silver market fundamentals remain bullish despite the price dip.
- Gold's valuation is still far below historical highs relative to fiat currency supplies.
CME Group COMEX NYMEX CEO Terry Duffy was partly correct. Yet this week's dip in silver and gold spot prices pales in comparison to what we saw the night and day following Trump's last US Presidential win in November of 2016.
In the annals of modern gold price maintenance history, there has been perhaps none a more egregious 24 hour trading period with an ensuing near 2 months that followed for the spot gold price market to the downside.
Just a gander at the delayed cup pattern on this long term gold price chart suggests the then price intervention party probably bought our slowly failing fiat US dollar dominated system a few more years. It also cost the western world more bullion at depressed spot price levels.
The still record high blue volume spike of COMEX gold futures trading remains Trump's shocking November 2016 win where the spot gold price popped on the news only to get beat down for weeks and months to follow. A $100 oz intra-24 hour price swing intervention was the tell at the time.
The global gold market proceeded to range trade between the low $1,100s oz to highs near $1,350 oz before major central bank August 2019 Jackson Hold 'GO DIRECT' currency creation plans blew out fiat monetary bases globally, the Sep 2019 REPO crisis following mere weeks after, and of course the COVID 2020 fiasco followed all that, about six months later.
Of course throughout that entire price containment channel our supposed enemies of the BRICS took large physical gold and other precious metal bullion delivery inflows at heavy discounts to today's relative valuations.
Things got so bad in the March 2020 gold market, that the CME Group COMEX gold futures market invented an unnecessary 400 oz gold futures contract (which no one is trading to this day). Their reason in doing this was to more easily begin double counting unsecured gold ETF metals allegedly held in London and New York, allowing them to present their fractional warehouse data with the appearance that there is plenty of underlying gold to go around.
There's not, we're almost back at levels reported prior to Covid 2020 on the light green colored eligible side of the underlying reported gold fractional reserve piles.
Makes it easy to suggest that when the real global rush to bullion finally comes, there won't be enough attainable bullion for delivery in reasonable time frames nor at reasonable premiums near derivative driven spot price points.
Unlike Trump's 1st term we're unlikely to be stuck yet again in another stagnant gold price channel for the next 3 yrs (2016-2019 vs 2024-2027). The most probable outcome remains $3,000 oz spot gold becomes support in next year, 2025.
BTFD, I am not going to innumerate with explicit words what that Rated-R trading abbreviation means. But the bottom line is it means buy the price dip.
And judging from what SD Bullion customers did with their bullion buying capital upon the sharp spot gold and silver price did, that is exactly what they did. Buying at a more than 3X rate versus more normal daily order flow data of late.
Following up on last week's Indian gold repatriation of 102 metric tonnes of gold. It was announced this week that India's central bank bought another 27 metric tons of gold bullion last month October 2024.
Being curious about your viewers out there, I recently posed a simple 3 choice youtube poll which got over 1,100 responses from our channel subscribers out there. And like India's central bank, about 78% of poll respondents are still actively adding to their prudent bullion stacks at present, and to come.
The spot silver and gold markets traded down on the Trump election week.
The spot silver price closed above $31 oz bid and the spot gold price finished at $2,683 oz bid.
The spot gold silver ratio grew to close at 85.
Much like many of you out there, I was not deterred by the spot price dip and added another kilo koala to the stack.
You see, all I have to do is look down under their silver spot price to see where we're destined to also go.
The bullish physical silver market fundamentals have not changed, and above ground stockpiles are being raided at the moment mainly for increasing industrial demand globally.
It will take a lot higher silver spot prices to get long term physical investors to sell some if any for devaluing fiat currency issuances to come.
The fiat Federal Reserve cut interest rates 1/4 of another percentage point this week, this week's gold price correction timing is not lost on anyone bothering to critically think things through.
What was likely lost on most in this news was the fiat Fed killed the following language from their reports. And in doing so to my mind the Fed has lost "confidence that inflation is moving sustainable toward 2 percent".
Fiat fed head Jerome Powell was asked this week a few pointed political questions.
In what might be his funniest line of the race. I've seen President Trump's golf swing and for a man his age, it is honestly pretty powerful. But it pales in comparison to the power of this most important piece of long term gold price trend data facing him and the global gold buying world.
The ridiculous imbalance of over-created fiat currencies already issued and outstanding in comparison to the estimated global gold mined pile above ground. As we are moving into a world of bullion over bonds as perhaps the most important macroeconomic trend trade building.
Gold's current global valuation in relation to 94% of the outstanding fiat currency supply regimes in the world, it still has to multiply by a factor four to at the moment to reach the more than 50% gold to fiat currency coverage we saw in the last 1980 western driven gold price mania phase. There is no telling how much more fiat currency issuance is going to come with the unfunded liability piles in the west coming due in the years and decades ahead.
This further gold revaluation trade has its highest probability of playing out well beyond Trump's coming second term and his remaining years slamming drives deep down the fairway.
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.
