Summary
- Gold reached new all-time nominal price highs in multiple currencies this week, including the Chinese yuan (surpassing 20,000), euro, pound, yen, Swiss franc, and several others, with the spot gold price closing at $2,771 per ounce.
- While Chinese gold jewelry demand decreased by approximately 25% in 2024 compared to 2023, investment-grade gold bullion demand in China increased by roughly 25%, indicating a shift toward wealth preservation against yuan devaluation.
- Western gold ETF allocations remain notably low at 1% of total ETF valuations, approximately one-eighth of the peaks seen during the August 2011 gold price records, while China is experiencing record capital inflows into gold ETFs.
- MKS Pamp, a major Swiss gold refiner, forecasts gold prices could reach $3,200 per ounce in 2025, with potential bullish scenarios suggesting up to $3,500, driven by expected rate cuts and US dollar weakness.
- Silver closed at $30.57 per ounce, with MKS Pamp projecting potential prices of $42 per ounce in their base case and up to $45 per ounce in bullish scenarios for late 2025.
- The gold-silver ratio closed at 90, with silver currently lagging behind gold's performance, a pattern typically seen in early stages of precious metals bull markets before silver tends to outperform later.
- President Trump's return to the White House and his advocacy for further rate cuts has been identified as a significant factor influencing bullion markets and potential future price movements.
- US silver refineries are reportedly experiencing significant backlogs of over three months in processing 1,000 oz COMEX Good Delivery Bars, leading to sourcing challenges for industrial consumers.
- The precious metals market has seen increased COMEX warehouse activity, with substantial gold bullion inflows and significant silver additions driven by potential tariff concerns and arbitrage opportunities.
- A comprehensive analysis of 163 fiat currencies versus gold throughout the fiat currency era reveals five distinct timeframes of nominal record price runs, with up to 69 fiat currencies hitting new nominal price highs in gold within a single 24-hour period during this week.
The most important bullion related moment in President Trump's first week back in The White House was most likely what you just heard.
The fiat US Dollar was one of the biggest losers against the gold price on the week. President Trump was not done on his desire to see further rate cuts.
Gold bulls around the world continued to have reason to celebrate gold price action of late.
The price for one troy ounce of gold in fiat Chinese yuan blew beyond 20,000 this week to a new all time high nominal price. It was not the only one. More on that in a moment.
Headlines suggested that gold demand in China were down year over year, but that is a bit of a misnomer and here is why.
While high grade gold jewelry demand in China was down nearly -25% in 2024 compared to 2023. The Chinese demand for investment grade gold bullion bars and coins surged up near +25% more in 2024 compared to 2023. Illustrating local buying is aimed at protecting against further fiat yuan devaluation fears and going to the lowest price premium formats to do so.
Data for Chinese gold imports for 2024 were just barely below the year prior and again the key difference being the surge in retail gold bullion buying as the fiat yuan continues devaluing to gold.
Meanwhile in the western world, we can see that total unsecured gold ETF allocations remain at a paltry 1% versus the remaining 99% of other collective ETF valuations in total. This is currently about 1/8th the peaks seen during the old August 2011 gold price record peaks during the then US debt downgrades and negative outlook changes by rating agencies.
The opposite is happening in China where record capital inflows into unsecured gold ETFs have been happening this past year.
Around the world this week, the gold price hit new nominal record price highs not merely in the fiat yuan but also the euro, pound, yen, Swiss franc, Canadian dollar, South Korean won, The Australian dollar, and the Indian Rupee to name but a few of the biggest names.
When we look at the four major precious metal current price points in fiat US dollars throughout this full fiat currency era, it is obvious that gold is leading. Silver continues slumbering behind, likely to play catch-up and outperformance later as per usual later on in a bullion bull market.
Both platinum and palladium are more or less sideways for now.
This chart reflects 163 fiat currencies versus gold throughout this full fiat currency era, and the bottom half spike reflects times and durations where gold is clipping new nominal record price highs.
The 1970s into 1980, the post 2008 GFC into 2011 high, the COVID price ramp, and the latest runs being five distinct timeframes of nominal record price runs around the world for gold measured by devaluing fiat currencies. During the middle of this week there were as many as 69 fiat currencies hitting new nominal price highs in gold in one 24 hour timeframe.
Here is this same chart but with laggard silver still globally underperforming gold for now.
Palladium and platinum are both quiet in terms of new nominal record price points but my contention remains that in this 21st Century bullion bull market, driven by fiat currency devaluation globally, it is merely a matter of time for all three white precious metals to find new nominal price record runs as they once did throughout the 1970s.
So we're not even finished with the first month of 2025, and the spot gold price in fiat US dollar terms is already about to fill the top price wick from 2024 suggesting much more stair stepping to come especially if and when President Trump gets his way with future rate cuts.
Stick around, on the other side of this break we will again hear from Daniel Ghali, senior commodity strategist of TD Securities, as he recently made more public comments on the growing disconnects in the silver and gold markets at the moment. We'll be right back.
Both silver and gold were up on the week in price action.
The spot silver price finished at $30.57 oz bid while the spot gold price closed at $2,771 oz bid, the highest weekly close all time for gold in fiat US dollar terms.
The spot gold silver ratio inched higher to close at 90 on the week.
More bullish base case price forecasts this week as MKS Pamp a major Swiss gold refiner suggests that a spot gold price high of $3,200 oz is in the highest probability for later on in 2025 as further rate cuts and fiat US weakness drives spot gold price still higher later this year. Going as far as suggesting $3,500 oz high is not outside the most bullish scenarios on the year.
Their base case for silver calls for a spot price high near $42 oz with their most bullish scenario calling for
a potential surge late this year to $45 oz spot.
That said the defense this week of spot silver $31 was obvious so stay frosty my fellow silver bulls.
The CEO of Scottsdale Mint made news this week citing that the 2 major silver refineries in the United States of America are currently backed up more than three months processing silver into 1,000 oz COMEX Good Delivery Bars )on behalf of the banks) that industrial consumers are having sourcing reasonably priced physical silver.
One glance at the COMEX silver warehouses of late and it is obvious that large shipments of eligible silver 1,000 oz bars have entered the COMEX system over the last month driven by potential tariff fears but also arbitrage profit making price premiums being paid in the USA at the moment.
Here to speak further to the more than 1 billion ounce silver supply deficit over the last six years and running is Daniel Ghali, senior commodity strategist of TD Securities from early this week.
On the COMEX gold end of the equation, again this week more gold bullion flooded into underlying COMEX gold futures warehouses both in eligible and registered piles. Ghali had further takes on how the eastern world is propelling the current bullish price action in gold ongoing.
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.
