Japan Records Record Gold Price High

In a strengthening bullion bull market, when the short side tries to induce spot price decline attacks, they increasingly get smoked and smothered under higher prices.

During the last three-month run for gold prices higher, you can see many short-side betters buried under higher prices shortly after every red spike sell-off volume spike.

In today's COMEX gold price trading action, we saw a similar short snake bite quickly filled with a decent rally to close the end of this week.

This recent gold rally has undoubtedly been assisted by a relatively weaker fiat US dollar and by lower yields on US bonds since late last year. It has likely also been assisted by robust government central bank gold reserve buying at clips not seen since after World War 2.

Interestingly, commercial banks are now already citing technical gold price support levels to where 2022 LBMA conference attendees guessed the gold price would be by October 2023.

Of course, no one knows exactly how long this current gold price rally will last and precisely when the nominal gold price record of $2,075 oz will get left as support in an eventual move towards $2,300 and $2,500 oz.

What I do know is every single devaluing fiat currency around the world is going to be buried by gold in the coming years. And what gets buried by gold eventually gets dumped-trucked upon by silver too.

A simultaneous decisive silver price consolidation breakout mirrors the current gold price runaway in the Pakistani fiat rupee. 

And while relative fiat US dollar strength over the last years might have frustrated silver bulls, a secular bear market for the fiat US dollar is likely here or not far away from now.

The breakout from the last few years of frustrating price consolidations is inevitable. Pakistan is simply showing us a preview in real time.

The silver and gold markets had a week of tiny ups and downs in trading.

The spot silver price finished the week slightly below $24 oz, where it began the week's trading.

The spot gold price finished flat on the week, around a $1,930 oz bid.

The spot gold-silver ratio rose slightly on gold's relative strength, finishing the week's trading up to 81.

This past week I spoke with the Silver Seeker channel regarding falling premiums in the physical silver bullion markets. I'll link that interview here. But before we go further, one misconception is that someone who has been in the bullion markets long enough to know.

During the cyclical bear market for silver post the 2011 run towards $50 oz, it was common to see spikes in premiums followed by collapses in the silver spot price. 

But that was not the case during the first leg of this 21st Century's secular bullion bull market for silver. I note the green box on the chart here, which illustrates the last time the silver spot did a fast tripling in nominal price, which coincided with a timeframe in which relative percentage price premiums over the then ongoing silver spot prices simultaneously slimmed. 

The rally for silver to follow this massive ongoing price consolidation will likely end up dwarfing the 2011 run in virtually all facets.

Another large western government gold silver bullion mint reports that 2022 was a record year for ongoing demand. The United Kingdom also knows the dark irony the US Mint already knows regarding minting profitability. The more these nations debase their sovereign fiat currency units, the more profit their bullion mints can make in seigniorage fees selling to long-term bullion stackers preserving their long-term purchasing power.

Chinese demand for gold is back and strong again, as noted by substantial price premiums on gold bullion on that side of the eastern world.

China's gold imports in 2022 are back at pre-pandemic levels, importing 1,345 metric tonnes of gold bullion last year. To put that into perspective, China imported gold at nearly 30Xs the amount the US Mint sold in 2022.

Looking at Swiss Gold data, we can see the west-to-eastern gold bullion flow from last year. India also imported a fair size of freshly refined Swiss gold bars in 2022.

Speaking of India, perhaps you did not know, but the big gold and, respectively, largest silver importing nation last year did so in the face of relatively high bullion taxes slapped onto incoming imports. There isn't a remaining US state that dares throw an +18.45% tax on bullion purchases as India currently does.

And while the nation of India claims they are considering dropping their bullion import tax down to below 12% sometime soon. The fact that India tries to tax bullion imports at such a high rate exacerbates illegal bullion smuggling, estimated at perhaps more than 200 metric tonnes per year.

Staying in the eastern world, Japan recorded yet another record gold price high in fiat yen this past week. And once again, I need to harp on the point that where gold goes, eventually, silver in a mania phase follows and outperforms. This silver cup formation in Japan will likely become an over 45-year building blowout, and you can see how far it has yet to climb from its dwarfing still 1980 nominal price high versus today in 2023.

Further into eastern world news this week, this time from India, as we listen to their bullish case for non-precious metals with low inventory levels as China reopens from long-running economic lockdowns.

This crowded and busy price chart measures the performance of various metal values in nominal fiat Federal Reserve note currency units versus silver and gold through this 21st Century bullion bull market. 

What you will likely see moving from left to right is the pre-2008 GFC commodity bull led by China, followed by the first secular bull leg for silver and gold into their 2011 respective tops. 

While we are indeed moving out from an all-time paper asset bubble era back into another commodity bull market cycle, this version likely ends in a similar store of value crisis akin more significant in size than the early 1980 western world-driven version.

Here's how the two monetary precious metals left all other non-precious metals in the dust last secular bull top in early 1980. And while this time is indeed different, it is also very similar in fundamental ways. 

My contention is an upcoming rhyme in store of value instability is building. Yet this upcoming massive call to account for the soundest monies humanity has ever known will be the largest the world has ever collectively experienced.

That is all for this week's SD Bullion Market Update.

As always, to you out there, take great care of yourselves and those you love.

← Previous Next →
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...