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 [Music] I'm Charlotte Mloud with investingnews.com and here today with me is Chris Marcus, founder of Arcadia Economics. Thank you so much for being here. Great to have you, Charlotte. Fun to be back. Uh I'm not sure how long ago it was the last time we did this, although I can safely say the gold price is a bit higher. silver most likely and certainly fascinating time in the world economically and financially and plenty to discuss today. So happy to be here with you. Really good to have you

back and I think it's safe to say definitely there's been some pretty big changes since our last conversation. So we'll get into silver and gold today. Starting with silver I think as as we usually do. So, like you said, it's been a pretty interesting time for silver, especially over the last few weeks. Recently, we had the price take a hit along with the tariff news with with pretty much everything else. And we're on the rebound right now. So, curious to see what you're watching when it comes

to silver right now. Do you think it's taking its cues more from its precious side or or from its industrial side? Well, at least for the last few weeks, it's seems to be taking its price action from the tariff side or whatever the latest tariff headlines are. Obviously, we can see there is April 2nd and quite a sell-off. There was actually a tick or two briefly where in fact when that that reciprocal tariff announcement was announced, silver had just traded over $35 an ounce. So, if you zoomed in, you

could see a tick where over $35 an ounce, then just got pummeled. Uh, and I believe there were a few prints, very brief, then it rebounded, but under the $28 level. So, that was about a week and a half ago at least. We're recording today on April 14th. And tough end of the week that one was both in gold and silver. Uh, gold going briefly below 3,000 an ounce in the futures. Although certainly for metals holders quite encouraging to see how it bounced back. What do we have today? 3218. And you know obviously there's a lot of

confusion a over whether there's going to be tariffs depending on the day how much the tariffs are. Then if Scott Bent says hey we're going to tariff you guys don't tariff us back and then we'll we'll call it a deal or call it a day. yet does not seem like it went according to that plan. Even Europe came back with reciprocal tariffs. So I mean it's your it's not just Russia or China. I mean it's US allies as well. And obviously it it China and the US keep one uping each

other. I think there was a 125% China wants to tariff that China wants to do now. So, a you don't even have any certainty with the tariff policies, let alone how they're going to impact the markets. Certainly, we've seen that with gold and silver. Obviously, at the same time, we've seen a lot of metal come from London to New York, which I personally don't think that the tariffs fully explains that. I think that's part of what's happening there. yet also signs that there is tightness in the market,

including when the Bank of England said, "Hey, it's going to take us 48 weeks to get customers their gold back." And perhaps worth pointing out, Charlotte, they're not they're not holding, you know, Grandma Gertrude's 10 gold eagles. You can look on their website, they talk about central banks and large institutional customers. And when he said when they said that, I'm sitting there thinking that man, if you're holding gold and silver in storage, I would think basically you would exhaust every avenue

first before you would tell people we can't get you your metal right now. I mean I mean I know that you talk with people throughout the bullion industry, fund managers, investors, uh people like Rick Rule, Eric Sprat. Am I right that almost uniformly the people who are buying and owning metals the ability to access it and get it is one of the top things. Right. Absolutely. Absolutely. So for them to say that I think is is a stunning event in itself. Then you have Dave Ramden of the Bank of England. G was asked about that

at a press conference. And again, I I know sometimes people might be on the spot or or whatever, but it it didn't sound good the answer. And he said they're, you know, they're running out of slots and gold is heavy and you got to move the stuff around, which okay, I guess maybe if you're a central bank, you shouldn't shouldn't store it there until they hire a couple more people. I don't I don't know what to make of that but saw it trading at a discount to LBMA gold silver at the same time we as you

and I meant talked about before we hit the record button we have the silver institute report probably uh may even be out by the time this is posted so I expect we'll see what was it the fifth or sixth consecutive year of a deficit at the same time that you're having still even with these price is a bit of a bare market in the mining stocks. So, it's like be one thing if you had a deficit, but all hands were on deck. Hey, let's get these projects per minute. Money's flowing into the sector.

Even if you had that, you still have a lag of when that silver comes online and maybe interesting to dig into the size of the projects that come online relative to the size of the deficit. But, so I think those things are combining. Obviously, there's volatility in general because of the tariff policies. Um, but also continued signs of tightness in the market. And when you look at some of the inflation parameters, it's also understandable why people are investors are quite keen on gold and silver right

now, even if that has not been so much the case in the West lately. But anyway, a primer of the some of the things we've been seeing the last couple weeks. Yeah, I think that gives a good idea of what's going on and all the the very many elements at play there. Maybe we go into the flows of gold and silver a little bit more from London to New York cuz I know that's an area that our audience has had a lot of questions about. So, you're mentioning, you know, this has been something that's been

ascribed to the tariffs. Maybe you have some different ideas there. We have now I believe we found out gold and silver are exempt from the tariffs although of course that's changing from day to day, week to week, hour to hour. So who knows if that will stay. What are those flows of metal looking like right now? What are your thoughts on this whole situation? Sure. Um and and to what you mentioned about the gold and silver finally being exempt was interesting. Scott Bent did an interview with Tucker Carlson.

believe he may have just done a second one I saw this morning. But at least the first one which I saw was fascinating because in the interview, this was before they were actually exempted, but when the interview was recorded, but he's mentioning he's like and gold and silver, which I not sure if they were are going to be exempt from the tariffs. So it seems like even he didn't know until it was finally policy. And also in that same interview he mentioned that his friends used to refer

to him as a gold bug which you know it's kind of funny in its own right. I wonder how that like is he walking into the office like hey Bob hey gold bug if so anyway someone who is aware of what's going on in the market and he didn't even seem to know that whether they were going to be exempt or not. So on one hand to the degree like once you have that arbitrage where um people may have heard that the EFP premiums were spiking which is basically the difference between the spot price in London and the futures

price in New York not entirely dissimilar from what we saw in 2020 when that spiked as well and led to some big losses for banks and was part of the rally back then. So when the spread widens there is a degree of to which arbitrage can take place. So I think there was some of that. Also, we did ultimately not have the tariffs on gold and silver and I don't remember hearing any talk of England being tariffed or any additional incremental tariffs on England, which means that aside from the fact that some of it may have been

arbitrageed, I still little don't know that we have the full explanation of why that metal was coming here. If customers were in the west through Comx vaults were initiating or increasing positions, someone was taking delivery and some of that may have been the banks but also the banks uh their short positions had been hitting quite large levels at the same time. So I think there's also a degree of demand in the west which is driving that as well. And I I personally don't think that the

tariffs fully explains all of the metal that's come over. And I know a few of your guests that you've had on I think have mentioned that as well. So there's a degree to which like yes, this could be a factor, but also that there seems to be an increased demand for gold and silver at this time when you add in the uncertainty for all the different reasons we've been talking about. Yeah, I think there's a a real desire to find the one thing that is causing this and the reality is there's probably multiple

factors at play. So, yeah, I've really been enjoying hearing all of these different perspectives on what's happening. So, looking more at what's driving silver as well as gold prices right now. I think you posted a few days ago on Twitter saying if you really want to find out what's driving them, you should be looking at what's happening with bonds versus stocks. So I'm curious if you could talk a little bit about that and and what you're watching there. Yeah. Well, it was really interesting

shortly after the reciprocal tariffs on the second and everything got pounded except there was stocks were selling off, gold and silver, all risk assets were selling off and you saw that money going into bonds. the yield and I'll pull that up here was below 4% not too long ago which on that part certainly is a normal reaction and here we have our 10-year yield and there you go back that's April 6th we're below 4% yet gets down to 3.83% 83% was up at 4.53. So that's 70 basis points in a week. That's a pretty

significant bond sell-off. And especially towards the end of last week, there were a couple of days where the stock market was down quite a bit. and the bonds were getting pummeled, which to see that divergence. I'm not saying that that means that all capital is fleeing the western system and gold's going to be reset to tomorrow night, but still when you start to see things like that, I mean, maybe just a couple days so far, but certainly an indication of things not functioning as normal. And

simultaneously, while we've had that happening, um I might add, cuz this is one I've been fascinated with, uh let's take the year chart. Here's the US dollar index. There you see just below par. This was 3 days before Jerome Pal decided that 25 basis points weren't enough back in September. Despite pausing at the meeting before and in the midst of inflation not coming down, I believe it may have still been rising back then deciding that 50 is necessary and we interesting timing of course to see

right after that is when the dollar index spikes got over 110 briefly as you can see there and again this was happening obviously you had the election right around here and hearing about tariffs and the market reacting thinking all right well tariffs if he's going to install this great protectionist policy is going to be great for the dollar although I wondered back then and we have a substack now Charlotte and one of the things I had fun writing about was that okay I see the dollar is rallying

now but is it going to be a little bit different it's one thing to say like oh we're going to do tariffs lower taxes is grow this baby and sure and and although I wondering you know some of these things there there's multiple moving pieces so you say like well if this stays the same and we raise this we're good to go well when you raise this sometimes that other one moves around a lot and sure enough the tariffs you can debate I know there's different schools of thought of whether

this is a long-term best way to go or not yet it's clearly clearly gone different than what they were planning. How do we know that? Because again, Scott Descent before he did them said, "Don't don't retaliate and we'll be good to go. It'll be stable and we can just move on." Well, they retaliated. So either, you know, there's some hidden other plan. That was really the intent behind that or at least according to what he's saying publicly. He told him not to retaliate and now

it's escalating since then. So, and sure enough, I remember we going to see because this is very similar to what happened uh if you look back to the last time Trump was coming into office. So, there you see back in that's September of 2016, dollar index at 95. So that's a two months before the election gets up over 103 by December after Trump is elected and then about 15 months later it's below 90 and obvious to see how the metals hung in even while you had this part here. I mean you would have that's when

you would have thought maybe silver be at 25 or $23 didn't happen. And now that you see this and and especially take a look at what's happened in the last week. So here we are on April 9th. What was the uh 9th was last Tuesday I believe. So 102. I mean you had some big moves couple days where it was down two points and down another 50 cents today. So that's had a big part to do with what we're seeing in the metals. And again, I think more than anything, it's like hard for anyone to price anything accurately

because you don't know what the rules are going to be tomorrow. Yeah. I think there's there's really so much uncertainty going on. It's it's creating a lot of issues for people who want to plan for the future for sure. I think another point that we said before we turn the camera on that we'll talk about is what's going to happen with Powell and the Fed. So, some interesting dynamics playing out there with what's going on with inflation and the Trump Powell relationship, which is a little

bit antagonistic, I would say. So, what are you what are you expecting to see from the Fed as we move forward toward the next meeting and and maybe into the year? Well, fortunately, and let me see if I can pull a few things up here. I mean, that's not going to be the hardest part to forecast because we'll get their dot plot up from their recent meeting. You can here's the best part. You don't have to take my opinion for it. And that's what I love about some of these things or I mean I hopefully I'll have

something to add here, but like it's not me or you saying it. I mean, this is the facts and the market opinions. So here we look at Fed fund futures. And so it looks like we're on pace to stay unchanged in May. Then 64% 65% chance a quarter cut point cut in June. Favor for another quarter after that. Favor for another quarter after that. Favored that the next action after that. So, this is what the markets are saying. Now, why would they be saying that? Well, you know, you don't really

have to go too far out on a limb here because here's the Fed's dot plot and some fascinating going back to what I said before how it's like, all right, well, you know, if you unemployment's here and you raise interest rates and unemployment stays there to be great, but what if it doesn't stay there because you've changed another part of your formula? So, this part was fascinating that here we go. Here's the Fed funds and here's 2025. They're saying an average of 3.9% which is lower

than where we are now. And then in 2026 there, this is the Fed governors, not the banks or silver bugs or again lower rate in 2026. Again, lower rate in 2027. And somehow, see this is I love this line here in December. So a couple months ago, they were saying 2025 they expected inflation to be 2.5%. So in 3 or 4 months since then. Now they think it's going to be 2.8% this year and they're going to be cutting interest rates, but that's just going to drop down to 2%. While I might add, you also now have a trade war going

on. It seems again I fully allow for the possibility and maybe you could say even probability or likelihood that there's going to be some day where there's some deal reached. All right, we're going to do this, you're going to do that, and some agreement. Hopefully, it won't be my god. Could you imagine if the next year it's just like, oh, the tariffs 3,000% over there, 5,000 here. You think at some point what now you wide range of what that agreement could look like or how harmful or inflationary

because someone is paying these tariffs and ultimately that's 99.9% of the time passed down to the end consumer level for basic e economic law reasons. Yet they're going to get it. They're going to get inflation down in the middle of a trade war by cutting interest rates. While I might add, they've also talked about reducing the pace of quantitative tightening. And given that there's a very good chance that if Doge actually does cut, that would have that would seemingly have quite an impact on tax

receipts. I mean I I that's one of those things where it's like should we cut wasteful fraudulent spending? Absolutely. Can you also have an economy that has become so indebted that when you cut that while simultaneously government spending is 23 or 24% of GDP? Can you also have something like this where here's the Atlanta Fed's GDP now negative growth? I mean, they keep making it more negative each every couple days that it comes out. And I hear some people say, "Well, that's just

the impacts of the tariffs." Okay, well, so far the tariffs are only getting bigger. So, you know, which way should I expect this to go? And gee, you would think given given all of that, it's kind of hard to imagine those deficits coming down. So, is the Fed going to be restarting quantitative easing? And through all of that, inflation is going to come from 2.8% down to 2.0% while interest rates are cut further and the tariffs are based on countries not responding, which has already happened. So I I think you start putting

all of those together and you know there's a lot of times when the metals don't react the way we think that they should but at least to the degree that there's uncertainty in addition to market tightness. You know that's how you end up with gold. Are we at a new record today? No. Actually down a couple bucks today. But looks like the uh peak here is uh 3263. And just as a reminder of what's happened over the past year. So we'll go we'll go to the five years so we can

see a little before because this all just happened last start around February of last year January. Here we are just at 2,000 and this I hadn't quite thought of but I mean just since November gold's up almost $600 half a year. I mean that's like it it happens quickly that you know you don't always stop to think like gee well it was only a couple months ago it was there and and now you have banks putting Goldman talking about $4,500 gold in an extreme tale scenario. Well, gee, would I would have

to think that with what's happening with these tariffs and also that we're seeing tightness in gold and silver and all sorts of other counter effects from this, it's at least possible we could be in the middle of an extreme tail scenario. So, I believe UBS just upgraded their target another 500 bucks this morning. And kind of like we saw last year, the price is going up faster than a lot of these banks are raising their targets yet. And then add on that we have the new Treasury Secretary. His friends call

him gold bugs. So here we are. Yeah. Here we are. It's it's amazing when you zoom back and look at the chart. I think it really reminds us where we've come from and exactly how quickly and very interesting to look at those big banks that are quite quickly raising their price targets for gold. So I'll ask you where do you see gold going in 2025? What do you think is realistic? And then of course it's a really key question. I know people are looking at silver and wondering okay when are we

going to see silver follow gold higher? Do you have any thoughts on on that? Sure. Um, first of all, the where do I see gold going in 2025? I'm going to guess that what are we in? We're in April now. By the end of the year, I would guess we're couple hundred bucks higher, maybe more. I would say the one thing to caution people of that hopefully we got a reminder of in the past two weeks. It is not going to be a straight line. And hopefully it was a very encouraging reminder that after those tariffs came

out and we saw gold down almost $200 or $300, silver down as much as $7, you're going to see that. I wish I could tell you you could hold your gold and silver and you won't see you don't have to look is one way of getting around that. But fortunately, we've seen that even in those conditions, the turnaround, especially on the gold side, is now has set a new high since then. So per perhaps a better answer if I can change your question a little bit because I was thinking about this

earlier. You know, you can have a educated guess about 2025. Although if someone were thinking about what they're doing now, which of course is going to be different in every person's situation, but Charlotte, if I can ask you a question, do you think the price of the gold is going to be lower or higher in 2035, 10 years from now? Oh my goodness. Of course, I think it's going to be higher. So, I know, hey, I probably would have said the same thing back in 2011 when it was hitting 1900 and we did have that

decade where it stayed lower. Sure does feel like conditions are changing. We haven't even we haven't talked about the bricks and it's been quite quiet there. Although, I don't think that means that they just all of a sudden gave up. whether there ends up being a formal unit 40% gold back currency or whether they just buy the gold because they see that the debt has to be revalued. The math is the math. So I mean I think the incentives central banks are continuing to buy gold. We did have Russia mention even

purchasing silver last year. It was unclear whether it was the actual the government or the central bank but in their draft budget they mentioned gold, silver I believe also platinum and palladium. So, and what do you what are the alternatives for storing? Well, if the US is in the situation it is, which would seem like somewhere or another there's going to need to be a dollar devaluation to do some form of debt restructuring. you know, it it it leaves people with few choices in terms of a monetary store of value and again, I

think that's why we're seeing a lot of central banks and other groups and starting to see it now even a bit institutional. I would say some of that metal that's flowed from London to New York is representative of institutional. And perhaps one other thing for the silver fans out there is that we've had a lot of selling on the retail level over the past year and a half, two years, and yet still running a deficit. And this is with I've had multiple William dealers report that some of the product that's being sold

back in the coins and bars is being melted down into industrial bars. So if that's what's happening and some of that is needed to feed the industrial demand, I keep wondering what happens if retail turns from sellers to buyers. Again, it's in the midst of the reported deficit and leave leaves a tricky situation. So I I guess in net maybe the difference between gold and silver is that if you were to have some sort of reset which I cannot by any means guarantee. No one has told me about

that. Although based on the way the situation that we have that certainly seems like that has to be some sort of possibility. I think there are reasons that it would be more likely gold rather than gold and silver. Yet silver, you have a different profile where we could reach the point where there is a shortage. There's still time on the clock and we did have inventories come down from 1990 to 2005 and then they started getting built back up due to advances in mining technology. So things can change yet let me put it

this way in that let's say if I wanted to create the ideal conditions to facilitate some shortage of metal perhaps not entirely dissimilar from what we saw in Coco at least like the train is coming down the tracks now and it's not there yet but it's it's it's certainly going to be fascinating to watch and Um, we did just have the banks on the silver side. Second largest short position ever aside from July of 2016 and in fact there's a a guy named Robert Godly who was a former managing

director at JP Morgan on their precious metals desk was interesting. He posted these updates on LinkedIn and had mentioned the size of the short position and that he thought it was that large and that a bank may be exposed. So right as that short position was on the large side JP Morgan former managing director said a bank may be exposed. That was a week after that we saw the price come down from 35 to 28. And sure enough, last Friday we did see there was a lot of short covering and will be fun to

watch where it goes from here. So I think silver will churn higher in the the bank of things that I think and I can't necessarily prove this. I do think there's going to be some point where gold is going to if gold continues going up that there's going to be some slingshot effect in silver. Um then again add in that if you do get some sort of shortage which we are not there yet and I want to be clear about that but headed in the direction there. So, it'll be be it's it's certainly fun

times if you're a longtime gold and silver investor to see them going up and also just to the degree that it, you know, if you love studying markets and history and just seeing these events, I think a lot of the things that gold and silver investors and analysts and speakers have talked about for a long time, I mean, they're happening now. So, from that intellectual capacity, it's it's fascinating what we're living through. Yeah, there really is that happening now element right now and it's

it's very interesting and exciting. I agree. On the note of retail demand for silver, I have a small follow-up question there. I wanted to get on the silver squeeze 2.0 that we saw. So, this is a few weeks ago at this point, and it was very I think there's a lot of activity going on on social media. Of course, I don't think the price really had the the impact that people hoped it would, but what what are your thoughts about that? What does it tell you about sentiment in the market right now?

Well, a few things. I mean, I think it's good that there are people that have interest in silver and that are buying silver and that that always on a net level has an impact. I would say at the same time that one of the things that I've seen and I think a lot of us have learned in these past couple years is that all the retail is not generally driving the price. Even when you have those big events like we had in 2021 where it was more that the dealers ran out of hedged inventory. There wasn't

actually a shortage of metal. Now there was a lot of purchasing and that drove it up. Even with the amount of metal and and if you remember in the ETFs, I think it was like a they claimed 120 million ounces went into SLB over three days, which now they didn't they weren't driving trucks around. My understanding is that, you know, you have kind of imagine like a big football field with piles of silver and you take the tag from one pile and put the other guy's tag on. um yet again that retail is often not driving the

price. Now does it factor in on a broader level? Yeah. And if for example, like I said before, if we have a lot of that selling turn to buying, you know, you never know how close you are to having a tipping point. Although I will add that I had an interview with Rick Rule uh back in I think December and I remember he after the first silver squeeze he did done a couple interviews where he talked about how for the PSLV trust he's like well we went and cleared out what was in New York then we went cleared out what was

in Chicago, Nova Scotia, Boston and basically anywhere that they could get to truck metal because their bylaws, you know, you can't have it on its way and has to be driven by a truck. Um, or maybe it wasn't that it had to be driven by a truck, but they were anywhere that they could get a truck to deliver it, they were. And they had cleared out the inventory until eventually they were able to be satisfied by the LBMA. What was interesting though is he said that essentially the retail silver

holders had they continued buying at that pace and again I citing Rick because his access through PSLV was seeing this firsthand he felt that it would have broken had that level of buying continued and the follow-up question I asked him was okay where does that leave us now and again he still feels it's an inevitability I don't want to put words in his mouth but that's what he said of of a mismatch between paper and physical. So, how do you price that? How do you know when that happens? Well, that's why

a lot of people are keeping an eye on the inventory stock piles that are being depleted. Daniel Galley from TD Securities has written about how I think his paper is the silver squeeze we can buy into where he's looking at how the inventories are coming down. I believe the free float of silver because if you look at LBMA numbers a lot of that is accounting for ETFs and but in terms of what's actually available uh I remember seeing a couple weeks ago was around what last year's deficit

was now again could people take metal out of New York hasn't disappeared so some of it's shifted but you you see the direction that things are headed in and they can change. Although it at least when you look at what's happening it things that are happening now so far continue to indicate more of what we've had. Okay. Really interesting to to go over that and also to hear Rick Ro's thoughts. I'm sure he's pretty well informed on everything that's going on there. So we've we've been through I

think quite a bit of what's happening in gold and silver. Although there's so much going on it's impossible to cover everything. I'll I'll let you go, but before I do, any final thoughts you would leave investors with things that you think are important to know or watch right now? Um, well, I think certainly the bond yields and the dollar index because all these things are connected and obviously at the end of the day, I love the way Luke Groman phrases it where are they going to stand by and let the Treasury

fail which seems like no matter what happens that that would probably be avoided. I've also thought a lot of whether we will get something similar to 2008. My guess is that they would never allow it to go down that far again to that extent. Similarly, Donald Trump was recently saying he thinks the Fed should lower interest rates. And at least from what I'm watching, it's it like yeah, he's maybe he's given him a recommendation or a suggestion and hopefully we can lay to rest the whole independence thing. But

aside from what he's saying or suggesting, when we've seen how the markets are reacting for the tariffs and we're just getting them escalated, he's kind of stiff arming them into forcing them to lower interest rates. I mean, we hear rumors of hedge funds in trouble with their Treasury basis trade and potential Fed bailouts. And it's kind of hard to know how close the Fed is to doing some sort of emergency action. And I will point out that even when the banks were failing in first

quarter of 2023, he did keep raising interest rates. So maybe they're not that close to responding, but in terms of cutting rates, again, we went over before they're already it's already priced into their own numbers. So it seems like Trump is going to get what he wants. And even if he wasn't, his policies are really putting the foot on the neck to make it happen. So those are some things uh certainly to watch out for and perhaps gold and silver just a final thought on that. Assume there's going to be

volatility. So if you see it down a lot one day, don't get too down. If you see it up a lot one day, you know, don't get too crazy either. But like you said, between the cost of mining these metals and the dynamics of debt, leverage, interest rates, when I think, well, let's say I bought gold today for $3,200. You know, is there a chance like it's 28 or $2,700 some point this year? It's possible. Is there a chance that it's 27 or 2,800 10 years from now? Man, that that seems

harder for me to imagine, but it's going to be fun to watch, right? Yeah, I think we are in some fun times if you are looking at it correctly and positionable. So, this was this was really good. Thank you so much for coming on to talk about what's happening with silver and gold. As always, it was really informative. Well, I appreciate you having me. It's always nice to see you and uh yeah, I guess I'll be seeing you again in person in July. at the Rick Rule Symposium. So, it was nice to meet you in person last

year and hopefully uh some of your viewers and and readers will be able to catch up there as well. Yeah, we'll definitely catch you there in a couple of months. So, that'll be really good. For now, I think once again, I'm Charlotte Mloud with investingnews.com and this is Chris Marcus with Arcadia Economics. 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 thoughts, so leave us a comment below.

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