Summary
- Gold closed at its highest weekly US dollar price in history, with significant bullion flows from Switzerland to the U.S. since December 2024.
- Swiss gold refineries are operating near maximum capacity, processing approximately 250 tons per month, while BRICS nations also maintain major refining operations.
- Many analysts' high gold price predictions for 2025 have already been surpassed before the end of Q1, with Citi forecasting a potential rise to $3,500 per ounce by year-end.
- Major U.S. banks have adjusted their precious metals derivative positions, with Citi increasing exposure while Bank of America and JP Morgan reduced theirs.
- Gold demand remains strong globally, with Western FOMO buying and Vietnamese consumers forming long lines to purchase gold amidst local store limits.
- India faces a $13 billion loss due to its sovereign gold bond program, which failed to curb gold imports and instead became a financial liability.
- The gold-to-silver ratio remains historically high at 91, mirroring past market trends where silver lagged before making explosive gains.
- Historical patterns suggest bullion bull markets involve periods of high volatility, price corrections, and revaluations in response to macroeconomic instability.
- The rigged CPI data system has historically downplayed inflation, with Shadow Government Statistics estimating the 1980 gold price high at nearly $30,000 per ounce in today's terms.
- The SD Bullion Market Update concludes with insights from Robert Gottlieb, a veteran silver market analyst, discussing silver’s long-term bullish outlook.
This was Gold's highest weekly US dollar close in history.
Swiss gold bullion flows to the USA represented by those large purple bars on the far right of this chart illustrate nearly 400 tons of physical flows since Dec 2024 last year.
The Big Swiss 4 Gold Refineries are probably operating at amax throughput capacity of about 250 tons of gold bullion per month.
Of course there are lots of other gold refineries in BRICS nations like Russia, China, and South Africa but in terms of Western world gold friendly markets... Switzerland is the big gold refiner bottleneck.
We're not even done with Q1 2025 and already half of the LBMA's gold price high guessers on this year have been blown by before the first quarter ends.
In bullion bulls, the surprises typically come to the upside.
We have Citi bank dropping notes bull casing gold to possibly pop to $3,500 oz by year end. We'll discuss volatility from here to there and higher shortly.
I'll give Citi credit, they dared put a 3 month call out there same time the US Office of the Comptroller of the currency published the fact that they also increased their US based precious metals derivatives book by an additional $15 billion notional, while both Bank of America and JP Morgan reduced their overall US based precious metals derivative books by larger total sums, thus the orange bar fell to end last year.
Of course, nobody really knows these and other major bank's respective precious metals positions over in London and in other derivative market makings around the world, and that is part of the ongoing problem of this opaque industry at large. A little later, we'll go deeper and literally hear from someone whose career was working on those kinds of large commercial bank desks.
For now remember the closing words of long time London gold market trader Peter Hambro, whose July 4th 2022 admission article originally published on the London based Reaction website recently deleted off their website about one month ago as gold withdrawal delays were embarrassing the Bank of England and such admissions were likely not helping its growing public relations folly.
Back when the US OCC began publishing the US precious metals derivative trading data in July 2022 Peter Hambro warned to close his piece with the following words... READ.
This week Daniel Ghali went back on BNN Bloomberg to hammer home some solid points about gold building FOMO trade west vs eastern world.
Last week, I flashed this chart that illustrated the bad start to the year of the fiat US dollar, one of the worst on record going back to 1995.
On the other side of the world, people in Vietnam are FOMO'ing into hours-long lines to buy gold bullion and gold rings. Literally what they can get according to local store buying limits ranging from local store buying limits from one tael aka 1.215 oz to just 1 gold ring.
“I have spare cash and do not know what to do with it."
And so buying precious metals with extra cash is common in a bullion bull, and the Vietnamese are doing just that.
And that will keep happening there, and I can say that confidently just glancing at their long term local silver price chart which has yet to blow beyond its 2011 highs, so gold is gonna keep marching higher as silver eventually plays catch up later on.
Probably the craziest story on the Eastern side of the world this week was the admission that the Indian government is naked short $13 billion notional in a silly gold government back investment option that has blown back in myriad ways.
Gold Price Paradox: A $13 billion naked short on yellow metal in India that loves glitter:
In 2015, India’s finance ministry introduced a sovereign gold bond program to reduce gold imports and offer returns linked to gold prices. However, the program turned costly as gold prices surged, resulting in significant government liabilities. Taxpayers now face the burden of these rising costs, with the plan not curbing gold imports effectively.
In terms of India, an outstanding $13 billion naked gold short loss is like one month's trade deficit sum at the moment, they'll just debase the fiat rupee further, same old story.
It is pretty ironic because the Reserve Bank of India (RBI) in 2013 admitted that the global gold market at the time was paper levered 92 oz paper to 1 oz physical.
Here they are a dozen eating their paper promise losses galore as local Indians continue bought real physical gold and silver in size that only this century China in gold and the USA in silver can match in tonnage terms.
Stick around on the other side we'll get deeper into past bull market data, and get a listen to a former major commercial bank desk manager's reasons for being bullish silver bullion to come.
The silver and gold markets had mixed performance this week.
The spot silver price did pop briefly over $34 oz intra-week only to give back nearly $1 oz to close just over $33 oz bid.
The spot gold price got another highest weekly close achieved with spot finishing at $3,023 oz bid.
The spot gold silver ratio climbed on silver's relative weakness to a still stubbornly high level of 91.
In terms of other bullion, the bull market passed and behind, the late 1970s version also had a stubborn spot gold silver ratio channel that it battled within albeit more than half the version we currently find ourselves seemingly locked within.
Back then it was a 40s to 30s range. With gold outperforming silver from 1976 through 1978. Then by February of 1979, silver got its running shoes on, blew through its $6.50 oz cup and went on to outperform gold by a factor of nearly three fold over the following twelve months.
Silver also frustrated its bulls back during the Oct 2009 to August of 2010, QE era.
It seems we have a similar spike & sideway channel now just larger & higher than ever experienced prior.
This week, I went on Palisades Radio's Youtube channel where I did my best to squash exuberance and take the longer view of where we are and where we are likely going long term with bullion.
For me, it's our ponzi record debt markets, ongoing record deficit spending, fiat currency proliferation worldwide, US stock bubble market, mass $100s trillion in Western world unfunded liabilities... These factors and more should give any long-term bullion bull the courage to buy the big price dips along our way higher.
IOWs IMO, until these major points get rectified by sharply revaluing bullion on a relative basis, it's a bullion bull market ongoing.
That said, every major bullion bull market and bull runs eventually return to their 200 day moving averages and at times like the 2008 GFC, it can even nominally dip well below such levels while the wholesale and retail bullion market runs dry of inventory and goes into extreme premiums on products with long delivery delays.
Seeing something akin again in our unknown future is highly likely along the way.
Here's one lingering concern I have and the full interview's link I will leave in the show notes below.
James Anderson: This is a Run to Gold Over Bonds
https://youtu.be/UVPg6sd56D4?si=AmViKXGaQVE5hD4G
This is the US government's rigged CPI data going back to when the inflation data rigging began 1980 onwards, when gold almost broke the system last. Expect to see this nonsense again as gold eventually goes towards $3,500 oz. Shadow Government Statistics which claims to use the old 1980 CPI methodology has the 1980 gold price high at just below $30,000 oz looking backwards.
I know it sounds crazy, but if we take into account outstanding US debt coverage at the time versus US Official Gold Reserve value back then, the data jives.
The silver side of the rigged CPI price data even still has a 1980 high price for silver at $170.50 oz using data at the end of January 2025 looking backwards. And this is merely using the US government's increasingly rigged CPI data looking backward.
Bottom long term line, is bullion is still relatively cheap given all contributing factors at the moment.
To close, we're gonna listen in to a March 12, 2025 interview conducted by The Silver Institute with Robert Gottlieb who has been an outspoken silver bull of late mainly posting his thoughts on LinkedIn. This is perhaps the first time he has spoken to retail investors in such a public format.
I will link the full interview in the show notes below, but will try and splice in the most important parts to close this week's Bullion Market Update. It's deep commercial bank desk coverage, try and follow along the best you can.
I might have left a dozen minutes or so of market trader positioning minutia on the cutting room floor. But I left what I thought were the most pertinent points from a longtime industry leader in his own words for us to hear and take in.
The full link to that 28 minute podcast is in the show notes below for those who want to listen to it again.
PODCAST: Where's the Silver Going?
itunes:
https://podcasts.apple.com/us/podcast/wheres-the-silver-going/id1568101851?i=1000698923135
Twitter X:
https://x.com/jameshenryand/status/1902742011427308001
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.
