James Henry Anderson: US$3,600 Gold, US$40+ Silver — What's Happening, What's Next?
Summary
Gold Market Dynamics: Gold has recently broken out of a price wedge, influenced by technical factors and expectations of Federal Reserve interest rate cuts, with potential for further price increases.
Interest Rate Impact: The anticipation of interest rate cuts by the Federal Reserve is a significant driver for gold prices, as the market expects a dovish shift in monetary policy.
Bullion vs. Bonds: There is a long-term expectation that bullion will outperform bonds, with a shift from a four-decade bond bull market to a potential multi-decade bullion bull market.
Stock Market Concerns: The S&P 500 is seen as overvalued due to passive flows and concentration in a few stocks, with potential for a significant correction that could benefit gold.
Silver Market Outlook: Silver has surpassed $40 per ounce, driven by industrial demand and investor interest, with expectations of further gains potentially reaching $50 or more.
Central Bank Gold Purchases: Emerging markets, particularly China, are leading in gold bullion purchases, potentially holding larger reserves than publicly declared, which could influence global gold dynamics.
Investment Strategy: A recommended allocation of 20% of liquid net worth to physical bullion is advised, with a focus on gold and silver, considering age and risk tolerance.
Market Manipulation and Data Access: There are ongoing concerns about market manipulation in precious metals, with recent restrictions on access to critical market data highlighting transparency issues.
Transcript
[Music] I'm Charlotte Mloud with investingnews.com and here today with me is James Henry Anderson, senior market analyst at SD Bullion. Thank you so much for being here. Great to have you. Charlotte, it's great to be back um always and uh it's good to be back. I'm looking forward to this conversation. Really good to be catching up with you. It's been a while, but I think it's the perfect time to be speaking with you. It's been a historic week for gold and silver. So, we're going to jump right into it. I think we can start with gold, and of course, we'll move on to silver later, but beginning with gold. So, gold had a little bit of a a break in terms of price movement over the summer months, and we've seen it break out this week. There's lots of factors driving gold, but what's behind this latest move for you? Yeah, that that's always a great question because what you see what you end up seeing like I saw a Bloomberg article explaining what the reasons for gold popping out was and it just goes back it reminds me of when I used to talk to some of the oldtimer traders at the largest bullion trading desk in North America and they would joke with one another and say yeah when we have journalists call us sometimes we'll say any damn thing to get them off the phone and the competition is amongst us to see who can get whatever ridiculous quote published in the press. So, um, you know, the absolute concept of why it's doing this, it's probably more technical than anything else. The overall trade inevitably like you you saw the price wedging for 5 months. The question was, were we going to break down or break up? Uh, obviously we've broken up. Um, you know, I was kind of finger crossed hoping that, you know, it would break down so I could get more gold bullion around 3,000, right? The 200 day moving average is kind of critical in a bullion bull market. At some point we'll revisit it, but now it looks like we're going to revisit it at a higher level than it once would have been if we broken down lower. Um, and that's just inevitable. Like the 200 day kind of stays underneath the price throughout the entire bull market climb. Eventually it'll go back toward it even dip below it. And that's when you know you get tested in terms of your your thesis whether or not it's still legit and you have to go back to the fundamentals, the structure, the system, all the reasons why you own it, reconsider that. Has anything changed? And most likely it has not because we have a lot to go through before it changes. So in the short time term, you know why it's doing that, exactly why it's doing that. The gold market is mostly opaque. You don't really have a full realtime understanding as to what's happening. Price action tells you, you know, it's broken out. Very true. And so I'm curious in that case to get your thoughts on the Fed. There's been a lot of talk about the gold prices moving because there's expected interest rate coming from the Fed later this month. So, are you are you looking at that? Are you paying attention to what you think could happen there? Yeah, that definitely helped. I mean, the Jackson Hole situation, they literally just said, "Yeah, I mean, we're ready for some cuts." So, you basically have a market where gold is kind of front running. Gold typically will front run things before anything else happens. So, that definitely could be one of the reasons why this is happening. I mean, it's basically looking ahead and thinking, well, you know, Trump's going to get his way and Jerome Powell's going to move out and some Dub's going to come in and they're going to do whatever they got to do yield control-wise to get the rates to come down. And I mean, I'm talking offshore special purpose vehicles, literally printing currency out of thin air, jamming bonds into it, whatever they have to do to get the yield curve down, they will do it. So, that will definitely be one to watch moving forward. So, any other factors right now that you're really paying attention to when it comes to gold? We mentioned that there's there's so many different ones out there and what are you what are you looking at most closely? Most closely when I look at the gold market I look at right now the bond market has been getting its head handed to it for 5 years. There may be a reversion in this cut cycle for bonds. Okay, bonds probably will outperform for a while you know in in a cutting cycle but it won't last. Ultimately this is a bullion over bond trade that's going to go on for decades. Okay, you had a bull market in US bonds from 1980 to 2020 roughly. Um and so that's four decades. Okay. So, you know, common sense says for the next two decades, you're going to see bullion crush bonds overall. Uh the other one I'll look at is US stocks, which is super important. uh once you get a real shakeout in US stocks and people thinking recession and or fear the the flows into gold will start to come and then related flows into silver eventually will come as people learn about the beta bet that silver plays especially once the recession subsides the inflation kicks on the emerging markets need more industrial silver etc etc and then the solar value trade down the line when people are looking at the currency literally burning up in their pockets I mean it's already pretty common place like I talked to average people like the other day I was sitting just having a little drink with a lady who ran a halfway house shop at a golf at a golf course. And you know, she's just bitching and moaning about the prices of groceries, how they basically doubled in recent time. And I mean, this is common. This is everywhere. So, we're not that far in terms of the psychology that that requires to really break and you get really massive flows and people really afraid of what that currency's value is going to be. Maybe we talk a little bit more about the stock market. I know you've posted on X about what you see going on there with the S&P in a bubble perhaps going back into parody with gold. So that's that's pretty interesting. Can you go into what you're seeing there? Yeah. So the S&P 500 has, you know, obviously been levitated in the last 5 years with all the injections of currency into the system, but when you actually go and look at the underlying mechanics of what and how it operates, right, with passive flows and how how absolutely like there's only like a few stocks that take up a huge portion of the S&P 500. If you have those stocks come down, you you'll have a big move in the S&P 5 back under. Now, look, the powers that be are not going to allow. They're going to step in and whatever it takes to try and keep that stock market nominally looking good. They want to keep all the sheeple in that stock market as long as they possibly can because the insider class, the corporate rich, the executives, they want to they want to get wealthy. And that's generally in the United States how a lot of people get wealthy is through being the heads of corporate corporations. Okay? as over as over as overpaid as those people are as ridiculous as they rationalize their pay versus the average employee within their companies that is the country we live in that is the culture we are in so you have to keep that in mind what's will end up happening is if you look at like Argentina and or Venezuela and you look at their their silly stock markets they look cool because they're going up not only up the chart but in real terms in gold and silver terms they are losing big time and that will be the same way here you look at the stock market especially a long. I'm talking a 100red-year chart. You look at a 100-year chart, you see a pattern that's very obvious. We're on a rollover pattern now. Gold um you know it rolling back nominally to match the S&P 500 one to one. Meaning six, you know, let's say 6,500 is the S&P 500. Gold's at 3500ish. For gold to go to 6,500 and match the S&P 500 is normal. That is the historic norm in the mid-range of financial history in the United States. It is only the last 20, 30, whatever 40 years that you have cognitively been biased to think that stocks always win. No, they don't. There are decades, times where people eat it by owning stocks. Go back in the 1930s, 1940s, terrible place to be. Go back, I mean, bonds, similar similar story. You have secular bears that can last for a long time and commodities and precious metals can do extremely extremely well. And I think we're heading into that era. you know, this decade toward the end of this decade and the next, you're going to have a thing where where we're where basically the value of real things that we have to have for our modern day, you know, world, um, they're going to shoot up in terms of relative value versus all these paper assets and all these bubbles that have been super overvalued. I mean, you have a situation where gold, I mean, just one to one, that's the starting point. We're going to probably go beyond that. Gold will go beyond the S&P 500. And then if you look at silver, the chart's even more ridiculous. split it's even more well how would I say it's even more on steroids right I mean silver to do a 10 bagger in real real value in terms of buying power the S&P 500 is something that would be completely within the historical norm from here until there and that's probably in the 20 2030s when it does that 10 that 10x gain against purchasing power in the S&P 500. So um I am aggressively uh probably overly so in bullion and I'm obviously talking my own book but I this is my book. This is my pocket. and I keep my eyes on it and I tell people precisely why I'm doing it and I show them with data. It's not just simply, you know, me just saying these things. These are real, these are real numbers. These are real facts. You can go look them up. Absolutely. And when you're having these conversations with people, what is the level of interest in gold that you're seeing in the West right now? Because that's been a a key question that I've been asking a lot of people about when does that start to shift toward interest over here. Yeah. So in the west, just for instance, in my own personal life, in my people in my circle, you know, a guy who's been a longtime bond trader who I grew up working for at the golf course, you know, the other day I saw him and he talking to me and he's saying, you know, like they've been li they've been buying a lot of gold, you know, like he's this bond trader. He talks like this, you know, like yeah, he's uh he's one of the best characters there at the course. But like when you hear that guy saying like gold is good, you know, like it's like you got a bond trader who's saying like he understands why I'm so bullish gold. Um, and so, so yeah, I mean, you have a situation where people who are within those industries fully understand it because they they actually spend the time to look it up, but the average investor still, no, they're still in delusion land. They still think that what what the number on the screen 6500 S&P 500 is true wealth and it won't ever disappear in real value terms. But, uh, you know, like I like I'm suggesting that's inevitable. It's going to happen. and you're going to have gold chased back to match it and then beyond it in time. I'm curious what you see coming from central banks. So, we know central bank buying has been very supportive for the gold price. As the price continues to rise, do they keep buying at these levels or or what do you think is coming? If you had a currency creator desk over there and you had all these different fiat currencies sitting over there and you had all these bonds that they could freeze at any moment in time um and you were in emerging market and you were in a situation where maybe you're not in the best light or thought of in terms of the United States andor the western uh hemisphere, you might think twice and that's precisely why the emerging market is a leader in this uh record size gold bullion buying. I'm talking larger than anything that's ever been done in history. um even more so World War II and and to now. So that's year after year after year they've been doing it and this is only what we can figure out like you know they declare a certain percentage there's a small section where we we go to the OTC markets and people make estimates but they always forget that literally from 2008 to like 2020 they they weren't there they weren't doing the estimates but there was massive amounts of gold that got that moved out to the east especially China. So, the concept that China doesn't have um multiples of what they publicly claim, I'm talking multiples. The only question is, you know, when they're going to declare it, why according to their agenda, but at some point they're going to come out and they'll probably end up having larger official gold reserves than anyone in the world. Wow. And so, I would think that all the bricks are tied up in all of this as well. So, when you're looking at this, how are you fitting the bricks and and kind of the growing dominance there of the bricks into this picture? Well, it's an important thing. I mean, they're they're going to keep growing. If you look out in the world and you think 10 20 years down the line, I mean, the Silk Road is going to develop a lot. Uh that that whole area of the world has a lot of room for growth and it has a lot of smart people and has a lot of people who want to play and work on the same page. Uh so they actually start making um real returns on the things that they're pulling out of the ground, you know, in terms of commodities and or energy, etc., etc. And so, you know, in a commodity bull market, those people are going to inherit a lot of real value gains. That's just inevitable. And these are landlocked countries. They don't have to go overseas all the time. So, they can, you know, they can rule um one of the, you know, the largest land mass together. You know, they trade well and in balance. Um they can rule for a very long time. So, to me, that concept that bricks are going to like, you know, subvert the the dominance of the dollar, that that's nonsense. That's like clickbait headlines. But on the long term, you know, when you get the emerging markets working together, trading together, using literally using new technologies where they can trade currencies without the US dollar as intermediary, that is dollar bearish. There will be no dollars between their trading. That is not good for the US dollar's long-term purchasing power. Yeah, I think it's really important to to look at the big picture there. And so you were mentioning at the beginning of this conversation, we were at a point where gold was either going to break up or down and we've seen it go up. So I'm wondering when you look at the price right now, where do you see support and resistance levels for gold at the moment? Yeah. So right now, let me just pull the chart up so I'm not speaking out of turn here. You got um a pop that's blown beyond the 3500. 3500 will be the bottom. you know, if it dips below that, then maybe we'll have a little bit of time, you know, going down and retesting some stuff. But 3500 is super key. Stay above that. Uh see if we can clear 3,600 soon, you know, in terms of spot price. Obviously, people love to show futures prices, but remember spot price is king. That's what really matters. Um and then, you know, on the down like the 200 day, if it stays up here for a while, the 200 day will keep rising. I I haven't looked at the 200 day lately, but it's probably well over 3,000, maybe 3,30 or so. 3040 it keeps climbing. Like I said, you know, if you're in this market looking to get some gold bullion, you know, you could if you have a position already, then you can, you know, you can just basically wait it out. If you don't have a position already, then you better start. You know that that you start onesie, twos, you kind of dollar cost average in and start building a position. And the same goes with silver. You know, it's basically I, you know, the fact on a relative basis that they're so cheap versus the stock market and fiat currencies and virtually every other thing you can name on a long-term chart is why you definitely need to have, you know, an aggressive position in gold and silver. I mean, I would argue 20% of your liquid net worth needs to be allocated to bullion at this time. Yeah. Yeah. Well, that answers one of the questions I was going to ask you, which is of course, how much gold and silver should you own? So, it's at that that 20% level at this time. Yeah. So, let's say I have, you know, my own private business. I'm not talking about that. It's not your enterprise. Keep that out. I'm not talking about your residence. I'm talking about your liquid net worth. Say you have a million dollars, you know, mixed amongst stocks, bonds, etc., etc. Well, $200,000 of that needs to be allocated into physical bullion that you own outright privately outside of this system in case the worst comes to pass. And you know, you give me some time, I could paint some really ugly things, but um you let's hope that for the best, but let's prepare for the worst. And that 20% allocation in that situation is going to do very well where the other 80% may not do so good. And how would you how would you split that between gold and silver? That's a personal question. It depends on your age, right? Like I'm 45 years old. I got time, you know, so I'm aggressively positioned in silver. Uh but I do own some gold. I do own some platinum. Now, if I were 65, I would probably have much more income, right? I would have depending on my health and longevity feelings and my, you know, whoever my children were and what they're like. Um, you know, these are all things to consider. So, but um but gold is is nice when you get larger sizes because it's very tiny, easy to hide, easy to, you know, it's it's super small. I mean, I literally $200,000 in gold I can hold in my hand. It's it's nothing. I mean, it's so easy to keep discreetly. Uh silver is a little bit different. 200,000 I'd be sitting on a couple stacks of silver here, you know, literally. Um so it's a little bit bigger, a little more cumbersome. So it's a younger man's metal, whereas gold is the older older person's uh holding because it's less volatile and and you know what you want is is less volatility as you get older, whereas silver is going to be a wild ride. Platinum too, I would consider platinum bullion, I think uh on the long haul, is very cheap um versus gold on a on a long-term chart. And at some point in my life, uh, gold is and platinum are going to meet again. And platinum is going to probably go beyond gold, I think. So, it's it's but it's a long hey it's a long wait. It may take 10, 20 years before that happens, but it will happen again. It's happened before. That's how financial history works. Yeah. Yeah. We see the same kind of repeating cycles. So when people are looking at these physical bullion products, I'm wondering I always like to ask you this question, where are you seeing the vest best value right now in terms of gold and silver products? So right now the um premiums on American silver eagles and I'm going to speak on a United States perspective um because that's where I am and that's where most of our customer base is and that's where the majority silver bullion buyer in the world is. Um, the American Silver Eagle is I still think the best. If you can get them around three bucks over spot for the long haul, that's a good bet. I wouldn't go all in on just silver eagles. There's other options, but I definitely would keep a large allocation to silver eagles because there's times where they go into premium and you can arbitrage with them by when they say or you know during the co era they went 10 $20 over spot. Well, selling them back to dealers and then getting them into generic and converting into generic ounces from there in like 100 ounce bars or 1 oz rounds or what have you, you had the ability to increase your ounces with with like no risk. Like as long as your counterparties are solid and you know them, uh you literally could increase your weight by 40%. And such a trade and and it's literally like you sell, you buy. There's no, you know, it happens very very quickly. Um, so silver eagles to me 90% silver if you're a US citizen. Junk silver I think is a really nice purchase because you can get it now at spot and or below spot depending on where you are. Um, we have a situation where there's so little retail appetite at some at some moments where 90% silver still ends up getting sent off to refineries and melted. So they're not making any more of those. And I would suggest two or three generations from now those will be collector's items. So for me, 90% is something I probably pass down. Silver Eagles is something I use to arbitrage and flip to get more OZ. And Silver Eagles, there is no doubt in a in a real squeeze. They're the number one product. They are in the United States. People just spilled all over them. They love them. Very helpful. And so in the past, we we have had situations where it gets harder for people to actually get their hands on physical gold and silver. Do you see a point in the future as prices rise where we see that happen again? So the the points when that happens is fear driven. Okay. So if you get a situation where black swan creates some type of liquidity crisis and you have a pairing down like literally like everybody wants their capital back situation. Well that's when bullion goes off the shelf. In the United States, there may be about five billion of like liquid like bullion on shelves ready to be sold by dealers if you add it all up. Maybe I mean it's not much. It's really is not much. So you get a push an impetus like the Silicon Valley bank situation like that that that drove record sales throughout the United States. Um you had running, you know, you had banks, you know, bank runs happening about four or five of them, you know, had to shut down and or rejigger themselves. and you had a real fear and that the banking system was going to go under. You get something like that and immediately all the stuff on the shelves goes gone, the you know the premiums jack out and then you have these long delivery delay times. You don't want to get caught in that situation. You want to get ahead of that. And this has happened multiple times in my career. It's going to happen again. It's inevitable. I've saw it in 2008. Saw it in 2023. I've seen it in other spurts and starts and during COVID. It's going to happen again. So that's inevitable, right? So, we need to be prepared before that happens again. And so, we've been talking a lot about gold. Let's move over to silver and look at what's going on with the price because, of course, it's an exciting week for silver as well. We saw it got get past $40 per ounce since I think the first time since 2011. So, I'll ask you the same question I asked for gold. So, we know underlying drivers for silver. What is it that's pushing it this time right now? So you know right now you have a spot gold silver ratio at 87 which is historically very very high. So but you have a situation for silver where the industrial demand is more than anyone ever thought was coming on in the last 5 years. It's been relentless and it's grown so much now that you have annual deficits that are becoming commonplace and headlines. So what you're ending up happening is is people who are seeing this and higher net worth investors are starting to move in um and allocate into silver. So, it's bringing along combination pressure between industrial demand and the fact that you're going to start having people betting on it in terms of uh short short to medium-term trading to try and make beta over gold. They want to see, you know, if gold's going to do well, silver's going to do better. That's that's how they see it. And so, um that's what's happening a lot of. And you also see some of the miners doing well. So, the entire complex, right? I mean, I'm talking from not just the bullion markets. Right now, the retail market's a little slow. Um, but in terms of the actual places where the price discovery mechanics are happening, you have a lot of people coming on. Momentum traders are starting to come on and they're starting to see silver running from 40 to 50 and having a battle for 50 and who knows what after that. But but these this is the this is the era where you're going to see a lot more trading and not just in the comics but also over in China the Shanghai futures exchange you're going to see it in a lot of different places. Uh, and you're going to see, you know, China, if you look out far enough, you you would expect that in China there'll probably be a ring of people, a ring of really wealthy guys who are going to go long and silver, and there's probably going to be, you know, all these allegations of new Chinese Hunt brother types. You know, that that's probably inevitable as time goes forward, right? And you're mentioning that that $50 level, which of course everybody likes to look toward for silver. And a lot of the time in the past I've heard, okay, if silver gets past 40, then it's a relatively easy path to 50. So I'm wondering how you see it. I know prices are hard to predict, but what are you thinking? I mean, there's people in the industry who I respect who are saying 50 could happen this year. And these aren't just like random dudes on Twitter. These are guys who've been trading, you know, in the comics since gold became tradable in the comics since 1975. I respect these folks and their um and the methodology they use to come up with such a bold public claim. Whether or not it happens this year and or next year and or 2027, you know, the only the only thing that can kind of get in the way would be a deflationary, you know, collapse type of situation where, you know, you get a 2008 type deflation that comes and crushes the system and spot prices start falling. That one thing that that does occur, what'll end up happening is you have a bifurcation. Bullion will stay up here and the spot price might stay here, right? So your downside in bullion is very limited. It's an asymmetric bet in the sense that it has multiples to the up and it has very little limited down at these levels and given the situation we're in. Um yeah I mean the fact is whether or not it happens now 50 this year or next year or it's like a psychological number. It really means absolutely nothing in terms of, you know, what did $50 buy you in 1980 in terms of real world goods and services versus what $50 in 2011 even bought you in real world goods and services versus today. Now, if you use like the rigged inflation data that the government has been rigging ever since 1980, ever since the last time gold and silver almost crushed the entire system, well, it it's like silver should be triple digits just based on their own rigged data looking backwards. So if you actually use more of a free market 1980 approach to doing it, the silver price gets absolutely ridiculous. I would sound crazy if I started spitting those numbers. So the the concept of of silver hitting triple digits um even by the end of this decade, but certainly in next in in terms of the nominal fiat dollar price is is a no-brainer to be you can see it. It's coming. Um you know, ultimately the question is not really the nominal price, it's what you what it will buy you in real world goods and services. How much of a median house can it get you in terms of ounces? How much of a, you know, the S&P 500 can it get you? I mean, you have to base it, you know, you have to measure it based on like the most important asset classes, the largest ones with the biggest data sets to get a feel for what is undervalued, fair valued, and or overvalued. Because at some point, we're going to get toward fair value, and then at some point we're going to get into overvalued. And by the time we get an overvalued, uh, I'm not going to be here talking and pumping silver. I can guarantee you that. So that that'll be a different era. I think that's a really fair assessment. And in terms of the silver price, so we've we've talked in the past about precious metals price manipulation, especially when it comes to silver. And so when we see the price moving like this, what does that tell us about manipulation? Is is the grasp becoming less? What what is going on here? So the manipulation that that we constantly saw in the 2010s was more obvious and more apparent. Uh there's always a short side that wants to induce, you know, sell-offs. There's always a long side that wants to make the price go higher, whether or not they're conspiring at what times of the day. You know, some of these trades, they look a little bit artificial. You know, that's one thing like a lot of people will spend hours and hours talking about this. And in the end, like, you know, it's like it's it's a lot of egos just just battling over points that no one can prove, right? And so you have a situation where I believe that we have systemically suppressed gold and silver prices based on the system, based on the fact that derivatives ultimately for the most part are the things that discover price week to week, dayto day, year to year. And that has been the case for a long time. And the derivative markets uh you know in terms of the size of them compared to the actual physical markets, it's just ridiculous. The the fact is is that you basically have to have systemically suppressed gold and silver prices in order to have full fiat currency cartels that we have had for 55 years running. And you know, the bond market is starting to illustrate that that's kind of unraveling. Uh but the bond market, you know, that is what kind of kept everything in check. But if that starts to unravel, you have a situation where gold and silver renumerate, revalue, they start showing you exactly what they are. They are money much better than any of these dumb fiat currencies we've ever used. These fiat currencies were ultimately founded on being originally a weight of gold and silver. And now the reversal of that is going to recount in terms of real value. Gold and silver are going to attract a ton more value as these things come undone and unravel. Thanks for going into that one. I think it's it's important to cover. Very tricky but but important to go over. And in in silver, you had mentioned before we turned the camera on, you had some current events that you wanted to take a look at here. So, I'll turn it over to you and we can we can go over what you're seeing there today. Sure. So, there was an email I got this morning and I figured it was inevitable. Um, the LBMA publishes their data for uh London Gold Fix and London Silver Fix price data. Um, and they published it and they've had it on their website for a long time. And you know, in this industry where people don't have huge uh, you know, net worths, they're just running websites kind of like a mom and pop. uh you have people who will simply scrape that data and then use it for charts etc. So one of my colleagues in this industry, one of the best uh Nick Lard out of Australia got an email this morning basically and more or less wasn't necessarily threatening them but it was basically saying hey buddy you got to take that data down andor join our our club and pay $50,000 a year or whatever it costs to get their private data. Uh I'm sure it's something you know ridiculous that only banks can afford and and institutions. So basically they're just threatening them to say like look you can't use our data any longer so take it off. Um and that's the problem. The problem being is that that data is uber critical to understand where we have been and to understand how they have suppressed the market. You can take that data and you can look at various charts that illustrate that the western world has been using the price fixing schemes that they had for decades and decades and or the comic system or the other lever you know London uh trading markets the the the local London etc etc whatever all the different names they have there uh you can use that data and you can see how the eastern world has bifurcated has run away in terms of price discovery versus the western world uh and so you have a situation where they totally have gone on the other the two different two different directions. And on the silver chart for instance, like the silver chart is the one that I key on a lot for silver. Um it it literally like you you have a situation where I can tell you the data in 1970. The chart starts at $1.92 and a half cent an ounce, right? $1.92 an ounce. Okay? So it runs for 55 years. You have spot now at $40.70 some odds on the chart. Uh so for the last 55 years it's run from $1.92 to 20 cents an ounce in uh New York trading hours in comics hours. So it's just simply gone downward in a multiple of almost uh what is that 10fold downwards whereas uh the eastern side it's now at $387.31 cents an ounce right so this huge bifurcation I'm talking about on this chart there are four times uh in silver full fiat currency era history where the blue and the red line have met recon converged there will be a fifth time and it will be in triple digit landing so that is the point I mean the point is is I think LBMA really personally I I think they're embarrassed by the fact that they're literally getting you know more or less shown throughout the the world like hey like look at this market that pretends to be you know so functional but look at the data like don't listen to the words just look at the data and see how their system has more or less given like Russia literally Russia it gets over on this fact like Russia got saw that this was happening in the mid 2000s they went out and they had a policy to essentially move about 30% of their sovereign wealth into gold bullion and then they went into war and they had that gold bullion pile thanks to this rigging of the price for the last what 20 years or so and and and now everyone looks around and thinks well how is Russia so powerful well it's cuz you jacked with the price you know you basically had all these London traders making their bonuses you know so so now we're in a situation where where great nice job you corroded our entire western world and you have a situation where Russia China etc are now converging They have massive power, massive fors of gold. They you It was a judo move essentially. And and and the reason why is so so people who trade on these derivative desks can make their quarterly bonuses. That's essentially what it is. And the people down in emerging markets who mine the stuff out of the ground, who cares about them? I want my bonus. You know that that's how these people think. Well, I think this really shows how much is going on behind the scenes that the average person, even if you're following Gold and Silver, you might not know about this. So, do you have any advice for people on on how they can keep track of some of these more behind the scenes movements? So, on every week on SD Bullion's YouTube channel, I publish a you know, SD Bullion's weekly market update. Uh, it's generally like a 10 to 20 minute video. Um, you know, you might be overwhelmed if you first showed up and you don't really know much about the market, but once you kind of start to understand the verbiage, the lexicon, what's going on, uh, if you're a left brain, if you like data, if you like to see charts, etc., etc., you'll probably end up enjoying it. I try and make it somewhat sarcastic and somewhat darkly humor. We have, we have a little bit of fun in it. Um, it's not super politicized. I try and keep it really down the barrel with gold and silver related. Uh, and so yeah, I would say come to the SC Bullion YouTube channel, check out the weekly bullion market update. You can come on my Twitter feed, check that out. Um, and you know, there's all types of resources. Just reach out to me on Twitter if you're if you're a newbie and you have no clues. Just I, you know, I I answer virtually anybody that asks me things unless it's a bot and then I just, you know, kick them to the side. But normal people, if they come to me and respectfully ask questions, I I'll point them in the right direction. Well, I'll I'll link to your channel in the video description. and I always enjoy the the weekly updates that you do. I think they're they're a pretty fun watch. So, encourage people to check that out as well. And a little bit more on silver, the other point I wanted to mention to you. So, a week ago, maybe a couple weeks ago at this point, we had silver added to that draft critical minerals list in the US. So, I wanted to get your take on that. It sounds like it's it's not quite official yet, but heading in that direction. Do you think it will come to pass? Will other countries follow the lead there? Is this important? Any thoughts? It is important. I mean for a long time platinum has always been considered a critical metal because of military etc. Right. It's super key for any type of you know jets or things that military use. Uh whereas silver is super key too for the military. Uh and and so you've got to have it for nuclear power. You've got to have it for virtually anything that's that's big in terms of scale industrially. You've got to have silver. So, um the concept that it's finally being admitted that yes, it's a critical mineral and yes, we have to have it. I mean, that's a fact. In the United States, we use um we have we have to import literally six times the amount that we actually mine per year. So the amount that we have to mine like we only mine a certain amount like like the fact is we use five to six times uh you know internally for production for different things industrially or for investors who buy it in bullion form we have to get five to six times what we actually mine in our own land of silver. Uh so we have to have it and the only way that you're ever going to get bullion stackers to turn around and actually sell their silver is you have multiples of spot price. So, you know, if you want to keep the spot price at these artificially rigged levels, then it's fine. You're going to keep having deficits and at some point you're going to start running into walls. Um, but if you allow, I'm sure in a controlled manner, but if you allow silver to go back toward where it relatively should be in in terms of reality, it should be triple digits, uh, then you'll actually see start seeing some flows and it's not, you know, there will be stackers who will be moving, you know, moving out of silver at a triple digit level per ounce for sure. So there will be recycling that will occur. But, you know, on the long long-term scale, if you look out, you know, decades and decades, we have to have silver. We've got to have it. It's just a fact. And so, mining is going to probably become much more important, especially in South America. China's already there. They're already frontr running everyone. They're already down there um setting up deals, you know, shipping the metal off to Chinese refineries, uh, directly from South America. That's where the most proven reserves are. And um so yeah, I mean it's it's just inevitable that that that silver is just we have to have it. You can't we can't have this conversation today without it. It's just it's one of those elements we just have to have and it's limited supply. That's just the way it is. Yeah. And well, I think that's how they would define a critical mineral. So it does sound like it makes a lot of sense. Okay. As we're as we're getting to the end here, I remember when we talked last time, you were saying that this was going to be a bullion bull market first and then, you know, maybe later down the line we'd see the mining stocks participate. And it seems like we're getting to that point right now. So, I'm just wondering before I let you go, any comments on the mining equities that you would make at this point in the cycle? So, generally, uh, the mining equities, the majors start to move first, then the mid tiers maybe will get a little bit of action. the juniors, not until much later in the mania phase. The juniors, by the time gold and silver go in their mania phase, you're going to get every every scoundrel, every every type of crooked person you ever saw in the cryptocurrency market, they're going to show up and be pumping juniors constantly. So, expect that that's coming. Um, but ultimately I in in what I believe is this is a a this is a kradia of winter. We're going through a restructuring of the system. And so, first and foremost, I want my capital in my hand, and I'm not so concerned about the return of capital. And miners are risky. And if you look at a long-term chart from 2007 until now, bullion has handily outperformed miners over that time frame. For the most part, there's a couple blips where miners do okay. And I think we're going through a blip right now where miners are doing okay. But you have a system you have a situation where where where you have the structure of a system uh nations they're going to you know like everything is up for grabs right and you have a situation too where inhibit inhabitants of these countries uh who work in those places and who know those that they have proven reserves like that they're going to start shutting things down. I mean they're not going to put up with it if they're not making enough money. So and then as well you know governments always will start nationalizing etc etc. So, you just have to be jurisdictionally very very respectful of what you're doing and allocation wise, you have to be very smart about it. This is not a lot lucky lucky lottery ticket. Do not go out there and throw up like 12 juniors and think that that's going to be, you know, your mix to like ride the bull market. That is an absolute clown show uh idea of how this is working. What you should do is get a very foundational strong position in bullion. And if you want to speculate in miners, do it. But just know that you can and will get jacked. I got jacked once and I had I had a good position Russian minor uh and when Ukraine happened froze it still frozen you know so from that moment on I just thought you know that's more or less the universe telling me I'll play with minors maybe later on later on but right now I am bullion focused because right now we're going through a destruction phase and in the destruction phase you want bullion makes makes total sense and gives a really good idea of where your focus is right now so I We'll let you go unless you had any final thoughts on the markets or if you want to let I guess we already mentioned where to find you but if you want to go over that again. So the one thing I would suggest people remember is that uh right now coffee for instance in the commodity market is in backwardation and so what that means is that there's limited amounts of coffee in warehouses right and so the cash price is much more expensive. I'm talking the price right now over the table from big bags of coffee is over the price of the futures. I I don't care what future it is. It's underpriced. what the spot is right so it's in full backward full backwardation at some point at some point I'm suggesting that silver likely will go and do full backwardation and maybe even gold I don't think gold has been but if you see a situation where silver is in backwardation it is going to go straight up straight up you know it's going up I mean that it it happened it happened multiple times in the 2000s and that's where many of the many of the major silver bull markets uh occurred and it's not even close to happening yet right now uh but in the future learn what backwardation is monitor it if you get a full silver backwardation that is that is literally like alarm bells ringing and if gold happens look out Jack something really wrong is happening okay well that is where where we'll wrap it up for today this was really good I think you you left me with a good understanding of where we're at for gold and silver so thank you very much for coming on to talk today all right thanks Charlotte it's always good talking with you of course once again I'm Charlotte Mloud with investingnews.com And this is James Henry Anderson with SD Bullion. Thank you for watching. If you like this video, make sure you hit the like button and subscribe to our channel. We'd also love to hear your thoughts, so leave us a comment below. [Music]
James Henry Anderson: US$3,600 Gold, US$40+ Silver — What's Happening, What's Next?
Summary
Transcript
[Music] I'm Charlotte Mloud with investingnews.com and here today with me is James Henry Anderson, senior market analyst at SD Bullion. Thank you so much for being here. Great to have you. Charlotte, it's great to be back um always and uh it's good to be back. I'm looking forward to this conversation. Really good to be catching up with you. It's been a while, but I think it's the perfect time to be speaking with you. It's been a historic week for gold and silver. So, we're going to jump right into it. I think we can start with gold, and of course, we'll move on to silver later, but beginning with gold. So, gold had a little bit of a a break in terms of price movement over the summer months, and we've seen it break out this week. There's lots of factors driving gold, but what's behind this latest move for you? Yeah, that that's always a great question because what you see what you end up seeing like I saw a Bloomberg article explaining what the reasons for gold popping out was and it just goes back it reminds me of when I used to talk to some of the oldtimer traders at the largest bullion trading desk in North America and they would joke with one another and say yeah when we have journalists call us sometimes we'll say any damn thing to get them off the phone and the competition is amongst us to see who can get whatever ridiculous quote published in the press. So, um, you know, the absolute concept of why it's doing this, it's probably more technical than anything else. The overall trade inevitably like you you saw the price wedging for 5 months. The question was, were we going to break down or break up? Uh, obviously we've broken up. Um, you know, I was kind of finger crossed hoping that, you know, it would break down so I could get more gold bullion around 3,000, right? The 200 day moving average is kind of critical in a bullion bull market. At some point we'll revisit it, but now it looks like we're going to revisit it at a higher level than it once would have been if we broken down lower. Um, and that's just inevitable. Like the 200 day kind of stays underneath the price throughout the entire bull market climb. Eventually it'll go back toward it even dip below it. And that's when you know you get tested in terms of your your thesis whether or not it's still legit and you have to go back to the fundamentals, the structure, the system, all the reasons why you own it, reconsider that. Has anything changed? And most likely it has not because we have a lot to go through before it changes. So in the short time term, you know why it's doing that, exactly why it's doing that. The gold market is mostly opaque. You don't really have a full realtime understanding as to what's happening. Price action tells you, you know, it's broken out. Very true. And so I'm curious in that case to get your thoughts on the Fed. There's been a lot of talk about the gold prices moving because there's expected interest rate coming from the Fed later this month. So, are you are you looking at that? Are you paying attention to what you think could happen there? Yeah, that definitely helped. I mean, the Jackson Hole situation, they literally just said, "Yeah, I mean, we're ready for some cuts." So, you basically have a market where gold is kind of front running. Gold typically will front run things before anything else happens. So, that definitely could be one of the reasons why this is happening. I mean, it's basically looking ahead and thinking, well, you know, Trump's going to get his way and Jerome Powell's going to move out and some Dub's going to come in and they're going to do whatever they got to do yield control-wise to get the rates to come down. And I mean, I'm talking offshore special purpose vehicles, literally printing currency out of thin air, jamming bonds into it, whatever they have to do to get the yield curve down, they will do it. So, that will definitely be one to watch moving forward. So, any other factors right now that you're really paying attention to when it comes to gold? We mentioned that there's there's so many different ones out there and what are you what are you looking at most closely? Most closely when I look at the gold market I look at right now the bond market has been getting its head handed to it for 5 years. There may be a reversion in this cut cycle for bonds. Okay, bonds probably will outperform for a while you know in in a cutting cycle but it won't last. Ultimately this is a bullion over bond trade that's going to go on for decades. Okay, you had a bull market in US bonds from 1980 to 2020 roughly. Um and so that's four decades. Okay. So, you know, common sense says for the next two decades, you're going to see bullion crush bonds overall. Uh the other one I'll look at is US stocks, which is super important. uh once you get a real shakeout in US stocks and people thinking recession and or fear the the flows into gold will start to come and then related flows into silver eventually will come as people learn about the beta bet that silver plays especially once the recession subsides the inflation kicks on the emerging markets need more industrial silver etc etc and then the solar value trade down the line when people are looking at the currency literally burning up in their pockets I mean it's already pretty common place like I talked to average people like the other day I was sitting just having a little drink with a lady who ran a halfway house shop at a golf at a golf course. And you know, she's just bitching and moaning about the prices of groceries, how they basically doubled in recent time. And I mean, this is common. This is everywhere. So, we're not that far in terms of the psychology that that requires to really break and you get really massive flows and people really afraid of what that currency's value is going to be. Maybe we talk a little bit more about the stock market. I know you've posted on X about what you see going on there with the S&P in a bubble perhaps going back into parody with gold. So that's that's pretty interesting. Can you go into what you're seeing there? Yeah. So the S&P 500 has, you know, obviously been levitated in the last 5 years with all the injections of currency into the system, but when you actually go and look at the underlying mechanics of what and how it operates, right, with passive flows and how how absolutely like there's only like a few stocks that take up a huge portion of the S&P 500. If you have those stocks come down, you you'll have a big move in the S&P 5 back under. Now, look, the powers that be are not going to allow. They're going to step in and whatever it takes to try and keep that stock market nominally looking good. They want to keep all the sheeple in that stock market as long as they possibly can because the insider class, the corporate rich, the executives, they want to they want to get wealthy. And that's generally in the United States how a lot of people get wealthy is through being the heads of corporate corporations. Okay? as over as over as overpaid as those people are as ridiculous as they rationalize their pay versus the average employee within their companies that is the country we live in that is the culture we are in so you have to keep that in mind what's will end up happening is if you look at like Argentina and or Venezuela and you look at their their silly stock markets they look cool because they're going up not only up the chart but in real terms in gold and silver terms they are losing big time and that will be the same way here you look at the stock market especially a long. I'm talking a 100red-year chart. You look at a 100-year chart, you see a pattern that's very obvious. We're on a rollover pattern now. Gold um you know it rolling back nominally to match the S&P 500 one to one. Meaning six, you know, let's say 6,500 is the S&P 500. Gold's at 3500ish. For gold to go to 6,500 and match the S&P 500 is normal. That is the historic norm in the mid-range of financial history in the United States. It is only the last 20, 30, whatever 40 years that you have cognitively been biased to think that stocks always win. No, they don't. There are decades, times where people eat it by owning stocks. Go back in the 1930s, 1940s, terrible place to be. Go back, I mean, bonds, similar similar story. You have secular bears that can last for a long time and commodities and precious metals can do extremely extremely well. And I think we're heading into that era. you know, this decade toward the end of this decade and the next, you're going to have a thing where where we're where basically the value of real things that we have to have for our modern day, you know, world, um, they're going to shoot up in terms of relative value versus all these paper assets and all these bubbles that have been super overvalued. I mean, you have a situation where gold, I mean, just one to one, that's the starting point. We're going to probably go beyond that. Gold will go beyond the S&P 500. And then if you look at silver, the chart's even more ridiculous. split it's even more well how would I say it's even more on steroids right I mean silver to do a 10 bagger in real real value in terms of buying power the S&P 500 is something that would be completely within the historical norm from here until there and that's probably in the 20 2030s when it does that 10 that 10x gain against purchasing power in the S&P 500. So um I am aggressively uh probably overly so in bullion and I'm obviously talking my own book but I this is my book. This is my pocket. and I keep my eyes on it and I tell people precisely why I'm doing it and I show them with data. It's not just simply, you know, me just saying these things. These are real, these are real numbers. These are real facts. You can go look them up. Absolutely. And when you're having these conversations with people, what is the level of interest in gold that you're seeing in the West right now? Because that's been a a key question that I've been asking a lot of people about when does that start to shift toward interest over here. Yeah. So in the west, just for instance, in my own personal life, in my people in my circle, you know, a guy who's been a longtime bond trader who I grew up working for at the golf course, you know, the other day I saw him and he talking to me and he's saying, you know, like they've been li they've been buying a lot of gold, you know, like he's this bond trader. He talks like this, you know, like yeah, he's uh he's one of the best characters there at the course. But like when you hear that guy saying like gold is good, you know, like it's like you got a bond trader who's saying like he understands why I'm so bullish gold. Um, and so, so yeah, I mean, you have a situation where people who are within those industries fully understand it because they they actually spend the time to look it up, but the average investor still, no, they're still in delusion land. They still think that what what the number on the screen 6500 S&P 500 is true wealth and it won't ever disappear in real value terms. But, uh, you know, like I like I'm suggesting that's inevitable. It's going to happen. and you're going to have gold chased back to match it and then beyond it in time. I'm curious what you see coming from central banks. So, we know central bank buying has been very supportive for the gold price. As the price continues to rise, do they keep buying at these levels or or what do you think is coming? If you had a currency creator desk over there and you had all these different fiat currencies sitting over there and you had all these bonds that they could freeze at any moment in time um and you were in emerging market and you were in a situation where maybe you're not in the best light or thought of in terms of the United States andor the western uh hemisphere, you might think twice and that's precisely why the emerging market is a leader in this uh record size gold bullion buying. I'm talking larger than anything that's ever been done in history. um even more so World War II and and to now. So that's year after year after year they've been doing it and this is only what we can figure out like you know they declare a certain percentage there's a small section where we we go to the OTC markets and people make estimates but they always forget that literally from 2008 to like 2020 they they weren't there they weren't doing the estimates but there was massive amounts of gold that got that moved out to the east especially China. So, the concept that China doesn't have um multiples of what they publicly claim, I'm talking multiples. The only question is, you know, when they're going to declare it, why according to their agenda, but at some point they're going to come out and they'll probably end up having larger official gold reserves than anyone in the world. Wow. And so, I would think that all the bricks are tied up in all of this as well. So, when you're looking at this, how are you fitting the bricks and and kind of the growing dominance there of the bricks into this picture? Well, it's an important thing. I mean, they're they're going to keep growing. If you look out in the world and you think 10 20 years down the line, I mean, the Silk Road is going to develop a lot. Uh that that whole area of the world has a lot of room for growth and it has a lot of smart people and has a lot of people who want to play and work on the same page. Uh so they actually start making um real returns on the things that they're pulling out of the ground, you know, in terms of commodities and or energy, etc., etc. And so, you know, in a commodity bull market, those people are going to inherit a lot of real value gains. That's just inevitable. And these are landlocked countries. They don't have to go overseas all the time. So, they can, you know, they can rule um one of the, you know, the largest land mass together. You know, they trade well and in balance. Um they can rule for a very long time. So, to me, that concept that bricks are going to like, you know, subvert the the dominance of the dollar, that that's nonsense. That's like clickbait headlines. But on the long term, you know, when you get the emerging markets working together, trading together, using literally using new technologies where they can trade currencies without the US dollar as intermediary, that is dollar bearish. There will be no dollars between their trading. That is not good for the US dollar's long-term purchasing power. Yeah, I think it's really important to to look at the big picture there. And so you were mentioning at the beginning of this conversation, we were at a point where gold was either going to break up or down and we've seen it go up. So I'm wondering when you look at the price right now, where do you see support and resistance levels for gold at the moment? Yeah. So right now, let me just pull the chart up so I'm not speaking out of turn here. You got um a pop that's blown beyond the 3500. 3500 will be the bottom. you know, if it dips below that, then maybe we'll have a little bit of time, you know, going down and retesting some stuff. But 3500 is super key. Stay above that. Uh see if we can clear 3,600 soon, you know, in terms of spot price. Obviously, people love to show futures prices, but remember spot price is king. That's what really matters. Um and then, you know, on the down like the 200 day, if it stays up here for a while, the 200 day will keep rising. I I haven't looked at the 200 day lately, but it's probably well over 3,000, maybe 3,30 or so. 3040 it keeps climbing. Like I said, you know, if you're in this market looking to get some gold bullion, you know, you could if you have a position already, then you can, you know, you can just basically wait it out. If you don't have a position already, then you better start. You know that that you start onesie, twos, you kind of dollar cost average in and start building a position. And the same goes with silver. You know, it's basically I, you know, the fact on a relative basis that they're so cheap versus the stock market and fiat currencies and virtually every other thing you can name on a long-term chart is why you definitely need to have, you know, an aggressive position in gold and silver. I mean, I would argue 20% of your liquid net worth needs to be allocated to bullion at this time. Yeah. Yeah. Well, that answers one of the questions I was going to ask you, which is of course, how much gold and silver should you own? So, it's at that that 20% level at this time. Yeah. So, let's say I have, you know, my own private business. I'm not talking about that. It's not your enterprise. Keep that out. I'm not talking about your residence. I'm talking about your liquid net worth. Say you have a million dollars, you know, mixed amongst stocks, bonds, etc., etc. Well, $200,000 of that needs to be allocated into physical bullion that you own outright privately outside of this system in case the worst comes to pass. And you know, you give me some time, I could paint some really ugly things, but um you let's hope that for the best, but let's prepare for the worst. And that 20% allocation in that situation is going to do very well where the other 80% may not do so good. And how would you how would you split that between gold and silver? That's a personal question. It depends on your age, right? Like I'm 45 years old. I got time, you know, so I'm aggressively positioned in silver. Uh but I do own some gold. I do own some platinum. Now, if I were 65, I would probably have much more income, right? I would have depending on my health and longevity feelings and my, you know, whoever my children were and what they're like. Um, you know, these are all things to consider. So, but um but gold is is nice when you get larger sizes because it's very tiny, easy to hide, easy to, you know, it's it's super small. I mean, I literally $200,000 in gold I can hold in my hand. It's it's nothing. I mean, it's so easy to keep discreetly. Uh silver is a little bit different. 200,000 I'd be sitting on a couple stacks of silver here, you know, literally. Um so it's a little bit bigger, a little more cumbersome. So it's a younger man's metal, whereas gold is the older older person's uh holding because it's less volatile and and you know what you want is is less volatility as you get older, whereas silver is going to be a wild ride. Platinum too, I would consider platinum bullion, I think uh on the long haul, is very cheap um versus gold on a on a long-term chart. And at some point in my life, uh, gold is and platinum are going to meet again. And platinum is going to probably go beyond gold, I think. So, it's it's but it's a long hey it's a long wait. It may take 10, 20 years before that happens, but it will happen again. It's happened before. That's how financial history works. Yeah. Yeah. We see the same kind of repeating cycles. So when people are looking at these physical bullion products, I'm wondering I always like to ask you this question, where are you seeing the vest best value right now in terms of gold and silver products? So right now the um premiums on American silver eagles and I'm going to speak on a United States perspective um because that's where I am and that's where most of our customer base is and that's where the majority silver bullion buyer in the world is. Um, the American Silver Eagle is I still think the best. If you can get them around three bucks over spot for the long haul, that's a good bet. I wouldn't go all in on just silver eagles. There's other options, but I definitely would keep a large allocation to silver eagles because there's times where they go into premium and you can arbitrage with them by when they say or you know during the co era they went 10 $20 over spot. Well, selling them back to dealers and then getting them into generic and converting into generic ounces from there in like 100 ounce bars or 1 oz rounds or what have you, you had the ability to increase your ounces with with like no risk. Like as long as your counterparties are solid and you know them, uh you literally could increase your weight by 40%. And such a trade and and it's literally like you sell, you buy. There's no, you know, it happens very very quickly. Um, so silver eagles to me 90% silver if you're a US citizen. Junk silver I think is a really nice purchase because you can get it now at spot and or below spot depending on where you are. Um, we have a situation where there's so little retail appetite at some at some moments where 90% silver still ends up getting sent off to refineries and melted. So they're not making any more of those. And I would suggest two or three generations from now those will be collector's items. So for me, 90% is something I probably pass down. Silver Eagles is something I use to arbitrage and flip to get more OZ. And Silver Eagles, there is no doubt in a in a real squeeze. They're the number one product. They are in the United States. People just spilled all over them. They love them. Very helpful. And so in the past, we we have had situations where it gets harder for people to actually get their hands on physical gold and silver. Do you see a point in the future as prices rise where we see that happen again? So the the points when that happens is fear driven. Okay. So if you get a situation where black swan creates some type of liquidity crisis and you have a pairing down like literally like everybody wants their capital back situation. Well that's when bullion goes off the shelf. In the United States, there may be about five billion of like liquid like bullion on shelves ready to be sold by dealers if you add it all up. Maybe I mean it's not much. It's really is not much. So you get a push an impetus like the Silicon Valley bank situation like that that that drove record sales throughout the United States. Um you had running, you know, you had banks, you know, bank runs happening about four or five of them, you know, had to shut down and or rejigger themselves. and you had a real fear and that the banking system was going to go under. You get something like that and immediately all the stuff on the shelves goes gone, the you know the premiums jack out and then you have these long delivery delay times. You don't want to get caught in that situation. You want to get ahead of that. And this has happened multiple times in my career. It's going to happen again. It's inevitable. I've saw it in 2008. Saw it in 2023. I've seen it in other spurts and starts and during COVID. It's going to happen again. So that's inevitable, right? So, we need to be prepared before that happens again. And so, we've been talking a lot about gold. Let's move over to silver and look at what's going on with the price because, of course, it's an exciting week for silver as well. We saw it got get past $40 per ounce since I think the first time since 2011. So, I'll ask you the same question I asked for gold. So, we know underlying drivers for silver. What is it that's pushing it this time right now? So you know right now you have a spot gold silver ratio at 87 which is historically very very high. So but you have a situation for silver where the industrial demand is more than anyone ever thought was coming on in the last 5 years. It's been relentless and it's grown so much now that you have annual deficits that are becoming commonplace and headlines. So what you're ending up happening is is people who are seeing this and higher net worth investors are starting to move in um and allocate into silver. So, it's bringing along combination pressure between industrial demand and the fact that you're going to start having people betting on it in terms of uh short short to medium-term trading to try and make beta over gold. They want to see, you know, if gold's going to do well, silver's going to do better. That's that's how they see it. And so, um that's what's happening a lot of. And you also see some of the miners doing well. So, the entire complex, right? I mean, I'm talking from not just the bullion markets. Right now, the retail market's a little slow. Um, but in terms of the actual places where the price discovery mechanics are happening, you have a lot of people coming on. Momentum traders are starting to come on and they're starting to see silver running from 40 to 50 and having a battle for 50 and who knows what after that. But but these this is the this is the era where you're going to see a lot more trading and not just in the comics but also over in China the Shanghai futures exchange you're going to see it in a lot of different places. Uh, and you're going to see, you know, China, if you look out far enough, you you would expect that in China there'll probably be a ring of people, a ring of really wealthy guys who are going to go long and silver, and there's probably going to be, you know, all these allegations of new Chinese Hunt brother types. You know, that that's probably inevitable as time goes forward, right? And you're mentioning that that $50 level, which of course everybody likes to look toward for silver. And a lot of the time in the past I've heard, okay, if silver gets past 40, then it's a relatively easy path to 50. So I'm wondering how you see it. I know prices are hard to predict, but what are you thinking? I mean, there's people in the industry who I respect who are saying 50 could happen this year. And these aren't just like random dudes on Twitter. These are guys who've been trading, you know, in the comics since gold became tradable in the comics since 1975. I respect these folks and their um and the methodology they use to come up with such a bold public claim. Whether or not it happens this year and or next year and or 2027, you know, the only the only thing that can kind of get in the way would be a deflationary, you know, collapse type of situation where, you know, you get a 2008 type deflation that comes and crushes the system and spot prices start falling. That one thing that that does occur, what'll end up happening is you have a bifurcation. Bullion will stay up here and the spot price might stay here, right? So your downside in bullion is very limited. It's an asymmetric bet in the sense that it has multiples to the up and it has very little limited down at these levels and given the situation we're in. Um yeah I mean the fact is whether or not it happens now 50 this year or next year or it's like a psychological number. It really means absolutely nothing in terms of, you know, what did $50 buy you in 1980 in terms of real world goods and services versus what $50 in 2011 even bought you in real world goods and services versus today. Now, if you use like the rigged inflation data that the government has been rigging ever since 1980, ever since the last time gold and silver almost crushed the entire system, well, it it's like silver should be triple digits just based on their own rigged data looking backwards. So if you actually use more of a free market 1980 approach to doing it, the silver price gets absolutely ridiculous. I would sound crazy if I started spitting those numbers. So the the concept of of silver hitting triple digits um even by the end of this decade, but certainly in next in in terms of the nominal fiat dollar price is is a no-brainer to be you can see it. It's coming. Um you know, ultimately the question is not really the nominal price, it's what you what it will buy you in real world goods and services. How much of a median house can it get you in terms of ounces? How much of a, you know, the S&P 500 can it get you? I mean, you have to base it, you know, you have to measure it based on like the most important asset classes, the largest ones with the biggest data sets to get a feel for what is undervalued, fair valued, and or overvalued. Because at some point, we're going to get toward fair value, and then at some point we're going to get into overvalued. And by the time we get an overvalued, uh, I'm not going to be here talking and pumping silver. I can guarantee you that. So that that'll be a different era. I think that's a really fair assessment. And in terms of the silver price, so we've we've talked in the past about precious metals price manipulation, especially when it comes to silver. And so when we see the price moving like this, what does that tell us about manipulation? Is is the grasp becoming less? What what is going on here? So the manipulation that that we constantly saw in the 2010s was more obvious and more apparent. Uh there's always a short side that wants to induce, you know, sell-offs. There's always a long side that wants to make the price go higher, whether or not they're conspiring at what times of the day. You know, some of these trades, they look a little bit artificial. You know, that's one thing like a lot of people will spend hours and hours talking about this. And in the end, like, you know, it's like it's it's a lot of egos just just battling over points that no one can prove, right? And so you have a situation where I believe that we have systemically suppressed gold and silver prices based on the system, based on the fact that derivatives ultimately for the most part are the things that discover price week to week, dayto day, year to year. And that has been the case for a long time. And the derivative markets uh you know in terms of the size of them compared to the actual physical markets, it's just ridiculous. The the fact is is that you basically have to have systemically suppressed gold and silver prices in order to have full fiat currency cartels that we have had for 55 years running. And you know, the bond market is starting to illustrate that that's kind of unraveling. Uh but the bond market, you know, that is what kind of kept everything in check. But if that starts to unravel, you have a situation where gold and silver renumerate, revalue, they start showing you exactly what they are. They are money much better than any of these dumb fiat currencies we've ever used. These fiat currencies were ultimately founded on being originally a weight of gold and silver. And now the reversal of that is going to recount in terms of real value. Gold and silver are going to attract a ton more value as these things come undone and unravel. Thanks for going into that one. I think it's it's important to cover. Very tricky but but important to go over. And in in silver, you had mentioned before we turned the camera on, you had some current events that you wanted to take a look at here. So, I'll turn it over to you and we can we can go over what you're seeing there today. Sure. So, there was an email I got this morning and I figured it was inevitable. Um, the LBMA publishes their data for uh London Gold Fix and London Silver Fix price data. Um, and they published it and they've had it on their website for a long time. And you know, in this industry where people don't have huge uh, you know, net worths, they're just running websites kind of like a mom and pop. uh you have people who will simply scrape that data and then use it for charts etc. So one of my colleagues in this industry, one of the best uh Nick Lard out of Australia got an email this morning basically and more or less wasn't necessarily threatening them but it was basically saying hey buddy you got to take that data down andor join our our club and pay $50,000 a year or whatever it costs to get their private data. Uh I'm sure it's something you know ridiculous that only banks can afford and and institutions. So basically they're just threatening them to say like look you can't use our data any longer so take it off. Um and that's the problem. The problem being is that that data is uber critical to understand where we have been and to understand how they have suppressed the market. You can take that data and you can look at various charts that illustrate that the western world has been using the price fixing schemes that they had for decades and decades and or the comic system or the other lever you know London uh trading markets the the the local London etc etc whatever all the different names they have there uh you can use that data and you can see how the eastern world has bifurcated has run away in terms of price discovery versus the western world uh and so you have a situation where they totally have gone on the other the two different two different directions. And on the silver chart for instance, like the silver chart is the one that I key on a lot for silver. Um it it literally like you you have a situation where I can tell you the data in 1970. The chart starts at $1.92 and a half cent an ounce, right? $1.92 an ounce. Okay? So it runs for 55 years. You have spot now at $40.70 some odds on the chart. Uh so for the last 55 years it's run from $1.92 to 20 cents an ounce in uh New York trading hours in comics hours. So it's just simply gone downward in a multiple of almost uh what is that 10fold downwards whereas uh the eastern side it's now at $387.31 cents an ounce right so this huge bifurcation I'm talking about on this chart there are four times uh in silver full fiat currency era history where the blue and the red line have met recon converged there will be a fifth time and it will be in triple digit landing so that is the point I mean the point is is I think LBMA really personally I I think they're embarrassed by the fact that they're literally getting you know more or less shown throughout the the world like hey like look at this market that pretends to be you know so functional but look at the data like don't listen to the words just look at the data and see how their system has more or less given like Russia literally Russia it gets over on this fact like Russia got saw that this was happening in the mid 2000s they went out and they had a policy to essentially move about 30% of their sovereign wealth into gold bullion and then they went into war and they had that gold bullion pile thanks to this rigging of the price for the last what 20 years or so and and and now everyone looks around and thinks well how is Russia so powerful well it's cuz you jacked with the price you know you basically had all these London traders making their bonuses you know so so now we're in a situation where where great nice job you corroded our entire western world and you have a situation where Russia China etc are now converging They have massive power, massive fors of gold. They you It was a judo move essentially. And and and the reason why is so so people who trade on these derivative desks can make their quarterly bonuses. That's essentially what it is. And the people down in emerging markets who mine the stuff out of the ground, who cares about them? I want my bonus. You know that that's how these people think. Well, I think this really shows how much is going on behind the scenes that the average person, even if you're following Gold and Silver, you might not know about this. So, do you have any advice for people on on how they can keep track of some of these more behind the scenes movements? So, on every week on SD Bullion's YouTube channel, I publish a you know, SD Bullion's weekly market update. Uh, it's generally like a 10 to 20 minute video. Um, you know, you might be overwhelmed if you first showed up and you don't really know much about the market, but once you kind of start to understand the verbiage, the lexicon, what's going on, uh, if you're a left brain, if you like data, if you like to see charts, etc., etc., you'll probably end up enjoying it. I try and make it somewhat sarcastic and somewhat darkly humor. We have, we have a little bit of fun in it. Um, it's not super politicized. I try and keep it really down the barrel with gold and silver related. Uh, and so yeah, I would say come to the SC Bullion YouTube channel, check out the weekly bullion market update. You can come on my Twitter feed, check that out. Um, and you know, there's all types of resources. Just reach out to me on Twitter if you're if you're a newbie and you have no clues. Just I, you know, I I answer virtually anybody that asks me things unless it's a bot and then I just, you know, kick them to the side. But normal people, if they come to me and respectfully ask questions, I I'll point them in the right direction. Well, I'll I'll link to your channel in the video description. and I always enjoy the the weekly updates that you do. I think they're they're a pretty fun watch. So, encourage people to check that out as well. And a little bit more on silver, the other point I wanted to mention to you. So, a week ago, maybe a couple weeks ago at this point, we had silver added to that draft critical minerals list in the US. So, I wanted to get your take on that. It sounds like it's it's not quite official yet, but heading in that direction. Do you think it will come to pass? Will other countries follow the lead there? Is this important? Any thoughts? It is important. I mean for a long time platinum has always been considered a critical metal because of military etc. Right. It's super key for any type of you know jets or things that military use. Uh whereas silver is super key too for the military. Uh and and so you've got to have it for nuclear power. You've got to have it for virtually anything that's that's big in terms of scale industrially. You've got to have silver. So, um the concept that it's finally being admitted that yes, it's a critical mineral and yes, we have to have it. I mean, that's a fact. In the United States, we use um we have we have to import literally six times the amount that we actually mine per year. So the amount that we have to mine like we only mine a certain amount like like the fact is we use five to six times uh you know internally for production for different things industrially or for investors who buy it in bullion form we have to get five to six times what we actually mine in our own land of silver. Uh so we have to have it and the only way that you're ever going to get bullion stackers to turn around and actually sell their silver is you have multiples of spot price. So, you know, if you want to keep the spot price at these artificially rigged levels, then it's fine. You're going to keep having deficits and at some point you're going to start running into walls. Um, but if you allow, I'm sure in a controlled manner, but if you allow silver to go back toward where it relatively should be in in terms of reality, it should be triple digits, uh, then you'll actually see start seeing some flows and it's not, you know, there will be stackers who will be moving, you know, moving out of silver at a triple digit level per ounce for sure. So there will be recycling that will occur. But, you know, on the long long-term scale, if you look out, you know, decades and decades, we have to have silver. We've got to have it. It's just a fact. And so, mining is going to probably become much more important, especially in South America. China's already there. They're already frontr running everyone. They're already down there um setting up deals, you know, shipping the metal off to Chinese refineries, uh, directly from South America. That's where the most proven reserves are. And um so yeah, I mean it's it's just inevitable that that that silver is just we have to have it. You can't we can't have this conversation today without it. It's just it's one of those elements we just have to have and it's limited supply. That's just the way it is. Yeah. And well, I think that's how they would define a critical mineral. So it does sound like it makes a lot of sense. Okay. As we're as we're getting to the end here, I remember when we talked last time, you were saying that this was going to be a bullion bull market first and then, you know, maybe later down the line we'd see the mining stocks participate. And it seems like we're getting to that point right now. So, I'm just wondering before I let you go, any comments on the mining equities that you would make at this point in the cycle? So, generally, uh, the mining equities, the majors start to move first, then the mid tiers maybe will get a little bit of action. the juniors, not until much later in the mania phase. The juniors, by the time gold and silver go in their mania phase, you're going to get every every scoundrel, every every type of crooked person you ever saw in the cryptocurrency market, they're going to show up and be pumping juniors constantly. So, expect that that's coming. Um, but ultimately I in in what I believe is this is a a this is a kradia of winter. We're going through a restructuring of the system. And so, first and foremost, I want my capital in my hand, and I'm not so concerned about the return of capital. And miners are risky. And if you look at a long-term chart from 2007 until now, bullion has handily outperformed miners over that time frame. For the most part, there's a couple blips where miners do okay. And I think we're going through a blip right now where miners are doing okay. But you have a system you have a situation where where where you have the structure of a system uh nations they're going to you know like everything is up for grabs right and you have a situation too where inhibit inhabitants of these countries uh who work in those places and who know those that they have proven reserves like that they're going to start shutting things down. I mean they're not going to put up with it if they're not making enough money. So and then as well you know governments always will start nationalizing etc etc. So, you just have to be jurisdictionally very very respectful of what you're doing and allocation wise, you have to be very smart about it. This is not a lot lucky lucky lottery ticket. Do not go out there and throw up like 12 juniors and think that that's going to be, you know, your mix to like ride the bull market. That is an absolute clown show uh idea of how this is working. What you should do is get a very foundational strong position in bullion. And if you want to speculate in miners, do it. But just know that you can and will get jacked. I got jacked once and I had I had a good position Russian minor uh and when Ukraine happened froze it still frozen you know so from that moment on I just thought you know that's more or less the universe telling me I'll play with minors maybe later on later on but right now I am bullion focused because right now we're going through a destruction phase and in the destruction phase you want bullion makes makes total sense and gives a really good idea of where your focus is right now so I We'll let you go unless you had any final thoughts on the markets or if you want to let I guess we already mentioned where to find you but if you want to go over that again. So the one thing I would suggest people remember is that uh right now coffee for instance in the commodity market is in backwardation and so what that means is that there's limited amounts of coffee in warehouses right and so the cash price is much more expensive. I'm talking the price right now over the table from big bags of coffee is over the price of the futures. I I don't care what future it is. It's underpriced. what the spot is right so it's in full backward full backwardation at some point at some point I'm suggesting that silver likely will go and do full backwardation and maybe even gold I don't think gold has been but if you see a situation where silver is in backwardation it is going to go straight up straight up you know it's going up I mean that it it happened it happened multiple times in the 2000s and that's where many of the many of the major silver bull markets uh occurred and it's not even close to happening yet right now uh but in the future learn what backwardation is monitor it if you get a full silver backwardation that is that is literally like alarm bells ringing and if gold happens look out Jack something really wrong is happening okay well that is where where we'll wrap it up for today this was really good I think you you left me with a good understanding of where we're at for gold and silver so thank you very much for coming on to talk today all right thanks Charlotte it's always good talking with you of course once again I'm Charlotte Mloud with investingnews.com And this is James Henry Anderson with SD Bullion. Thank you for watching. If you like this video, make sure you hit the like button and subscribe to our channel. We'd also love to hear your thoughts, so leave us a comment below. [Music]