New York Fed GOLD Vault! Your Gold & Silver Investment is About to Become Priceless - EB Tucker
New York Fed GOLD Vault! Your Gold & Silver Investment is About to Become Priceless - EB Tucker
Money Sense: 3-3-2025
A potential gold revaluation presents a unique, non-default pathway for managing the United States surging national debt.
The discussion extends beyond simple market pricing, with central banks showing renewed interest in physical gold and a global trend toward repatriating tangible assets.
EB Tucker explains that if gold reaches 4,000 dollars per ounce, US reserves would be worth 27 trillion dollars —about half the US stock market's valuation.
He highlights that stocks are a uniquely American asset, contrasting them with the London Stock Exchange, which struggles to retain major companies. It took gold a decade to appreciate from 2,000 to 3,000 dollars, and according to our charts, the market is behaving similarly to 2011, a peak that lasted a decade.
Thus, moving from 3,000 to 4,000 dollars might take another decade. If so, the interest payments on an equivalent amount of debt would roughly wipe out the price gain.
Reflecting on his personal experience, Tucker recalls visiting the New York Fed gold vault in 2001. He notes that institutional investors avoid physical gold, preferring futures and contracts since physical metal is lately seen as "dead money" that doesn't generate returns.
However, recent developments have raised concerns over the accuracy and transparency of these reserves. Speculation about potential shortages or overstatements in US gold reserves could significantly impact financial markets, inflation expectations, and investor sentiment.
However, Tucker emphasizes JP Morgan's near silver crisis due to the Wall Street Silver movement. He explains that institutions avoid holding physical metals, preferring to lease gold and create complex financial instruments.
Recently, gold deliveries on the COMEX have reached record levels, a clear indicator of the explosion in demand for physical gold. This phenomenon could create a snowball effect, prompting other major institutions and central banks to step up their delivery demands, putting further pressure on the system as a whole.
Looking at major fundamentals, EB Tucker argues that gold's price movements over the past few years were due to a well-managed, financialized market rather than external factors like tariffs. He explains that large-scale futures trading was used to control price volatility, but recent declines in futures volume indicate a shift in market dynamics.
Strength in gold earlier this month is linked to increased safe-haven demand, increasing expectations of accelerated Federal Reserve interest rate cuts, and growing inflows into gold-backed exchange-traded funds.
Since December, over 600 tons of gold have been transferred to New York City vaults, according to the World Gold Council.
Gold has not been a direct target of tariffs, but market reactions to trade uncertainty have driven a significant shift in trading behavior and impacted the gold price.
The movement of gold from London to the US, rising COMEX premiums, and concerns over availability were largely the result of risk management decisions rather than true supply issues.
