Summary
- Central banks around the world are stockpiling gold, with India recently repatriating 100 metric tons of its gold from the Bank of England.
- The Bank of England reportedly stores its gold in a vault built on clay, which can only hold up to four tons of gold per stack.
- In contrast, the Federal Reserve Bank of New York is built on bedrock and can hold much larger stacks of gold.
- India may be repatriating its gold in preparation for a future where gold is used for international settlements instead of the US dollar.
- There is potential for a silver squeeze due to increasing physical demand and limited supply.
- There is a debate among experts about the best way to invest in gold, with some recommending physical gold and others recommending ETFs.
- The CEO of the CME Group once said that precious metals are going to enter a mania phase at some point.
- Is gold undervalued and could reach $5,000 or $6,000 an ounce?
We're gonna start this week with some four year old footage provided by the BBC, shot just before COVID March 2020 hit the fan. These images from within the bowls of the seemingly lawless City of London underoos if you will, juxtaposed by the ongoing trends. To get your nation's hard gold bullion savings, the hell out of that place.
Yes the oldest full fiat currency issuing central bank of the world, you're looking inside their gold vault. Allegedly around 5,000 metric tonnes of gold bullion are stored there, mostly for other sovereign nations, in their basement built on slippery shapeshifting clay.
You might recall in 2019 Poland pulled 100 metric tonnes of their gold from there, and shipped it home to their Polish central bank.
Or in 2018, Venezuela's Hugo Chavez getting told by the Brit Anglo powers that there be "no gold for you" the last time he asked for some of his country's gold back for repatriation.
Well, in probably the biggest gold related news this week was India. Having just pulled 100 metric tonnes of her gold back from their longtime Bank of England held stash.
Perhaps a bit more speculation on forward looking whys in a few minutes.
First I want you to understand the size of this bullion withdrawal by India, once colonized by the faded British empire nation.
This is one of the lame pictures the Bank of England allows out in the public domain to show off her gold basement.
Cool, huh?! Well, India just took that whole rack of 25 columns back home.
Back to the footage a month before Covid hit 2020.
I'm sorry, come again? (Brit accent)
Interesting cause in late August 2019, the fiat Bank of England, fiat Federal Reserve, the fiat Bank of Japan, and the fiat European Central Bank along with Blackrock and other wanna be master's of the universe minions, all unilaterally decided it was time to "Go Direct" and flood their respective fiat monetary systems with massive injections of fiat M1 currency supply issuances. Yes a half year before the pandemic even hit in earnest.
Not surprising gold has nearly doubled in spot price since, in all 4 localities.
Say it one more time, pudgy.
Not today it's not.
He's not lying.
You see the faded British Empire's Bank of England built their gold vault on clay. Which can't withstand the weight of more than 4 tonnes of gold stacked on top of one another.
The fiat Federal Reserve of New York, on the other hand, is sitting on bedrock. And it still allegedly has, though Germans might disagree, the largest reported hoard of sovereign gold collectively stacked in the world.
More on the NY Fed's failed fiat propaganda from this week, in a few minutes.
Back to England. Explain it away Sir.
The Bank of England likes to brag they've never had their gold or other gold stolen from their basement.
But I looked this up, the story's old, but it's very real given construction work in London around those streets at the time.
Just over 188 troy ounces of gold bullion, or just under a half million in fiat US dollars equivalent today.
Well, some of us might feel the honest sewer worker got stiffed considering his easy solo access to the supposedly impenetrable front of a highly secure vault. Least he got to keep his dignity, and sleep better through his remaining nights in this plane of existence.
Onward to why India is now repatriating gold from London in such size.
I'm sure all the BRICS followers out there have their pet theories as to why.
Here's perhaps one.
It is possible that some of the nations leading the coming BIS mBridge wholesale CBDC sovereign capital account payment systems, might be considering using gold as the ultimate settlement beyond mere digital currencies from time to time.
The Financial Times this week reminded readers that the coming wholesale CBDC grids will likely lead to more passive fiat US dollar diversification over time. As more and more central banks put less and less of their future reserves into western fiat currency units, and perhaps more and more into building out their respective economies.
That might be disruptive.
Think about it, if these massive BRICS nations can trade bilateral, directly and seamlessly with less fiat US dollars as the trade intermediary, that would be bad for demand and overall buying power of said fiat US dollars, no?
Cut to the fiat NY Fed's website this week which pounded the table basically saying the shrinking dollar demand story is overhyped.
And while that may be true for now, technology oncoming that they didn't dare discuss in their article will quickly change that.
The authors categorized China, India, Russia, and Turkey as a small group of countries in their writing.
The internet raged.
They forgot to mention that between the four powerful BRICS nations, they collectively own about 1/4th of all the recorded gold ever mined already.
They forgot to mention they have over 1/3rd of the human population on this world, in regions that stand to get increasingly wealthier and more powerful as time proceeds.
They did stick this dumbed down chart in there, certainly it misdirected some of their readers to think yea Official Gold buying while it may be at record highs the last year and a quarter. Look at how tiny it is in comparison to all the fiat promise piles the central bank owns collectively more of.
Well massive bond markets in bonds have begun post Covid 2020, and major fiat currency bear markets thanks to oncoming CBDC disintermediation are likely one of the the next major planks to fall.
Oh and Official Gold Reserves just passed the fiat Euro as the second largest collective holding by world central banks combined.
The fiat US dollar is the final major boss for gold to pass in the years and decades coming.
Turning now to the political and judicial drama this week in the United States.
I try not to be too political on this channel.
But it's virtually impossible to analyze gold and silver markets without doing so.
Seeing my home country being culturally and politically divided / conquered consistently is never fun.
But being an alleged doomer, supposed loser silver bull, when I saw the shorts paint back the $31.80 rally yesterday my heart sank. Just knowing the inevitable end of month retest to $30 oz would paint the tape today.
So I woke up to this clip, making a bit of a silver lining in the lunacy of this world we are living in.
Hopefully you find it funny as well, I'll be back this break shortly.
Not surprisingly it was an up and down holiday shortened week in gold and silver price action with the first few days of derivative driven price discovery being dominated by Asian trading, only to let the COMEX shorts paint the tapes lower to close the week.
The spot gold price finished at $2,330 oz bid and the spot silver price stayed strong to importantly close the month with the spot price taped above $30 oz for the monthly price breakout watchers out there in the hyper levered derivative markets.
The spot gold silver ratio finished the week down and then up basically flat at 76.
For those looking to buy the spot price dip in silver, look no further than this proper low premium sale on Pre-1964 US 90% silver coins at SD Bullion.
We're certainly not minting any more of them any time soon. Much has been lost to industrial melt-age over the past 60 years.
And from time to time, their price above spot premiums blows sky high. Reaching nearly 50% above silver spot prices during both the 2008 GFC and more recently in late 2022. If you don't think, that will happen again. I got a bridge to sell you instead.
Some interesting bullish mainstream financial articles on exploding silver industrial demand this week.
Most of them deal with the combination of China silver bullion premiums, record Indian silver demand through April 2024, solar panel productions, and increasing silver electrification demands.
Bloomberg has the peak of silver importation premiums paid in China as high at spot +15%. My chart has been saying +12% but whatever. The point is China has been increasingly buying silver by nearly an additional 100 metric tons per month of late, paying through the eye to get it often from the dwindling City of London unsecured silver ETF coffers.
The story on silver through this recent breakout has been all about industrial demand. Let's hear TD Securities Senior Commodity Strategist Daniel Ghali speak to the this week on Canadian Bloomberg.
While this all sounds bullish silver... and yes there have been many years thus far in the 21st Century where silver spot prices in fiat US dollar terms have popped nearly +50% to +80% in January through December timeframe. The analyst didn't bother to explain how ridiculous silver spot price discovery around the world has bifurcated since Covid 2020.
The shadow eastern aggregated silver price from 1970 until last I looked this week in late May 2024 has ballooned to over $386 oz.
And while silver bulls out there are creating charts illustrating respective silver price breakouts of the past, denominated in today's fiat dollar term potential to come.
I want to remind you that if we go off the questionable data of either industry analyst firms, the often hated CPM Group or the Silver Institute.
Both data sets provide similar hardening pictures.
Silver industrial demand is exploding, supply is not keeping up. Four years of deficits and counting.
Silver bullion investment demand is the wildcard that can both exacerbate the currently tight industrial 1,000 oz bar situation.
And will likely again lead to shortages and premium blowouts in the retail wholesale gold silver bullion markets again to come.
Any week now another US digital bank run fiasco could kick off.
Regional bank shares are trading like hot potato trash.
The fiat Federal Reserve is now admitting-tingly sitting on an unrealized $1 trillion in losses with the garbage bond portfolios it has been forced to buy.
Interest on our exploding hard US debt levels has just past our bloated military spending.
And the uber wealthy are most asleep at the wheel collectively allocated to precious metals to the tune of 1% in aggregate.
Be it silver or gold, my suggestion is to get properly positioned sooner than too late.
Indian demand, Chinese demand, Middle and far eastern demands are not going away. And the west has yet to experience the coming store of value crisis that is building up while they remain distracted and confused within illusory overpriced bubble markets.
Let's hear a proper British analyst talk about $3,000 oz gold within the next 12 months. Listen to how nervous he is admitting the building of bullish gold facts.
Finally to close this week, I want to take you back to July 2017.
When the then and still CEO and Chairman of the CME Group COMEX NYMEX basically admitted on air that precious metals are going to the mania phase at some point.
See if his points don't jive with what you are witnessing in this often short term sighted world we live in.
And so do fellow my cocoon club members out there.
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.
