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 [Music] I'm Charlotte McLoud with investing news.com and here today with me is Dana samelson president of American Gold Exchange thank you so much for being here great to have you oh it's great to be here with you Charlotte thanks for having me really good to be catching up with you once again it's been a little while but I think it's pretty much the perfect time to be checking in with you given everything that's going on in the gold market I know you've been doing a lot of work on your YouTube channel to

make sure that market participants stay informed about what's happening and your latest video goes into a big question that I think many people are thinking about right now which is this movement of gold from London to New York so you explain this is to do with the Tariff situation but there's a whole lot more Nuance than that so I thought we could begin there and if you could pull out the key information that you think people should know yeah okay so um we've seen a huge flow of physical gold move from London and

Switzerland in particular but around the world into New York uh this all started in December and it ramped up in January into February and it's been massive we saw something similar when covid hit because demand for gold in the US exploded on the back of that you know you know economic closures and the $6 trillion dollar of printing of new money out of thin air this time is different it's because of tariffs and what happened is the premium difference between what an ounce of gold was worth in London versus what an ounce

of gold was worth in New York changed normally they're very close but the premium in New York jumped because if tariffs are put on gold or silver you know they're not going to be a couple percentage points they could be you know 10 15 20 who knows which conceivably makes gold worth more uh in New York in the long run and silver too in particular and silver is actually a a bigger issue right now but what happened was because of the way the market has been set up for decades the physical Market is dominated by the

London bullion Market Association and of course the bank of England has the big Vault where they store a lot of Central Bank gold uh you know 400,000 bars of gold so physical markets in London but if you're hedging and you're selling forward in the future's Market you're doing that in New York and normally these prices are very close to each other but when the premium surged in New York what two things happened if you're carrying a position and you sold it say at 2800 and now the New York price jumps

to 2850 or 2900 well you get a margin call immediately so number one you got to pull more money out of your pocket that you didn't expect to make up the 10% margin that you have to have with the comx exchange but more importantly number two if you're a hedger a strict hedger and you're going to buy that position back at the month expiry and Roll It Forward you're going to take a loss on that premium because you sold it lower before the premium surged I talked with my hands a little bit

now if you deliver that gold to The comx Exchange you get the premium back and you don't lose it and remember the margins on physical gold are tiny so suddenly you're losing three four five% on a premium it's big money and for the big bulon Banks like HSBC or JP Morgan Chase or Goldman Sachs or Deutsche Bank and a couple of others you know to move that gold deliver to The Exchange and not lose the premium surge causing you a loss was a big factor in getting that whole movement of gold started but once

those contracts recovered with abnormally large deliveries you can still do it and make a profit because the premium is still there in New York and you know when this ramped up the premium difference was about $50 $60 at one point in time uh the last I checked it was down to about 10 I haven't checked in the last couple of days but silver by the same token got to be over a dollar higher in for physical silver uh now last I checked it was about 50 cents now that doesn't seem like much but if you're moving thousands of ounces

either by airplane for gold or by you know freighter ships primarily for silver it adds up and it's a it's a simple way to make extra money plus once you have it here then you can loan it out and earn interest you know from a lease rate and these big Banks they have two things that you and I don't have they have financing and they have storage vaults on top of that so they have an insiders advantage that you and I don't have and this is the financial um incentive that has driven

this whole huge flow of gold and silver into the US I mean on average for the last you know year the comx has had about 17 million ounces of gold in it and now it's up to almost 38 million ounces so it more than doubled the supply of gold in New York uh silver I think it went from 20 million to 60 million ounces but silver is particularly vulnerable now to a supply shock and here's why central banks hold gold as an asset as a reserve it's a tier one Reserve uh so you can hold it like a treasury um so there's a lot of

gold lying around in the system that just sitting there as the bank of England has said they've got over 400,000 bars of gold but it's usually just sitting there right now silver the stock piles of silver are not the same they're much more sensitive to demand because silver is more of a commodity metal and the available supply has been drawn down much more sharply if you look at the London bullion uh Market Association figures for how much silver they have they've lost about 30 or 40%

of their physical silver and it's getting close to a Tipping Point where in Gold they've lost three or 4% of what they've held so silver is much more potentially sensitive to an actual physical Supply shock and if you're a producer and you're going to need silver to make EVS or uh solar panels or other things that silver required uh for in production it makes sense for you to pay an interest fee to have it here in the states already here to own it to pay financing on it for 3 to six months than to be

subject yourself to a potential teror if tariffs are enacted so this is what's Driven the whole thing and I think silver is much more ripe for potentially a supply shock and then a price gain on the back of that if it can break out which it's trying to right now over 3250 it's tested so and compared to Gold's run know the gold to Silver ratio today is about 90 to one I haven't crunched it in the last couple of days but it's high and silver is undervalued relative to gold gold has set new record highs

continually all last year and into of this year while silver is still know $18 below its two previous highs yeah this is a really interesting situation and I think that was a good overview of what we see going on there so many many different paths that we can go down I'll ask you a little bit more about gold and versus silver in this situation because I know that people were having questions during this time about whether London was running out of gold because delivery times were being extended it sounds like

silver is really as you've been saying the one that we have to worry about in that situation so anything more that you would add on that note well um yeah a couple things so I do think the actual available spool of physical silver is getting closer to a Tipping Point now if we go into an economic contraction that'll be mitigated a bit but if the economy in the US continues to do well or if China starts to get better which is possible I'm not too thrilled about the Eurozone economic activity for the

next six months or a year but uh if economic activity India too you know gets better it'll require more silver being needed and right now the available stock piles of silver particularly in London are getting much lower right now with all the delivery delays in Gold you've got to remember when this situation first ramped up the traders that needed to get that gold into in New York to beat the February contract expiration they soaked up all the available gold they could get their hands on in the lbma in the available

Market Swiss refineries number one so then they went to the bank of England to borrow gold or Red Gold but the bank of England is primarily a storage facility it's not a fulfillment facility and they're not used to moving this much metal this fast they've got internal controls uh Dave Ramsey said you know and it's been viral quote this stuff is heavy and he's he's actually right it is heavy and you know you see a spike in what's come out of Switzerland into the US um but a lot of those bars you know

are 400 ounce bars in the Bank of England and the comx exchange accepts primarily 100 oun in kilogram bar so that big spike in Switzerland is mostly metal going from London to Switzerland to be reformed by the refineries and then sent to the us so I don't think the you know all the hoopla about the delivery delays out of the bank of England was just that hoopla there's only so much they can handle and this is what they this is not their normal business model yeah I think that good to get your perspective on that I also

wanted to ask I think we have to talk a little bit more about this whole tariff situation and I know that it's really influx from day to day from week to week we've seen so many changes already recently what do we know about whether there could be tariffs on precious metals like gold and silver what have you seen so far well my opinion is that it doesn't make sense to tariff gold because it is a tier one asset and it's equivalent to a treasury so they're not going to tariff treasuries right so my

tariff gold and the commodity uses for gold are about 5% compared to 95% being a monitary metal so I don't think it makes sense to tariff gold I don't think you we'll just have to see what happen happens silver potentially could be tariffed because it's not a monetary metal it's a commodity metal and we get about I think Mexico exports about 75% of the world's silver and they're our top trading partner with Canada there are are two top trading partners now what's happened with the tariffs that's

really interesting is you see Canada is being very reactive to everything we do like now there's a tiff between the Ontario president Doug for who wants to to tear off electricity that Ontario provides Minnesota uh New York and Michigan so Trump announced just today while we're taping this that he's going to double the aluminum and steel tariffs on Canada because of that so this is one-upmanship It's gamesmanship and Trump does not want to be one uped right he's trying to be the last voice in the Tariff argument

but what's interesting is um Mexican president president Shin bam I think that's how you pronounce her name has been much more diplomatic she's been slow to react she's been very measured in her response and I think she's taking a much better look at the Long View and how to react to president Trump with respect and dignity as opposed to just trying to bully which I think you know Premier Trudeau and and now president of Ontario dunk for have both done so it's interesting it's interesting to watch

but we're going to feel some pain I mean there's no doubt that prices are going to cost more for things that we need in the United States as a result of this and that's causing a lot of domino effects as you you're well aware of yeah yeah it's definitely interesting to see this play out here in Canada where I am going on so so strong like you said so we're GNA we're going to feel these effects too I'm sure as this all plays out I think I have one more point that I

want to ask you about on this this movement of precious metal situation so I think you mentioned that that spread between the the London and New York gold is is becoming smaller so are we seeing this this trade come to an end how is that looking to you yeah these things don't normally go on forever and we had an unusually large amount of physical contract settled for delivery in February I you know on average the comx will actually deliver 20 to 25,100 ounce contracts on a monthly basis and in February was

almost 78,000 if I got my number correct it's a little bit higher than it would might be for March at this point in time but what we're also seeing coming down is the is not only the premium that gold is worth in New York over what's been happening in London or elsewhere but we're seeing the lease rates tumble as well for renting gold for a month three months six month and that I think is the pulse more than anything because when the lease rates Spike to like 9% that means Traders got to have it right now

and that was the February contract expiration which I think was most of the immediacy of this situation so it's going to continue as long as there's a premium differential a higher premium in comx but I think a lot of the easy money or the loss mitigation has already been done uh so it might continue a bit further now if tffs are actually imposed we'll see you know how that all plays it yeah yeah I think with the caveat for sure that if tariffs play out in in any particular way we could see we could see

a change there so we'll we'll keep an eye on that we'll see how this was situation develops definitely very interesting so far and I think tied into this movement of gold is talk about different different things that are happening in the US like talk about if the us is going to revalue its gold talk about if there's going to be an audit of the gold in Fort Knox so I wanted to get your take on on those situations as well and whether you think those are realistic things to to potentially have

happened well I think we need we do need transparency and uh not having a proper audit of either Fort Knox or the Federal Reserves Holdings which are about 5050 about 4,000 tons in each Place Fort Knox Kentucky and the FED Holdings in New York uh I think that's necessary the world is calling for it now and if it's not there I think it creates a huge credibility problem for the US the dollar going forward now my personal belief is that it's there I do think that a proper audit that's done methodically listing

every bar weight Purity getting a total on it is going to be a gigantic pain in the butt for the us because I've seen some of the oldtime pictures of gold being stored in Fort and there's one in particular of um the treasury secet secretary in 1974 and she's got gold piled up against up against her on this side over her head and down below and those bars you know it's like you pull one out you're going to get a pile of gold landing on your head and that's why I think it's a

problem to audit because it's just not stored well the way normal bars might be stored but I do think that the gold is probably there um and I would be very surprised if it's not but it'll create a lot of problems it's not now with revaluation uh it's held on our books at $42 22 an ounce if we were to revalue it to Market that would get the US on paper about another $800 billion dollar of you know monetary assets that they could conceivably you know use to spend but the interest on our debt right now is

more than a trillion dollars a year so I while it's meaningful I don't think it's that meaningful it could still happen and it's probably overdue for it to happen but um you know the US is wealthy in a lot of ways we're primarily wealthy in land so you know that's how we could raise money if we wanted to sell land that the federal government owns and president Trump's actually talked about selling I don't know three 450 Federal buildings around the country to uh to

raise money um I'm not sure I necessarily agree with that because it's like our national parks you want to hold on to these things for perpetuity you never know um but that's a possibility as well but revaluation of gold will help a little bit but in the great scheme our finances are pretty bad which is why president Trump's doing everything he's doing right now to help hold our spending in check which has been you know rampant um and potentially grow the economy but I think we're going to feel pain which is

really what this whole last week's been about before we feel the gain and I'm afraid that the pain will be too much for the country to bear before the fruits of all that will be felt economically and president Trump only has two years to get this done a little less than that now because when the midterms come typically any president that holds all three uh entities of government the presidency the Senate and the house they lose one of those at midterm usually the house which means gridlock yeah the clock is is really

already ticking and I know that he's moving pretty fast but you know time is time is also going fast as well so maybe we talk a little bit more about this this pain that's coming because when we talked we talked this past summer and we're speaking about the possibility of a recession in the US and I think you told us you know it's the most anticipated talked about recession that that hasn't happened and we're still kind of waiting on it despite this this past week of pain so any any further

thoughts on that updated right now well there are some growth concerns economic growth concerns that are just percolating to the surface now in the last couple of weeks and a lot of it has to do with this tariff uncertainty because no one really knows how much input costs might go up and the US economy has um been the beneficiary of a bout of economic exceptionalism they hear that word tossed around US economic exceptionalism where we are the really the only economy that's performing well in the world today China's been weak um

Japan's been weak for decades uh Europe has been hammering by this Ukrainian war and uh know Germany and France the world's number I'm sorry the Euro Zone's number one and number two economies are at or near recession already now the situation when we talked last summer in bokar ratan was a little bit better but the US GDP is is slowing down a bit we are at 2.3% for the fourth quarter we were at 3.1% for the third quarter of last year um you know we just saw the Atlanta fed GDP now which is a measure of GDP right

this day that the date is received uh spiked from two plus 2% to minus 2.8% uh just a couple weeks over the last two weeks but that is uh a measure that really is very choppy until you get very near the very end of the quarter and all the data is received now what's happened is we've seen a lot of front running of tariffs with importers buying everything they can to get it into the US so our Imports have been really high but corresponding exports haven't been factored into that yet and that'll help

to balance it out but anytime you see a almost a fivepoint tumble and two prints on uh you know the biggest economic factor in the world US GDP it snaps a lot of heads and that's what happened in the past week so we'll see how it goes I think economists are expecting that we might get one and a half to 2% GDP in the first quarter which will be weaker than we had uh last quarter or the same but the employment the employment is still pretty good we're not you know we're going to see

layoffs starting to hit especially government um but the employment uh Market in the US is still fairly healthy yeah yeah and I think that highlights how slowly these things can can play out maybe even though it feels like everything is happening all at once I also wanted to bring up the FED we've got the fed's meeting coming up later this month and the FED is really been trying to engineer this this soft Landing amid everything that's going on so I'm curious to get your thoughts of

what you think we may see there when we get this next meeting well the FED has caused two major policy errors in the last four or five years that are on Jerome Pal's watch number one when Co hit they they overs stimulated way too much both the fed and the government um and pal admitted that I think it was in the December 22 meeting uh he came clean about that and then they reacted too slowly to inflation's ugly surge in 2022 and right now you know Pal's looking at Legacy and they've done a

pretty good job at trying to to land this inflation bout that we've gone through without causing a recession by being too tight uh and I think they're doing a fairly good job allthough the market is starting to say hey maybe not because yields have been holding up where they should be a little bit lower than they are although they've come off a bit just in the last week or so uh on the different treasury yields duration uh as we're getting some concerns about you know US economic growth going forward because of

all these tariff uncertainty so the feds done a pretty good job I think they might cut one or two times this year you know the the odds of them cutting three times know jumped up in the last two weeks because of all this stuff that's been happening um with the s so the market is now anticipating that the FED may cut 75 basis points this year but they're for the next couple of months they're just gonna be they're sidelined it's Donald Trump is the elephant stomping around the room not your own pal I think I

think that's a good way to put it it's yeah there's a lot of things that we're kind of just waiting to see how the rest plays out so we'll we'll put that one in that bucket as well so we've been talking about a lot of factors that are positive for gold as of course we can tell in Gold's recent price action any other factors that you're watching right now that you see strongly impacting gold yeah we've we we've gone through this real frothy phase where you know when

President Trump was elected in November gold was 2800 it went down to about 2650 and then rebounded back to about 2800 when he took office this whole tariff concern punch it all the way up almost to 3,000 and then we went into a corrective phase right where the froth is kind of coming out of the market it's healthy I would have thought that the correction we've been going through for gold in particular would have been more pronounced and prolonged possibly taking gold down to 2750 maybe

2700 um on a technical uh look at the charts but what's happened since February 28th is something very dramatic and meaningful which is President Trump and president zalinski had that fight public fight in the office which signaled a gigantic shift of US policy eliminating 6070 years of hey the US has got Europe's back and now we're saying not only that we're probably not going to support Europe uh but we're certainly not going to continue to support Ukraine because Donald Trump wants that war to

end I don't blame him for that it's been a vicious brutal ugly situation but what's happened is a couple things number one if we're going to to slow down our military expenditures that we give to the Ukraine remember a lot of that money that we use goes to our own arms manufacturers booing up the own the US economy we're not sending them money we're sending them arms that we produce here so if we're going to slow that down that's going to be a Slowdown of US economic

growth but by contrast Europe has vowed a pledge Germany France Great Britain to supplement that so how does all that translate well the dollars taken a huge tumble in the last week alone it's fallen on the US dollar Index from about 1075 to 1035 which is just a complete collapse as money has moved out of the us out of our stock markets as you can see that's pretty obvious and out of our currency and primarily into the Euro and the Yen I'm sorry the Euro and the British pound which have surged on the

back of this dollar collapse and that has helped to buoy gold because the gold and the dollar tend to trade inversely so I think the correction that we would have gone through for gold would have been worse than it has been especially in the last week with gold bouncing off of 2875 in the spot Market back over 2900 and holding higher right now simply because the dollar took a big tumble and gold and the dollar tend to trade inversely because most of the consumers of gold around the world buy it in dollars but

they buy it outside of the US so when the dollar gets strong it costs more when the dollar gets weaker it costs less in their currency so there's more demand when the dollar is weaker for gold and I think that that's contributed to the gold being better off right now than it might have been otherwise and a lot of people are looking at it going oh it's just going sideways well actually it's really performing quite well right now compared to where it might have been otherwise especially with the liquidity

event that's happening in the stock market usually when stocks take a big tumble you know gold gets caught up in the liquidity event I call it throwing the baby out with with the bath water you know it's just like gold gets sold off too because everybody on wall Street's just raising cash right they're selling everything they can and then like a day later which has happened today Gold's rebound they realize oh we got to get the baby back and they go and they bring the baby back

home and that's kind of what's happened today we've seen gold rebound from yesterday's extreme stock sell off while stocks are still a bit sideways today so I think Gold's looking really good and underneath that more importantly as we got the uh 2024 World gold Council uh total for how much central banks have bought in 2024 and it's just a little bit less than 2023 and that's just a little bit less than 2022 uh all three are over a th000 tons a year which is double what they've been

buying for the previous 10 11 years and that's because of the weaponization of the dollars so Central Bank appetite for gold across the board last year was the third highest record uh level and just a little bit below 20 23's number in spite of the highest price we've ever seen gold Trader I think that's that's certainly very significant and this leads well into my next question which is about your your gold price outlook for 2025 so looking at the rest of the year for the metal

you know do we need to see more more of a pullback than we've seen because you mentioned it's been quite well supported here what are you seeing for gold for for the the rest of the year well I think that there's underlying the gold market in the US Dollars there's a lot of support for gold at 2800 I would be really surprised if we got into a real correction and gold got much below that if at all and that's kind of what I was looking for on this correction then has mitigated by this dollar weakness we

talked about a minute ago uh I don't see much changing in the in the great scheme of things if we do see the US go into a recession a real recession uh you know later in the year which is possible probable I don't know um we could see gold come off a bit the trend is your friend and the trend for gold is higher still that hasn't been broken so I'm still thinking we could see 33 to maybe $3,500 gold um this year before uh all said and done I think silver is the medal of of opportunity

right now uh I think it should be you know $42 not $32 an ounce and maybe $50 an ounce and we like might be getting close to that Tipping Point where it just runs $5 in a day you don't know what happened I mean that's possible um so I really like silver as a better speculation right now platinum and plaum are sideways I think they're good medals for trading you know you buy them both of them between 900 and 940 and you sell them at 1,50 to 1100 I think that's a that's a simple trait I think they're

more tied to the Chinese economic health than many people realize Japanese economic health as well but I do think gold you know we've had a big gain last year big gain so sideways to higher is my call for this year and I think silver could get the 20 or 30% run higher still maybe even more than that this year I think I think people will definitely be happy to hear that about silver I know it's it's quite a frustrating metal for a lot of people and also good to hear that there are ways that you can play in

the platinum and padium markets if you if you want to do those trades there so good to go into that before I let you go I did want to ask so we we've got a pretty good idea of gold demand at the global level we know how much central banks are are providing support but what are you seeing among your customers right now when it comes to Precious Metals demand what what kind of sentiment are you seeing what are people looking to buy well our our business you know we're a physical Metals dealer has been pretty

healthy but that's because we've been buying a lot from our clients and selling pretty much an equal amount and we saw a lot of selling in the US ramp up last year when gold got over 22 $2300 an ounce this has not been a US driven gold market it's been a global uh globally driven gold market primarily based on Central Bank demand and a lot of the brics countries not wanting to trade the dollar but they can't get out of the dollar it's not easy to do that but they can buy gold and have gold in

Evol can't be seized or sanction so what's happened is the appetite for gold in the US has been a a lot less than you might think it should be based on the record run we've had in price over the last 12 months but I attribute that primarily to the lack of fear in the US markets and in the US economy we had two big blowups of fiscal gold demand in the United States the great financial crisis then when Co hit and over the last year until just recently stocks have been doing real well GDP has been pretty good

employment's been good there is no fear driving it the emotional response right now in the marketplace now that might just be starting to change with the stock market correction that we're going through um and we are seeing some big money move into our Market people who are a little bit concerned you know wealthier clients have been making some bigger trades but the smaller trades uh from I would call the average guy on the street are far less than they have been but I think some of that's due to

inflation Spike I mean it's just it's a harder world to make ends meet these days because of inflation is not 3% it's you know 20% in the US when you add it all up in the last couple years so I do think we could see a bit of a change now that the stock market is looking very vulnerable um and it just depends on what happens with the US economy and you know what happens with the FED if the fed is forced to really drop rates that'll buoy gold and if we get into a worse enough economic situation where they have to

stimulate again watch out my $3,500 price top might be uh conservative yes yes I think there's there's so much uncertainty right now so thank you for at least trying to make heads or tails of of what we see happening before I let you go any any final thoughts you would leave investors with right now I know there's a lot going on no I I really think that the best course of action you know is to have 5 to 10% of your assets in gold is an insurance policy for the rest of your money it's a

way to get your hard-earned savings out of an Ever depreciating currency uh and it's a way to beat inflation because gold has held its value silver too to a degree uh especially over the last year uh and it's going to have an asset that has no counterparty risk right its value is not determined by the opposite party producing a result or a profit or paying a rent check so I do think um gold and silver stacking is a great way to go and it's a great way to cost average as well get on a regular accumulation program

but stick to it a lot of people get started but they don't follow through over the longer term that's really the best way to accumulate and it's what I've been doing for the last couple years ever since Co really blew because I could see the writing on the wall with our debt just surging so it's bad news for the dollar it's bad news for every currency okay I think that's a good place to wrap up we can all remember to hopefully be consistent really good to have you on to go through all of these

topics I found it really helpful and hopefully we have you back again soon thank you Charlotte I'm available whenever you'd like to have me back I really appreciate it it's been wonderful to talk to you today it's been great to talk to you as well and once again I'm Charlotte McLoud with investing news.com and this is Dana Samson with American Gold Exchange thank you for watching if you like this video make sure you hit the like button and subscribe to our Channel we'd also love to hear your

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