Gold news

 [Music] I'm Charlotte McLoud with investingnews decom and here today with me is James Henry Anderson senior market Analyst at SD bullion thank you so much for being here really good to have you Charlotte it's great to be back really good to be catching up with you we last spoke almost exactly a year ago and you told us at the time that 2000 was just a beginning for gold and certainly we're now seeing that play out so I'm hoping you can help us make sense of some of the Dynamics we're seeing for

gold recently so we finished last week with gold briefly going above 2400 then it pulled back and we're still now below 2400 although we're pretty close so for you what was driving that move past 2400 and and now the pullback that we've seen yeah so last time we spoke obviously gold was resistance at 2000 and it was coming back and forth and kind of fighting with that and a year pass now and 2000 really seems like support I believe the 200 day moving average is now clear over 2000 and so um you know

looking out of why that's happened and and and you know the Dynamics involved it really feels like technically underneath things are changing in you know in a way where we're looking ahead at one of the biggest secular bullk Market media phases gold ever uh in history I mean it it sounds uh a little bit hyperbolic if you look back at like the late 7s version of that was mostly Western driven in the derivatives markets whereas this time you have it happening physically and derivatives as

well Global on a global basis so uh you know $2,400 a dollar gold it sounds like a lot I that exposed to people who are kind of used to these suppressed commodity prices given the system that that price discover them but ultimately I think 2400 is going to be looked back in time as being cheap uh the thing is is that gold can be pretty volatile if you look back at 78 and late 78 I think gold had $200 an ounce as of resistance and then it became support you had a situation late 78 where it ran from 200

to 250 and then over a 30-day basis went from 250 back down to 200 tested that support and then 4 xed uh within about 14 months following I don't think we're going to have anything that dramatic happen 14 months but I am suggesting that uh it it is going to likely occur again where you'll see you know take the zero away from $2400 an ounce gold and you're back at the 1978 nowal price for me to you know to see it test 2000 again and then eventually in the long run go beyond 8,000 uh would not be surprising

just given the Dynamics of what we're looking at yeah okay really good to get your perspective on what's going on here because when I look at mainstream reporting on what's going on in gold there's a lot of pointing to tensions and conflict in the Middle East and I know we've had some some commenters here on our Channel ask why aren't we talking about that so for you to what extent is is that playing into what's going on is that a major factor or is it these these more ongoing large trends that are key

for gold right now it's it's definitely playing into into it in the sense that you know anytime there's Geo geopolitical uncertainty any uncertainty is good for gold really uh and and in terms of underneath I'm talking in like a bigger term of of of the preference of bullion over bonds looking straight down the barrel of a secular Bond bar Market that's going to run for this decade into next um we're talking about a situation where you have so much capital and hot Capital that can flow into various

sectors such an underweighting of Commodities in terms of the high Networth investment class and the institutional side when those funds start flowing in because they realize things that change we're moving out of um you know a tech bubble into a commodity super cycle you'll have massive inflows that are coming into the commodity sector and a lot of them will drive into silver and gold because this is what we're looking at is most likely going to become a store of value crisis over time and a supply s side crisis

where you're going to have a situation where there will be fits in in in in eras where getting bullion you know in size will be very very difficult to do especially on the silver side but even in the gold side depending on how acute the crisis can go okay really interesting and we'll come back to I think that supply side angle in just a moment but one of the things we spoke about in our last conversation was that that ongoing Trend toward dollarization and I know that's a really big topic but

it seems like it it's very important especially the way you're looking at things so what developments there key developments have we seen over the last 12 months so you see a lot of buying from central banks right the last two years you've had record buying and I'm talking over a th000 tons and that's what's admitted right and if you look on a historic basis post World War II the size and scale of those two bars when you look at it on the long-term charts it dwarfs everything in the past so

something changed and it's become obvious I think in the Eastern world that having gold in their in their Sovereign savings makes complete sense China is probably leading the way but there's a lot of other countries I mean even in the EU you have Poland out there buying in heavy heavy volumes right so it's not simply just an Eastern driven thing there's also uh Western countries that are doing it and this is on the Central Bank front running the crowd scale uh you know the central

banks are the ones by their actions doing this you know they'll tell you so many things in in so many ways and words but uh you don't really have to believe them much just watch their actions and and I think what you're seeing here is just simply them front running the eventual trade of high net worth institutions running into bullion and and other retail investors Etc going into every type of from bullan all the way to miners to derivatives everything will see inflows okay yeah definitely I've been

hearing so much about the Central Bank buying Trend so that's been been very interesting to watch I want to ask you about another gold price driver that I have been hearing a lot about over the last little while so of course everyone is watching the FED very closely and for a long time I was hearing well gold will really take off when the FED starts to cut interest rates and of course we haven't seen that happen yet and it seems like it's even getting pushed further out down the road than we may

have expected so I wondered if you could weigh in on that and you know watching the fend how how important is that for at the W seems to be doing fine without any fend Cuts yeah uh and as well just you look at prior Cycles um gold typically front runs the FED cut right so Gold's going to have it's going to make major moves a lot of times before that even happens it starts getting priced in and I think what you're seeing is a little bit of combination of that as well as momentum Traders kind of piling in on the long

side and then just taking those quick profit scalps that they can on the long side um so it's a combination of a few factors but uh you know ultimately in the end it's basically a situation where you'll have people who come into the market for short-term medium-term trades and then the longer term steady Longs will probably be consistently winning over the next 5 10 20 years okay and I wonder if you could give me a little bit of a road map for gold in 2024 so at the beginning of this

conversation you mentioned some pretty high price targets that we could see down the road so but in 2024 what are we looking at and how how can investors I guess play this situation because it's getting very interesting I think people are looking around and maybe not knowing quite what to do yeah I think first and foremost for me is I've always been first and foremost foundationally you should own a a larger position of bulling than most likely you've heard people say uh in terms of your liquid net worth I think

having a fifth 20% of your liquid net worth in physical bullion makes total sense you can get even more aggressive if you want to go into Miners and other things that are a little bit more risk Laden but uh you know that that that number is not just pulled out of thin air if you backtrack data and do back testing from 1968 till now so basically the full fiat currency era and the risk reward for owning bullion throughout that entire time frame especially gold has been pretty good in terms of it's

It's its performance relative to the S&P 500 or to uh us treasuries and bonds Etc so uh what we're looking at here is a situation where the S&P 500 is in bubble bubble territory completely overvalued on a long-term basis when you look at the uh the you know the value over long term and then the bond situation where US Treasury is ultimately going to probably have to nationalize a lot of things and going to have to force citizens to so they're going to mandate that citizens end up buying the the US

debt you're going to have a big change in the banking system coming out with the cbdc grid coming on I would imagine there'll be massive consolidation and you're going to have Force probably treasury buying on the banks as well as the US citizenry so you're looking at Major underperformance in terms of bond holders uh in terms of real value what they're going to get you know they'll they'll give you maybe eight nine 10% on the 30 year or 10 year but in real terms when you have inflation running at 20%

and they're lying to you the entire time you're going to be underperforming 10% year after year after year right so that's the situation we're looking at it's a it's a world that's changing and it's going to be a lot different in the head in terms of what we've seen the last 5 10 years yeah I think that one thing that has been ingrained over me over the years it's if you have a very high gold price like you had mentioned possibly an $8,000 gold price what's

going on externally in the world that that is making that happen so anything more that you would say about this this situation that we could see coming up yeah there's been a lot of different things o over the history that have kind of shown that there's times and Frames we've only lived the last 50 years where where the world has been running on a full fiat currency standard and and before that you know gold had been pegged at a artificial price and John xter was a former Central Bank Governor he drew a

cartoon in late 1968 that was showed an inverse pyramid with gold at the very bottom and all the derivatives and everything every other asset class built top and during SP events or any type of secular change or or structural change you're going to have a lot of the value come back down toward that that that bottom pile of gold and I think that's what we're going to be going through as we we structurally change and relearn the fact that gold is the foundation of everything in in terms of you know

Finance it's basically everything has mushroomed off of that and we're going to go back to a situation where gold is a key asset and virtually every and not simply Central Bank Sovereign uh balance sheets but it's also going to be on high net wor investors balance sheets it's going to be on the balance sheets of virtually everyone in the world and that's how you get to a situation where you have a bullion Market Mania and you have a price that goes up way higher than ever was thought to be allowed to

go right and at some point you start to revalue it to a certain extent I I don't even care about the Fiat nominal value really I care in terms of relatively what it'll buy you in goods and services and how many shares of the S&P 500 it gets I mean it's very obvious to me that we're going back to S&P 500 being in parody with the gold price right the S&P 500's over 5,000 roughly so Gold's at 2400 Gold's going to double at some point in terms of relative value

for the S&P 500 and it's probably going to outperform because if you look on a long-term basis there's been sharp errors of that happening especially during commodity super Cycles where gold vastly outperforms s&p500 and I think you know for Bullion holders from here to there you're going to be able to afford yourself a lot more S&P 500 or various US Stocks if you hold from here to there and take profits at certain points along the way okay and so lots of good good thoughts on gold there I want to make

sure that we also go back and take a look at what's going on with silver so silver also recently some exciting price action I believe we got almost to $30 recently but unlike gold silver is it's well away from its all-time high so I want to ask you I guess you know we tend to hear that silver lags behind gold is it now getting ready to take its acced from gold yeah so typically in major bull market moves gold leads first and that's typically what you want to see and you want to see silver take its time and

almost torment silver blls in the sense that they'll be griping about it not uh not catching up with gold but then eventually it starts to catch up and it does it very rapid fashion uh right now I think the gold silver ratio last is like in the 80s right and and the historical basis that's rather High I think last uh last time we made a run at 30 it was uh 2020 2021 and the gold silver ratio dipped down to the low 60s when that was happening now here we're at the same point where it's trying to

bust through 30 and the gold silver ratios up in the 80s so the um the potential for gold for silver to run uh you know in terms of price and relative value to gold is is rather rather strong right now and if you look at a technical chart of the gold silver ratio it looks like if it falls off the cliff it can really go for for a good run here and whether or not that's going to happen this year that's hard to say I I'm not sure exactly when we're going to get through 30 but I am sure we are going to

get through 30 once that happens you're going to get momentum Longs piling in the silver trade because once it gets Beyond 34 the run into the mid-40s is kind of an easy scalp for any momentum long and uh you know I personally would probably would probably do a short medium-term trade on something like that to me that's an nrer once you see silver pop Beyond 33 34 you hold till mid 4S on a short medium-term trade something that lasts maybe 6 12 months something like that okay really interesting and you know for

you how much do you weigh Silver's industrial side when you look at Silver because I get I get varying responses when we talk about precious versus industrial when it comes to Silver I do a lot in the sense that it's it's scabbling up all the supply that's pretty much available and you know with the spot prices as low as they are you have it it's kind of this Duality between people who look at spot price for silver at 2930 and think that that's that's the that's a that's a properly

discovered price and I I would argue that that is that is a uh suppressed price that by the system has basically kept it in a level that's that's uh you know we're just half off its all-time nominal price high from 1980 and we're talking in terms of 2024 Fiat US dollars that have devalued rampantly for the last 50 years compared to that time frame so the amount of potential for silver not only to get to 50 but then finally get beyond that and start running is is is already loaded in the

system and you have this this sector in terms of industrial demand I mean the amount of demand that's required for solar for for all the green energy batteries that we're trying to create all that stuff's coming on at the same time that we're staring down a situation where there's going to be a store of value crisis you have people piling into gold eventually nominally Gold's going to look too expensive so people even in Asia are going to start thrifting into silver you'll have people in India

piling into silver you'll have people even in China piling into the silver or in other smaller Asian countries the uh it's not just simply a us thing there the US is dominant in terms of the silver market and investment demand side but there's going to be a large flow not simply from the United States but also around the world you're going to see people moving into silver just because gold is nominally super super high okay okay so quite a situation building there and I do want to talk more about supply

and demand because of course St Bion is a precious metals dealer so I'm curious about what you're seeing right now from from people with gold so high and silver on the move are people wanting to buy do they think prices are too high what what sense are you getting so on the gold side I think you're seeing you're seeing some people kind of waiting to see how this goes um there's no fomo just yet you you'll start to see fmo occur when you get Beyond 3,000 it really starts running up

walls you're going to start seeing people who realize I don't have any gold and I better get it now before it's much more expensive uh at the at the moment you have mostly people who are there's some new invest vors but most of the people here are are are are steady investors who've been buying consistently adding to their positions uh as silver you know gets toward that potential of jumping through 30 once you get Beyond 30 then you're going to get a new crowd of uh interested investors

coming in and learning the story in terms of overall demand it's pretty robust it's been about the same clip as 21 22 only 23 out out out does what we've been doing in terms of volumes uh the reason being the banking crisis more or less that spring really shook a lot of people and you know we still have a banking crisis ahead I it's just inevitable I think just given all the factors that are are building um not just simply commercial real estate but there's other factors involved as well

uh so yeah so the situation is the premiums are good at least they're they're pretty competitive and thin they're not as wide and gapped out as they were during the covid uh era so people who are getting into silver for instance you can get you know 10 oun bars for just a dollar or so over spot if you look around and and do some shopping so that's that's mainly what we're getting we're getting a lot of consistent regular buyers who are coming in and buying and they are encouraged by

what's happening with the spot price and um that's basically what's been going on thus far this year right and when if we go back to what you were saying earlier about Supply potentially getting very tight in the future are we talking about a situation where it's it's hard to get metal but if you want to pay the high premiums you can or will it be more of you know there's there's just nothing available and you cannot have it so there will be combination of both on the investment side like you

described there'll probably be a lot of demand it'll be difficult to serve the only way to do that is by having um you know a spot price that's that's going up but obviously the premiums on these products are going up as well and that that that way you can at least defend some of your supplies so you don't sell out too quickly on the industrial thousand out side that'll be very very difficult for them to keep up in terms of overall demand I mean you had them I think uh silver Institute today came out

saying this year I think the the deficit is going to be forecasted around 250 million ounces and then that in 2020 is the only one that supersedes according to their wor I think they said 300 million ounces it's like four or five years in a row of massive deficits in terms of the supply demand side and at some point we're going to hit the wall in terms of what's available and what's being demanded and the only way to to meet that is to get spot price climbing higher so you get a lot of secondary

product coming back into the market it and some of that secondary product will turn into industrial side it'll get recycled and refin not even refined because most of it's 39 fine we're not talking about the 1960s version or 1970s version of the silver Bol marker where 90% scrap came in and old 90% coinage came in now most of the silver inventory that's going to be coming in is going to be old 39 fine silver that people have been hoarding you know say since the 80s you know they were part of that bone

market and it took a long time for it to come back and now they're just ready to offload that stuff and so you know so anywhere near 50 bucks they're fine they'll just sell it and and that'll be that and that stuff will end up in solar panels and that stuff will end up in cars uh but ultimately you know I'm talking looking at even further of like silver running to 75 even triple digits I think is inevitable as well in terms of per ounce price at fat dollars and that's within a five to 10 year range I

I I can't imagine it not doing that given all the Dynamics that are going on all right and and you touched on this a little bit earlier but for people who are looking to buy physical gold and silver right now do you have any tips in terms of how they can get the best value because of course although prices feel high right now it sounds like they will go much higher so still an opportunity so like for instance I got I brought a little showand tell here like this is a 10 oun silver bar right look

how tiny that is you could buy these probably just over a dollar or spot and stack them somewhere in your house and um put them away and and you know forget about them for a while and then come back and the spot price is doubled or tripled and if you want you could take sell a few of them at your local shop or to a dealer like us but these things are generic little 10 o bars and you can get them just a dollar over a spot it's no problem you can also get them in ground form which is privately mitted small 1 o

size typically or you can get S coins like a silver eagle or silver maple leaf those are usually a few bucks over spot uh but uh they're a little bit more uh demanded in terms of the industry and well known and recognized because it has a a government stamp on it it's it's a legal tender in the respective countries so it's a combination it really depends on your objectives if really getting as many ounces as you want for your currency I think the best bet then would be probably bars in sizes of I think 10

ounces is pretty nice because the size and increments are pretty good you could go even larger you can get 100 ounce bars but those things you can easily stack and store a lot of uh a lot of value in a small space and and you can that's that's an easy way for people to discretly hold some in their house and and even in non-bank storage we offer that as well there's other services out there that offer that too it's uh it's something that has grown a lot in the last 12 15 years as I've been in this

industry in the sense that people not only keep it in their homes but they'll also keep it with a Brinks or Lumis and a segregated you know storage account I personally do that myself uh for a portion of my Holdings so it's it's common and people put them in Iris and other things like that as well so okay another related topic that I wanted to just briefly get your thoughts on is you know I keep seeing these headlines about Costco selling gold and silver and I wondered about your perspective as a

precious metal dealer do you think this is is this good in terms of you know more people are are seeing it maybe they're getting into it or or what are your thoughts there yeah so I'm sure that confuses people who aren't in this industry to understand that Dynamics at play um my hunch is it's one of our competitors who more or less has a an Indian investor who came in and bought a large portion of their business and is now funneling a lot of their product through them through Costco right so

it's like a multiple chains of uh the way that these products are bring to Costco as well Costco has these Visa cards right if you have a Visa card and you're a member you can get like massive Kickback I forget the percentage but it's like 3 to 5% Kickback on your purchases these cars so what you have there are a lot of people who know these you know who know that the gold bars are available at a really good spot price plus they're going to use the card for the kickback and they're going to get

gold almost at spot right I mean they're going to get a price that's really really good the issue being that once it goes up on their website it gets sold out like that because there's tons of people who already are in on it and know what's happening so yeah nominally it sounds like a lot 200 million a month U but in the grand scheme of things 200 million a month is nothing on the North American side in terms of overall Revenue that that goes on in the bulling industry so it's nice for Costco it's

good they get headlines and such it's nice in the sense that it gets people to understand that this is happening and that this is this is actually being driven by mainstream investors mainly that are out there buying it for the long term that's all great stuff but in terms of the scope of what's really happening underneath and how the Dynamics are at play I at least I can give you some coverage and understanding what's happening yeah okay okay interesting to go into that some some

some tricky points there that I was not aware of all right I think that we've we've covered a number of the points that I wanted to ask you about on gold and silver but I want to put it back to you and see if there are any other elements that you're really watching right now things that you think investors should be aware of yeah I I well really I always like to tr try and keep a longterm perspective I think in the shorter term you you could have a situation where gold could run to 3,000 an ounce this year depending on

how this plays out how things go for the year but on a longer term perspective it's really I try and measure things in terms of uh silver and gold versus the relative purchasing power of asset classes so like for instance I mentioned the gold and S&P eventually meeting one to one and eventually gold going beyond the S&P price S&P is 5,000 roughly right now you know to see gold go to 8,000 at this at this you know at some point in terms of relative value that's coming you know

it's just a question of how many years and mean what are the Dynamics at play but I think long term on a chart you can kind of see that it's just the the way that markets move they they go up into a situation where it's it's gone crazy in one way and it'll go down and go crazy in another way and that's where we're headed we're going back down toward the crazy commodity super cycle Spike low in terms of uh snp's performance versus gold so it really is a question of

understanding that that yes things are changing underneath structurally things are going to change in terms of capital flows in terms of positioning overall in the world and you kind of want to get ahead of that you know you don't want to be laid in that you don't want to be one of those people who comes chasing at the end and buys when it's overpriced you want to get position ahead of time and and I also think one thing that people need to consider too is just the this is not like situation where you need to put

a lot of risk out on the table I I understand people like the idea of Miners and such but there's a lot of risk involved in mines in gold and silver and there's also risk in terms of they've underperformed bullying since 2007 and I don't see that just overall there's been a couple blips of time where they outperform buling in short time frames but if you look at the general Trend overall they've gone down in a u shape since 2007 uh versus bullion how they perform that you shape

eventually will come up but it could take 5 10 years or so and we're talking about a change in the world where jurisdictions are going to get a little bit nutty and and minds are going to get closed or nationalized or it'll be very difficult to mind because people aren't putting up with that in their backyard so things let you seem for instance in Panama I mean I I live in Panama I saw that firsthand what happens when people get up at the about mining in their country uh I had a miner in Russia that

got confiscated that's you know the shares are sitting with the US Treasury now I can't touch them right so these are these are these are moments in time that are lessons to know like okay maybe I'll just stick with bullan for theot you know for the longer haul and not not start speculating too much in miners maybe maybe later later on when the speculative man starts going nutty then it'll be time to start throwing darts at the board and hoping that you hit but uh in in the meantime my strong suggestion

is that the majority of your exposure and precious metals should be in physical bullying that you own outright outside the system that you have direct command over or you have a third party that you fully trust that's not involved markets at all that's simply just a storehouse or Logistics Trader like a not a Trader like like a Brinks or a lumus so those guys aren't they don't have derivative desks there at their store warehouses they're not making markets they're simply holding the metal

for you and your title and name and if you tell them to ship it somewhere they'll do it right they'll go through a security process for it so really it's about you know uh the return of your Capital not so much getting risk you know getting out there and putting your neck out on the line for for just massive gains when things may not pan out the way you might think they so I think you know if I look around a lot of the griping that I see in our industry is the mining sector right it's the guys

who have been sitting around buying all these under you know these obviously undervalued minds but uh you know they underperformance for burst bullion I think continues for another five 10 years and I I I feel I I feel bad for people who don't understand the Dynamics at play but this is a bullan bll market first and then later maybe the miners will start to catch up and not perform but that's going to be later yeah I think that just based on what I see I think many of our viewers will be on the same page in terms of

frustration about the miners was that was that 5 to 10 years still of underperformance for the minors that you had just mentioned okay I think so there'll be fits in starts where some miners will do well and you'll see people out there on social media bragging about how they're one Miner did great versus bullan but in the general Trend overall if you look at the various sectors globally I'm not just talking about the United States I'm using the entire world like Austria Australia

United States and other major mining sectors compared to how bullan is performed over 2007 if you look at like a long-term chart we're in like a u cup and we're still at the bottom of the U eventually it'll start coming up but that could be a while and and in terms of this you know just the geopolitical tensions and and the stuff that's happening on the national scale in a lot of these countries there's just a lot of risk you know I mean people they like to have a minor in North America okay it's

probably a lot more safe of jurisdiction than say somewhere in Africa or South America but I'm just suggesting that overall people really need to think through that this is uh this is a major change that we're going to be going through and you kind of want to make sure the majority of your pile is something that you control out right okay yes certainly I think I think many people will be on the same page and I have just one final small question before I let you go which is you know this this is all starting to sound very

inevitable it feels like we're we're on course here is there anything that that throws us off this track that gold is on is there anything that could happen that would send us in in a different direction sure uh like a solar flare or maybe some type of asteroid like I mean or like a deflationary nightmare that they can't get a hold of and they can't queue either way out of perhaps you know but I I don't see it I think uh you know the world continues on this is the thing I I know it sounds scary to say $8,000 an

ounce gold what's the world look like what's the cost of a bread all that kind of nonsense look gold went to 850 in 1980 okay the the price of a loaf of bread your local grocery store didn't go through okay things sometimes re you know they restructure and they they they re the the market will revalue certain things based on the Dynamics of that Market at the time that doesn't mean the price of of your bread at the local grocer is going to go through the roof right so you can have a situation where

gold gets a premium silver gets a premium because of the Dynamics at play and because of the Dynamics that have been building for decades but you can also have a situation where you can afford your groceries right so we're going to go through a weird time where where yeah things are going to get more expensive because we are going to go through a secular inflation and there's going to be weird Dynamics in the sense of there's going to probably be a cbdc system where they're going to be giving

stiens out to people so they can make you know so there's no riots in the streets and stuff like that but the world won't in the world just changes and it moves on into a new system and a new day and so I I think you just go to have to kind of be ready for that be ready to see see probably the craziest stuff you've seen in terms of for change in in the financial markets in your entire lifetime the next five 10 years okay okay thank you for humoring me on that question and you know people tell

me I'm very serious in these interviews and I never laugh but that did make me laugh so I think it's a good place to glad I got you to to laugh that's good it's a little bit of levity never hurt any exactly okay well thank you thank you so much for for coming on to go over what's going on in gold and silver I think this was a really good overview of your thoughts and and what could be coming next thanks for having me on again Charlotte of course and once again I'm Charlotte McLoud with investing news.com

and this is James Henry Anderson with SD Bullet thank you for watching if you like this video make sure you subscribe to our Channel we'd also love to hear your thoughts so leave us a comment below we'll see you next time [Music]