Summary
- Bullion enthusiasts worldwide, including in India, seize opportunities presented by dips in spot prices.
- On the festival holiday of Dhanteras in Mumbai, a long line forms as people eagerly await the chance to purchase physical silver and gold items.
- India, an emerging economy, is expected to experience significant increases in wealth per capita in the coming years.
- London silver inventories fell in October 2023, with speculation that a substantial portion was exported to India, which has seen subdued demand recently compared to the record levels in 2022.
- India's return to heightened silver bullion imports and raises questions about the source and spot price points of this future demand.
- The global trend continues as investors move away from underperforming US Treasuries and bonds in favor of bullion.
- Moody's announcement of a negative outlook on US debt, citing higher rates and persistent deficits, is highlighted as significant news.
- Poland and China added substantial amounts of gold to their official stacks in October 2023.
- Central banks cutting interest rates rapidly could be a trend, and the US stock market sees capital outflows as investors shift toward bullion in light of economic concerns.
Savvy bullion and precious metals stackers around the world like to take advantage of spot price dips and India is no exception.
This clip was taken in Mumbai today during the festival holiday of Dhanteras. What you see is a long line awaiting the chance to purchase physical silver and gold items.
India is one of the emerging economies which will experience one of the largest increases in wealth per capita next year and in the decades ahead.
London silver inventories recently fell through last month October 2023, and you can bet the vast majority of these over -38 million ounces was exported off to India where the demand for silver has been subdued through this only until lately especially compared with last year 2022's record demand of nearly 310 million ounces or just under 10,000 metric tonnes.
What happens when India finally returns to again demanding outsized silver bullion import levels we have seen in the last handfuls of years? Where will it come from and at what spot price points?
Later on in this week's SD Bullion Market Update we will also highlight some interesting forecasts on just how much increased demand specifically for industrial silver applications the world will be seeing from the Chinese over the next ten years as well.
The collective world continues in record volumes to collectively on net run away from underperforming US Treasuries, bonds, and underperforming IOUs on paper often opting to buy bullion in record volumes instead.
Today late this afternoon Friday Nov 10th bad news was snuck out in hopes of not stirring the pot too much. Moody's announced it has cut US debt outlook from stable to negative, citing higher rates and persistently large annual deficits ongoing.
Poland again added nearly another 200,000 oz of gold to its official stack last month Oct 2023.
No surprise that China too just announced it bought more official gold bullion for its sovereign stack. Adding over +23 metric tons of gold or 740,000 oz of gold last month October 2023 officially.
Of course China also keeps unofficial gold physically held off-balance sheet with their sovereign wealth fund, spread out amongst various state bank vaults throughout China, and with its military as she mines gold in China and offshore in continents like Africa at world leading clips year after year.
If you have studied physical gold import export flows and gold mining data over the decades since the last time gold performed a full accounting of the outstanding fiat US dollar supply in Jan 1980, estimates range from conservatively three to as many as ten times more official gold than what she officially claims publicly at the moment.
Most westerners remain clueless to these facts, and will learn them the hardest ways later on as they finally catch on to the fact that bullion will continually outperform bonds and current historically overvalued paper assets.
At the moment already, central banks are now cutting interest rates at the fastest pace since August 2020. Of course, the United States and other large economic zones like the EU will likely follow in accordance at some point next year 2024.
Meanwhile this week, financial twitter had a laugh this week as Jerome Powell went off script as his speech was interrupted by environmental protesters... wait for it... wait for it.
For the US stock market, it appears increasingly so that many retail investors and financial institutions are closing the door on seeking coming gains in US stocks as capital flows out of the stock market increasingly continue to grow with both investor classes.
Who can blame them?
We live in an increasingly weak consumer driven economy that currently requires the government to spend nearly 40% of our annual GDP just to keep things looking at if they are normal and all is well with the US economy.
For those who have gains in the US Stock market and are currently rotating out into bullion, I often use this long term chart to illustrate why an eventual meeting with the spot price of gold and the nominal S&P 500 is a rollover ahead.
Here is a quick clip provided by COMEX CME Group illustrating the history of this powerful swing trade from stocks to gold back and forth over that last long lifetime of US financial history.
If you are like me, you see our collective experience in 2008 - 2011 as the warmup for the eventual mania phases for both silver and gold.
It is my current contention that those bullion buyers holding either gold or silver over the coming handfuls of years should collectively outperform bloat US stock values on a real basis.
The silver and gold spot price un fiat Fed note terms traded downward on the week.
The spot silver price closed at $22.27 oz bid while the spot gold price closed at $1,938 oz bid.
The spot gold silver ratio finished the week at 87.
To provide a bit more coverage on this late day Friday news dump on Moodys downgrading US debt. Here are some talking heads at Bloomberg adding a few points to try and soothe the bad news.
Of course one of Bloomberg's own analysts just a month and a half ago stated that he believes gold and the S&P 500 will again meet at $3,000 as a result of an upcoming US recession.
Moving on to an eye popping forecast on upcoming growing silver industrial demand mainly coming from electronics manufacturing in China over the coming ten years.
Oxford Economics consultancy stated the following in a report released this week, the backlink for the free 21 page report is in the show notes below.
They state that the demand for silver will continue to grow for the next decade, far outpacing its growth over the last 10 years, much of it coming from China.
And while the Federal Reserve’s recent aggressive monetary policy continues to support the fiat U.S. dollar and higher yields, and while recession fears are weighing on potential industrial demand to come.
They forecast that between 2023 and 2033 global output of end users of industrial
silver will increase by 46% in real terms.
Citing rapid growth in the output of the electrical and electronics applications industry,
which is forecast to grow by 55% over the coming decade.
They didn't dare try and take a stab at how much investment demand will be growing over that same time period and I would argue only omniscience knows for we really have no idea of the unforeseen economic shocks we will be having to live through from now until the year 2033.
That all said, since the year 1970, the shadow aggregated eastern price for silver has added up to currently over $317 oz.
And my contention remains as we have seen many times throughout this full fiat currency era, the last time being in early 2011.
The red current spot price line and the eastern shadow silver price line have another date of destiny meeting in the future, likely where all this increasing silver demand is going to require massively higher spot prices to induce above ground inventories to be refined into industrial and investment grade applicable formats.
Whatever the nominal fiat per ounce number will be when that again occurs is not all that important, what is important is that holders of silver by then will be able to afford way more in real goods and services with their silver bullion holdings than they currently do with the phony derivative suppressed price points.
That will 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.
