Summary
- Vladimir Putin visited China during the Belt and Road Initiative forum, amid ongoing wars in Ukraine and Israel.
- Western media outlets like Reuters are anticipating a conflict over Taiwan, given China's preparations.
- China is considering issuing gold-denominated bonds and limiting commodity exports to protect its economy from future sanctions.
- Six months ago, China's leader met with Putin in Moscow, discussing potential global changes.
- Gold futures briefly cleared $2,000 oz, indicating a potential gold bull market.
- Gold prices in major fiat currencies worldwide are approaching record highs, including in Australia, China, the European Union, the UK, Japan, and India.
- The relative strength of the US dollar has prevented a gold breakout.
- Precious metals research suggests "upside risk" for gold, silver, and platinum prices.
- Central banks are favoring gold over bonds, especially in times of conflict and inflation.
- China and India continue to drive strong demand for physical gold, with silver demand on the rise as well.
With simultaneous wars now ongoing in the Ukraine and in Israel in the Middle East.
Russia's Vladimir Putin went to China this week to meet with Xi Jinping during the of Belt and Road Initiative forum
Meanwhile this week western media outlets like Reuters are beginning to look forward to the likely coming conflict over Taiwan. Anyone who has paid a shred of interest to China over the last few years knows China is gearing up for potential fallouts that may come from taking the island of Taiwan.
Learning from recent US sanctions against Russia, China is apparently now considering issuing gold-denominated-bonds, as well as limiting other critical commodity exports perhaps to further crowd-out western price discovery power and ensure future sanctions do not hamper its domestic economy and international business dealings.
Perhaps you recall, it was only 6 months ago that the two pro-multipolar world leaders met in Moscow where China's emperor had the following words for Putin and the watching world.
Gold's COMEX Dec futures contract briefly again cleared $2,000 oz today and it appears we are on the cusp of a fourth run towards a gold bull market breakout marching towards $2,100 and eventually beyond in time.
Technically the spot gold price chart denominated in major fiat currencies around the world all are inching towards collective breakouts respectively.
Australia, China, the European Union, the United Kingdom, Japan, and India.
All are seeing gold as or again on the cusp of new record price highs.
Had not been for relative fiat US dollar strength over the last few months and years. We'd have broken out already by now.
Speaking to Bloomberg today, Suki Cooper of Standard Chartered Bank Precious Metals Research put an interesting take on where gold, silver, and platinum are at the moment. Take note how she uses the term "upside risk" to convey precious prices moving higher ahead.
Gold is again outperforming US Treasuries, and the move by the world's central banks into bullion over bonds will likely only grow as more conflicts come, fiat currencies get further debased and secular inflation brings about an all time secular bond bear market era.
To Suki's point, the deficits in precious metal commodity markets like silver bullion for instance, suggest that silver will scream higher and up to the right as this decade unfolds into the next.
Gold demand appetite is also continuing to come in strong over in India regardless of record high rupee prices highs of late. Indian silver import levels are still off yet a local premium is beginning to form, leaving me to believe we may see larger silver imports as locals thrift further into cheaper silver over record price gold.
China, and the youth of China are not stopping their world leading buying of physical gold bullion anytime soon.
Easterners in China and India often have longer term views of economic history having often lived through fiat currency crises within many of their lifetimes.
We westerners are often clueless to the risks associated with when things go wrong with the underlying fiat currency unit values we take for granted.
Just have a listen and look at how random people on the streets of San Diego, California act when offered physical gold bullion right next to a local coin and bullion shop.
Gold and silver traded strong to close the week.
The spot silver price closed at a $23.35 oz bid while the spot gold price closed just under $2000 oz for the week.
The spot gold silver ratio finished the week flat at 84.
Jerome Powell was out this week, ignoring how much more deficit spending we are going to rationalize to come as we get hit with a massive recession and likely further geopolitical conflicts to come.
No problem, US Treasury secretary Janet Yellen said the US can certainly afford military support to both Israel and Ukraine. No mention about how much we can afford the likely Taiwan boondoggle or coming major recession ahead though.
Gold is beginning to sniff this all out.
It has been coiling sideways in fiat US dollar terms for over 3 years now.
You know what they say, the bigger the base the bigger the eventual move.
Grizzled COMEX gold futures traders of nearly 50 years are calling this coming move about as obvious as can be.
The S&P 500 US stock market index has a future date with the spot gold price, and that is only the beginning in my view. At what nominal number that happens is up in the air of course, but the stock market still is overvalued historically by nearly every measure you can look at.
And then there is laggard silver just trying to get back and beyond to its TAMP'd down $30 oz level.
Long term fundamentals and the technical charts are still calling for silver bought in the $20s a troy range as cheap as dirt in our collective futures.
So, take heed bullion stackers out there.
The world is setting up to be your oyster as we go through changes like we have never seen before.
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.
