Back in August 2018, gold’s spot price was $1,160/oz. Gold is now at $1,500, beating the S&P year-to-date. Why? The soaring price of gold is propelled by HUGE supply deficits of “Good Delivery” gold bullion (400-oz bars).*
The last time PHYSICAL fundamentals controlled the pricing mechanism for precious metals was in 2011.
That summer, major mints in Canada, Austria, Perth, South Africa and the U.S. completely ran out of gold. Silver supplies were just as tight. For six to eight weeks, dealers across the nation were unable to satisfy over-the-counter demands. Dealers went “Bid only” — “No offer.”
Silver rose from $6.40 [Jan. 2005] to $9 [Jan. 2006] to $13 [Jan. 2007] to $15 [Jan. 2008]. On April 28, 2011, silver hit $49.82/oz.
The year before the global credit-collapse, gold was $525/oz [Jan.5, 2006]. The day credit FROZE worldwide, gold was $662.60/oz [Aug. 9, 2007]. On March 14, 2008, gold surged past $1,000 per oz for the first time ever. In 2010, gold was $1,180 at year-end. Acute shortages drove that run-on-gold to $1,903.30/oz [Aug. 22, 2011].
Gold is breaking out after forming a 6-year base. According to legendary Louise Yamada, Bloomberg News (Aug. 5, 2019): “THE BIGGER THE BASE, THE HIGHER IN SPACE.” https://www.youtube.com/watch?v=4GnDNUxAcbY
Take delivery while actual coins are readily available in North America. Extreme product shortages always end up triggering runs in silver/gold to higher highs. On the upside, there will be little resistence for a long, long way.
Submitted by Denise Rhyne
* Global mine production increases the world’s gold supply by 2,500 to 3,000 metric tonnes PER YEAR. However, over-the-counter markets in London and Zürich alone trade more than 940 tonnes of gold PER DAY. This means more gold is traded in Europe every 3½ days than is mined worldwide in one year.
How is this possible?
According to trading data from the LONDON BULLION MARKET ASSN., bullion banks such as ICBC Standard Bank (Industrial & Commercial Bank of China); HSBC (Hongkong & Shanghai Banking Corp); UBS (Union Bank of Switzerland); Scotiabank; and JPMORGAN predominantly trade synthetic positions (PAPER gold), rather than PHYSICAL gold.
PHYSICAL gold and silver will give you protection from third-party risk and overnight currency devaluations.
Scroll down to the Kyle Bass video about Chinese currency manipulation: https://www.zerohedge.com/news/2019-08-05/kyle-bass-warns-yuan-could-sink-another-40-if-pboc-pulls-support
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