Is the Physical Gold Market Breaking Away From Paper? A Mint Founder's Urgent Warning
Summary
Market Outlook: The podcast discusses the conflicting economic signals from the US durable goods report, highlighting a decline in headline numbers but strong core business orders.
Gold Market Dynamics: Josh Far, CEO of Scottsdale Mint, explains the impact of a US customs ruling on Swiss gold tariffs, which temporarily disrupted the physical gold supply chain and highlighted the fragility of market structures.
Global Trade Shifts: The discussion emphasizes the bifurcation of global trade lines, with increasing tariffs and the need for the US to build better partnerships and infrastructure to handle metals.
East-West Gold Market Tensions: The podcast critiques the inefficiencies in the Western gold market infrastructure, particularly the London Bullion Market Association (LBMA), and the growing demand from Eastern markets.
Silver and Industrial Demand: The conversation touches on the rising industrial demand for silver, driven by its critical role in technology and military applications, and the potential for higher prices due to increased demand from nation-states.
Investment Strategies: Josh Far advises retail investors to take a measured approach when investing in physical precious metals, emphasizing the importance of understanding market dynamics and not rushing into large purchases.
Geopolitical Considerations: The podcast discusses the geopolitical implications of precious metal markets, including the strategic positioning of assets and the potential for increased government control and politicization of bullion markets.
Future Outlook: The episode concludes with a discussion on the long-term journey of precious metals investment, suggesting that both higher prices and tighter access could define the market in the coming years.
Transcript
[Music] Hey everyone, welcome back. I'm Jeremy Svern. Now, the market is working through the latest US durable goods report. The headline numbers showed a decline while core business orders came in strong, presenting yet again a conflicting economic picture here. And and meanwhile, as we look at spot gold, it's holding just below $3,400 an ounce. But we're going to focus on the mechanics of the market itself. Now, joining me today is Josh Far. He's the founder and the CEO of Scottsdale Mint. And I got to say, when Josh was on our show last February, he told our audience that the next major story in the physical market would be tariffs. And his prediction was remarkably accurate, if you can recall. I mean, the market just weathered a period of significant turmoil after a surprise US customs ruling threatened Swiss gold with a 39% tariff, a move President Trump himself had to personally reverse on social media. Josh, welcome back. Great to see you. >> Great to be back. Uh let's start there. Let's start there. For that several days, I mean, the market operated under the chaos of that customs ruling. Now, we heard reports of metal being held in bonded warehouses, unsure of its status. From your vantage point as a mint operator, I mean, what did that period of regulatory uncertainty due to the physical supply chain? Did it cause a real world redirection of metal flows? What do you think here? Yeah, a lot of the trade desks actually pulled um all gold sales especially on on deliverable deliverable branded bars. So they either jumped uh we saw the EFP the exchange for physical premium you know 30 $40 $50 plus late on that Friday um going in you know and people didn't didn't really know and a lot of people were pulled um pul pulled completely all offers off off the table. So, but we did see Trump did step in and personally basically say we're not going to tariff gold. And I think where the intention is, he doesn't want to hurt the exchange. Obviously, we need metal to flow in uh to to the United States. So, you don't really want to tariff something that you need more of and and Trump really wants more gold here in the US. So, I think they he basically he hasn't given full certainty yet. Uh but there's no doubt there may be a difference between a 100 ounce and a kilo bar that's for the exchange. Uh but but we don't we still don't have full full confidence and it looks like still 1oz retail sizes which are manufactured a little bit further are being tariffed. So right now Swiss gold bars are essentially out of the US market right now other other outside of the secondary. >> Interesting. Okay. So, was this like just a we had to talked to a couple people. Some just said it was a a customs era and and other analysts said, "Well, no, they did it intentionally to see how the market reacted." So, what are your thoughts behind this whole move? >> Well, it came it was a it was a customs ruling, but it was it was it wasn't the full head. So, it wasn't a and I think if if you read if you read it was actually a bar that had extra features on it such as um encrypted QR codes. uh it had it had a little bit more than your standard bar. So if if if we read if you read the customs rulings, he may have ruled correctly. That wasn't the intention. So not all 100 ounce and kilo bars are are made exactly the same. So I think what we saw was I and I and I believe Trump is trying to say, hey, the raw material can come in to the US, but I want fabricated goods to be tariffed. That's I want the manufacturing here in the US. I think I think that uh that that that component is is what what Trump is trying to get uh uh specifically addressed, >> right? Yeah. No, I mean it was fascinating. Obviously here we were covering it and and now the situation is clarified. Has the market, you know, simply snapped back or did that expose maybe an episode of fragility in the supply chain that has permanently changed how people source their metal? >> Both. So >> just in the last few weeks, so my my other company is called the Wyman Reserve. We're actually a highsecurity vaulting operation that's also a foreign trade zone. So our facilities tearfree. So just over the last few weeks, we're being visited by foreign governments, refineries, companies that own their own vessels. They're moving raw material uh all around the world. There's no doubt that this is a sign to come. We're going to see the the world is bifurcating which means we we're not going to be able to do trade freely and openly with every continent, every country like we have been for the last, you know, few decades. So we're we're trade lines are are going to be stressed. Uh we're going to see tariff issues up, down, left, right. I mean even take copper for example. While they said that they're not going to tariff copper, they're going to relook at it again in about a year or so. So the options are we need to at least here in the United States uh we need to we need to build build better partnerships. We need to build um more infrastructure related to handling the metals. Bring bring more and more material into the United States to be you know more more self-sufficient. And I think what Trump is trying to do is align the Western Hemisphere, which is North and South America, to really to really work together in in the event of what what could be a more of a kinetic world uh war at at some point. >> Yeah, let's talk about that. I we move to the kind of the structure of the gold market, specifically this east west dynamic. I mean, there was a recent critique in the Financial Times and it argued that the core of the western trade, the LBMA, is misaligned with global demand. It it kind of highlighted the inefficiency of shipping 400 London bars to Switzerland to be re-refined into, you know, kilo bars demanded by Asia. I mean, as a mint operator, you're a bridge between these two worlds. How much of a logistical strain and an added cost does this structural mismatch place on the entire physical market itself? I mean, is the West's infrastructure kind of failing to keep pace with the East demand? >> Well, I think things have changed a lot since World War II. So after after after the world wars were ended a lot of the a lot of the war debt was settled at the Bank of England. So a lot of that gold was there and if we if we take a step back and we start looking at where who is consuming the precious metals where are these refineries located where are the manufacturing located the United States is a major manufacturing hub and obviously China is is is as well the US is still thankfully still has quite a bit of the higherend manufacturing within the precious metal space. So if we kind of look at the UK, the UK is not part of the EU anymore. And London does not have a lot of manufacturing in in its in its relative, you know, um, radius. And so there's not a lot of refineries there. There's not a lot of in manufacturers. So a lot of times this material, as as you mentioned, every market has a different spec. So those specifications for trade could be a different size, a different purity, different uh just just and they don't they don't necessarily fit. And so often they do have to go to refinery, get get melted and recreated into, you know, a different a different spec to to go to Asia or to go to the United States. So I think there's there's no doubt that, you know, I think you're going to see a push for a decentralization away from London. That doesn't mean London completely goes away. Uh but it it means that maybe they're going to have to take a less of a lead dog role and and you're going to see, I think, the United States uh grow. You're going to see obviously China grow. Those are going to be probably your more competing competing grounds as we go forward. >> Yeah. I mean that critique also described the LBMA and London clearing as a kind of an opaque private club is what they called it. I mean given the amounts and the immense flow of physical metal moving from the Western vaults to Eastern State and and private buyers. I mean do you believe the current market structure in London accurately reflects the reality of of where the center of gravity for physical metal physical gold now lies here Josh? Yeah, uh jurisdiction matters. I don't think London is the top jurisdiction to hold Germetal in anymore. And there, as you look at uh clearly Trump has been very clear, he doesn't like the direction that the UK is going. And as as Europe is clamoring, there's still a lot of people don't know this. Most of Europe still has seized Russian assets. So this war between Russia and Ukraine, there's a huge monetary component. And I I I think why would you want your assets to be in a zone that could be highly potentially kinetic at some point? So >> physical demand, you add just all these all these risk factors and a lot of these larger vaults are not maybe in they're not in the right geographic jurisdiction. So we're we're probably going to see that that's going to continue to to to grow as we go forward. >> Yeah. Let's uh I mean to to to that point on the LBMA system in in February, you and I were discussing this massive gold shipments to New York causing withdrawal delays of up to eight weeks from the Bank of England. When we see stresses like that and we know the clearing system is a private consortium, how much do you factor in counterparty risk with within London itself? I mean, is there a growing concern among major players about who is on the other side of a trade when the physical metal gets tight? Well, if you start at the highest level, and that's the central banks and and and you know, sovereign nations, they're moving their own metal around. So, if you start there and just pay attention to what some of the bigs are doing, and then as you start to go down uh as you go down the list of of of other entities, you know, the old adage of uh possession is 9/10en of the law. This is this is very important. Who's overseeing the audits? Are the audits happening? Where are they? I mean, we saw in the United States when Elon Musk uh was a little bit more at at the political helm uh in the news wanting to audit, you know, the Fed the Federal Reserve's gold, you know, let's look at the US's gold and and Trump was talking about that and that's gone quiet. So, we at the end of the day, more transparency if you can if you can hold if you can hold material that can be visited by the customers that could be audited by, you know, with with by third parties. Uh, and that's what my operation does and that's why I think we're seeing a lot of success as material is coming over from Europe and and to a place like a jurisdiction like here in the state of Wyoming. >> Yeah. Yeah. It's so fascinating to watch. We just saw I mean I want to move on to silver because it's been making some crazy moves here. We got a lot to talk about but Bloomberg is now just reporting I just came over the terminal here that India's regulator may soon allow its $177 billion pension system to buy gold ETFs. So even a 1% allocation could mean about 17 tons of new demand. How would that flow hit the physical market Scottdale serves especially kilobars and coins and would you need to adjust sourcing? Uh there well there's no doubt I 2025 has seen an adjustment of where metal is flowing from what what jurisdiction to to the other and that disruption is going to continue. So you you know capital goes to where it's treated best. So if someone's bidding above the market, you know, that material is going to flow to that continent. So the there's no doubt that I I you know, I'd like to see the numbers come in. We saw Saudi Arabia uh talk I guess they they did buy some some silver. I'd like to see that number be be a lot bigger. But I think this represents that, you know, the world is leaving like nation states. They're more economic zones, which is we could we could also debate whether that's a good thing or not. But you know if we look at it as you know Trump is investing in companies uh other other central banks are investing in markets they're investing in commodities you know so they're trying to tighten their their they're they're trying to tighten their exposure to certain things that they need but they're also trying to make money. So I think this is a great example of the silver market really is not big enough for you know if we go back the 80s was the Hunt brothers. We saw George Soros try to try to uh capture the silver market and was was had had his hand slapped and then it was Warren Buffett in the late 90s. Could could this happen through nation states and and basically they could gobble up and take control of of a lot of the supply you know and and you know silver is and you and I were just talking about that previously uh it's now on the critical mineral list um or this is being discussed along with copper so it's used in military it's used in AI it's used in so many different things that I I'm watching these investments come in and so you know how's that going to change from a retail perspective it's It's the wind is at your back and so does that mean we're going to see much higher prices for years to come? I I I think that's what most people could conclude. >> Yeah, I mean I was going to say I will expanded classification of say silver and copper meaningfully kind of alter your sourcing chains or demand patterns for silver coins or even trigger hedging flows into other metals like copper linked coins or rounds, you know. >> Well, I think where I see it as a lot of people the term merchant bank is going to be coming back. So while governments may not be trading super well together, banks stand in the middle and they do the sourcing. So I think you're going to see more of more of the banks get involved in other countries and then they end up sourcing for those governments. So yes, supply chain there's going to be more competition. So the US had a silver stockpile uh at you know about 20-ish years ago. It ran out and so it was no longer considered strategic for the US military. Could they start to build back another stockpile again? I think we're going to we're going to watch that unfold. >> Fascinating time. I mean, allied governments are ramping up critical mineral cooperation, especially around copper and even silicon. I mean, could that mean more domestic mintgrade supply or tighter competition for precious metals from industrial buyers >> 100%. So in a good great example is what we had to deal with during COVID >> is every a lot a lot of people kind of forget when we think of precious metals we kind of think just on the investment side but the amount of companies that use it the auto the autoc catalyst to to make automotive hybrids are using more and more of you know also platinum palladium and some of the other precious metals. So they all buy at the same time and they sometimes buy way more than they need. This is no different than we see at the grocery stores during during shutdowns. So, it's not that we our cities didn't have food. They just got all gobbled up. It's not that we didn't have enough toilet paper. People just stockpiled too much of it. So, the same thing will absolutely happen with precious metals. And the other thing that's going to be interesting is is offtake agreements, which means >> people with big big dollars behind them will enter into an agreements with certain mines and refineries to basically have first right of refusal on all that material coming out of that facility. So, that's going to become very critical for for for manufacturing going forward. Oh, there's so many things. I'm making notes because there's some things I wanted to follow up on. Um, including platinum because what a run it's been on. Before we do that, I want to do a little bit of a deep dive on silver. I mean, we've been talking about it here at Kicko, obviously, a lot. Our audience is very familiar with the structural deficit narrative and yet we see data from major sovereign mints like the Perth Mint reporting softer retail bullion sales in July citing seasonal slowdowns. But I guess how do you reconcile those two realities in your own business? Josh, are you seeing a clear divergence between relentless industrial demand and a more sentiment driven retail demand? Yeah, on the on the retail front, it's been quiet the last two years. And I think it's a it has really to do with a function of liquidity in the financial markets and capital rotation. And so we've kind of seen where everything's kind of risen. We haven't had a whole lot of panic since the Silicon Valley Bank 2 and a half years ago. So to me on you're absolutely right, the the the average retail buyer has not been been participating in in in in the purchasing on this move. However, um my my other company, Lyman Reserve, also had it operates as a fund and works with through the broker dealer community. It works with uh high netw worth uh family offices. They are actively either buying into it or they're looking at absolutely making an allocation. As as you look at both gold and silver, it's it's especially the on the gold side, it's outperforming bonds at every uh time interval. So, I think what you're seeing is is the more sophisticated buyers are looking at this going, "Hey, these prices aren't really that high." If we look at historical ratios between other elements such as as the as the the financial industry, the financial markets, uh, precious metals have a long way to go. And I think at some point, I think what you saw in the Perth Mint numbers is yeah, the average Joe on the street, they're not they're not buying in. But there's going to be a liquidity dump coming uh where the governments are going to be printing kind of leaving quantitative tightening. I think we're about to phase in. Obviously, you're seeing that in the states uh with with the possibility of of some a couple a couple interest rate cuts. Are they going to turn that hose on and that liquidity flows? And then that's when I I envision the retail market wakes up and starts buying and clamoring for those markets. So, when you have banks, governments, industrial players, and retail all clamoring for the same asset class at the same time, that's when you see fireworks. >> Yeah. And I mean, it just comes down to basic supply and demand, right? And I mean, many of our long-term investors have been burned by that silver deficit narrative before. They always get a little upset about it. But from your seat, what tangible evidence can you kind of point to that makes this time structurally different from previous filled rallies? I mean, is it simply the fact that this industrial demand is now so critical for this green transition and this whole tech infrastructure play that it's no longer discretionary? >> Yeah. So, we're leaving or slashleft and we're continuing to leave globalism. So where everyone traded fairly and and and in in love and harmony, that's not happening anymore. So you just had Trump and a Chinese representative just yesterday sitting down and you know Trump's trying to get more minerals and you know negotiation negotiations are going back and forth and Trump literally says you know we have some tricks up our sleeves that could totally destroy China but we're not going to do that. Well the reality even when you threaten things like that that tells you what's at stake. So absolutely I think companies, governments, you you think about military uh what is going the military going to look like in the future? And I think what we're seeing in in Ukraine and and Russia is maybe just an appetizer of it. You're seeing old warfare, but they're they're mixing in some of the drone warfare. So if if you're not building data centers to run your AI to run which is which is going to end up running your military systems going forward, you're going to lose. So you're seeing now, you know, coal p power plants are not being shut down anymore. If anything, the life is being extended. They're trying to build nuclear as fast as possible. And then combined with that, these data centers, they need all different types of minerals. So you have to secure your future. China has frankly done a better job at securing their their industrial future through through primarily the African continent. And I think now the United States is scrambling to try to catch up. >> Yeah. And I mean we focus obviously heavily on that silver's industrial side, but it's is its monetary role making a quiet comeback? I mean we're seeing governments liberalize their gold markets. Are are any sovereign clients expressing interest in minting silver legal tender is more than just a commemorative product, you know, perhaps as a strategic asset for their citizens in an unstable currency environment. >> Yeah, you know, excellent point. I think silver has been, you know, traditionally for for thousands of years, it has had a strong monetary role. I think if we were trying to look at if you're going to, you know, I I'm not in the camp that we're going to be using silver or gold at the grocery store to buy it. I don't think we're ever going to be 100% backed or anything like that, but could you have a basis? You know, could you have a core where you've got some underlying assets that they're basically building call your foundation for for your economy, uh, for your financial system? Absolutely. So, could could silver take on a role like that? We did see the central uh the Russian um the Russian central bank earlier this year. They're investigating. They're looking at it and and obviously India that's that's the bricks. So the bricks I believe they're looking at more more of precious metals and especially gold as more of a settlement layer. Uh but they want that to be kind of the the backbone of of of who they are and what they're doing. And there's no doubt that that Trump and the US administration is trying to play catch-up. >> You said a lot of foreign banks, a lot of a lot of foreign uh nationals are coming through your your walls right now. They're talking to you. I mean, I know that you're obviously not at liberty to discuss a lot of these things, but any insight into what those discussions look like? >> Yeah, a lot of it's based on tariff. I mean, Trump Trump has basically said America is open for business. Uh he wants either manufacturing to come to the United States or to work with to work with uh manufacturers. So, my manufacturing company, Scottsto Mint, obviously is is seeing a lot of interest from from from all over the world. So, which is which is fantastic. That's what Trump wants. Trump wants to bring business back here. Um, we also need raw material. We need semi-finish material, things like that. So, as we as we look to some of these partnerships, I think this is this is definitely gamechanging long term. Um, there's no doubt that Trump is competing with and I think that might have been a hint. We you alluded to it before when when Trump when when the tariffs did hit some of the Swiss bars. you know, is there I'm not saying an envy, but if if if in theory Switzerland is is refining somewhere between 60 maybe upwards of 70% of the world's gold, how much of that could potentially come to the United States? So I think long term that's where people look at a facility like like mine which also offers the high high-end vaulting uh for for these industrial players as well uh and sovereigns is is this this is could Wyoming become a new precious metals hub you know to as we as we as we work between mines refineries governments banks uh and that's really what what's being set up here. >> Interesting. So, America's back when it comes to this. I mean, we've heard about this traded, you know, east and west coal gamble. It sounds like there's a lot of discussions taking place. >> Um, you know, sometimes I say in the in the globe community, there's there's the the doomer concept that the United States is going to and don't get me wrong, it's it's got some tough times ahead there. There's no doubt. But never never bet against American ingenuity and and what's going on. And I I think um and really relationship even even I know uh you know our Canadian friends. Uh I I don't think our politicians always speak for each other, but but I see I see a lot of partnerships growing, you know, a lot of a lot of new ways. Just how we've done business in the past is really not not how it's going to happen going forward. So, um I'm I'm optimistic that that uh the right people, the right companies that that are looking at the future and and positioning now to succeed in in our new call the new regime uh will will do quite well. >> Yeah. I want to discuss platinum for a second. I mean, it's shown significant strength recently after lagging for so long. When new capital comes to you for physical platinum, I mean, what is the thesis that you're hearing? Is it a simple relative value play against gold? Are we, you know, investors now making a specific kind of forward-looking bet on its role in the hydrogen economy? What's the what's the thoughts? >> Yeah, I I probably it's just too cheap. So, it it had been sold off for the last number of years and has not participated as much. And then you've seen, and I I think this really took took fold right around when Trump took office, is EV sales and production are going down, but hybrids are going up. So, a hybrid needs to turn on more times per the day. So, you need you need more uh you actually need more platinum in in that technology for those vehicles. So, I think you're seeing the the the consumption. We saw the news when when China bought an awful lot of platinum all at once. you're seeing a growth in in that segment. So platinum platinum has a little bit more of an industrial component slash with a little bit of an inflation factor. Uh whereas you know gold has been predominantly this this past year or so has been more of a central bank monetary play. >> Yeah. Yeah. And when you're talking about the capital I mean is it still primarily kind of high net worth individuals making tactical allocations or are you starting to see more institutional or fund level interest in physical platinum? >> Yeah. um fund of funds. I mean that they're all looking at different different different components and often time some sometimes they'll they'll talk to their bank and the bank will you know banks buy from other other companies. They don't own everything. So banks are often an intermediary and then you know we've had some sovereign clients that we we talked to this bank and they they actually offered your facility as an option. Uh so you know the reality is is we could either work with existing banks that are out there or other groups. So we we kind of see it coming from from all different directions and and there's no doubt that people are feeling underexposed to to this this asset class and that trend is it's not going to stop. I think I just see this for a number of years as continue to grow. >> Precious metals and I kind of look at at my facility between vaulting and and and and vaulting and manufacturing. We're essentially a component within that merchant bank loop. So we're we're we're a key a key cog in it. Uh and if and if things are supposed to be done in the United States, uh you know, we're we're we're we're going to see just an awful lot of uh business going forward. >> I don't know if you saw the story today, but we're also seeing those shifts in the market structures globally. Just today, Vietnam uh officially announced its end to its state monopoly on gold bullion production. As someone who mints for sovereign nations, I mean, what does a move like that signal to you? Yeah, you know, oftent times, you know, larger governments, take the United States, they they have the US Treasury and the US Treasury, the only person, the only the only entity that can that can produce US currency is the US Mint. But smaller governments often time they don't have the sophisticated manufacturing and skill set. So, they outsource that component. So, I'm not really sure on on Vietnam's component, but sometimes they do turn to the private sector such as such as mine to do something a little bit different uh in in the marketplace and or to either supplement what they're doing in their in their own in their own government. Often times, governments will outsource a component whether it's that's a semi-finish product or the final product and it goes back to them. So, I can't really speak this to the specifics of what of how governments think. Sometimes they're just pushing uh and needing to push a a cultural mandate. Uh sometimes they're in it to to promote their their their country as being strong for business, strong for tourism. So there there's all different types of of of reasons that central banks or governments will will will will get into precious metals beyond just the the investment component. >> Yeah. Yeah. I mean, when you're minting currency for a sovereign nation and that nation is in a geopolitically sensitive region, what does that process look like? Are there security, logistic, political challenges involved in manufacturing, delivering, you know, a country's money that maybe an average person could never even consider? >> Yeah. So maybe, you know, I I look at Yeah. There are certain countries we just won't won't work with. So obviously that's, you know, we're we're in a whole new a whole new world of of who who to work with and who to not. But yeah, it's it's a trust factor and and these central bankers, they all talk to each other. So who you know when they go to their conferences you know I either either they had a good experience with this entity or not. And so that's usually where a lot of our business comes from um they know who we are uh and and if they need if they if they need something produced or or done. obviously being uh being being produced in the United States, there's a little bit more confidence uh that we're going to, you know, from from auditing of of of what we're producing the, you know, every single coin that's produced has to be reported uh in in within their central bank as being issued. So, so you know, we're we're we're often having site visits from from the government entities and able to to work with them best we can. >> What a time what a time to be alive. Finally, Josh, I mean, in our last interview in in February, you called this an explosive decade, and we're now deeper into it, and we just saw a bureaucratic ruling nearly paralyze a global gold trade, requiring that presidential intervention, of course, on his tweet. Has the explosion so far been less about price and more about the complexity and fragility of the underlying market structure itself? >> Yeah, it it's going to be a journey. It's not going to all well well if you if you're all if you're fully in you want it to just explode overnight, right? That but the average it's it's going to be a journey. I think what what we're seeing unfold all of 25 is just showing where where it's this is going to be, you know, for many many many years. And so we we basically the United States is in a just over a 50-year experiment of not having any ties to the gold backing. And so you weren't allowed to even own gold as an investment prior prior to Richard Nixon in the early '7s cutting the tie. So I think what we're seeing just just the chaotic is I think people are realizing, wait a minute, gold's important. I I don't I don't get it. I I was told it was a pet rock. I told uh So I think perception is changing all around the world. And if you've probably seen the videos of what's going on in China, some of their their shopping malls where they're selling gold, it's it's like it would be like the Black Fridays of of 15 years ago in the US where everyone's clamoring to get into Best Buy to get that new TV. The same thing's happening for for gold. And I think that's not happening in the United States right now. No one alive in the US has ever gone through a true currency crisis. I think we can all say we're going through some sort of financial crisis because the purchasing power is eroding even if the dollar has held strong versus other currency pairs. But where where is that going this decade? I think it's just it's to me it's fairly obvious. Uh it's it's a but it will be a journey. And so as we watch what as we watch what unfolds, I think you know channels like like KitKo I I appreciate tuning in and you have great great guests because it is daytoday hour to hour. there's a new a new uh new post on X drops. It it keeps it keeps evolving uh so fast and I think we're all just uh just enjoying the enjoying the ride. >> Yeah. Amen. I mean a lot of coffee takes a lot of this and uh it's been interesting to watch. I mean I I lived in Hong Kong over 20 years ago and I've been to Shenzhen and to some of those malls watching the amount of people going on not just for gold but silver too, right? I mean it's been pretty wild. I got to ask you, I mean, if we were to step back, I mean, obviously gold's still near a record high, silver has been declared possibly this critical mineral. Platinum is still running deficits and sovereigns are buying. I mean, when you look at the bullion landscape, do you expect the next 5 years to be defined by higher prices or by tighter access? >> Both. Both. >> Yeah, totally. um you know a lot of things are going to go up in price and then certain things are going to do a lot better even even when when the credit market gets hurt you know different things I think that's really the beauty of precious metals is it does really well when a lot of other business segments don't do well so as as the market tightens people realize the importance you know you're going to see probably companies actually putting gold on their balance sheets so you're you know the topic in 20 24 25 is companies adding Bitcoin. Well, the reality is is what's an even better asset? Uh you can take you can take loans at much better rates off of physical gold if it's held in the right vault. Uh so it's a much easier product for for businesses to to to work with. Um that's not to not to poo poo uh Bitcoin, but I do think I think that's a that's what you're going to see as we go forward. Uh Tesla even amended their bylaws, their SEC bylaws to allow for gold bullion. So the difference between bullion and an ETF is ETF's a paper product. Bullion is the physical product. So they're they're even allowed uh within their SEC rags to purchase it. So I think you're going to see as we go forward uh you're going to see more and more uh mainstream adoption. >> Yeah. I mean we're seeing it but but isn't the real risk less about the price and more about control? I mean between these governments classifying metals as strategic and then sovereigns repatriating reserves again. Could investors wake up to a world where bullion markets look less free and and more politicized than ever? >> Uh yeah. So access uh just like what they've done in you know if you kind of look at the central bank digital currencies you know that Europe is probably going to be the first to to roll out unfortunately is restricting the on and the offramps. So that's where you're going to see you know and then they can kind of in you know kind of control it tax it blacklist different things. So I think uh the same the same thing is very true with with with gold. It it currently is deemed as a um it's a collectible per IRS rules. Um so it it currently the access is is fairly it's fairly open. Trade is trade is happening. But I think long-term uh frankly gold status could could really outpace a lot a lot of other asset classes that are out there that might be even harder to on and off ramp. Uh but there's no there's you I think you bring up a really good point that we're going to be talking about over the next number of years. >> Yeah. Because I mean if sovereigns are playing the long game, doesn't that mean short-term price swings matter less than positioning yourself before access gets restricted? >> Yeah. And then and then just wait when other asset classes are are hurting or crashing. So you know there there there is the greed index when when people want to make a lot of money, but then there's the fear index which is it's just I don't want to lose. And I think that's that's when you're going to see precious metals just really start to outpace uh everything else. >> Beauty. All right. Finally, my friend, I mean, for our audience watching right now, from the season stacker to the person maybe considering their first ever purchase, what's the single biggest mistake you see retail investors make when buying physical precious metals? And what's your best, you know, piece of advice to avoid it? >> Yeah, you know, and and my company's kind of in an interesting situation where we do we do have a direct channel. We also sell to almost every large dealer really all around the world at a wholesale level. I would say is just just have a look around. You don't have to go you don't need a broker. Uh you don't need someone in the middle necessarily. So I would say, you know, just have a look around where you feel comfortable. Get price points. Um know who you're buying from, how long have they been in business, those those types of things. So I think take your time. You're not going to get you're it also don't have to do it all at once. So uh you know when everyone's like I've I've got this seven figures to buy all at once. Well, why don't you just buy a sample, see if you like it first, do a do a trade, see how that how that transaction went through. So, I think um go slow. Think of this as a journey. It's not going to be an overnight uh uh hype, which that's some some of the some of the channels talk about this is all going to happen overnight. Could it? >> Sure. But I I this is more of going to be a journey. >> It's a long game. We're treating it like the central banks who continue to buy even at these high prices on the metal. I'm surprised that they keep stacking this at these prices, too. Some of them are on auto uh Jeremy. So they're just on an auto buy program and I think you're going to see more like that and I know that personally. So they're really kind of price agnostic. They're just more it's an allocation. So each and every quarter each month they're just allocating and I think that's what you're going to see um from here on out. Oh >> be wild if just you know 10% of our population went passive with an ETF buying those spots there too then. Huh. Okay. >> Uh, indeed. Yeah. >> Yeah. Exactly. All right. That's an essential perspective from the heart of the physical market. Josh Far, CEO of Scottsdale Mint, appreciate your time as always and look forward to hearing you. Uh, you got to give me some insights. Make sure you're WhatsAppapping me when things happen. We got to get some exclusives here, Josh. >> Definitely. Well, I I appreciate keeping in touch and uh look forward to coming back on soon. >> Appreciate it. Thanks so much. And for Kick News, I'm Jerry Safford. Thank you for watching. Don't forget to hit the subscribe button. and we're going to have some great content coming at you all week long. We'll see you next time. [Music] Heat. Heat. [Music]
Is the Physical Gold Market Breaking Away From Paper? A Mint Founder's Urgent Warning
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Transcript
[Music] Hey everyone, welcome back. I'm Jeremy Svern. Now, the market is working through the latest US durable goods report. The headline numbers showed a decline while core business orders came in strong, presenting yet again a conflicting economic picture here. And and meanwhile, as we look at spot gold, it's holding just below $3,400 an ounce. But we're going to focus on the mechanics of the market itself. Now, joining me today is Josh Far. He's the founder and the CEO of Scottsdale Mint. And I got to say, when Josh was on our show last February, he told our audience that the next major story in the physical market would be tariffs. And his prediction was remarkably accurate, if you can recall. I mean, the market just weathered a period of significant turmoil after a surprise US customs ruling threatened Swiss gold with a 39% tariff, a move President Trump himself had to personally reverse on social media. Josh, welcome back. Great to see you. >> Great to be back. Uh let's start there. Let's start there. For that several days, I mean, the market operated under the chaos of that customs ruling. Now, we heard reports of metal being held in bonded warehouses, unsure of its status. From your vantage point as a mint operator, I mean, what did that period of regulatory uncertainty due to the physical supply chain? Did it cause a real world redirection of metal flows? What do you think here? Yeah, a lot of the trade desks actually pulled um all gold sales especially on on deliverable deliverable branded bars. So they either jumped uh we saw the EFP the exchange for physical premium you know 30 $40 $50 plus late on that Friday um going in you know and people didn't didn't really know and a lot of people were pulled um pul pulled completely all offers off off the table. So, but we did see Trump did step in and personally basically say we're not going to tariff gold. And I think where the intention is, he doesn't want to hurt the exchange. Obviously, we need metal to flow in uh to to the United States. So, you don't really want to tariff something that you need more of and and Trump really wants more gold here in the US. So, I think they he basically he hasn't given full certainty yet. Uh but there's no doubt there may be a difference between a 100 ounce and a kilo bar that's for the exchange. Uh but but we don't we still don't have full full confidence and it looks like still 1oz retail sizes which are manufactured a little bit further are being tariffed. So right now Swiss gold bars are essentially out of the US market right now other other outside of the secondary. >> Interesting. Okay. So, was this like just a we had to talked to a couple people. Some just said it was a a customs era and and other analysts said, "Well, no, they did it intentionally to see how the market reacted." So, what are your thoughts behind this whole move? >> Well, it came it was a it was a customs ruling, but it was it was it wasn't the full head. So, it wasn't a and I think if if you read if you read it was actually a bar that had extra features on it such as um encrypted QR codes. uh it had it had a little bit more than your standard bar. So if if if we read if you read the customs rulings, he may have ruled correctly. That wasn't the intention. So not all 100 ounce and kilo bars are are made exactly the same. So I think what we saw was I and I and I believe Trump is trying to say, hey, the raw material can come in to the US, but I want fabricated goods to be tariffed. That's I want the manufacturing here in the US. I think I think that uh that that that component is is what what Trump is trying to get uh uh specifically addressed, >> right? Yeah. No, I mean it was fascinating. Obviously here we were covering it and and now the situation is clarified. Has the market, you know, simply snapped back or did that expose maybe an episode of fragility in the supply chain that has permanently changed how people source their metal? >> Both. So >> just in the last few weeks, so my my other company is called the Wyman Reserve. We're actually a highsecurity vaulting operation that's also a foreign trade zone. So our facilities tearfree. So just over the last few weeks, we're being visited by foreign governments, refineries, companies that own their own vessels. They're moving raw material uh all around the world. There's no doubt that this is a sign to come. We're going to see the the world is bifurcating which means we we're not going to be able to do trade freely and openly with every continent, every country like we have been for the last, you know, few decades. So we're we're trade lines are are going to be stressed. Uh we're going to see tariff issues up, down, left, right. I mean even take copper for example. While they said that they're not going to tariff copper, they're going to relook at it again in about a year or so. So the options are we need to at least here in the United States uh we need to we need to build build better partnerships. We need to build um more infrastructure related to handling the metals. Bring bring more and more material into the United States to be you know more more self-sufficient. And I think what Trump is trying to do is align the Western Hemisphere, which is North and South America, to really to really work together in in the event of what what could be a more of a kinetic world uh war at at some point. >> Yeah, let's talk about that. I we move to the kind of the structure of the gold market, specifically this east west dynamic. I mean, there was a recent critique in the Financial Times and it argued that the core of the western trade, the LBMA, is misaligned with global demand. It it kind of highlighted the inefficiency of shipping 400 London bars to Switzerland to be re-refined into, you know, kilo bars demanded by Asia. I mean, as a mint operator, you're a bridge between these two worlds. How much of a logistical strain and an added cost does this structural mismatch place on the entire physical market itself? I mean, is the West's infrastructure kind of failing to keep pace with the East demand? >> Well, I think things have changed a lot since World War II. So after after after the world wars were ended a lot of the a lot of the war debt was settled at the Bank of England. So a lot of that gold was there and if we if we take a step back and we start looking at where who is consuming the precious metals where are these refineries located where are the manufacturing located the United States is a major manufacturing hub and obviously China is is is as well the US is still thankfully still has quite a bit of the higherend manufacturing within the precious metal space. So if we kind of look at the UK, the UK is not part of the EU anymore. And London does not have a lot of manufacturing in in its in its relative, you know, um, radius. And so there's not a lot of refineries there. There's not a lot of in manufacturers. So a lot of times this material, as as you mentioned, every market has a different spec. So those specifications for trade could be a different size, a different purity, different uh just just and they don't they don't necessarily fit. And so often they do have to go to refinery, get get melted and recreated into, you know, a different a different spec to to go to Asia or to go to the United States. So I think there's there's no doubt that, you know, I think you're going to see a push for a decentralization away from London. That doesn't mean London completely goes away. Uh but it it means that maybe they're going to have to take a less of a lead dog role and and you're going to see, I think, the United States uh grow. You're going to see obviously China grow. Those are going to be probably your more competing competing grounds as we go forward. >> Yeah. I mean that critique also described the LBMA and London clearing as a kind of an opaque private club is what they called it. I mean given the amounts and the immense flow of physical metal moving from the Western vaults to Eastern State and and private buyers. I mean do you believe the current market structure in London accurately reflects the reality of of where the center of gravity for physical metal physical gold now lies here Josh? Yeah, uh jurisdiction matters. I don't think London is the top jurisdiction to hold Germetal in anymore. And there, as you look at uh clearly Trump has been very clear, he doesn't like the direction that the UK is going. And as as Europe is clamoring, there's still a lot of people don't know this. Most of Europe still has seized Russian assets. So this war between Russia and Ukraine, there's a huge monetary component. And I I I think why would you want your assets to be in a zone that could be highly potentially kinetic at some point? So >> physical demand, you add just all these all these risk factors and a lot of these larger vaults are not maybe in they're not in the right geographic jurisdiction. So we're we're probably going to see that that's going to continue to to to grow as we go forward. >> Yeah. Let's uh I mean to to to that point on the LBMA system in in February, you and I were discussing this massive gold shipments to New York causing withdrawal delays of up to eight weeks from the Bank of England. When we see stresses like that and we know the clearing system is a private consortium, how much do you factor in counterparty risk with within London itself? I mean, is there a growing concern among major players about who is on the other side of a trade when the physical metal gets tight? Well, if you start at the highest level, and that's the central banks and and and you know, sovereign nations, they're moving their own metal around. So, if you start there and just pay attention to what some of the bigs are doing, and then as you start to go down uh as you go down the list of of of other entities, you know, the old adage of uh possession is 9/10en of the law. This is this is very important. Who's overseeing the audits? Are the audits happening? Where are they? I mean, we saw in the United States when Elon Musk uh was a little bit more at at the political helm uh in the news wanting to audit, you know, the Fed the Federal Reserve's gold, you know, let's look at the US's gold and and Trump was talking about that and that's gone quiet. So, we at the end of the day, more transparency if you can if you can hold if you can hold material that can be visited by the customers that could be audited by, you know, with with by third parties. Uh, and that's what my operation does and that's why I think we're seeing a lot of success as material is coming over from Europe and and to a place like a jurisdiction like here in the state of Wyoming. >> Yeah. Yeah. It's so fascinating to watch. We just saw I mean I want to move on to silver because it's been making some crazy moves here. We got a lot to talk about but Bloomberg is now just reporting I just came over the terminal here that India's regulator may soon allow its $177 billion pension system to buy gold ETFs. So even a 1% allocation could mean about 17 tons of new demand. How would that flow hit the physical market Scottdale serves especially kilobars and coins and would you need to adjust sourcing? Uh there well there's no doubt I 2025 has seen an adjustment of where metal is flowing from what what jurisdiction to to the other and that disruption is going to continue. So you you know capital goes to where it's treated best. So if someone's bidding above the market, you know, that material is going to flow to that continent. So the there's no doubt that I I you know, I'd like to see the numbers come in. We saw Saudi Arabia uh talk I guess they they did buy some some silver. I'd like to see that number be be a lot bigger. But I think this represents that, you know, the world is leaving like nation states. They're more economic zones, which is we could we could also debate whether that's a good thing or not. But you know if we look at it as you know Trump is investing in companies uh other other central banks are investing in markets they're investing in commodities you know so they're trying to tighten their their they're they're trying to tighten their exposure to certain things that they need but they're also trying to make money. So I think this is a great example of the silver market really is not big enough for you know if we go back the 80s was the Hunt brothers. We saw George Soros try to try to uh capture the silver market and was was had had his hand slapped and then it was Warren Buffett in the late 90s. Could could this happen through nation states and and basically they could gobble up and take control of of a lot of the supply you know and and you know silver is and you and I were just talking about that previously uh it's now on the critical mineral list um or this is being discussed along with copper so it's used in military it's used in AI it's used in so many different things that I I'm watching these investments come in and so you know how's that going to change from a retail perspective it's It's the wind is at your back and so does that mean we're going to see much higher prices for years to come? I I I think that's what most people could conclude. >> Yeah, I mean I was going to say I will expanded classification of say silver and copper meaningfully kind of alter your sourcing chains or demand patterns for silver coins or even trigger hedging flows into other metals like copper linked coins or rounds, you know. >> Well, I think where I see it as a lot of people the term merchant bank is going to be coming back. So while governments may not be trading super well together, banks stand in the middle and they do the sourcing. So I think you're going to see more of more of the banks get involved in other countries and then they end up sourcing for those governments. So yes, supply chain there's going to be more competition. So the US had a silver stockpile uh at you know about 20-ish years ago. It ran out and so it was no longer considered strategic for the US military. Could they start to build back another stockpile again? I think we're going to we're going to watch that unfold. >> Fascinating time. I mean, allied governments are ramping up critical mineral cooperation, especially around copper and even silicon. I mean, could that mean more domestic mintgrade supply or tighter competition for precious metals from industrial buyers >> 100%. So in a good great example is what we had to deal with during COVID >> is every a lot a lot of people kind of forget when we think of precious metals we kind of think just on the investment side but the amount of companies that use it the auto the autoc catalyst to to make automotive hybrids are using more and more of you know also platinum palladium and some of the other precious metals. So they all buy at the same time and they sometimes buy way more than they need. This is no different than we see at the grocery stores during during shutdowns. So, it's not that we our cities didn't have food. They just got all gobbled up. It's not that we didn't have enough toilet paper. People just stockpiled too much of it. So, the same thing will absolutely happen with precious metals. And the other thing that's going to be interesting is is offtake agreements, which means >> people with big big dollars behind them will enter into an agreements with certain mines and refineries to basically have first right of refusal on all that material coming out of that facility. So, that's going to become very critical for for for manufacturing going forward. Oh, there's so many things. I'm making notes because there's some things I wanted to follow up on. Um, including platinum because what a run it's been on. Before we do that, I want to do a little bit of a deep dive on silver. I mean, we've been talking about it here at Kicko, obviously, a lot. Our audience is very familiar with the structural deficit narrative and yet we see data from major sovereign mints like the Perth Mint reporting softer retail bullion sales in July citing seasonal slowdowns. But I guess how do you reconcile those two realities in your own business? Josh, are you seeing a clear divergence between relentless industrial demand and a more sentiment driven retail demand? Yeah, on the on the retail front, it's been quiet the last two years. And I think it's a it has really to do with a function of liquidity in the financial markets and capital rotation. And so we've kind of seen where everything's kind of risen. We haven't had a whole lot of panic since the Silicon Valley Bank 2 and a half years ago. So to me on you're absolutely right, the the the average retail buyer has not been been participating in in in in the purchasing on this move. However, um my my other company, Lyman Reserve, also had it operates as a fund and works with through the broker dealer community. It works with uh high netw worth uh family offices. They are actively either buying into it or they're looking at absolutely making an allocation. As as you look at both gold and silver, it's it's especially the on the gold side, it's outperforming bonds at every uh time interval. So, I think what you're seeing is is the more sophisticated buyers are looking at this going, "Hey, these prices aren't really that high." If we look at historical ratios between other elements such as as the as the the financial industry, the financial markets, uh, precious metals have a long way to go. And I think at some point, I think what you saw in the Perth Mint numbers is yeah, the average Joe on the street, they're not they're not buying in. But there's going to be a liquidity dump coming uh where the governments are going to be printing kind of leaving quantitative tightening. I think we're about to phase in. Obviously, you're seeing that in the states uh with with the possibility of of some a couple a couple interest rate cuts. Are they going to turn that hose on and that liquidity flows? And then that's when I I envision the retail market wakes up and starts buying and clamoring for those markets. So, when you have banks, governments, industrial players, and retail all clamoring for the same asset class at the same time, that's when you see fireworks. >> Yeah. And I mean, it just comes down to basic supply and demand, right? And I mean, many of our long-term investors have been burned by that silver deficit narrative before. They always get a little upset about it. But from your seat, what tangible evidence can you kind of point to that makes this time structurally different from previous filled rallies? I mean, is it simply the fact that this industrial demand is now so critical for this green transition and this whole tech infrastructure play that it's no longer discretionary? >> Yeah. So, we're leaving or slashleft and we're continuing to leave globalism. So where everyone traded fairly and and and in in love and harmony, that's not happening anymore. So you just had Trump and a Chinese representative just yesterday sitting down and you know Trump's trying to get more minerals and you know negotiation negotiations are going back and forth and Trump literally says you know we have some tricks up our sleeves that could totally destroy China but we're not going to do that. Well the reality even when you threaten things like that that tells you what's at stake. So absolutely I think companies, governments, you you think about military uh what is going the military going to look like in the future? And I think what we're seeing in in Ukraine and and Russia is maybe just an appetizer of it. You're seeing old warfare, but they're they're mixing in some of the drone warfare. So if if you're not building data centers to run your AI to run which is which is going to end up running your military systems going forward, you're going to lose. So you're seeing now, you know, coal p power plants are not being shut down anymore. If anything, the life is being extended. They're trying to build nuclear as fast as possible. And then combined with that, these data centers, they need all different types of minerals. So you have to secure your future. China has frankly done a better job at securing their their industrial future through through primarily the African continent. And I think now the United States is scrambling to try to catch up. >> Yeah. And I mean we focus obviously heavily on that silver's industrial side, but it's is its monetary role making a quiet comeback? I mean we're seeing governments liberalize their gold markets. Are are any sovereign clients expressing interest in minting silver legal tender is more than just a commemorative product, you know, perhaps as a strategic asset for their citizens in an unstable currency environment. >> Yeah, you know, excellent point. I think silver has been, you know, traditionally for for thousands of years, it has had a strong monetary role. I think if we were trying to look at if you're going to, you know, I I'm not in the camp that we're going to be using silver or gold at the grocery store to buy it. I don't think we're ever going to be 100% backed or anything like that, but could you have a basis? You know, could you have a core where you've got some underlying assets that they're basically building call your foundation for for your economy, uh, for your financial system? Absolutely. So, could could silver take on a role like that? We did see the central uh the Russian um the Russian central bank earlier this year. They're investigating. They're looking at it and and obviously India that's that's the bricks. So the bricks I believe they're looking at more more of precious metals and especially gold as more of a settlement layer. Uh but they want that to be kind of the the backbone of of of who they are and what they're doing. And there's no doubt that that Trump and the US administration is trying to play catch-up. >> You said a lot of foreign banks, a lot of a lot of foreign uh nationals are coming through your your walls right now. They're talking to you. I mean, I know that you're obviously not at liberty to discuss a lot of these things, but any insight into what those discussions look like? >> Yeah, a lot of it's based on tariff. I mean, Trump Trump has basically said America is open for business. Uh he wants either manufacturing to come to the United States or to work with to work with uh manufacturers. So, my manufacturing company, Scottsto Mint, obviously is is seeing a lot of interest from from from all over the world. So, which is which is fantastic. That's what Trump wants. Trump wants to bring business back here. Um, we also need raw material. We need semi-finish material, things like that. So, as we as we look to some of these partnerships, I think this is this is definitely gamechanging long term. Um, there's no doubt that Trump is competing with and I think that might have been a hint. We you alluded to it before when when Trump when when the tariffs did hit some of the Swiss bars. you know, is there I'm not saying an envy, but if if if in theory Switzerland is is refining somewhere between 60 maybe upwards of 70% of the world's gold, how much of that could potentially come to the United States? So I think long term that's where people look at a facility like like mine which also offers the high high-end vaulting uh for for these industrial players as well uh and sovereigns is is this this is could Wyoming become a new precious metals hub you know to as we as we as we work between mines refineries governments banks uh and that's really what what's being set up here. >> Interesting. So, America's back when it comes to this. I mean, we've heard about this traded, you know, east and west coal gamble. It sounds like there's a lot of discussions taking place. >> Um, you know, sometimes I say in the in the globe community, there's there's the the doomer concept that the United States is going to and don't get me wrong, it's it's got some tough times ahead there. There's no doubt. But never never bet against American ingenuity and and what's going on. And I I think um and really relationship even even I know uh you know our Canadian friends. Uh I I don't think our politicians always speak for each other, but but I see I see a lot of partnerships growing, you know, a lot of a lot of new ways. Just how we've done business in the past is really not not how it's going to happen going forward. So, um I'm I'm optimistic that that uh the right people, the right companies that that are looking at the future and and positioning now to succeed in in our new call the new regime uh will will do quite well. >> Yeah. I want to discuss platinum for a second. I mean, it's shown significant strength recently after lagging for so long. When new capital comes to you for physical platinum, I mean, what is the thesis that you're hearing? Is it a simple relative value play against gold? Are we, you know, investors now making a specific kind of forward-looking bet on its role in the hydrogen economy? What's the what's the thoughts? >> Yeah, I I probably it's just too cheap. So, it it had been sold off for the last number of years and has not participated as much. And then you've seen, and I I think this really took took fold right around when Trump took office, is EV sales and production are going down, but hybrids are going up. So, a hybrid needs to turn on more times per the day. So, you need you need more uh you actually need more platinum in in that technology for those vehicles. So, I think you're seeing the the the consumption. We saw the news when when China bought an awful lot of platinum all at once. you're seeing a growth in in that segment. So platinum platinum has a little bit more of an industrial component slash with a little bit of an inflation factor. Uh whereas you know gold has been predominantly this this past year or so has been more of a central bank monetary play. >> Yeah. Yeah. And when you're talking about the capital I mean is it still primarily kind of high net worth individuals making tactical allocations or are you starting to see more institutional or fund level interest in physical platinum? >> Yeah. um fund of funds. I mean that they're all looking at different different different components and often time some sometimes they'll they'll talk to their bank and the bank will you know banks buy from other other companies. They don't own everything. So banks are often an intermediary and then you know we've had some sovereign clients that we we talked to this bank and they they actually offered your facility as an option. Uh so you know the reality is is we could either work with existing banks that are out there or other groups. So we we kind of see it coming from from all different directions and and there's no doubt that people are feeling underexposed to to this this asset class and that trend is it's not going to stop. I think I just see this for a number of years as continue to grow. >> Precious metals and I kind of look at at my facility between vaulting and and and and vaulting and manufacturing. We're essentially a component within that merchant bank loop. So we're we're we're a key a key cog in it. Uh and if and if things are supposed to be done in the United States, uh you know, we're we're we're we're going to see just an awful lot of uh business going forward. >> I don't know if you saw the story today, but we're also seeing those shifts in the market structures globally. Just today, Vietnam uh officially announced its end to its state monopoly on gold bullion production. As someone who mints for sovereign nations, I mean, what does a move like that signal to you? Yeah, you know, oftent times, you know, larger governments, take the United States, they they have the US Treasury and the US Treasury, the only person, the only the only entity that can that can produce US currency is the US Mint. But smaller governments often time they don't have the sophisticated manufacturing and skill set. So, they outsource that component. So, I'm not really sure on on Vietnam's component, but sometimes they do turn to the private sector such as such as mine to do something a little bit different uh in in the marketplace and or to either supplement what they're doing in their in their own in their own government. Often times, governments will outsource a component whether it's that's a semi-finish product or the final product and it goes back to them. So, I can't really speak this to the specifics of what of how governments think. Sometimes they're just pushing uh and needing to push a a cultural mandate. Uh sometimes they're in it to to promote their their their country as being strong for business, strong for tourism. So there there's all different types of of of reasons that central banks or governments will will will will get into precious metals beyond just the the investment component. >> Yeah. Yeah. I mean, when you're minting currency for a sovereign nation and that nation is in a geopolitically sensitive region, what does that process look like? Are there security, logistic, political challenges involved in manufacturing, delivering, you know, a country's money that maybe an average person could never even consider? >> Yeah. So maybe, you know, I I look at Yeah. There are certain countries we just won't won't work with. So obviously that's, you know, we're we're in a whole new a whole new world of of who who to work with and who to not. But yeah, it's it's a trust factor and and these central bankers, they all talk to each other. So who you know when they go to their conferences you know I either either they had a good experience with this entity or not. And so that's usually where a lot of our business comes from um they know who we are uh and and if they need if they if they need something produced or or done. obviously being uh being being produced in the United States, there's a little bit more confidence uh that we're going to, you know, from from auditing of of of what we're producing the, you know, every single coin that's produced has to be reported uh in in within their central bank as being issued. So, so you know, we're we're we're often having site visits from from the government entities and able to to work with them best we can. >> What a time what a time to be alive. Finally, Josh, I mean, in our last interview in in February, you called this an explosive decade, and we're now deeper into it, and we just saw a bureaucratic ruling nearly paralyze a global gold trade, requiring that presidential intervention, of course, on his tweet. Has the explosion so far been less about price and more about the complexity and fragility of the underlying market structure itself? >> Yeah, it it's going to be a journey. It's not going to all well well if you if you're all if you're fully in you want it to just explode overnight, right? That but the average it's it's going to be a journey. I think what what we're seeing unfold all of 25 is just showing where where it's this is going to be, you know, for many many many years. And so we we basically the United States is in a just over a 50-year experiment of not having any ties to the gold backing. And so you weren't allowed to even own gold as an investment prior prior to Richard Nixon in the early '7s cutting the tie. So I think what we're seeing just just the chaotic is I think people are realizing, wait a minute, gold's important. I I don't I don't get it. I I was told it was a pet rock. I told uh So I think perception is changing all around the world. And if you've probably seen the videos of what's going on in China, some of their their shopping malls where they're selling gold, it's it's like it would be like the Black Fridays of of 15 years ago in the US where everyone's clamoring to get into Best Buy to get that new TV. The same thing's happening for for gold. And I think that's not happening in the United States right now. No one alive in the US has ever gone through a true currency crisis. I think we can all say we're going through some sort of financial crisis because the purchasing power is eroding even if the dollar has held strong versus other currency pairs. But where where is that going this decade? I think it's just it's to me it's fairly obvious. Uh it's it's a but it will be a journey. And so as we watch what as we watch what unfolds, I think you know channels like like KitKo I I appreciate tuning in and you have great great guests because it is daytoday hour to hour. there's a new a new uh new post on X drops. It it keeps it keeps evolving uh so fast and I think we're all just uh just enjoying the enjoying the ride. >> Yeah. Amen. I mean a lot of coffee takes a lot of this and uh it's been interesting to watch. I mean I I lived in Hong Kong over 20 years ago and I've been to Shenzhen and to some of those malls watching the amount of people going on not just for gold but silver too, right? I mean it's been pretty wild. I got to ask you, I mean, if we were to step back, I mean, obviously gold's still near a record high, silver has been declared possibly this critical mineral. Platinum is still running deficits and sovereigns are buying. I mean, when you look at the bullion landscape, do you expect the next 5 years to be defined by higher prices or by tighter access? >> Both. Both. >> Yeah, totally. um you know a lot of things are going to go up in price and then certain things are going to do a lot better even even when when the credit market gets hurt you know different things I think that's really the beauty of precious metals is it does really well when a lot of other business segments don't do well so as as the market tightens people realize the importance you know you're going to see probably companies actually putting gold on their balance sheets so you're you know the topic in 20 24 25 is companies adding Bitcoin. Well, the reality is is what's an even better asset? Uh you can take you can take loans at much better rates off of physical gold if it's held in the right vault. Uh so it's a much easier product for for businesses to to to work with. Um that's not to not to poo poo uh Bitcoin, but I do think I think that's a that's what you're going to see as we go forward. Uh Tesla even amended their bylaws, their SEC bylaws to allow for gold bullion. So the difference between bullion and an ETF is ETF's a paper product. Bullion is the physical product. So they're they're even allowed uh within their SEC rags to purchase it. So I think you're going to see as we go forward uh you're going to see more and more uh mainstream adoption. >> Yeah. I mean we're seeing it but but isn't the real risk less about the price and more about control? I mean between these governments classifying metals as strategic and then sovereigns repatriating reserves again. Could investors wake up to a world where bullion markets look less free and and more politicized than ever? >> Uh yeah. So access uh just like what they've done in you know if you kind of look at the central bank digital currencies you know that Europe is probably going to be the first to to roll out unfortunately is restricting the on and the offramps. So that's where you're going to see you know and then they can kind of in you know kind of control it tax it blacklist different things. So I think uh the same the same thing is very true with with with gold. It it currently is deemed as a um it's a collectible per IRS rules. Um so it it currently the access is is fairly it's fairly open. Trade is trade is happening. But I think long-term uh frankly gold status could could really outpace a lot a lot of other asset classes that are out there that might be even harder to on and off ramp. Uh but there's no there's you I think you bring up a really good point that we're going to be talking about over the next number of years. >> Yeah. Because I mean if sovereigns are playing the long game, doesn't that mean short-term price swings matter less than positioning yourself before access gets restricted? >> Yeah. And then and then just wait when other asset classes are are hurting or crashing. So you know there there there is the greed index when when people want to make a lot of money, but then there's the fear index which is it's just I don't want to lose. And I think that's that's when you're going to see precious metals just really start to outpace uh everything else. >> Beauty. All right. Finally, my friend, I mean, for our audience watching right now, from the season stacker to the person maybe considering their first ever purchase, what's the single biggest mistake you see retail investors make when buying physical precious metals? And what's your best, you know, piece of advice to avoid it? >> Yeah, you know, and and my company's kind of in an interesting situation where we do we do have a direct channel. We also sell to almost every large dealer really all around the world at a wholesale level. I would say is just just have a look around. You don't have to go you don't need a broker. Uh you don't need someone in the middle necessarily. So I would say, you know, just have a look around where you feel comfortable. Get price points. Um know who you're buying from, how long have they been in business, those those types of things. So I think take your time. You're not going to get you're it also don't have to do it all at once. So uh you know when everyone's like I've I've got this seven figures to buy all at once. Well, why don't you just buy a sample, see if you like it first, do a do a trade, see how that how that transaction went through. So, I think um go slow. Think of this as a journey. It's not going to be an overnight uh uh hype, which that's some some of the some of the channels talk about this is all going to happen overnight. Could it? >> Sure. But I I this is more of going to be a journey. >> It's a long game. We're treating it like the central banks who continue to buy even at these high prices on the metal. I'm surprised that they keep stacking this at these prices, too. Some of them are on auto uh Jeremy. So they're just on an auto buy program and I think you're going to see more like that and I know that personally. So they're really kind of price agnostic. They're just more it's an allocation. So each and every quarter each month they're just allocating and I think that's what you're going to see um from here on out. Oh >> be wild if just you know 10% of our population went passive with an ETF buying those spots there too then. Huh. Okay. >> Uh, indeed. Yeah. >> Yeah. Exactly. All right. That's an essential perspective from the heart of the physical market. Josh Far, CEO of Scottsdale Mint, appreciate your time as always and look forward to hearing you. Uh, you got to give me some insights. Make sure you're WhatsAppapping me when things happen. We got to get some exclusives here, Josh. >> Definitely. Well, I I appreciate keeping in touch and uh look forward to coming back on soon. >> Appreciate it. Thanks so much. And for Kick News, I'm Jerry Safford. Thank you for watching. Don't forget to hit the subscribe button. and we're going to have some great content coming at you all week long. We'll see you next time. [Music] Heat. Heat. [Music]