Summary
- President Trump recently visited Fort Knox to see the nation's gold reserves, though the author argues a proper audit would require simultaneous teams at multiple locations.
- The author claims that significant gold price manipulation occurred in the 24-hour period following Trump's 2016 election victory, with an unusual $100/oz price swing.
- There has been a massive influx of gold into the COMEX warehouse system recently, with the purchasing power of these inflows exceeding what happened during the 2020 COVID period.
- Major financial institutions like JPMorgan, Bank of America, Santander, and Barclays are taking large positions in gold, each stopping over 10,000 contracts.
- The recent gold inflow to the USA is estimated at over 600 tons, equivalent to 72% of the gold underlying the world's largest unsecured gold ETF moving into the COMEX system in just a few months.
- The silver market is described as more dislocated than the global gold market, with no lender of last resort and potential for significant price movement.
- The author cites evidence that China has been accumulating massive amounts of gold since the 2008 financial crisis, with net bullion outflows to China exceeding 5,300 tons from Switzerland and the UK.
- A 2022 article by London gold trader Peter Hambro allegedly admitting that precious metals prices are suppressed by derivatives was recently removed from a London website.
- The gold-to-silver ratio closed at a historically high level of 90, with analysts suggesting silver may soon catch up to and potentially outperform gold's recent price movements.
- The author provides historical context, noting that in 1980, US gold reserves were valued at approximately 25% of outstanding US debt, which would translate to a gold price of $34,630/oz today to achieve the same ratio.
Careful Mr. President.
Get to meddling with gold you might get more turbulence than you were expecting.
Gold seems to be finally having its Media Attention moment in the 21st Century bullion bull.
And US President Donald Trump went on tour this week, hammering home he's heading to Fort Knox to see the part of the nation's still world leading Official Gold Reserve stockpile.
Instead of another silly press tour of Fort Knox and then pretending that's some kind of audit.
To actually do the job correctly the US would need 4 parties of simultaneous auditing teams who would spend days possibly weeks counting and testing at random samples from the four supposed locations of our US Official Gold Reserves.
You would need teams in Fort Knox, Denver, West Point, and at the NY Federal Reserve. You'ld probably also have to declare by fiat any potential encumbrances on said gold reserves are null and void, come what may.
But sober up everyone, a legit US Gold audit is highly unlikely to happen and I'll go as far as to say, not within my lifetime it won't.
After all, our now US President told us all in 2016, "We don't have the gold, other places have the gold."
In case you forgot or were gold asleep at the time, only a few months following that clip from Trump on the campaign trail in Utah. He shockingly won his first term as President in early November 2016.
That 24 hour period to follow his win is still the most obvious short term global gold price intervention to date.
An up and down $100 oz swing when to start the election night gold was priced at $1280 oz.
That's like seeing a $250 swing in a 24 hour period with today's gold price near $3,000 oz.
Not impossible, but many standard deviations from normality.
OK let's move on and kill a bit of recent gold hopium.
Treasury Secretary Scott Bessent was asked this week about his Administration's plans for gold.
Here's what he had to say.
In terms of fiat US dollar denominated inflows into the COMEX gold warehouse system, the current purchasing power of the gigantic size inflows dwarfs what happened during the 2020 Covid COMEX gold inflow arbitrage.
Makes sense as the spot gold price has doubled since back then.
The typical names of the large COMEX gold house and customer accounts taking the gold inflow warehouse warrants is typical with JPM's customer account leading, Bank of America, Santander, and Barclays being the next largest all stopping over 10,000 100 oz equivalent contracts apiece.
In terms of gold ounces the inflows are still a bit tinier to date than what they were back in Covid 2020. And what followed from middle 2022 to the near end of last year 2024 was a slow bleed out and pulling of Comex gold from the collective warehouses.
Where did that gold go?
Perhaps some went back to London, but I would venture to guess a good amount of it went off into HNW private investor gold bullion stashes here in the USA.
To put this recent more than 600 gold ton inflow into the USA into perspective, that is like over 72% of the purported gold underlying the world's still largest unsecured gold ETF just up and moving into the COMEX system in a matter of a few months.
Meanwhile silver mostly being pulled from London into the COMEX system is being slept on.
Silver is more dislocated than the global gold market. Silver has no lender of last resort
like Gold does currently (from central bank leasings or lending). More on the silver market on the other side of this week's Bullion Market Update.
There were even high ranking bullion desks this week asserting on Arabic language news programs that the gold outflow to the USA has been one of the largest on record. With estimates of 2,000 tons whereas up to now we only have visibility of just under 1/3rd of that bold claim.
Further gold inflow visibility into the USA can be seen from this latest Swiss gold export data to the USA. A net inflow of 193.4 tons out of Switzerland's big 4 gold refineries.
Where did that gold come from?
About 62 potential countries that export gold to Switzerland for refining.
Allow me to put this large gold inflow data into perspective through a Chinese lens over the last dozen years. Between exports from Switzerland, and the UK, I can count here a net gold bullion outflow to China of over 5,300 tons between the two charts. And that only partially covers the amount of gold China has been gobbling up especially since the 2008 GFC.
Someone who has been warning about this precarious global gold market situation for about as long as I have, Luke Gromen looks like he is about to have published a long form interview with Tucker Carlson.
So millions of US gold buying demographic viewers are about to get a Master class in the world's modern day gold market. And yes, I would say by now we can call gold's Media Attention phase is finally underway in full for this 21st Century bullion bull market.
Now let's shift gears and swing over to sneaky seemingly lawless London. I was alerted this week that longtime London gold trader Peter Hambro's article from July 4, 2022 where he basically admitted that day to day precious metals prices are derivative suppressed shams.
Well his tell the truth article recently got pulled from the London Reaction website.
No problem, you see we have technology called digital archiving on the World Wide Web that allows us to view past versions of websites. So we still have Peter Hambro's article and we'll continue publishing it so people know to get prudently positioned now, not later.
The situation as admitted by the US Office of the Comptroller of the Currency has gotten even more derivative levered than in 2022 when he published his article. In the USA, the largest PM derivative players remain JP Morgan, Citibank, and Bank of America in that order.
We have documents going back to early 2013 when the Central Bank of India at the time admitted that the then global gold market was discovering day to day prices through phony derivative leverage at the time estimated to have been 92 oz paper vs 1 oz physical gold.
It's probably gotten much worse since then, and don't even get me started on how ridiculously paper suppressed silver still is (probably something like 2 to 3 multiples of what the Central Bank of India admitted in 2013).
Let's swing again back to London who early this week has another go of trying to calm onlookers' nerves about their delaying situation in gold withdrawals from London.
Have a look and listen.
You might think that with the Western world currently going nuts over gold, the eastern world might be selling into it. Well, not exactly based on reports this week.
Good on you Chinese Grandma, nothing wrong with taking some profits after your gold has more than doubled in local spot price over the last dozen years.
After all that time, something like 30,000 tons of gold has gone off to the silk road majors with India and China leading the way in getting more gold wealthy seemingly by the year.
Stick around after this short break we're going to get into the silver market. And hear from some recent silver commentators about why when silver gets going it will likely blow gold's recent massive moves away.
The silver and gold markets finished up again on the week.
The spot silver price closed at $32.55 oz bid with a bit of selloff weakness to end today.
The spot gold price ended today at $2,937 oz bid up on the week's trading.
The spot gold silver ratio rose on silver weakness to close this week at a still historically high level of 90.
When will silver finally begin playing catchup to gold?
Still a common question unknown but hard to believe gold can blow into the $3,000s per ounce this year and silver would still have its relatively relaxed correlation no play catch up and even outperform.
Staggering physical silver supply deficits have many silver commentators feeling the same.
Bloomberg macro strategist Simon White wrote on silver this week.
Daniel Ghali, Senior Commodity Strategist at TD Securities continued banging the tables this week on Silver highlighting exploding 20 year high 3 month silver lease rates in London.
A few final insightful posts regarding the ongoing valuation of gold versus other competing asset classes.
The Australian housing bubble is beginning to give way to gold in real value terms. Look at the top right chart above that is average Australian house prices divided by gold which has recently fallen like a stone.
Long-term targets for bullion versus homes down under are the lower bound double lines on the gold and silver chart bottom right.
Similar but slower story US State side.
Where rising home prices and high mortgage rates have pushed the median age of homebuyers to a record high age of 56 years old up from 31 years of age back in 1981.
Speaking of the early 1980s, those levels remain long term target lines for average US house costs relative to gold and silver respectively.
Look hard again, top right chart.
Gold is falling, eventually silver follows gold in the bullion bull market and future manias.
Finally to close I want to remind you just how early or middle innings we likely are in this ongoing bullion bull market.
With a look back to 1980 when early in the year on January 21, 1980 the gold futures price per oz hit a then all time nominal price high of $875 oz in then way more powerful full fiat US dollars at the time.
No rumors of the world's demise when gold goes manic and accounts for profligate fiat currency bubbles remain exaggerated.
You see back then, the same alleged amount of Official Gold Reserves held by the USA that we currently allegedly still hold now, well that 8,133 and a half tons of gold was briefly valued at 1/4th or 25% of our then outstanding US debt at the time, $863 billion.
Cut to today, $36.2 trillion debt and growing.
With $150 trillion or more in unfunded liabilities increasingly coming due this decade and for decades to come.
For history to rhyme in time, we're talking about a gold mania price spike to $34,630 oz at the moment.
And as our US debt keeps rising that equivalent 25% gold to debt coverage spike number rises to silly levels that perhaps bitcoin psychologically prepared the world to one day witness in gold globally.
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.
