So we do get into a bit of a silver squeeze.
If you look at the comex warehouse, we've seen a, you know, a big draw
down there so you can still buy, you know, big bars economically, but
the smaller bars are even problematic right now, hundred ounce 10
ounce 1, ounce in particular
Well it's all about the dollar being abnormally strong.
In the world over the last six to eight months.
The US economy is saver economy.
It's performing better than Chinese economy.
Japanese economy, Europe is certainly in a lot of trouble because of
war in Ukraine, Great.
Britain's economy is underperforming.
So, and our interest rate differential.
What we're paying on our bonds here is higher than every other
countries as well.
So, for safety and for four,
Yield money from around the world is moved out of most other places
and into the u.s.
and the Gateway is the dollar.
So the dollar has surged about twenty percent on average against the
Yen, and the Euro, and the British pound over the last six to eight
months which is a tectonic move.
It's a gigantic rocket ship move higher and gold tends to trade
inversely to the dollar.
So a higher dollar pushes gold lower and we're seeing gold trading
today about
Hundred and fifty dollars US, which is well under the 1752 1950 range.
It's enjoyed over the last two years and especially during a period of
high inflation.
But if you go back to the 70s, when we had three inflationary waves,
Gold lagged.
And then it played catch up with a Vengeance in the 74 75.
And then again, in 1979 1980.
So, gold climbs a wall of worry, we've seen gold, take a take a punch
up higher when the British guilt problem revealed itself, you know,
who knew the British Pension funds were leveraged and their gilts.
And that's all they had to sell and they got a margin call on their
own guilt.
So he created the death spiral, you're aware of what happened there.
So there's a lot of black swans lurking, whether they emerge or not,
we'll see, but right now, gold is on sale, especially in dollars.
It's not on sale in Euros though, or in Japanese Yen or in British
Pounds or other currencies that have declined, it's just on sale in
dollars.
There are but those those are unusual times when they trade in tandem
right now today for for a couple of hours.
Yes.
You know, the dollar has peaked on the dxy and about 114 it's about
112 today.
Yesterday was about 110.
So a following the FED statement and then especially chairman Pals
comments, which were very hawkish and more hawkish than most marked
Market.
Participants expected them to be the dollar caught a bid and gold got
pushed back down.
So I do think gold is basing in dollar.
Is between about 16 and a quarter in 1650.
And the dollar has probably peaked at 114 on the dxy, but we're in a
period of stabilization now where it'll be hard pressed with the
dollar to go a lot higher or gold to go a lot lower from here in
dollars.
Well, it's completely fed related right now and how high will the FED
go.
Most markets were gaming that we got a 3 Port quarter point rate hike
which we got and then a half a point rate hike in December
Or with, maybe quarter point rate hikes going forward as they wait for
the lag effect to catch up to the economy.
For what the rate hikes versus when they actually the economy feels
that here in the United States.
But Powell clearly put on the table yesterday that we could get
another two more one, or two more three quarter point rate hikes,
which is what caused the dollar to catch a bid.
Now, I think most of the move has been made, you know, it's possible
that the dollar could go a little over 114 on the dxy.
Into next year depending on what the FED does.
But we are getting weaker here in the u.s.
economically.
And we are headed towards a recession.
It may not be a bad one, but clearly, the economy is weakening in a
lot of different forward-looking metrics and remember the FED tends to
Look Backwards not forward.
So once we, once the FED sees the effect of what they've done they
mate, they may not be breaking as hard which would tend to make the
dollar.
Come down and gold intern rise.
Then that's what we're expecting yesterday to be announced.
But that wasn't the case.
So that was the surprise.
So we're probably range bound with the bias.
Still towards the dollar, being a little higher, and gold being
pressured a bit.
I'm not a mining expert to be honest with you.
So there is enough silver coming out of the ground but a lot more
there's a lot more attrition in silver for other uses, you know, an
industry which we don't have in Gold.
Most of the gold that comes out of
Ground stays above the ground and is eventually resellable where
silver has a much higher attrition rate in use for manufacturing and
creating things.
So we do get into a bit of a silver squeeze.
If you look at the comex warehouse, we've seen a you know a big draw
down there but there's still a lot of bars mean you can buy thousand
ounce silver bars but they're not easy to trade, they weigh 70 pounds,
they're about this big and
They're hard to ship because of their weight.
If you want to sell something, you can't sell half a bar without a
hacksaw.
So you can still buy, you know, big bars economically, but the smaller
bars are even problematic right now.
100 ounce 10 ounce 1, ounce in particular Will silver tends to
oscillate in a wider pattern than gold of gold goes like this.
Silver tends to trade a lot wider and silver was way over sold and
under $19 down.
Round 8.
Dollars and we are in a bit of a physical silver squeeze here in the
US for products.
Whether that's contributing or not to the silver price moving up ahead
of the gold price.
It's hard to say this point in time because that's just happening.
But silver is actually leading gold at this moment in time which is
very unusual and some of it may have to do with manufacturing.
A lot of a lot of Silver's used in manufacturing solar panels
Electronics.
Electronic Vehicles.
Were gold is the currency of Last Resort so we don't really have a
problem with the Fear Factor in Gold.
I think people are just sensing that silver is oversold and it's
catching a bit a bit more than gold right now.
For that reason, well for 2020 and 2021 once covid, hit and they'll
all that government spending was dramatically, increased our sales
quadruple doesn't industry.
We were suddenly went from selling about
seventy percent of normal business to four and five times normal
business.
And we had that for most of 2020 2021
So, we have seen a drain in, you know, comex supplies of silver over
the last couple of years.
Because of that, in 2023 sales have been good.
They have been great, like they were the last year's, but they're
still strong.
And we've seen a bottleneck particularly in the 1 oz Sovereign minted
silver coins.
Physically, you know, if the gold is silver ratios, 85, 21, which is
about where it is.
It takes 80 5 ounces of silver, those blanks to equal 1 ounce of gold.
So the time and effort to make the similar dollar amount and Silver's
a lot higher and the bottleneck is the blank.
So we're not seeing enough of the blanks being made.
And demand has outstripped.
The mints around the world's ability to produce 1 ounce coins.
So we are in a silver squeeze and now that the one answers are
problematic, especially the u.s.
silver eagles, which the u.s.
men is
Just been way behind the production curve this year, they're making
far less than they have premiums for silver eagles are abnormally high
at sixteen Seventeen dollars over the spot price, almost doubled, the
spot price which I've never seen before.
In my career, we've been - selling those against coins like Canadian
maple leafs or Austrian silver philharmonic's or South African silver
crew grants, but even those are in tight supplies and now that's
Rippling down into the bar.
Manufacturers, the 100-ounce bars.
Announce Mars, so premiums for these other products are higher than
normal, not abnormally high, but they're still, you're paying two and
three dollars an ounce more than you would, in a normal market.
And that's just because there's not enough product to meet demand, and
until the 2023 products.
And we're in a transition phase here, 2 plus the queen died.
Now, who thought the queen would screw up the silver market.
When she passed away.
But her picture is on three of the major products Britannia is Maple
Leafs and Australian kangaroos.
So,
The Canadian Mint stopped production for about three weeks till they
figured out what they were going to do.
Next is during the mourning period and that came right at a critical
time.
Plus the low silver price under $20 has created a lot of demand.
So it's been a couple different ways of it is all culminating in
higher premiums for physical and we're going to be in this phase until
the 2023 product start flowing in Earnest sometime during the first
quarter of next year.
So, thus the price on the street for physical silver.
Is twenty-four twenty-five dollars an ounce when the spot price is
$19.90.
So the US Mint has 12 different worldwide Distributors that they sell
to and the business you do with the meant alone as 50 to 100 million a
year, right?
So the man says you're taking two hundred thousand, silver eagles,
this month, you're taking them right and then it's your job to sell
them.
So when everyone's flush with supplies premiums are low and it's a
very competitive market when print when there are less
Little supplies.
There's less units to sell and these are businesses that have to be
profitable, they simply have to get more for that same unit.
So the Distributors charge, what the market will bear to secondary
dealers like myself, who deal with the retail public, right?
So it's the mint just riveters are making more money right now than
they might otherwise because the men charges aren't necessarily as
high relative, although the men's have raised their rates to because
they can get more as
as well.
Well, I was having dinner with one of the, with the president of one
of the US Mint Distributors the other day and I was saying, hey, is
this silver squeeze?
Really that bad?
On the Komets warehouses.
He's and he said, no, there's a lot of silver out there.
Don't worry about that.
I'm like, okay.