Summary
- Gold has reached new record highs globally, not just in the USA but across major economies.
- Russia anticipated this trend decades ago and has steadily increased its gold bullion reserves since the mid-2000s.
- European central banks are also adding to their gold reserves despite high nominal prices.
- Most US residents remain unaware of gold’s rising value and the reasons behind it.
- The US dollar has lost over 99% of its value relative to gold, with the last 1% devaluation unfolding now.
- Gold, once priced at $20.67 per ounce, now costs over $2,600 for physical bullion.
- Federal government spending continues to rise unsustainably, with debt and interest expenses ballooning.
- Unfunded liabilities from programs like Social Security and Medicare are growing, with gold yet to fully account for these future costs.
- Gold prices are breaking out across numerous fiat currencies worldwide, from the Australian dollar to the Swiss franc and Chinese yuan.
- The upcoming BRICS summit may introduce a new payment system tied 40% to the price of gold, signaling a shift away from US dollar dominance.
A scorching close into new record high prices for gold this week, not merely in the USA but in most major economies around the world.
And while Russia saw these gold record nominal price days coming decades in advance and increasingly stacked gold bullion reserves steadily since the mid 2000s.
Increasingly even many European central banks are steadily adding to their growing gold reserves regardless of the new nominal price high in fiat euros.
Yet most US residents remain figuratively asleep on the couch, seemingly in mass unknowing of what is currently happening with gold and certainly as to the whys.
The current fiat US dollar has devalued over -99% to gold and the final devaluation of the remaining 1% in value is playing out in real time.
What once cost $20.67 per troy ounce, now currently costs just over $2600 oz in physical 999 bullion formats gold bars or gold coins.
In the COMEX gold futures market as well, the perhaps most unnoticed all-time high continues painting tapes higher.
Is this current gold rally actually just the collapse of the US dollar?
Yes and no. The answer is more nuanced and complex of course.
Let's quickly stare into the abyss of the US government's fiscal situation with some fresh charts and data.
Federal US government spending has gone to a new level of madness since the Covid 2020 era kicked off, and there are no signs of slowing anytime soon.
Incoming tax receipts are nowhere close to the amounts of fiat US dollars the feds are spending and thus the hard US debt level continues ballooning higher and higher.
Interest expenses on the US debt are about to hit $1.2 for fiscal year by the end of this month September 2024.
And while gold is sniffing out coming rate cuts, it has yet to begin fully accounting for the $100s of trillions in rising unfunded liability costs to come from programs like Social Security and Medicare (the respective 1st and 2nd largest annual expenses running for the Federal Government).
We're going to run through some 2024 gold price charts around the world so you can better understand this is a global phenomenon. As we have consistently suggested it would be.
Let us look not merely at this year's gold price chart in fiat US dollars to confirm a technical breakout ongoing.
Have a look at gold in fiat Australian dollars in 2024 on the verge of breakout.
Similar story in fiat Canadian dollars priced by gold in 2024. A new all time devaluation spike.
In fiat Swiss francs the 4th test of this year's trading range is underway.
In fiat Chinese yuan, the world's largest physical gold buying economy, a gold price breakout is underway.
Similar story in fiat euros.
Fiat British pounds not sterling or holding their value very well versus gold either.
In the world's second largest physical gold buying market, the spot price is also breaking out.
The once relatively strong fiat Mexican peso has relented to gold and its local spot price is again climbing walls.
The fiat Russian ruble price of gold has broken out as well.
And while up on the year overall, recent relative strength of the fiat Japanese yen has bought its recent nominal gold price high some time.
But if we simply back out and look at this full fiat currency era we see the general future for every circulating fiat currency under the sun. All are being devalued to gold over time.
The spot gold price closed just under $2,600 oz on the week as the spot silver price popped higher as well closing the week at $30.70 oz bid.
The spot gold silver ratio fell on silver's relative strength versus gold to a still historically high figure of 84.
Let's see what kind of follow up the two precious metals have in the coming expected first fiat Federal Reserve rate cut next week.
Probably the most interesting news item late revolving around gold last week were reports out of Russia regarding the coming Oct 2024 BRICs summit meeting.
There are recent reports and public quotes of creating a common unit of account amongst BRICS to use within the growing BIS mBridge payment settlement system.
The most interesting public comment is that the head of the BRICS Business Council task force
Is explicitly stating that their upcoming unit of account will be 40% tied to the ongoing price of gold in the aim of making the payment settlement unit more universally accepted, and more liquid for players involved.
Of course this BRICs move to create a more multi-polar and less fiat US dollar dominated world has been moving at a glacial pace. But many eyes including our own will turn next month to see what kinds of further details are communicated and expressed at their upcoming BRICS meetings revolving around building bilateral trade settlements using the new BIS mBridge platform which allows for participating countries to further sidestep US dollars or the SWIFT systems as intermediaries.
The fact that they are openly talking about tying their coming system to a 40% gold value rate ongoing is another clue and signpost that the world with the largest populations and gold buying citizenries are keen on replanting gold as the universal underlying trusted store of value that it has long indeed been.
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.
