Some interesting points in this article.
GOLD
The main movers in the market currently are Central Banks & investors watching inflation and the Federal Reserve.
Central banks & ETFs
Central banks of countries that don’t necessarily count themselves as US allies are buying up gold ETFs (Electronic Traded Funds) to reduce their dependency on the US dollar. China, India and Turkey are the main market movers in this area. Countries are looking forward to avoiding the impact of possible US trade sanctions, which does not bode well for geopolitical stability.
Inflation & the Fed
Inflation is pulling on gold from both sides, upward as some seek a safe haven from inflation and downward as fears over higher interest rates escalate. US investors are feeling less confident in the Fed lowering interest rates as inflation and jobs data continue to support elevated interest rates. This makes Treasury Bonds more appealing to gold as it will yield higher returns.
Ultimately, gold is trading mostly on paper (ETFs) right now. The physical market is slow industry-wide and premiums are plummeting. Major distributors are now offering some products at or even below spot price. This environment is difficult for physical product investors to stomach as they see high spot prices yielding lower returns than expected, especially for those who bought-in when spot was low but premiums were high.
We are consistently purchasing more product over-the-counter than we are selling, as we have been for most of 2024.
SILVER
Silver is seeing different circumstances than gold. We tend to be selling as much as we are buying over-the-counter for the past couple of weeks. Global traders are seeing silver as being overbought with a possibly significant correction looming. End of the year futures are inching towards $30 and volume of trades have been increasing in April.
Premiums for silver products have been holding steady at recent levels, unlike gold premiums.
One response to “Market Update”
I wonder what theses ‘allied’ buyers (above) do when they realize the gold ETF’s are paper and not backed by real gold 100%? They must know and play
the paper game like all the rest. What a world of liars and cheats we live in.
How can you manipulate a market buying and selling a product that doesn’t
exist in real life? ” Here is a bunch of paper I’m selling, now you real hard asset is worth less ” because I sold all this paper that says ‘gold’ on it. That I only borrowed for awhile. ‘madness’