"Safe" investment, maybe gold?

[46and2]

ATM said:

46and2 said:

Does anyone know why Gold has risen so much lately? We could see £1900 an ounce in the not to distant future at this rate.

Which I had bought more when I had the notion a few years ago.

No one really knows

There are a few factors at play which have been well discussed in this thread earlier -

All currencies are being devalued [or inflation is up depending on your understanding of money]

Lots of Central Banks are now buying more Gold and less USD based stuff like treasuries and bonds

War

Economic uncertainty - so its a flight to safety

Talk of interest rate cuts - this is always good for Precious Metals and Commodities in general

Real rates are well below zero or negative - this means the real rate of inflation [not the rubbish inflation numbers we are told] SUBTRACT the current interest rates EQUALS the real rate

Some YouTube commentator types are also talking about commodities in general rising. So this is across the board. Not just Gold and other Precious Metals. We have seen Silver take off a bit recently. You can look at Copper, Platinum and other metals doing well also. Then the softs like Coffee, Cocoa and grains. Everything in the commodity space is rising. So you could argue some of the gains are the commodities just dragging it up with them.

Also some people [or those way out there conspiracy theory types - depending on your view] believe that as the debt mountains pile up and up then this becomes unsustainable. So the US government is now paying more than 1 trillion in interest to its debt or bond holders. Is this why less third parties are less willing to buy more of it. Some people think this could never happen but as the amount of debt increases and their ability to service this debt diminishes then you can get run away inflation or currency devaluation. This then leads to the destruction of the value of USD compared to stuff outside the USD system. So GBP and EUR would get caught up in USD devaluation. But Gold would not. So even if you think the end of the USD is impossible and will never happen in our lifetimes you have to acknowledge the risks are increasing as they accumulate more and more debt with no real plan to reduce it. They are currently paying out way more than they take in. And the amount of this difference is increasing at an accelerating rate. If there is no plan to fix this then this acceleration will continue to ... accelerate and so the value of these currencies will reduce at an accelerating rate and so Gold should in theory do the opposite and increase in value at an accelerating rate.




In simpler terms

Commodities are now increasing which will increase inflation
This should force the central banks to increase rates to curb inflation
But they cant do this because they have so much debt and cant afford to pay higher interest rates on this debt
Even as they do pay out higher interest on their debt this adds to inflation because this money they pay in interest goes out into the economy
If they dont have this money or they dont receive it in taxes they need to create more debt to pay the interest on their existing debt
So as their debt increases and interest rates increase this adds to inflation
This then makes third parties like China or The Saudis to think sod that I'm not buying more USD debt because they are looking more and more F'ed
This then makes the USD worth less and less
This then drives up prices of stuff like commodities
This then forms a loop or down ward spiral

Thanks for the reply. I noticed Palladium is massively down but the spot vs premiums makes it pointless for the average person to purchase. Maybe one for an ETF.

[RSTurboPaul]

Andy Schectman has been covering the BRICS arrangements progress and their likely impact on PMs in some detail in his various interview videos.


The very short summary would seem to be:

- As above, USD QE-infinity means monster inflation, 1tn extra debt per 100 days (!!) and other nations slowly sacking off US debt instruments as assets/collatoral because USD is a nonsense and hyperinflation appears to be a real threat

- Saudi etc. has declared no need to use (petro-)dollars to buy oil now and has announced protection arrangements with Russia to replace those which the petrodollar was originally based on, so less need for USD globally (which will flood the US with $ when they return to shore, causing more inflation, AIUI??), and they have applied to join BRICS

- Russia, India, China and other central banks are hoovering up Gold and Silver at unprecedented rates

- Gold was 'coincidentally' declared a Tier 1 asset, the same as cash, by (IIRC??) the BIS

- Russia (the R in BRICS) stating their aims include removing Comex price manipulation setting in time, allowing true price discovery to take place in a more genuine supply/demand/delivery marketplace without hypothecated 'paper' metals being used to short-sell / manipulate prices (paper contracts being about 400x actual Comex silver, IIRC, for example)

- BRICS announcing their intention to launch a currency based on basket of commodities - although it is mooted that the easiest / most well-known option would be to just use gold as a currency backing, like it was before Nixon took the US off the gold standard in 1973/1974 (can't remember the year) - which would seem to tie in with the central banks buying

- Silversqueeze via WallStreetSilver reddit

- Costco launched a line of Gold products, indicating public demand


The underlying theory appears to be that the BRICS nations are slowly shoring up their PMs positions and stockpiling it, with the end game being a new currency launched that is backed by PMs (rather than being printed out of thin air like the USD) and the ending of the USD as World Reserve Currency. Part of this involves arbitrage to the East from the West due to higher Buy prices being offered on the Shanghai Gold Exchange, and some commentators suspect China has over 30,000 tonnes of gold stashed away.

As part of this, it seems to be suspected that market forces will revalue gold and silver upwards (as we have seen) and, possibly, central banks will (additionally) revalue gold overnight either as part of a new currency announcement or as part of a debt-covering exercise (which can give crazy numbers of $100k/oz or something, lol).

The whole USD system will then die in a festering pond of hyperinflation and a biblical crash that is bigger than 1929, and we in the UK will suffer because of association.



And if you have a really large tin foil hat... 'The Great Taking' (look it up on Youtube) will then take place, whereby institutions hoover up 'privately held' assets via quietly-introduced laws and regulations that allow creditors to receive payment before those whose assets they actually are (were), and then the US will launch CBDCs on the now-Serf Class and/or a silver-backed currency using stockpiled silver that has been created while they have reduced Silver Eagle production output over the past few years, which may or may not have been hinted at by Donald Trump in various comments/tweets. lol

[Mr Whippy]

You forgot the patsy distraction like a war or something.


In the end no matter the ridiculous distortions the CBs impose by their cretinous policies, they can always be reasonably explained away under the cover of wars, rather than admission of their incompetence and omnipotence.


And that’s an even more dangerous mix when we’ve had 15 years of BTFD and don’t fight the Fed.
People are now trained to ignore risk.


There will be some unicorn assets out there, maybe, but I can see deflation coming back to haunt us.

Ie, even UK farmland went about 10x from 2002 to 2012. Why? Did meat, fruit and veg etc, go up 10x?
Nope, infact they become worth even less.
So deflation, vast over supply, and yield seeking in assets due to stimulus/low interest rates etc, themselves used to fuel inflation because of a lack of it inherent in the economy.

My gut is that productivity peaked into 2000s and everything since was about fighting off deflation with stimulus.

Now we see that doesn’t work without just getting ‘bad’ inflation (assets only)… so we’re now stuck.

We need good inflation, salary rises… but to get that we need sustainable growth now.

But to transform a world that grew business on stimulus and free money to one that can grow on actual merit and productivity?

It’s gonna take some changing!

Edited by Mr Whippy on Thursday 11th April 13:46

[ATM]

RSTurboPaul said:

- Silversqueeze via WallStreetSilver reddit

- Costco launched a line of Gold products, indicating public demand

I dont believe we have seen any real buying from retail. Most physical PM dealers in USA are seeing more retail selling than buying. So I think a lot of retail either need the money - fiat money - to pay their bills, or have been under water a while since buying in at previous pumps and want out at Break Even or modest profit.

GDX etf has seen outflows also. So retail selling GDX etf.

The silver squeeze did see some mania and premiums sky rocketed back in the day. But since then nothing like that demand. The Andy Schectman types of this world said at the time they have never ever seen demand like that.

Some people still talking about Solar panel demand increasing demand for Silver. Next Gen solar panels use more Silver per panel. And demand for panels in general should also rise. So this Solar demand should start to consume more and more of the available Silver.

The Central Banks are not buying Silver. They are only buying Gold. They might stat buying Silver but for now they are not. It is maybe too bulky for them to store in mass quantities. Usually it is retail who rush into Silver once the Bull market becomes glaringly obvious. If Gold continues to rise and rise then maybe retail wont be able to afford Gold and instead will want Silver.

I see a lot of talk about the Gold to Silver ratio. At past market peaks we have seen a much lower Gold to Silver ratio. If we revisit these lows or go further down then Silver should increase in value quicker than Gold.

Whats crazy is we are seeing these Countries on the opposite side to Us accumulating massive amounts of Gold and we are doing nothing about it. When does it become a risk? If we do get some currencies collapsing and Gold becomes the new benchmark then we are all screwed here because our countries have none.

China now has their own Gold exchange which - surprisingly - holds their Gold price higher than ours. So 'clever' traders see this as an arbitrage play and are buying here for less and then shipping to China to sell for more. In effect China is just sucking up all the physical Gold. Is this intentional - you have to wander.

[Scootersp]

46and2 said:

Thanks for the reply. I noticed Palladium is massively down but the spot vs premiums makes it pointless for the average person to purchase. Maybe one for an ETF.

One of Palladium's uses (a significant one) is car catalytic convertors hence it's pull back.


The metals have a historic monetary element and also a use one, Gold with the highest monetary/use ratio.

[ATM]

Scootersp said:

One of Palladium's uses (a significant one) is car catalytic convertors hence it's pull back.


The metals have a historic monetary element and also a use one, Gold with the highest monetary/use ratio.

Has anyone here seen a Platinum Britannia? There is no Palladium coins from the UK Mint but there are other countries who mint them.

[RSTurboPaul]

ATM said:

RSTurboPaul said:

- Silversqueeze via WallStreetSilver reddit

- Costco launched a line of Gold products, indicating public demand

I dont believe we have seen any real buying from retail. Most physical PM dealers in USA are seeing more retail selling than buying. So I think a lot of retail either need the money - fiat money - to pay their bills, or have been under water a while since buying in at previous pumps and want out at Break Even or modest profit.

GDX etf has seen outflows also. So retail selling GDX etf.

The silver squeeze did see some mania and premiums sky rocketed back in the day. But since then nothing like that demand. The Andy Schectman types of this world said at the time they have never ever seen demand like that.

That is my understanding also / I am inclined to agree.

ATM said:

Some people still talking about Solar panel demand increasing demand for Silver. Next Gen solar panels use more Silver per panel. And demand for panels in general should also rise. So this Solar demand should start to consume more and more of the available Silver.

The Central Banks are not buying Silver. They are only buying Gold. They might stat buying Silver but for now they are not. It is maybe too bulky for them to store in mass quantities. Usually it is retail who rush into Silver once the Bull market becomes glaringly obvious. If Gold continues to rise and rise then maybe retail wont be able to afford Gold and instead will want Silver.

I see a lot of talk about the Gold to Silver ratio. At past market peaks we have seen a much lower Gold to Silver ratio. If we revisit these lows or go further down then Silver should increase in value quicker than Gold.

Are we sure silver isn't being bought? It appears India is targeting it quite aggressively:

https://finance.yahoo.com/news/indias-february-sil...

Yahoo said:

India imported a record 2,295 metric tons of silver in February, up from 637 tons in January, said a government official, who declined to be named as he was not authorised to talk to the media.

In February, India imported 939 tons from UAE, as traders bought large volumes to benefit from a lower duty, the official said.

The country's silver imports surged to 2,932 tons in the first two months of 2024 compared to 3,625 tons for all of 2023, according to provisional data from the Ministry of Commerce and Industry.

Although that article does suggest it is just part of the upside to an ongoing cycle, and I'm not clear on if it is central bank buying or just a summation of all purchases by organisations/companies in India:

article said:

Chirag Thakkar, CEO of Amrapali Group Gujarat, a leading silver importer, said the industry had replenished stocks in January and February after having depleted them in 2023.

"Indian imports are cyclical in nature. In one year, imports may be very high, and then the following year they may fall. Since imports fell in 2023 after record buying in 2022, we can expect imports to pick up in 2024," Thakkar said.

India's imports could rise to 6,000 tons in 2024, from last year's 3,625 tons, driven by robust demand from the fabrication and solar industries, he said.

Thakkar said people were also buying metal for investment purposes, believing it will provide higher returns than gold.

WRT risk / china etc:

ATM said:

Whats crazy is we are seeing these Countries on the opposite side to Us accumulating massive amounts of Gold and we are doing nothing about it. When does it become a risk? If we do get some currencies collapsing and Gold becomes the new benchmark then we are all screwed here because our countries have none.

China now has their own Gold exchange which - surprisingly - holds their Gold price higher than ours. So 'clever' traders see this as an arbitrage play and are buying here for less and then shipping to China to sell for more. In effect China is just sucking up all the physical Gold. Is this intentional - you have to wander.

Agreed re: obvious risk to the West from lack of Gold holdings / China taking advantage of Western traders' short-termism. If, as it is alleged they always do, China are playing 'the long game', a slow and steady draw down of Western supplies at low (manipulated) prices via some minor additional arbitrage costs alongside a gradual dumping of USD bond over time would seem to make sense, and does not suggest good outcomes for a West focused on short-term profits and a 'this is fine' mentality.

[RSTurboPaul]

ATM said:

Scootersp said:

One of Palladium's uses (a significant one) is car catalytic convertors hence it's pull back.


The metals have a historic monetary element and also a use one, Gold with the highest monetary/use ratio.

Has anyone here seen a Platinum Britannia? There is no Palladium coins from the UK Mint but there are other countries who mint them.

Have been tempted by them as they are c.50% cost of Gold Brits (and it seems Platinum Squeeze could be a real thing if someone really put their mind to it) but the yellow stuff just seems like it would be a wiser buy in a market that may be looking for familiarity and/or a safe haven if/when TSHTF. lol

[46and2]

ATM said:

Scootersp said:

One of Palladium's uses (a significant one) is car catalytic convertors hence it's pull back.


The metals have a historic monetary element and also a use one, Gold with the highest monetary/use ratio.

Has anyone here seen a Platinum Britannia? There is no Palladium coins from the UK Mint but there are other countries who mint them.

So Palladium long term is likely worth less as EV use rises? Or maybe catalytic converter demand will rise due to demand for less pollution?

I've always looked at getting a platinum or palladium coin/bar but the premiums are just too much.

[dom9]

[Scootersp]

46and2 said:

So Palladium long term is likely worth less as EV use rises? Or maybe catalytic converter demand will rise due to demand for less pollution?

I've always looked at getting a platinum or palladium coin/bar but the premiums are just too much.

I think it's declined recently because of the ICE phasing our plans yes, perhaps it's overdone, that's where research/gut feel comes in!?

Silver I think will always be used "Pure silver has the highest electrical and thermal conductivity of all metals, and possesses the lowest contact resistance." this property meaning better efficiency in anything electrical? It's in whatever you are using to post here for example?

US dimes used to be silver, but they began to run out of money/material to make them (notice that doesn't happen now it's fiat)
https://en.wikipedia.org/wiki/Coinage_Act_of_1965#...

A dime used to have 2.25g of silver in it (because in times gone by we wouldn't accept less value metals in coins), we talk about the expansion of the money supply, well it's no wonder they ran out of silver back then, as less than $2 Billion dollars today of the same silver content dimes could be made with the annual global production of silver.

One of the US covid stimulus measures "Coronavirus Aid, Relief, and Economic Security Act and nicknamed the CARES Act or Phase Three, appropriated $2.3 trillion" It would take over 1000 years of global silver production to make the dimes this represents.

The largest bank in the US "JP Morgan has amassed a physical stockpile of silver of at least 600 million ounces by calculations at an average cost of around $20 an ounce, all while continuing to make hundreds of millions of dollars in manipulative COMEX short selling."

and also
https://www.justice.gov/opa/pr/jpmorgan-chase-co-a...

Sneaky to outright corrupt, but these are the last organisations that will relinquish power/wealth, or accumulate worthless things and so I'd rather mirror some aspects of what they do.

[ATM]

RSTurboPaul said:

ATM said:

Scootersp said:

One of Palladium's uses (a significant one) is car catalytic convertors hence it's pull back.


The metals have a historic monetary element and also a use one, Gold with the highest monetary/use ratio.

Has anyone here seen a Platinum Britannia? There is no Palladium coins from the UK Mint but there are other countries who mint them.

Have been tempted by them as they are c.50% cost of Gold Brits (and it seems Platinum Squeeze could be a real thing if someone really put their mind to it) but the yellow stuff just seems like it would be a wiser buy in a market that may be looking for familiarity and/or a safe haven if/when TSHTF. lol

If I bought a Platinum Britannia it would not be for an investment.

[ATM]

Gold close to hitting $2400 this morning

Silver sliced through $29 without stopping

[ATM]

RSTurboPaul said:

ATM said:

The Central Banks are not buying Silver. They are only buying Gold. They might stat buying Silver but for now they are not. It is maybe too bulky for them to store in mass quantities. Usually it is retail who rush into Silver once the Bull market becomes glaringly obvious. If Gold continues to rise and rise then maybe retail wont be able to afford Gold and instead will want Silver.

Are we sure silver isn't being bought? It appears India is targeting it quite aggressively:

Not sure. All I know is the Tier 1 asset thing for CB is important. Gold was reclassified as a Tier 1 asset for Central Banks from a Tier 3. I have no idea where Silver sits, but if it is not Tier 1 then it is less appealing, right now. Sure Central Banks could still accumulate hoping the Classification might change. But considering it takes up - whats the gold to silver ratio right now - 80x the space, when you want tonnes of Gold do you want 80x the tonnes of Silver instead?

In terms of countries buying but not their Central Bank. Yes one country could be ahead. Is that for manufacturing production. I dont know if Indians like Silver for Jewellery. But if they are manufacturing Solar Panels they will need Silver. Maybe Indians have started buying Silver because Gold is too high. No idea.

I think Silver price was very sleepy when Gold started going up. Silver is now playing catch up. It could just be that. Catching up. No idea.

[ATM]

https://twitter.com/TaviCosta/status/1775543807590...



Looks like this today - my rough version - struggled to find a quarterly candle chart

[RSTurboPaul]

ATM said:

RSTurboPaul said:

ATM said:

Scootersp said:

One of Palladium's uses (a significant one) is car catalytic convertors hence it's pull back.


The metals have a historic monetary element and also a use one, Gold with the highest monetary/use ratio.

Has anyone here seen a Platinum Britannia? There is no Palladium coins from the UK Mint but there are other countries who mint them.

Have been tempted by them as they are c.50% cost of Gold Brits (and it seems Platinum Squeeze could be a real thing if someone really put their mind to it) but the yellow stuff just seems like it would be a wiser buy in a market that may be looking for familiarity and/or a safe haven if/when TSHTF. lol

If I bought a Platinum Britannia it would not be for an investment.

I think a main worry would be losing it among a bunch of silver Brits because they look so similar lol

[RSTurboPaul]

ATM said:

Gold close to hitting $2400 this morning

Silver sliced through $29 without stopping

Looks like we are past 2400 now.

Will be interesting to see if Comex smashdown comes at 1.30pm, and how long it lasts.

Hard to know if buying now is good idea or not - as always, people rush in to buying things when the price rises 'because FOMO', and a lot of the time that seems to mean the top is in, but with the whole BRICS thing and potential for revaluing / the GSR ratio to shift substantially / metals likely dumping when the USD falls over and people have to unload assets to cover losses... ?!?

[RSTurboPaul]

One of the more recent Andy Schectman chat videos:

https://www.youtube.com/watch?v=btiL12hnheA

[ATM]

RSTurboPaul said:

ATM said:

RSTurboPaul said:

ATM said:

Scootersp said:

One of Palladium's uses (a significant one) is car catalytic convertors hence it's pull back.


The metals have a historic monetary element and also a use one, Gold with the highest monetary/use ratio.

Has anyone here seen a Platinum Britannia? There is no Palladium coins from the UK Mint but there are other countries who mint them.

Have been tempted by them as they are c.50% cost of Gold Brits (and it seems Platinum Squeeze could be a real thing if someone really put their mind to it) but the yellow stuff just seems like it would be a wiser buy in a market that may be looking for familiarity and/or a safe haven if/when TSHTF. lol

If I bought a Platinum Britannia it would not be for an investment.

I think a main worry would be losing it among a bunch of silver Brits because they look so similar lol

Well I think platinum is much more dense than all other metals. So it will be teeny tiny and dead easy to spot.

[RSTurboPaul]

This seems to have been picked up by some on Twitter - "Regulators told to be ready to handle failed clearing houses"

https://www.reuters.com/business/finance/regulator...


Not sure why they'd need to prepare for that sort of thing.

It's probably nothing...