Hi,
While silver and gold have certainly seen price volatility over the past 9 to 10 months, the fundamentals that make these precious metals desirable assets for investment still hold true. Inflation is still a massive problem that central banks have not got under control near as quickly as they said they would. Physical cash is still being replaced by intangible central bank digital currencies making it nearly impossible for citizens to have financial freedom. Most importantly, central banks are STILL buying these metals at a historic pace while many would consider silver and gold to be cheap. In August, central banks continued to stockpile, purchasing 77 tonnes of gold, marking a 38% increase in the purchases made in July. Human psychological behaviour would suggest that a majority of the public will not take notice of physical silver and gold until it doubles or triples in price or at the very least these metals see a couple green months in a row showing rapid price increase. This will cause a majority of people to miss one of the largest wealth transfers the world will have seen up to this point. As our financial system built on debt continues to slowly crumble due to being entirely unsustainable because it enriches the few at the expense of the many, central banks and a select few within the public citizen body are accumulating as much REAL wealth as they possibly can before the debt based system has its last dollar sucked out of it and it ultimately comes crashing down.
One thing that is heavily pointing toward a return of a silver and gold age, is that even while the Federal Reserve has been tightening monetary policy to help strengthen the dollar and stifle inflation, silver and gold continue to hold steady. Usually, under such conditions providing a stronger U.S. Dollar – silver and gold would be getting pummelled. However, this is simply not the case. Bonds also continue to rise providing holders more free dollars for their investments, yet silver and gold continue to hold steady and show strength, again, during a time with conditions that most people would expect to provide incredibly weak silver and gold price action. Yes, we have seen multiple red price days recently, however, as seen this past Friday, they are usually followed with an equivalent green day bringing silver and gold back to where they started on the week highlighting further that they refuse to show weakness and are ready to shoot higher.
Looking across the seas at China, you are seeing price developments that also suggest that silver and gold at current prices are FAR TOO CHEAP. This past week you saw the price per ounce of gold in Shanghai rocket to the second-highest premium ever recorded with the spot price of gold going to $112 per ounce higher than the global benchmark coming out of London. The only other time the premium got this high was last month when China restricted the shipment of gold, squeezing the market, pushing premiums in Shanghai to $120 more per ounce than prices in London. It is clear that China and many other eastern countries based on recent gold purchases see gold as far more valuable than Western governments would suggest, often referring to gold as a historical relic and not money. One country in particular that has quietly been bolstering their gold reserves is Singapore. At the beginning of January 2023, Singapore held 153.8 tonnes of gold, while today they currently hold 228.9 tonnes; an increase of 48.83% in a little over 9 months.
If we turn our attention over to Europe, we are seeing signs of financial trouble that again paint a very bullish picture when it comes to silver and gold. It was recently revealed by the International Monetary Fund (IMF) that if the European Central Bank (ECB) were to sell their entire bond portfolio that was amassed during lockdowns (essentially the rapid currency creation that took place due to them buying their own bonds), the ECB would lose an astounding ONE TRILLION EUROS! This has led both Germany and the Netherlands to predict that a massive bailout is coming to Europe, which in turn would create even more currency than we saw printed during lockdowns, which will make inflation seen during the pandemic look like child’s play. Of course, if central banks continue to print currency as they always do, this will continue to dilute the value of citizen savings, shining brighter and brighter lights on the importance of gold and silver as a store of value.
Especially now with Israel declaring war on Hamas after a surprise attack this past Saturday, if this conflict spreads to a point where countries begin picking sides and joining this war, the world will be put on edge, which will thrust silver and gold back into the spotlight due to its importance during times of chaos. As a reminder, just 12 days after Russia invaded Ukraine, gold was up 9.75% and silver shot up 10.16%.
Again, it is absolutely vital that during times of chaos whether that be financial or because of war – that you become your own bank and hold physical silver and gold the same way countries do to protect their wealth. This seems to be a lesson that citizens have mostly forgotten, yet governments never have. For thousands of years, when times get tough, silver and gold, sound, hard-money assets protect value better than anything else in the world. If you want to continue to secure your wealth or are looking to start doing so, below you will find great pieces to do that with. On the silver side, you have the classic Royal Canadian Mint 10 Oz Silver Bar, and for gold, you have a fractional 1/10th Oz Gold Canadian Maple.
