Precious Metals Analysis

We could be setting up for a significant squeeze in the gold and silver markets. We’re seeing signs that tariff concerns are growing, creating an interesting dynamic in the London precious metals market. Owners of gold in London vaults can loan their metal on a short-term basis and last week, lease rates suddenly surged to over 3.5 percent.

Over the last four months, the Federal Reserve has cut interest rates by a full percentage point. It started with a supersize 50 basis point cut in September, followed by quarter-point cuts in November and December. But despite slashing rates, Treasury bond yields have risen sharply. What’s going on in the bond market?

China announced an increase in its official gold reserves in November. It was the first reported increase after a 6-month pause, and it appears it wasn’t a one-off event.
And by the way, the Chinese have a lot more gold than they admit.

For the first December since 2019, gold-backed ETFs globally reported net inflows of gold. Asian funds drove the global increase in ETF gold holdings to close out 2024. On the year, ETF gold holdings dropped modestly by 6.8 tons, but assets under management rose 26 percent to a record high of $271 billion thanks to skyrocketing gold.

Gold was one of the best-performing asset classes in 2024, outgaining the red-hot U.S. stock market. People who follow financial news know that gold had a great year. Despite its typical apathy toward gold, even the mainstream was forced to sit up and take notice. But you may not realize just how well gold did.

How awesome would it be to dig around in your garbage can and find gold? Well, that’s pretty much what the British Royal Mint is doing. No, you won’t find mint employees dumpster diving, but they have developed a process to turn electronic waste into gold and silver jewelry.

Analysts at major Wall Street banks expect the gold bull rally to continue into 2025. And mainstream analysts tend to think the year will remain free from any kind of significant economic chaos or crisis. Gold had a tremendous 2024, setting multiple records and closing the year with a 26.5 percent gain – one of the best-performing assets last year.

Producer prices came in hotter than expected in November. This came on the heels of a CPI report showing price inflation is sticky. With inflation worries mounting, investors sold gold. Wait. People sold an inflation hedge with increasing signs of inflation? Yes. You read that correctly.

After rebounding in September, central bank gold buying surged in October, doubling the 12-month average. Central banks added a net 60 tonnes of gold to reserves in October, the highest monthly total year-to-date, according to data collected by the World Gold Council.

It took 118 days to add another trillion dollars to the national debt. That’s just under 16 weeks. On Thursday, Nov. 21, the national debt officially blew past $36 trillion. To be exact, it hit $36,034,994,586,981.97. You might be thinking, “Didn’t we just eclipse $35 trillion? Yes. It was on July 26, just under four months ago.

According to a report by the World Gold Council, the answer is yes. Gold’s excellent conductivity and its malleability make it an important component in the manufacture of electronic devices. Gold can be formed into extremely thin wires, making the metal ideal for use in small computer chips.

This is the conclusion of a new report by Toronto-based Capitalight Research Inc. commissioned by the Silver Institute: “Institutional investors seeking to strengthen their portfolios through diversification should consider the compelling benefits of investing in silver.” The report focuses on increased fragility in the geopolitical environment.

The United Arab Emirates is poised to usher in an “Asian Century” for gold to challenge dollar dominance, according to a report published by the Dubai Multi Commodities Centre (DMCC). The UAE leapfrogged the United Kingdom to become the world’s second-largest gold trade hub in 2023.