How COVID-19 Shutdowns Impact the Gold Supply Chain

How COVID-19 Shutdowns Impact the Gold Supply Chain

Visual Capitalist.Com By Nicholas LePan

Chains are only as strong as their weakest link—and recent COVID-19 shutdowns have affected every link in the gold supply chain, from producers to end-users.

Increased investor demand for gold coupled with a constrained supply has led to high prices and a bullish market, which has been operating despite these pressures on the supply chain.

Today’s infographic comes to us from Sprott Physical Bullion Trust and it outlines the gold supply chain and the impacts COVID shutdowns have had on the gold market.

The Ripple Effect: Stalling a Supply Chain

Disruptions to the gold supply chain have rippled all the way from the mine to the investor:

Production

Some gold mines halted production due to the high-risk to COVID-19 exposure, reducing the supply of gold. In many nations, operations had to shut down as a result of COVID-19 based legal restrictions.

Delivery

Strict travel regulations restricted the shipment of gold and increased the costs of delivery as less air routes were available and medical supplies were prioritized.

Refinery

Refineries depend on gold production for input. A reduction in incoming gold and the suspension of labor work shortened the supply of refined gold.

Metal Traders

Towards the other end of the gold supply chain, traders have faced both constrained supply and increased cost of delivery. These increased costs have translated over to end-users.

The End Users

Higher demand, lower supply, and increased costs have resulted in higher prices for buyers of gold.

Gold: A Safe Haven for Investors

As the virus spread around the world threatening populations and economies, investors turned to safe-haven investments such as gold to hedge against an economic lockdown.

This increase in investor demand affected the four primary financial markets for gold:

Futures Contracts:

A futures contract is an agreement for the delivery of gold at a fixed price in the future. These contracts are standardized by futures exchanges such as COMEX. During the initial periods of the pandemic, the price of gold futures spiked to reach a high of US$70 above the spot price.

Exchange-Traded Funds (ETFs):

An ETF is an investment fund traded on stock exchanges. ETFs hold assets such as stocks, bonds, and commodities such as gold. From the beginning of 2020 to June, the amount of gold held by ETFs massively increased, from 83 million oz to 103 million oz. The SPDR Gold Trust is a great example of how the surge in ETF demand for gold has played out—the organization was forced to lease gold from the Bank of England when it couldn’t buy enough from suppliers.

Physical Gold for Commerce and Finance:

The London Bullion Market Association (LBMA) is a market where gold is physically traded over-the-counter. The LBMA recorded 6,573 transfers of gold amounting to 29.2 million oz ($46.4 billion)—all in March 2020. This was the largest amount of monthly transfers since 1996.

Coins and Small Bars:

One ounce American Gold Eagle coins serve as a good proxy for the demand for physical gold from retail investors. The COINGEAG Index, which tracks the premium price of 1 oz. Gold Eagles, spiked during the early stages of the lockdown.

Each one of these markets requires access to physical gold. COVID-19 restrictions have disrupted shipping and delivery options, making it harder to access gold. The market for gold has been functioning nonetheless.

So how does gold get to customers during a time of crisis?

Gold’s Journey: From the Ground to the Vault

Gold ore goes through several stages before being ready for the market.

Processing:

Gold must be released from other minerals to produce a doré bar—a semi-pure alloy of gold that needs further purification to meet investment standards. Doré bars are typically produced at mine sites and transported to refiners.

Refining:

Refineries are responsible for turning semi-pure gold alloys into refined, pure, gold. In addition to reprocessing doré bars from mines, refiners also recycle gold from scrap materials. Although gold mining is geographically diverse and occurs in all continents except Antarctica, there are only a handful of gold refineries around the world.

Transportation:

Once it’s refined, gold is transported to financial hubs around the world. There are three main ways gold travels the world, each with their own costs and benefits:

Commercial Flights:

Cheapest of the three options, commercial flights are useful in transporting gold over established passenger routes. However, the volume of gold carried by a commercial flight is typically small and subject to spacing priorities.

Cargo Planes:

At a relatively moderate cost, cargo planes carry medium to large amounts of gold along established trade routes. The space dedicated to cargo determines the cost, with higher volumes leading to higher shipping prices.

Chartered Airlines:

Chartered airlines offer a wider range of travel routes with dedicated shipping space and services tailored to customer demand. However, they charge a high price for these conveniences.

After reaching its destination via air, armored trucks with security personnel move the gold to vaults and customers in financial hubs around the world.

The World’s Biggest Gold Hubs

The U.K.’s bullion banks hold the world’s biggest commercial stockpiles of gold, equal to 10 months of global gold mine output. London is the largest gold hub, with numerous vaults dedicated to gold and other precious metals.

Four of the largest gold refineries in the world are located in Switzerland, making it an important part of the gold supply chain. Hong Kong, Singapore, and Dubai are surprising additions and remain significant traders of gold despite having no mines within their borders.

COVID-19: The Perfect Storm for Gold?

As countries took stringent safety measures such as travel restrictions and border closures, the number of commercial flights dropped exponentially across the world. For the few commercial airlines that still operated, gold was a low-priority cargo as space was dedicated to medical supplies.

This impeded the flow of gold through the supply chain, increasing the cost of delivery and the price of gold. However, thanks to the diverse geography of gold mining, some countries did not halt production—this helped avoid a complete stall in the supply of gold.

The COVID-19 pandemic has created the perfect storm for gold by disrupting the global supply chain while investor demand for gold exploded. Despite heightened delivery risks and disruptions, the gold market has managed to continue operating thus far.

https://www.visualcapitalist.com/impact-of-covid-19-on-the-gold-supply-chain/ 

Wealth Transfer

Wealth Transfer

The Final Wake Up Call By Peter B Meyer

 Once In A Lifetime Opportunity

More than any other time in history, people can exponentially increase their standard of living during this upcoming collapse, without being exposed to great risk. Normally the precious metal community’s wisdom says that gold and silver are not investments, but rather they are wealth insurance. While this has always been true in history, there also were brief moments where gold and silver have been simultaneously the safe haven and the best performing investments, achieving truly massive gains in absolute purchasing power.

 The wealth transfer that is now upcoming is set against the backdrop of global imbalances that dwarf any that came before. But this one is in combination with the fact that all world currencies are fiat which are exhibiting signs of expiration and death. This is an incredibly unique situation never seen before in history.

It is probably a once in a lifetime occurrence of all of humanity’s existence, an opportunity that may never occur again. The coming wealth transfer will be of a magnitude that the world has never witnessed. Buying physical precious metals is rapidly becoming acknowledged more widely as an investment that will benefit you and your offspring in the future.

Whatever the price is for gold and silver, if the world’s currencies were to collapse, the purchasing power of those who have not accumulated gold and silver or other precious metals would get transferred to those that did, and that will be a mind-boggling quantity of wealth. More than in any other time in human history, people that own precious metals will be able to increase their standard of living exponentially during the coming upheaval, without being exposed to great risks. 

Right now, the world is in the early stages of the next great bull market in gold and silver, and if not acted upon soon, you may miss the opportunity to make quick, easy, triple-digit gains. In the coming month Gold is to double and Silver to triple! Therefore, hurry up and buy what you can before the prices are too high to buy and it is too late. Gold and Silver will be the real winners, but this time in an absolute gigantic proportion of wealth transfer.

Knowledge is power that can be worn as a suit of armour, and Truth is a weapon that can be wielded like a sword, slicing through the propaganda of misinformation and deceit, laying bare the lies for all of us that are AWAKE, so now there is no fear but just enthusiasm to defeat the Deep State cabal for once and forever.

Panic And Chaos Will Break Out

The world’s silver supply would be gone in a nanosecond once the people realise there isn’t as much metal as is believed, because it’s a very small quantity available for sale. At this moment, there’s a shortfall in the world’s gold supply. The message is clear: Buy gold and silver coins and bullion now, for as much as you have liquidity available, and keep doing so till the prices escalate. The world is running out of silver, which makes  Silver the dark horse in the market.

There is shortness developing in the market, and the central bankers are out of ammunition, so eventually, a tipping point will be reached, where the investment public completely loses faith in the U.S. dollar, and all other paper currencies.

The day is coming when people will realise that holding a purchasing contract for gold or silver that doesn’t exist isn’t worth the paper it’s printed on, and this is also the case for all paper monies. Panic and chaos will break out. Prepare for a chain reaction collapse, wiping out everyone who owns paper!

Gold and silver have revalued themselves throughout the centuries and defeated all fiat currencies, bringing those fraudulent monies to justice. This is as certain as the sunrises in the morning. The honest physical precious metal investors will be rewarded with gains that will overshadow the stolen wealth by the Khazarian thieves.

Demise Of Paper Currencies Is A Certainty

The flip side of credit is debt, and this is where the problem lies. There’s no limit to how much money can be created. In a world of real money, each additional currency unit represents additional wealth. But with fiat credit or debt-money it is different. With credit, spending can be increased dramatically. But there is a limit to how much can be borrowed. Eventually, a point is reached where the cash flow dries up because it is servicing the interest on the debt. At this point the system is insolvent and broken.

 Fiat Currencies lead to corruption and a crushing debt burden, which are at the root of the world’s troubles. Virtually everywhere, governments and their citizens are borrowing more than ever before, and in many cases, they are far beyond any chance of orderly repayment. The point of no return has been passed – where even at zero interest, payments drown the ability to generate free cash to cover those payments.

Consequently, the debt burden is growing greater and greater. It must be clear by now; the banksters thrive spectacularly when fiat currencies are in place, at the people’s expense.

 When interest rates are pushed down by central banks to artificially low levels and held there for an extremely long period of time, credit expands and the burden of debt grows. That has been happening for almost four decades. And now, the entire economy depends on something that cannot continue, as debt cannot grow forever.

As long as rates stay low, the system is maintained and supported, but as the amount of debt increases, the quality decreases. Debtors’ balance sheets become weaker and weaker. Eventually, the credit markets change direction. Interest rates start rising. Then the weight of all that debt comes crashing down like an avalanche. And once it gets started, there is no stopping it. 

The banking system is an absurd business-model; they lend money they don’t have and charge lenders interest on it. Add to this, the ‘fractional reserve lending’ that allows the banks to lend ten times more than what they have on deposit. In other words, they lend ‘money’ they don’t have and which doesn’t even exist, correctly called – credit money– while they are legally authorised to charge interest on it.

It does look increasingly certain that the end of the fiat money hegemony is in sight.  The only questions at this point are:  When does it end, and when does the real panic begin? Regardless of the timespan, the demise of paper currencies is a certainty.

The fiat economic system’s counterfeit money makes counterfeit public policy, and ultimately destroys an economy, a society, and a political system. In short, when money can be created by just tapping a few keys of a computer, people are brainwashed to believe anything.

 Why Gold Is So Useful As Money

Those people may think that it is okay to shut down the whole economy, as they can cover the losses with “money from the government.” But the “money” from the government is counterfeit. Real money is part of the real world. It is limited, like time.

It is impossible to create a surplus of it just because it would be convenient to have more of it. If governments want to fund one project with real money, they have to take the money from something else. That’s why gold is so useful as money. Gold is limited, like time itself. Each ounce of it has to be discovered, dug out of the ground, processed, and stored.

 This is the way that gold connects “money” to the real world of time, sweat, toil, and risk. In that real world, any decision, any choice, must be considered in light of compromises. How much time will it take? How many resources will be required? What does it take away from the other things we want or need?

Usually, these questions are reduced to a single one: How much does it cost? But did anyone bother to ask that critical question as the COVID programs were rolled out – the Lockdown, the Rescue, the Pay-check Protection Program (PPP), and unemployment compensation?

The lunacy of the unemployment bonus is obvious. The average recipient actually earned more money from unemployment compensation than on the job, where wealth was created. The economic law of honest exchange demands only things of real value instead of currency that can be manipulated. As German-American economist and philosopher Hans-Hermann Hoppe once said:

“By virtue of the saver’s saving, even the most present-oriented person will be gradually transformed from a barbarian to a civilised man. His life ceases to be short, brutish, and nasty, and becomes longer, increasingly refined, and comfortable.”

Everyone by now should know that today’s money is phony, all the compensation programs are fake, the economy is counterfeited, and the stock market is a scam.

How Booms And Busts Are Created

It’s critical to understand what’s happening in credit. The credit market is the largest financial market around the globe, it drives the entire economy. It is highly cyclical. When interest rates are low and credit is cheap, “booms” are experienced. When rates rise and credit tightens, “busts” are experienced.

Since the 2008 financial crisis, credit has been kept cheap and easy to access. Creating, in the current credit cycle, the biggest excesses that ever have occurred in corporate debt. When the credit market starts to turn, as more and more high-yielding corporate “junk” bonds i.e. debt turns bad, the next crisis will be kicked off.

Many experts will tell that gold and silver generate no proper yield or income stream, but that isn’t true. First an example scenario to explain how precious metals are rightly employed creating an income stream for the long-term:

If a house was sold in 1971 for $ 20,663 and silver purchased for that amount, by January 1980 this investment would have outpaced real estate by a factor of 17, growing to $770,796. If you then sold your silver, you could buy eighteen median-priced single family homes, all in cash at the 1980 price of $ 42,747 per house and benefit from 100% of cash flows from these properties.

Today the situation is even better for a similar transaction. Real estate has become much more overvalued, and silver has become extremely undervalued. Measured against silver, the median priced single-family home in the US hit its peak in 2002, at a price of 38,123 ounces of silver, some two and a half times higher than at the beginning of the last precious metals bull-market in 1971.

When silver hit a peak in 1980 of $ 52.50, it was not atypical. When the gold and silver market explodes, the financial news will react just as it did in 1980, and the only thing to hear is about gold and silver. The scarcity of silver will go from something that a small fraction of the world population knows about today to something that everyone can become an expert on. It will turn out to be the Dutch tulip mania of 1637 all over again. Expect that less than 500 ounces of silver will buy a median-priced single-family house sometime in the future.

 Riding The Opposing Cycle Of The Correct Asset Class

Therefore, buy silver now and wait till silver is overvalued again and real estate is undervalued.

Because both cycles empirically are dissimilar to each other. The best thing to do now is to join the flow of precious metals, by betting that they only go up from here to their true value, which is quite realistic and certainly possible. The winnings will likely be quite large.

 In the above housing sample, even with 50% tax and other expenses included, you could still own twelve homes for rental income, against one home in today’s dollars. The biggest mean reversion in history is almost here, and be assured that every asset price over time always returns to the average value in the long run.

Whether news is good or bad, once you are riding the cycle of the correct asset class as an investor, it doesn’t matter. Investors who are aware of this will experience a huge accumulation of wealth, whereas the ones that are caught unaware may end up with nothing but debt.

As encouragement to the Trump Team and the Patriots going ahead by removing the Deep State Globalist mafia, every awake individual can help by flying the American or your own national flag until after the next election on November 3. This is the very best visual demonstration of our solidarity for Q and the Trump Team.

http://finalwakeupcall.info/en/2020/08/05/wealth-transfer/

Some Clear Thinking On Gold At Its All-Time High

Some Clear Thinking On Gold At Its All-Time High

Notes From The Field By Simon Black  August 3, 2020  Bahia Beach, Puerto Rico

For as long as I can remember, I’ve been a fan of Bruce Lee.  I was probably about four years old when I first watched one of his movies. And I was instantly hooked. The guy was legendary.

As a teenager, I learned more about how he lived, and I began to admire his tenacity, discipline, and relentless pursuit of self-improvement… qualities that I endeavored to attain. I remain a fan to this day. In fact there’s even a Bruce Lee mural on the wall at our office in Chile.

So when I had the opportunity to purchase some of Bruce Lee’s artwork a few years ago-- sketches that he drew with his own hand-- I jumped at the chance.  It cost me around $8,000… but it was the best money I ever spent. I had it professionally framed and hung in my home, and it’s probably my most prized possession.

I doubt I’ll ever sell it. But it’s the only asset that I allow myself to be sentimental about.

In everything else related to money, I force myself to be unemotional. I don’t fall in love with prospective investments, nor do I have an emotional attachment to businesses that I own.

You hear this a lot with entrepreneurs, who often refer to their companies as ‘their baby’.

I don’t have that view. Bruce Lee aside, I’m willing to sell any asset for the right price… especially if someone is willing to pay far more than what I think it’s worth, or what it could be worth in the future.

And this brings me to gold.

The price of gold is now at an all-time high in nearly every major currency, including US dollars. On Friday, in fact, gold briefly passed $2,000 per ounce, and it’s still hovering near that figure now.

A lot of people have an emotional attachment to gold… a borderline fanaticism.

I don’t. I write about gold quite frequently. But I’m not a ‘gold bug’.

My views on gold are unemotional, grounded in a rational understanding of gold’s advantages, and the disadvantages of the financial system. I’ve written about this extensively.

But one important thing to understand about gold is that it can be very difficult to value.

I can much more easily value a business like Apple, or private company that I own. The analysis is never perfect, but I can project future cash flows and market-based asset prices, and derive an appropriate value for what an asset is worth.

But gold does not intrinsically generate cash flow like a business or rental property, so that analysis doesn’t work.

People often try to predict the price of gold by examining certain financial benchmarks.

For instance, in theory there are some loose relationships between the gold price and the money supply. But these relationships are far from perfect.

The previous peak for gold was in 2011 when it reached around $1900. The gold price then fell for more than four years, reaching a low of around $1,000 in December 2015.

Yet during that 4+ year period, the Federal Reserve’s balance sheet increased 70% from $2.6 trillion to $4.4 trillion, and M2 money supply in the US increased 30% from $9.5 trillion to 12.3 trillion.

Gold should have performed well from 2011 to 2015 given all the money the Fed was printing. Yet instead the gold price fell.

There’s another theory that gold prices increase because the dollar is weak. But this relationship is also far from perfect.

In the summer of 2018, I wrote a note to our readers suggesting that it was a good time to buy gold, and that the price could double over the next few years.

At the time, the gold price was around $1200. But the ‘Dollar Index,’ i.e. the standard financial benchmark for the US dollar’s relative strength, was around 94.

Today gold is at a record high-- up more than 60% since I wrote that article. Yet the dollar index is almost exactly the same-- 93.8.

But if the theory is true, the gold price should be the same as it was in summer of 2016.

Finally, there’s a theory that the gold price is correlated with ‘real interest rates’, i.e. the rate of interest after adjusting for inflation.

This relationship is also far from perfect; real interest rates in 2011 and 2012, for example, were negative. Yet the gold price was falling.

Real rates in 2017 were rising. But the gold price was also rising. So this theory is also flawed.

The bottom line is that there’s no magic formula to tell us what the gold price should be. Dollar weakness, real rates, and money supply are all useful indicators. But they’re not predictors.

It’s fair to say, for example, that gold is still undervalued right now relative to recent growth in the Feds balance sheet.

Or that, over very long periods of time as central bankers print money and create inflation, gold tends to keep up.

After all, gold has a 5,000 year track record of holding its value against inflation.

In the short-term, however, the biggest driver of gold prices ironically seems to be emotion... specifically negative emotions like fear and mistrust.

Few people buy gold because they’re happy. Some forward-thinking central banks and investors may buy gold when it’s cheap because they understand its value and potential.

But for the most part, the price rises when people lose confidence in the financial system, in their government, in their central bankers, or in each other.

And that’s what we’re seeing now.

Nearly every government around the world looks incompetent and heavy handed against the Coronavirus.

Central bankers seem desperate.

Banks are sitting on trillions of dollars of losses, while regulators have actually asked the public ‘please do not withdraw your money.’

And social cohesion has practically collapsed. People are ripping each other apart over masks, social justice, political views, and just about everything else.

It’s hard to have trust and confidence at a time like this. And that’s been a key driver of the gold price.

If you own gold, congratulations. You’ve done well. But don’t be emotional about it.

A record high milestone like this is a good time to check your outlook; be rational and determine whether you want to buy, sell, or hold at this level.

Being rational means being able to see all sides of an issue.

You could easily make a strong case that the fear, uncertainty, and desperation could continue for quite some time. And that, long-term, gold continues to make sense.

You could also make a case that, given how quickly gold has risen in price, a short-term correction may be in order. Or that some of the fear subsides if a Covid vaccine is produced.

Remember that great quote from F. Scott Fitzgerald-- “The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function.”

To your Freedom & Prosperity  Simon Black, Founder, SovereignMan.com

https://www.sovereignman.com/investing/some-clear-thinking-on-gold-at-its-all-time-high-28481/

Overcoming Financial Obstacles To Investing In Gold And Silver

Overcoming Financial Obstacles To Investing In Gold And Silver

July 9, 2020   Investing Precious Metals

So far, we’ve unpacked the top two most frequently cited objections highlighted by recent research: 1) the investor is taking time to consider an investment proposal currently in hand, and 2) the investor is still in the initial research phase of his or her precious metals exploration.

The third most common reason given has to do with the price of gold. Specifically, investors cite objections such as not having "enough" money for gold and wanting to “time the market” by waiting for the price of gold to drop.

Below, we’re teasing out the nuances of these topics and providing what we hope will be helpful insights for anyone else who may be grappling with the same trepidations in their investment journey. Read on to learn more!

Not Enough or No Money for Gold Right Now

A typical charge we hear time and again is that the price of gold is too steep to begin or continue investing, which is subsequently and falsely projected onto the whole precious metals market at large. Many investors, both novice and seasoned, think they don’t have enough cash to start or continue investing in precious metals. While the availability of funds is an important consideration when making any long-term financial decision, precious metals are often more attainable than many people think.

Alternatives to Gold

While the yellow-hued metal has proven itself time and again to be a reliable store of wealth for investors of all backgrounds, acquiring precious metals does not mean having to add only gold coins to your asset portfolio. If you think the price of gold is indeed too high for you right now, there are a variety of other options from which to choose.

The silver market, for example, is a great complement to gold. Silver is often available at lower price points than gold, palladium, and platinum, making breaking into the precious metals sector more attainable for many investors. Silver is also typically regarded as a metal that gives investors a bigger “bang for their buck,” allowing them to accumulate more ounces per dollar than other higher-priced options.

It's essential to keep in mind that lower prices don't mean the investments are necessarily inferior when it comes to shoring up hard-earned wealth. Much like gold, silver has consistently increased in value over the last several years, allowing it to serve in its own right as a reliable hedge against inflation for many investors. Silver has and continues to be a reliable means of safeguarding wealth for many investors across the country.

To continue reading, please go to the original article here:

https://www.usgoldbureau.com/news/financial-obstacles-invest-gold-silver

Money Creation Inflates Gold

Money Creation Inflates Gold

July 16, 2020  Economy Gold Investment

On the surface it may sound encouraging to cash-strapped Americans that more currency is being created on their behalf. The thought being, that if more money is created, perhaps more of it will come their way. The Treasury Secretary, Steve Mnuchin is currently working on a plan with the Senate, to get additional stimulus payments authorized by the end of July. These funds would be distributed to Americans, in addition to those already distributed, to help relieve financial stresses related to the COVID-19 pandemic. All too often however, money created to help has the opposite effect because of the inflation often created with the additional currency.

Projection Review

In our “Precious Metals Outlook  2020” presented in October 2019, we told you about the recession likely to arrive in 2020, before COVID-19 had even materialized.  We also recommended holding onto Gold and Silver, but to consider selling Platinum and Palladium by year end, and look for opportunities to repurchase them during the 2020 recession.  The tables turned markedly, once the recession started in February. 

Those who took our recommendations to heart, have done well.  Platinum ended the year around $1000, but was below $600 by the middle of March 2020.  Palladium ended the year around $2000, but was below $1420 by the middle of March 2020.  These were good reentry points to get back in, for those watching.  

Meanwhile, spot Gold has climbed from $1500 to over $1800, with spot Silver moving from $17 to nearly $20 today.  While there may be some temporary pullbacks in Gold and Silver, they both appear poised to end the year higher than they currently are.

The question we have to ask ourselves, is what are the likely effects of currency creation for Gold and Silver going forward?  This is a question for which there is already an answer, if we look at what has occurred previously.  When we create more of something, the supply is increased, while demand for that item tends to decrease. 

In the case of $Dollars, when more are created, demand actually increases - because it often takes more of them to purchase the same amount of items.  That is, when the value of Dollars decreases, the quantity needed increases.  This is the current situation both here in the US, and abroad.  During the Great Financial Crisis of 2007-2009, the budget deficit reached nearly 10% of GDP.  GDP is a measure of the economic output of a nation; sort of like our national income level.  This year, our budget deficit is over 14% of GDP, and the highest it’s been since WWII.

To continue reading, please go to the original article here:

https://www.usgoldbureau.com/news/money-creation-inflates-gold

Where Does The Price Of Gold Go From Here?

Where Does The Price Of Gold Go From Here?

July 30, 2020  Economy Precious Metals

With the recent rise in precious metals prices to record levels in Dollar terms (in the case of Gold), many are wondering what is ahead.  Specifically, Gold’s previous record spot price in Dollar terms was reached on September 6, 2011, at $1,921.41. 

As you have likely heard, Gold went higher in nominal terms this week.  It is currently (at the time of this writing) at a spot price of $1,954.89, and has been fluctuating daily in an overall upward trend the last few years.  Some are calling this a speculative top, implying a correction is overdue. 

While decisions to sell are entirely personal and based upon individual circumstances, there are several conditions that support a continued rise in precious metals.  Mild corrections are normal, even in a climbing market.  It is my opinion that we are not likely seeing a peak now, but rather a period with new types of momentum, gathering steam for the years ahead.

Inflation Adjusted Prices Indicate Room to Run

Using the current government-defined method of calculating inflation, the previous record Gold price of $1,921.41 in 2011, would need to be $2,252.74 in 2020 adjusted for inflation.  In other words, the value of the Dollar has declined by 1.78% per year since 2011, meaning that Gold would need to reach $2,252.75 to set a new inflation-adjusted record high spot price. 

As we have written about previously, there continues to be a larger than normal difference between “spot” price, and the price to obtain actual metal.  Currently (at 7:51 AM on 7/29/20), the price to sell back a 1oz Gold Eagle (in good condition) is 1% higher than the spot price of $1,954.89.  This speaks to the continued demand for physical metal, regardless of the level of the spot price.

Silver also reached a high point in 2011 of $49.80, in the New York Spot Market.  Using the same inflation metric of 1.78%, the price would need to be $58.39 in 2020, adjusted for inflation. 

For Silver, the difference between spot price and metal acquisition price is even more pronounced than it is for Gold, on a percentage basis.  With the current “spot” price of Silver at $23.33, you can currently sell back a 1 oz Silver Eagle for 6% more than spot. 

To continue reading, please go to the original article here:

https://www.usgoldbureau.com/news/where-does-price-gold-go-from-here

Gold As Money Is Ancient Wisdom

 Gold As Money Is Ancient Wisdom

The Final Wake Up Call By Peter B Meyer

No Turning Around

Real money is based on natural characteristics, such as the fact that it is intrinsically valuable, durable, divisible, uniform, portable, scarce, and broadly accepted; these characteristics are essential for a medium of exchange to become an honest standard of widely accepted payment, which isn’t the case with today’s Central Banks debt-currencies.

Everything costs money – lockdowns, bailouts, and boondoggles, too. – Yahoo! Finance reports that consumer spending is back to where it was before the pandemic: But there’s a big difference. Before the pandemic, consumers were spending money they had earned. In June, they were spending money with a fuse attached.

In the US and the EU over 80 million people are collecting unemployment benefits. About two-thirds of those are getting more money from not working than before they earned on the job.

 The world economy ship is sailing into some rough waters, with waves already splashing over the railing. But instead of turning around and heading towards a safe harbour, it is being steered into even rougher water, with more trillions of COVID stimulus.

With up to $8 trillion in deficits expected by year end, the money masters’ brains have been muddled by phony money. The economy is being destroyed with taxes and regulations, people are being made dependent on the government and the central banks are printing money to provide giveaways to the urban masses. But the fake money is practically guaranteed to blow up in their face. And, when the money goes, everything goes. 

The Central Banks enable this spending frenzy by printing money – “whatever it takes” to keep the boat upright. While any fool can see that this is a recipe for disaster, as it is a seemingly endless downward cycle of more spending, more regulation, more debt and deficits, and more money-printing to pay for it.

The correct way to earn money is well known. Get up early. Work hard. Learn. Save. Invest. Build businesses. That has worked for every group or society. But today, the money is fake, the wealth is fake, and the progress is fake too.

 By issuing fake money and fake credit, the central banks and governments have purposely compromised the immune system of the economy. The only way to keep this scam going is to add massive doses of more fake money and fake credit.

A Wider Banking Crisis

The likelihood of default on a mass scale is increasing exponentially in this current situation. It is difficult to predict when, as there is no way out of this situation in which many banks cannot be rescued. These banks can only be saved if tons of physical gold are available, which they most likely don’t have. With the continuation by Central Banks printing up trillions of worthless currencies, people are losing faith in the whole system – its rules, institutions and its principles.

A COMEX failure to deliver gold may be coming soon, then contracts will be settled in cash and not with physical metal. How many times can the gold market do this? Gold specialist Alasdair Macleod says; “I think it will be the end of the futures market because nobody would trust it as a means of delivering gold. I mean it would have demonstrably failed. So, why would anyone play with it again? Of course, the failure of COMEX contracts is a very, very serious issue.”

 Fake Money Effect

What is going to happen to the price of gold? Macleod says, “The price is already on its way to infinity or, to put more accurately, the dollar is on its way to zero. The question I think you really want to know the answer to, is how long will that take?

In my view, not very long. Probably by the end of the year because we’ve got another thing happening in the background, and that is a banking crisis is developing. This is the natural consequence of the contraction of bank credit – a dangerous debt spiral, ending into a 1929 to 1932 horror show.

If there is a banking collapse, then those asset values will just go down to zero. The next thing, of course is that bond yields will start rising because of the inflationary implications of a financial collapse. At that stage, government financing becomes impossible because governments already are bankrupt.

According to Macleod stocks, the dollar, other currencies and bonds all go down together and explains, “That is the lesson of history. Everything just goes away. If you destroy the currency, you destroy all the financial assets that are priced in it. That just happens. It just goes.”

Macleod predicts that the problems with the currencies are going to happen by the end of this year. He believes the problems of the COMEX are going to happen considerably before that, everything being tied into a wider banking crisis.

 A wider banking crisis is certain. There is no way to avoid it. The purchasing power of all currencies will go to zero. Then $1,800/ounce for the price of gold and $19 for the price of silver is nothing compared to where it’s going to be. Gold will go up even more. And that is the reason why, real money and the fake stuff are moving farther and farther apart. As uncertainty rises; so does the price of gold and silver.

This now is the Fake Money effect; Gold is up about 24% so far this year, and it is nearing its all-time high of around $1,900 an ounce. While silver may follow gold much higher soon, possibly hitting $100 an ounce.

 Think about it; this is a major move that is happening, not because they are buying gold and silver so much, but because people are beginning to realise what is happening to the purchasing power of the dollar, pound, euro, yen and so on and so forth. And that is the thing to keep in mind.

By the end of this year the dollar and subsequently all other currencies will be destroyed, and the price of gold and silver is infinite. The collapse is likely to be so rapid that in the absence of any other information, the best thing to do is to hold on to gold and silver now, as an insurance policy just in case this analysis is right.

 Wealth Moves Out Of Fiat Currency Into Gold

It is important to know that everything is looking really good for the precious metals. The fundamental factors driving gold higher have been well publicised, and they are starting to impact the dollar, which is weak and in a severe downtrend.

 Gold this year and last already hit record highs vs most global fiat currencies. The US dollar is the last major hurdle to fall. Once gold finally climbs above $1910 to a new record high, expect a 1970s-type bull market in gold and particularly silver. As, silver kept going higher.

It’s never a straight-line of course, but back then, silver soared over ten years from its $1.20 starting point to that $50 peak in 1980. Silver hit that $50 level in 2011 again, and the expectation is silver is going to hit $50 once more soon. 

Silver has been leading gold of late, with the gold/silver ratio falling back from 140 to 92 ounces of silver equalling one ounce of gold. The ratio was 30 in 2011, and it is assumed that level will be reached – and probably broken to an even lower ratio – in this just started bull market.

The demand for physical metal is huge. Imagine what it will be like once $1900 is taken out. Then let’s add a banking crisis to that mix. The rush for the safety offered by physical gold and physical silver will be unprecedented.

The ratio of fiat currency to physical precious metals has never been this high. In other words, there is a lot of wealth that is going to be moved out of fiat currency into gold and silver in the weeks and months ahead.

Even silver could triple in price very soon, which is something never seen before in history. Silver’s rally since March has been steadily gaining on gold over the past two weeks, since the beginning of the third quarter, it has put in an impressive performance, finally showing its technical strength.

 Remember that the current private Federal Reserve Central Bank debt money system, is a manipulated scheme to let the insiders steal from the outsiders. They control the nominal paper value of our currency which isn’t money in the first place, lie about what is really going on, steal wealth from savers and workers, filling their own pockets and pay stolen money to their zombie – bank – friends. That’s the way it has always been and is supposed to stay on forever. 

Precious Metals Go To Stratospheric Heights

Eventually, the unpayable debt will drive the price of precious metals to stratospheric heights, that is for sure. Be wise, and buy precious metals before it is too late. To bring to mind; The heydays of debt-backed fiat currencies are over.

The world is moving toward money redeemable for fixed amounts of gold or silver. Gold and silver are real money. It is the very best money. It is the only money that has stood the test of time during more than 5.000 years. 

Wake Up Message

In various nations and regions around the world, groups are launched by awake citizens, who will contribute as patriots to liberate planet Earth.

Another excellent idea has been launched to motivate the quiet but awake majority to show themselves to the world by raising the national flag in support of President Trump’s re-election. Key puppets such as Obama, Clintons, Merkel, Rutte and Macron, among others, cannot be publicly arrested before more than 50% of the population is awake.

As encouragement to the Trump Team and the Patriots in removing the Globalist mafia once and for all, we can help and support by asking to the Trump Team and the Patriots to which we supporters also belong. The Globalist Mafia must be removed once and for all. Help, by motivating everyone who is awake all over the world to fly the national flag and fly it until after the next election on November 3. This is the very best visual demonstration of our solidarity, which should be implemented wherever possible.

FWC wants to help to unite all main action-groups by establishing a reliable communication network between these groups for the exchange of ideas, suggestions and activities. This network for improved cooperation could become a basis for future autonomous regional civil restructuring.

 Ultimately, the newly established local societies could cooperate together from this unified network. Any initiative is welcomed. Help identify local action groups for mutual exchange and support. Make your group known by contacting: Final Wake Up Call.

http://finalwakeupcall.info/en/2020/07/29/gold-as-money-is-ancient-wisdom/

Gold Soars To All-Time High As Dollar Dive Boosts Safety Rush

Gold Soars To All-Time High As Dollar Dive Boosts Safety Rush

By Brijesh Patel

(Reuters) - Gold surged to record highs on Monday as an intensifying U.S.-China row and a weaker dollar sent investors scurrying to the safety of bullion to hedge against the risks to a global economy already reeling from the COVID-19 pandemic.

Spot gold rose 1.7% to $1,934.06 per ounce by 0802 GMT after hitting a record high of $1,943.93. U.S. gold futures gained 1.7% to $1,929.40.

Silver too joined the rally, jumping 5.5% to $24, after hitting its highest since September 2013 at $24.36.

Gold is in "perfect condition to move higher," said ANZ commodity strategist Soni Kumari, as central banks push for liquidity amid the pandemic.

"Further support is also coming from falling yields, weaker dollar and geopolitical tensions between the U.S. and China. The safe-haven demand (for gold) has been rising while there is none for USD anymore."

The dollar fell to a near two-year low on increased bets the U.S. Federal Reserve could flag another accommodative policy shift when it meets this week, implying lower interest rates for longer.

To continue reading, please go to the original article here:

https://www.yahoo.com/gold-soars-time-high-dollar-033946066.html

No Surprise: Silver Is One Of The Best Performing Assets In World

No Surprise: Silver Is One Of The Best Performing Assets In World

Notes From The Field By Simon Black  July 20, 2020  Bahia Beach, Puerto Rico

Sovereign Man is a little over 11 years old. And when we started this business, silver was worth $13 per ounce at the time.  My philosophy then, just like today, is that precious metals hold their value over the long-term. But back then, there was one key indicator that told me an investment in silver could pay off fairly quickly.

In 2009, silver was trading at a ratio of over 70:1 to gold, meaning 70+ ounces of silver was worth 1 ounce of gold. A ratio of 70 was considered quite ‘expensive’; over the last century or so, the ratio has historically hovered around 50:1, i.e. one ounce of gold was generally worth 50 times an ounce of silver.

And back in ancient times, the ratio was closer to 15:1.

The 70:1 ratio back in 2009 didn’t make sense to me. The panic of the Global Financial Crisis had prompted a lot of investors to buy gold, but silver was largely being ignored.  So we suggested to our readers that silver is a sensible long-term bet.

In fact I wrote in an article on July 7, 2009 that readers consider a long-term futures contract that would lock in the price of silver for two years at just $13.

And sure enough, within two years, the gold/silver ratio had reversed to just 35:1, and the price of silver hit a record high of roughly $50 an ounce.

Now, no financial investment should move up or down in a straight line, and we were concerned that the silver price had risen too quickly.

So, within hours of the silver peak, we sent a note to our readers suggesting that silver may be at a top, and essentially locking in a gain of nearly 300%.

Silver then spent the next few years in the doldrums… until now.

Several months ago when this pandemic became a global issue, the gold/silver ratio hit a record 120:1… and the price of silver fell below $12 per ounce.

Once again, this didn’t make sense to me.

And I’ve written to you several times over the past few months that silver would probably rise, even beyond gold, because of all the Covid response.

Central banks around the world printed trillions upon trillions of dollars, and governments have increased their debt levels even more.

In the United States alone, the national debt increased by three-quarters of a trillion dollars just in the month of June!  And the Federal Reserve expanded its balance sheet from $4 trillion to $7 trillion since the start of the pandemic.

This is not without consequence. Governments are going deeper into debt, and central banks are feverishly printing more money, at a time when economies are barely functioning.  So there’s far more money circulating in an economy that’s producing fewer goods and services… which, again, doesn’t make sense.

Plenty of governments have tried this before; when their economies falter, they just print money and hope the problem goes away.  But typically this just makes the money worth less… and real assets like gold and silver worth more.

Unsurprisingly, silver is now one of the best performing assets in the world; the gold/silver ratio has fallen to 93:1… that’s still considered quite high, but clearly much lower than 120.  And the silver price just hit $19.70 per ounce as I write this-- a gain of 68% in just four months.

This means that silver has vastly outpaced the gains in the S&P 500 stock index, and it even outpaced the gains that gold has made since the start of the pandemic.

I believe there’s a very strong case to be made that both gold and silver could continue to perform very well over the next few years.

Around the world we’re already seeing record government debt, record corporate debt, record consumer debt, record central bank balance sheets, record money creation, and plenty of economies still in various stages of lockdown.  This pandemic is far from over... and the economic consequences will linger for years.

My analysis is pretty simple: the more money that central banks print, and the more debt that governments take on, the more valuable gold and silver will become.

Right now, gold is still relatively undervalued when compared to the overall money supply… and silver is still historically undervalued relative to gold.

So, again, there’s a good case that both could still rise from here over the next few years.

But my personal philosophy about precious metals isn’t about trading them to make a quick buck.

I view gold and silver as an insurance policy: a way to hold wealth when there’s a lot of uncertainty.

And there’s a ton of uncertainty right now… social unrest, political upheaval, massive bailout programs, looming Cold War.

Yes, the world is rarely certain. There are always crises and hotspots and emergencies to deal with. But the issues that we are dealing with today are genuinely unprecedented in modern times. And we’re dealing with several of them at the same time.

Ordinarily we can have a reasonable amount of confidence in what tomorrow is going to look like… or that six months from now the world will look a lot like it does today.  But the reality is that we have no idea what tomorrow will bring. Another major outbreak? Another lockdown? Another city set ablaze?

So, even though gold and silver still have strong upside potential, I believe it’s this level of uncertainty that’s the biggest reason to own precious metals right now.

To your freedom & prosperity, Simon Black, Founder, SovereignMan.com

https://www.sovereignman.com/investing/no-surprise-silver-is-one-of-the-best-performing-assets-in-world-28263/

Federal Reserve: Everything is fine. Just like in 2008

Federal Reserve: Everything is fine. Just like in 2008

Notes From The Field By Simon Black   July 9, 2020   Bahia Beach, Puerto Rico

It’s nothing but rosy news coming from the Federal Reserve.

Recently the Fed released this reassuring statement:

“The banking system remains well-capitalized under even the harshest of these downside scenarios. . .”

In other words, everything is just fine.

Yet at the same time, the Fed also announced that it would impose restrictions on bank dividends and stock buybacks, essentially preventing banks from passing along their profits to shareholders.

If those two statements strike you as completely contradictory, you’re right.

To read the complete article, please go to…

Federal Reserve: Everything is fine. Just like in 2008 | Sovereign Man 

 To your freedom & prosperity, Simon Black, Founder, SovereignMan.com

Gold Market Manipulation and The Federal Reserve

Gold Market Manipulation and The Federal Reserve

FX Empire Kelsey Williams June 29, 2020

Gold Market Manipulation and The Federal Reserve

Assertions are made that the manipulation takes place in a shroud of secrecy; and the unexpected lower prices for gold, or prices that don’t meet wildly bullish expectations, are cited as evidence of conspiratorial activity.

The claim is made that the price of gold would be much higher if this manipulative trading activity were exposed, acknowledged, and prohibited. But…

ALL MARKETS ARE MANIPULATED

****

I don’t disagree that there are forces at work in the gold market that can be disruptive; and may even be described as manipulative. However, the same is true of all financial markets – stocks, bonds, commodities, etc.

It is worth pointing out that gold and silver bulls are one-sided in their arguments against manipulation and its presumed effect on prices.

When prices don’t meet expectations on the high side, or an  ‘unexpected’ drop in price occurs, finger-pointing at shadow figures is heightened.

Long-side investors in all assets, including precious metals, ‘benefited’ from the manipulative efforts of the Federal Reserve twelve years ago and again just recently.

The recent recovery in prices for stocks, bonds, oil, gold, and silver has been almost unbelievable. It is literally jaw-dropping, but nobody is complaining. Nobody cries foul when markets are manipulated for the purpose of driving prices higher.

Only a couple of years ago, JP Morgan Chase’s accumulation of silver was assumed to be bullish for silver prices. On the other hand, they have also been subject to scrutiny about price manipulation. Would silver bulls care about price manipulation if prices went up?

ALL HAIL THE FED

When prices of most assets dropped sharply in 2008, the Federal Reserve stepped in with both guns blazing and pledged incalculable amounts of money and credit creation.

To continue reading, please go to the original article here:

https://www.yahoo.com/news/gold-market-manipulation-federal-051600422.html