Summary
- In 1964, the U.S. began removing silver from circulating coins, starting the trend of currency debasement, while gold hits new nominal highs, unlike silver.
- The silver spot price remains 36% below its historical highs from 1980 and 2011, closing this week just under $32 per ounce.
- Analysts predict silver to catch up to gold's outperformance, potentially by the end of 2024 or into 2025.
- Despite being outperformed by gold so far this year, silver is expected to see higher prices due to strong market fundamentals.
- Gold needs to rise by almost $1,000 per ounce to match inflation-adjusted price highs from 1980, as current CPI figures are deemed inaccurate.
- Silver would need to reach $170 per ounce to match its inflation-adjusted 1980 high, with analysts predicting even higher prices in this bull market.
- The Chinese government has announced a $1 trillion stimulus, adding to the speculation of rising gold and silver prices.
- Reuters suggests silver is likely to have a strong close to the year, driven by bullish market conditions.
- The silver market faces tightening supply, with demand exceeding supply by an estimated half a billion ounces over the last three years.
- India's large silver imports from London and the shrinking available silver supply indicate potential price increases driven by supply deficits.
In 1964, the same year the United States decided to take silver out of its circulating coinage and thus began the long road or currency debasement we are still embarking upon. CNBC Financial journalist was born, making him a typical 60 year old western financial talking head you hear on tell a vision. No silver is still nowhere near record nominal price highs even though gold priced in fiat currencies like the fiat US dollar seemingly hits new nominal price record high week after week.
We begin this week's Bullion Market Update with a fresh example aired today, of how little the western investing world understands either gold and silver markets respectively with such price history ignorance on public display all within one human lifetime of facts. The spot silver price is still nominally -36% off from its seemingly ancient 1980 and 2011 nominal price high levels of $50 oz, finishing this week just under $32 oz spot.
Many gold price analysts guess that to start this year 2024 have been left in the dusters gold leads this global bullion bull market as it should. Yet we are still awaiting silver to begin its typical catch up rally and gold outperformance perhaps later this year into next 2025.
And while silver market analysts' guesses to start the year have already been outperformed to date on the year by silver, there are many calling for high silver prices to close out the year with such excellent underlying market fundamental drivers CNBC in India will point out in the next 60 seconds.
In terms of record nominal gold prices ongoing, of course the market might be getting ahead, a factor we will examine later in this week's update. But by simply looking at the US Government's rigged CPI since the last time gold cleared the system in 1980. We still need nominal price highs of spot gold nearly $1,000 oz more in price before clearing the last nearly four and a half decades of inflationary data lies compounded.
The long term truth is gold is destined to go much higher than that in nominal fiat US dollar terms.
On the silver side of the last 4 and half decades of inflationary lies compounded, we still need a nominal price of spot silver just $170 oz to match the underreported inflationary high of January 1980. Again, my contention is that silver in nominal fiat US dollar terms will climb higher than that before this mania phase fully peaks out.
If indeed monetary precious metals become the last bubble of this post WW2 debt super cycle era, the fact that western media talking heads don't even have their facts close to correct is simply a current anecdotal of just how early we truly still are.
Biggest bullion related financial news this week was the return of Chinese stimulus and fiat currency creation to the tune of upwards of $1 trillion fiat yuan to help bolster its struggling banks, local real estate, and stock markets.
Barring any deflationary collapse scenarios, this kind of reckless arbitrary fiat currency creation is destined to continue fueling silver and gold spot price speculations higher over time.
Even Reuters is having to admit that the potential for silver to have a solid close to the year seems more probable by the day and random trillion fiat yuan bailout measure announcement.
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On the other side of this break we will look at the continued bull market in gold and when silver supply deficit fundamentals propel spot prices higher to come.
The spot silver and gold markets were both up on the week with what appeared to be some profit taking to close the trading this Friday.
The spot silver price finished at $31.61 oz bid with the spot gold price closed at $2,653 oz bid on the week.
The spot gold silver ratio finished at 83, and we'll continue monitoring the spot GSR to see if lower 80s and high 70s come back as they technically appear to be coming.
The handler of the Federal Trade Commission or FTC's twitter account had an embarrassing tweet corrected this past week. Apparently the agency was trying to warn its followers about real ongoing scams in the USA where scammers pretend to be agents of the FTC and talk unsuspecting victims into buying gold bullion so criminals can then make off with the goods.
The FTC tweeted, "anyone who tells you to withdraw money and buy gold bars to "protect" is is a scammer... Learn More.
Twitter followers piled on pointing out that the fiat US dollar has declined about 50% against gold over the past decade, so simply communicating that fact does not make one a scammer.
Gold bears were out this week with a chart banging the table that spot gold is currently historically overbought versus its ongoing 200 day moving average by 2 standard deviations.
And while that is true, gold can and has gone on runs where it has more than doubled on a percentage basis how far it has climbed above its 200 day moving average. Both the 2000s and 1970s gold bulls saw major runs larger than the one we are currently on, although given how nominally large the spot price number appears to norms onlookers out there, you can see why caution is being called for.
This coming week, China will be closed in gold trading for a national holiday, so if there were to be a bearish price breakdown opportunity to add to positions, this coming week might offer that to bullion buyers.
Underlying pressure for silver supply continues slamming the global silver market, and the float of available silver in London is certainly shrinking to levels that will at some point have real price discovery effects for soaring silver values.
A large swath of India's 45.6 million oz August imports came from dwindling London warehouses.
And judging by silver lease rates ongoing, the silver market has been seeing tightening physical market conditions especially over the last 3 yrs of large silver supply deficits totaling an estimated half billion more oz of demand than supplied by the market.
And there is no real sign of red hot silver demand factors slowing anytime soon. As the spot silver price hits 12-year price high levels, inching up to perhaps the biggest cup handle eventual blowout the financial world has seen global in scale.
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.
