Gold Price - Where is it heading?

[qldfrog]

Bonjour,

So you are in the market for 100M/oz or so?

jog on
duc

Was just evaluating a local gold buyer/reseller..not my usual one

 

[Garpal Gumnut]

Gold is up 0.81% in $USD and 0.27% in $AUD overnight in the markets via Kitco.com.

Trumps antics have caused a pause in the strengthening of the $USD, this is good for Gold though, so we cannot be always on the right side of the trade here in Australia.

gg

I just did a quick calculation on compounding a return of 0.27% over 1 year just 5 days a week as Gold is traded, and were one to achieve this return on Gold each weekday one would just over double ones money from $1000 to $2021 in 12 months.

So even though it seems an insignificant rise, it does add up.

when the AUD/USD falls it gets even better.

Daily Compound Interest Calculator

Use this calculator to work out your daily interest for a fixed number of days or months. It's useful for bitcoin and other crypto currency trading

www.thecalculatorsite.com

gg

 

[ducati916]

You don't hold it, you don't own it.

jog on
duc

 

[Garpal Gumnut]

POG is pretty much unchanged in $AUD overnight at $4543.39.

The AUD/USD has been hovering at 0.6270.

gg

 

[Sean K]

You don't hold it, you don't own it.

jog on
duc

Does Perth Mint do a lot of institutional gold or is it more retail?

When I turn up with my PMGOLD voucher will they cash it in for physical?

 

[Garpal Gumnut]

Does Perth Mint do a lot of institutional gold or is it more retail?

When I turn up with my PMGOLD voucher will they cash it in for physical?

I believe they do institutional as there was a kerfuffle with an entity in China where Perth Mint was accused of putting some impurities in to their ingots some years ago.

gg

 

[ducati916]

Lots of Gold news:

The cost to borrow Spider Gold ‘GLD’ Exchange Traded Fund (ETF) shares has almost tripled in 5 hours today to 6.29%. In mid-January 2025, the borrow fee for GLD shares was 0.5%.

‘Authorized Participants’, as defined by the GLD prospectus and consisting primarily of bullion banks, can redeem ‘Baskets’ of GLD shares to receive delivery of 10,000 oz. of gold at a time.

When you see this type of acceleration in the fee to acquire physical gold and given the background of the shortage of gold available for delivery in London and the high gold lease fees there, it can be inferred that something is cooking-off in the gold market.

​

Figure 1 - GLD Borrow Fee; source: https://chartexchange.com/symbol/nyse-gld/borrow-fee/ and Interactive Brokers

HT SluceBrother : https://x.com/Sluicebrother/status/1887612982999322744

In addition, we see nuggets like this from Korea: “The Korea Gold Exchange found its website overwhelmed by the influx of investors. As of 11:30 AM on Feb. 6, the waiting time to access the site was a staggering 5 hours and 20 minutes, with over 19,000 individuals queued online.

The rush for physical gold and silver is international in scope.

The current high and climbing lease rates for gold and silver is catching the eye of metal market observers.

As the London promissory note spot/cash gold and silver markets, leveraged to an extreme, move toward seizure central bankers are going to face a dawning of recognition then increasing anxiety about the return of their sovereign assets.

The critical path to market failure includes a realization by lessors of gold that, as gold (and silver prices) reset into higher orbits, market participants who have leased metal are not able to secure and return the leased metal due both to physical metal tightness as market leverage comes unwound but also - critically - lessee insolvency due to the liability of having to purchase metal for return to the lessor at far higher prices.
Just as aircraft can gently enter a ‘graveyard spiral’ or a ‘death spiral’ with everything seeming normal to the pilot at first but then quickly decaying into violent rotation downward, central bankers are going to gradually - then suddenly - recognize that much of the physical sovereign gold they have leased into the market for returns of pennies on the dollar will not be returned due to growing insolvency of those who have borrowed the metal.

The stop-gap metal leasing tool used to cover-over the fact that there is only a miniscule amount of available gold and silver in comparison the hundreds of millions of ounces of gold claims and billions of ounces of silver claims standing in the cash/spot market, will be withdrawn.

This morning’s interview with Craig Hemke of TFMetals Report is posted for the public at the following link:

https://www.tfmetalsreport.com/podcast/13037/thursday-conversation-david-jensen

Over the past 9 weeks, New York COMEX vault data show that the total NY COMEX vault stock of gold has increased 16 million (M) oz., or 498 tonnes, with likely more gold on its way.

Today, the London Bullion Market Association (LBMA) issued an early news release announcing that London gold vault holdings, that serve the world’s largest cash/spot gold market, had been drawn-down by 151 tonnes (4.87M oz.) of gold in January 2025.

This follows a draw on London vaults of 30 tonnes (963,000 oz.) in December 2024.

While recognizing that there is more gold in transit, these data indicate that of the 16M oz. added to NY vaults since the beginning of December 2024, only 5.8M oz. or 36% came from London vaults.

The LBMA frequently promotes the fact that London vaults hold approximately 280M oz. of gold and that the London gold market is highly liquid.

However, the Financial Times of the City of London reports this week that “Overnight leasing rates for gold recently jumped as high as 12 per cent, according to Philip Newman, managing director at Metals Focus, a London-based precious metals consultancy.”

London Gold Vaults Are Saying ‘No Mas’​

A lease rate of 12% to borrow gold is extremely unusual compared to the 2% to 3% level seen until very recently.

The high lease rates are indicating that London market participants who need to acquire physical gold can no longer buy sufficient metal and are being forced to borrow the metal at a very stiff interest rate.

Of particular note, from the beginning of December 2024 to the end of January 2025, London vaults have only had 2% of the total gold vault stock removed yet in recent weeks yet the gold lease rate has spiked as high as 12%.

This indicates to us that the London gold market is not liquid and has had its vault stock of ‘free float’ gold, or the amount of the total liquid stock of gold that was actually available to market, desiccated to the point that the liquid gold stock in London now appears to be well dried-out.
The green portion of the graph below of London gold vault holdings represents the gold ‘float’ or the portion of London gold not held by the Bank of England or by ETFs and therefor potentially available to market.
The ‘free float’, which is the portion of the float that is actually available for sale into the market, appears to be wafer thin.

Market data indicate that with an estimated 400M oz. or 12,440 tonnes of cash/spot contracts issued and standing in the London gold market, it took a draw-down of 5.8M oz. or 181 tonnes of gold from vaults to distress the London gold market.

That’s not a liquid market. Nor does it appear solvent.

​

Figure 1 - London Vault Holdings of Gold at December 31, 2024; source: LBMA / GoldChartsRUs.com


There has been a steady mantra repeated in the media and by the Bank of England that the current run on physical gold in the US and export of gold bars to New York is due to fears of President Trump’s tariffs.

Market data indicate that the claims that tariffs are driving gold imports into New York are not correct.

Following are several examples of the legacy media claiming tariff fears are driving gold importation into the US:

​

“The rush to ship gold from London to the US to take advantage of premium prices is fueling strong demand for slots to withdraw metal from the Bank of England’s vault, an official said.” - Bloomberg February 6, 2025

​

“Gold prices hit an all-time high on Monday, bolstered by safe-haven inflows after U.S. President Donald Trump's tariffs on Canada, China and Mexico added to concerns of inflation that would dent economic growth.” - Reuters February 3, 2025

​

“London is in the grips of a gold shortage as traders line up for weeks to get bars out of the Bank of England and ship them to the U.S. amid fears that the new Trump administration will levy tariffs on imports.” Fortune January 31, 2025

​

“A surge in gold shipments to the US has led to a shortage of bullion in London, as traders amass an $82bn stockpile in New York over fears of Trump administration tariffs.” Financial Times January 29, 2025

A Look At COMEX Data Indicates Accelerated Importation Of Gold Is Not Driven By Tariff Fears​

If tariff fears are driving the massive importation of gold and silver bullion into the US, then it could be anticipated that the bullion banks themselves are the entities taking delivery of the imported bullion.

On February 7, 2025, Michael Lynch of Michael Lynch On Gold And Silver (give Michael a follow!) noted in his article It Is Blowout Demand By COMEX Customer Accounts Driving Gold And Silver ... Nothing Else that COMEX data indicate bullion banks themselves are not taking delivery of gold and silver bullion but, instead, customer accounts are taking delivery:

“Most importantly, the rush to buy metal is driven by non-bullion banks. So far just one week into the February gold contract, over 2 million oz has transferred from bullion banks to customer accounts. That exceeds the entire total for any prior contract by more than a factor of 3….
…Things to point out … the net buying by customer accounts on the February contract at over 2.0 million oz has exceeded any other contract in comex history by more than 3X. In addition, the largest net sell by non-bullion banks was only 2 contracts prior. This 2 month change is enormous. …
… So, we’ve just seen the largest change in direction of customer moving from a strong sell to a record buy. This plot suggests a huge buy signal. As of yesterday’s comex reports, the buying deluge continues. I’ll bring you updates in the days to come.
Forgot to mention … tariffs have nothing to do with this. This is all about customer accounts at comex thirsty for metal.”

It will be interesting to see over time if we can get any hints of exactly whom is buying gold and silver bullion and taking delivery in such large size.




jog on
duc

 

[ducati916]

More Gold





Full:https://www.reuters.com/markets/wea...rder-create-sovereign-wealth-fund-2025-02-03/





The US could write up its gold to create fiscal capacity…to hear a Treasury Secretary with Bessent’s pedigree and gravitas say what he said this week struck us as extremely important. Investors should begin to consider the possibility of a world with $4,000 gold, DXY at 102-104, oil at $70, 10y UST yields at 4-4.5%, US industrial growth rising, US deficits falling. There are not many investors positioned for such a “gold-i-locks” market.


Market participants seem to remain confused about what Bessent may have just said, as they do not realise the Overton Window has shifted due to the acuity of the fiscal issue. We can see this confusion below, with commenters in the article above noting that the US runs a deficit, and therefore doesn’t have the savings to establish a sovereign wealth fund:

Typically such funds rely on a country's budget surplus to make investments, but the U.S. operates at a deficit. Its creation also would likely require approval from Congress.

"Creating a sovereign wealth fund suggests that a country has savings that will go up and can be allocated to this," said Colin Graham, head of multi-asset strategies at Robeco in London. "The economic rules of thumb don't add up."


Mr GG, you about to see gold up $100, $500 in a day.

jog on
duc

 

[Garpal Gumnut]

More Gold




Mr GG, you about to see gold up $100, $500 in a day.

jog on
duc

indeed Mr. Duc.

I have spent much of this weekend considering the chances of the Great Bronze Disruptor returning the $USD to the Gold standard.

I am considering going all in on gold. Physical. Or as close as I can to physical. One has to know when to hold 'em.



gg

 

[Sean K]

Mr GG, you about to see gold up $100, $500 in a day.

jog on
duc

Praise the Lord.

 

[Captain_Chaza]

Blimey! $500 --Pigs will Fly First!----IMHO

 

[ducati916]

Blimey! $500 --Pigs will Fly First!----IMHO

Come on Cap'n



So call it a 10% increase and you have gold at $2886 so that's an increase of $288/oz

Things are about to get wild in gold.

jog on
duc

 

[farmerge]

Praise the Lord.

@Sean K Meaning Gollie Locks ie POTUS

 

[ducati916]

jog on
duc

 

[Sean K]

jog on
duc

"early stages of a systemic crisis". Yikes.

 

[Dona Ferentes]

"early stages of a systemic crisis". Yikes.

 

[Garpal Gumnut]

I believe that it is open slather for "experts" on Youtube and "advisers" in commercial banks and funds to attempt to explain gold's rise recently. Everything from potential tariffs to the possible end of the Russian-Ukraine war is supposed to be significant to the gold price. Every expert attributes one thing or another, tardy gold delivery, futures as they relate to delivery, silver and basically you name it. Perhaps the wisest advice is that they all do. It is also possible that gold will fall in value. The atmosphere around gold and the geopolitical situation is very similar to the late 1970's which saw a rise and then a fall to stabilise for many years.

One aspect that is rarely mentioned is that the majority of world wealth is held by boomers, who in 1970 were in their late teens and 20's and keen to take risks and make wealth. Boomers now are keen to conserve that wealth and be conservative in their investing. Gold is seen as being safe.

There is also little mention of China and the BRICs as Trump has taken everyone's attention from their present accumulation of gold via their central banks.

So in my opinion it is boomers and BRICs who are keeping the price of gold high, and thirdly Trump and his antics. The only other white male in the woodpile is a return of the $USD to the gold standard. This is something that would appeal to Trump. We would then have to consider after an initial rise in gold whether there would then be a fall.

Interesting times.

gg