For almost two years you’ve been hearing, well, gold can’t stay this separated from US yields forever because it’s a mathematical certainty. Yada, yada, yada. And that’s true, but it’s not. See, gold follows the money. Gold is the money, but gold follows the economy. Who has the gold makes the rules? Well, who is the growing economy on Earth? Welcome to the morning markets and metals with Vince Clancy. Where each day he brings you the precious metals and financial news to get you ready for your day.

And now here’s Vince. Morning, everyone. I’m Vince Clancy and this is the morning meeting. We’re not going to talk about gold at all today. We’re not going to have to have a precious metals or anything related to it at all today. I’m like, all right, we’ll talk about gold. We’ll talk about gold in China, actually. We’re also going to talk about Starbucks as a proxy for the stagflationary environment that we’re going into.

Okay, before we do that, let’s look at the prices. The dollar is 106. 30 unchanged. 10 yields are also about unchanged at 4. 68. This would be 500 is down eight handles at 50. 17. The VIX is 16. 13 up, excuse me, 49. Gold is bouncing up 10 and change at $2,296. After down, geez, $45 yesterday. Silver, $26. 47 up 20 cents. That’s a nice bounce. Copper, no bounce at all at 4.

49. Oil down 75 cents again, that gas, 175. After getting hit again yesterday. So everything that we talked about in the morning got hit and it continued to get hit. Even oil was destroyed yesterday. And that’s all stagflationary news. Everything we said in that conversation yesterday was accurate, but it just got more exacerbated. And it took stocks with it significantly by the end of the day. Bitcoin down another 5%.

Wow, 57 and change. Ethereum 2800, 2879 down 4%. Platinum, palladium mixed. Look at that, platinum is up 15 with palladium down nine. Platinum is now worth more than palladium. Behold, all good things come to those that wait. I’ve waited about three years for that. I don’t have anything going. I used it. Anyway, for those of you that watch these, there’s plenty of fundamentals that determine that say platinum should be worth more than palladium, but it’s stagflation that’s doing this, right? Palladium is much more used in the economy.

Catalogic converters and what have you. So that might be what’s driving this spread. And I think people put into spread on kind of like the gold copper spread, you know. Grains, grains are mixed, not really crazy. Soybeans down 5, 11, 44 corn, it’s 4, 31 down to a wheat, a six or four, 70 mildly unchanged. There’s the stories from yesterday. Silver miners get some love. We discussed that at length.

The report went out as well. The UBS story about overweight and gold stocks. It’s a very important read. And why gold mine now? That’s our piece, original piece that we put out there. All right. So, again, today, premium Starbucks and stagflation, commentary, China gold influence. The China gold influence starts here. China gold influence is going to be short. It’s going to be easy to get a handle on as well.

For the last, I don’t know, forever, every Neokidsian economist has been telling you, gold is correlated to the US dollar. Gold is correlated to US yields. The higher yields are, the bigger opportunity costs for gold. Therefore, gold is a sale. Well, no, that hasn’t happened. And I’ll show you what I’m talking about. Here’s the gold market. That’s the candle. And the blue line is 10 year yields, real yields inverted.

So it’s upside down. So as 10 year yields decrease in this chart go up, gold would go with it. As 10 year yields on this chart go down or increase, gold should drop. So the correlation should be the same. They should go the same way. But something happened in probably February of 2022. What was it that happened in February 2022? Ukraine was invaded by Russia. And the US put sanctions on Russia.

And at that moment, what was 10 US at best broke. The dollar became strong and gold rally. This chart is even more obvious. Real yields went up, increased. But that did not take interest away from gold. Gold kept going up. That was the beginning of the end of the dollar as global reserve currency. Now, that’s a title. Not worried about that. So for almost two years you’ve been hearing, well, gold can’t stay this separated from US yields forever because it’s a mathematical certainty.

Yeah, yeah, yeah. And that’s true. But it’s not. See, gold follows the money. Gold is the money, but gold follows the economy. Who has the gold makes the rules? OK, well, who is the growing economy on Earth? China. Gold is following China’s yields now. That’s what the US chart used to look like. What you’re looking at there is the same exact gold chart with Chinese 10-year yields. Why is it correlated? Well, it’s correlated because people buy gold driving it up.

When Chinese yields, in this case inverted, go down. Right? So as the opportunity costs, the rule still applies. People are morons. OK, I’m sorry. The rule still applies. It just applies to the economy that matters the most for gold. And gold is going, people aren’t really buying gold in the US. So real rates don’t really matter in the US. Matters in China. So if rates are dropping in China, and the opportunity cost of owning gold in China is decreasing, and they have the most money to spend, then they’re going to drive price.

What I’m saying is correlations are alive and well. They just move to where the money is. Anyway, I also want you to keep in mind, just as a caveat, the correlation to the US real yields is going to come back. It’s not going to be gone forever. It’s just going to reset at a higher level. It’s not going to come back and make gold go to zero. It’s going to come back with gold at 2,000, 2,100.

And then you’re going to see the world rebalance, restabilize. I’ll give you an example of that. Not an example, but I’ll show you the contrast. So here’s all three lines. There’s the gold price. All right. US yields. Blue line are moving away from gold, breaking down against the gold relationship while the Chinese yields are coupling with the relationship. In fact, let me go back to the chart here.

See, just visually, the gold market does what it does. Okay, pretend you don’t care about gold. You don’t care about how volatile the Chinese yields are around. So it’s pretty volatile, pretty volatile. And then it kind of starts to tighten up. Actually, it correlates going back to 2018-19, but it starts to get less volatile in the end of 2021, beginning of 2022. What happened in 2022? We invade.

I’m sorry. We invaded Russia’s money. Russia invaded Ukraine, and we instilled sanctions. Again, February of 2022 is when this correlation tightened up when gold snapped to attention of the Chinese bonds. That’s it. So keep an eye open for that. And there’s that other traffic. It’s kind of a pretty sharp showing that gold for the last two years has really been the Chinese bond market. There’s all other kinds of correlations that matter as well.

But this one is just one that I think that we can all get a handle on. We talk about China’s increased influence on gold. People talk about it. Mainstream meeting doesn’t talk about it at all. They just say China’s buying gold. Well, it’s been happening for over two years. So maybe they need to catch up. Moving on. Starbucks is Starbucks is short. That’s my question. And I don’t know yet.

But Starbucks earnings came out. Starbucks is high in coffee, right? It’s either Starbucks or Dunkin Donuts, right? Construction workers could Dunkin Donuts and Big Shock commodity traders go Starbucks. Well, I’m not a Big Shock commodity trader, but I am a Starbucks person. And I use them as a proxy for the economy. And well, they’re not doing so well. And I’ve been paying attention to them for quite a while.

Here’s some pictures of it. This is their presentation, right? 10% returning favorites, 5% new platform innovation, 85% core platforms. This summarized, they’re not growing. They’re not building on existing client bases. People aren’t buying more from them. They’re just getting what they get and they’re moving on. Okay. Margins are decreasing. There’s lots of information in this. I’ll give you the bottom lines in my words by JP Borden. US businesses drying up to that I would add.

Yes. Remember, if you go out and you buy your coffee, you can’t afford a home. That was a story to make street media. Well, stop buying coffee out. You know, buy coffee at home so you can afford a home, right? Well, make your coffee at home. Well, now they can’t buy their coffee either. People are not buying food there. Coffee only even with delivery. So, you know, I’ve never bought anything but coffee there.

Maybe a donut works in a while, but even with the Uber delivery, people are getting anything there other than coffee. China is a problem. Big promise. China opening up is a problem and it’s slow going. But I would say in a stagflationary way, the economy is moving, right? And they’re expanding in China. That’s important. And here’s another one. Management is troubled. You may not remember this, but when the Gaza war started, Starbucks came out and supported Israel overtly.

And, you know, when you’re dealing with a product that’s consumed mostly by progressive liberals, ideologically, right? You buy Starbucks that give money to some people in a country. They don’t really give it to them, but they say they’re going to and you feel good about it. That’s the Starbucks thing, right? It’s very neoliberal. When you come out and say that you’re defending Israel, well, you lose customers, right? It’s not as bad as Bud Light, but it hurt them, right? The talk of the utilization and the fact that they didn’t get the unions they wanted, that hurt them, right? So the AOC progressives are soft boycotting that.

And I figured his first name, Schulz, Howard Schulz, the old CEO, he’s back. He’s not there, but he’s talking again, which means that management is not there. That management is having problems internally. So I would not be surprised if there were not a coup there. So it makes me think of, I might want a short Starbucks, except if Schulz were to come back, then that would be an end to the turmoil.

So I’m not sure what’s going on there, but I want to read this report and I would suggest you do as well. The market news, nothing particularly special except that home prices keep going up. Meanwhile, commercial real estate is going down. The world’s biggest food and drink companies are not making money because they’ve raised prices, you know, chocolate, et cetera, et cetera. And the Biden administration is going to reclassify marijuana as a less dangerous drug.

Because when the economy is going bad, you want people to be able to stay open and get high. So you get your pot delivered now. This is the 70s, you know? People are getting high and they don’t care about it. All right. Very cynical today, right? Geopolitics, nothing new today, nothing special. Data with that big day FOMC interest rate decision is 230 PM Fed Chas to and 230 PM Fed Chairman Powell.

Press conference happens. Well, today’s two training sessions, right? There’s the session now and there’s a session going into after the Fed training session. Right now, expectations have gone from six cuts in December down to one cut. So if we’re on a stagflationary path and you think he’s going to cut, then you’re going to sell after tonight. If we’re on a stagflationary path and you don’t think he’s going to cut, well, you know, you might be covered in shorts.

I don’t know. But the reality of it is stagflation is growing. If you do the search term, if you look up the Google search term for stagflation, it’s really exploding now, which is an implication that people are feeling it and worried about it. So there’s the premium reported bottom. There’s JP Morgan. They have it as an overweight. But I’m kind of sensing that they’re getting a little bit reticent in their recommendation.

And if it’s, have a great day. And remember, it’s China Bold now. It’s that US gold. Have a great day. Thanks for watching this morning’s markets and metals update with Vince Lansing. Brought to you each day by Miles Franklin Precious Metals. Where this week’s special is junk silver for only $2. 75 over spot. Junk silver is the pre 1965 dimes and quarters. And one of the products where we did see premium spike in the past couple of years.

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