Gold could hit $3,000 an ounce on Fed rate cuts, silver could outperform gold. Okay, I’m gonna start right off the top. That’s a deceptive headline. Welcome to the Morning Markets and Metals with Vince Lancey, where each day he brings you the precious metals in financial news to get you ready for your day. And now, here’s Vince. Well, hello there, my friends, and good morning. Chris Mark is here with you for Arcadia Economics. And just a quick note before we get to Vince’s show, I wanted to let you know the rule symposium coming up this next week, beginning actually Sunday, July 7th until Thursday, July 11th.

And this is going to be in Boca Raton, Florida. I will be there on Tuesday, possibly Wednesday as well, but certainly if you’re interested in the metals, this is a good show to check out. Obviously Rick Rule will be there. Jim Rickards, Nomi Prince, Andy Scheckman will be joining us as well. So certainly a lot of speakers, many of the folks that we have on the show. And you can also take a look at the schedule, which by the way, you can watch this online as well. This is not just for in person, although you can attend in person.

But either case, I’m going to put the link to that in the description field below. So whether you’d like to attend in person or online next week, just go there and click that and that will be the rule symposium. Again, I’ll be there on Tuesday. I know Andy Scheckman will be there all week. With that said, now we’ll turn it over to Vince. Good morning, everyone. I’m Vince Lancia. I hope you had a good 4th of July. Today is the 5th, a day after Independence Day at 759 a.m. We have non-farm payrolls out at 830 today.

Keep that in mind as we go through this. That may already be out by the time we see this. Today’s market rundown, we’re going to take a look at Bank of America’s new comprehensive commodity report based on a conference they just had. I’d say very comprehensive is the right word. That’s my word and we’re going to use it. We’re also going to take a little closer look at what they had to say about gold, silver, and copper. Let’s go through the markets first. The dollar is down nine. Ten-year yields are down one basis point at 433.

S&P 500 is 5534. Up two handles, the VIX is 1242. Up 15, gold is 2366. Up nine and change in climbing, as I speak. Silver 3061, clearing the 30 hurdle. Nicely again, up 22 cents. Copper 467, up seven cents. I’m sorry, 10 cents. 2.3 percent, interesting. WTI is down 15 at 8416. Natural gas is 229. Bitcoin and Ethereum both completely obliterated now, both below 200-day moving averages as well as 100-day moving averages. Bitcoin 55 and change, down 1600. Ethereum 2900, down 100 points. But that’s today. I look at the perpetual future, so it’s been down all weekend.

Let’s put it that way. Soybeans up six cents, corn down three cents, and wheat down eight cents. 1169, 396, and 574, respectively. Last week, Bank of America hosted a commodity conference, and they usually put out a report after those, and we have a copy of that. I think people have been talking about the gold pricing aspect of it, and we’re going to touch on that as well, but we’re going to give you it in the picture, in the bigger picture of what they’re saying there. All right, so home page, gold, silver, recognition sequence.

We said that on Wednesday, and it happens to have been true. Michael Oliver’s mid-year report, he was calling a market that should rally soon on Tuesday. That happened to be true, and we have a nice little report from TS Lombard describing what they believe is a reason today for the Fed to announce a September rate cut in the July meeting. Okay, Bank of America’s commodity commerce report. What did we learn at our commodity conference? Now, this is a combination of their research and their pulling of information from industry professionals, so it’s kind of a survey too, and it’s a good one.

The bottom lines we’ve pulled out for you here, the 3D should drive commodity prices higher into 2025. Those 3Ds are decarbonization, deglobalization, and data centers. We’re going to add the next one, debasement. Currencies will be debased to deal with higher commodity prices on some level. Some grains could trade in a range with upside risks. Supply overhang is real. What they’re saying there’s about energy specifically is that even though there is higher demand, everyone seems to have gotten their proverbial shit together in managing it. So OPEC is dealing with the shell overhang.

The shell overhang, even though it’s not as productive as it was, is now consolidating. So the shell patch is consolidating, and so you’ll get more efficiencies out of that. So we’re going to have an overhang of supply, not forever. Looks like the next six months, two years, what they’re saying. So the supply overhang is real, and you know, emergency measures, the SPR, that becomes, the emergency measures at government level almost always become commonplace. So they’ll do it again. If they get away with it before, they’ll get away with it again. Nothing exceeds like excess.

If it ain’t broke, don’t fix it. They do it until they can’t do it anymore, until the markets push back. And it seems like OPEC is in agreement behind the scenes with the U.S. for some reason. Okay, third, a lot of this report is about copper. Freeport, Matt Moran, they have a keynote section, and it’s very good. It’s about Freeport, right? So it’s about copper in general, but it’s about Freeport. Copper, but anyway, back to copper. So copper remains the darling of commodity investors, okay? This is all about energy. This whole report is about energy, okay? I’ll just put a big thing about it, but it’s not about oil, and it’s not about natural gas.

It’s about copper, and it’s about electrification. That’s it. When you’re talking about energy, you’re talking about copper now, and you’re also talking about silver. No banks admit that when you’re talking about energy, you’re talking about silver, except for Bank of America, and they always throw in a little line that makes me realize that people get it. They just don’t talk about it too much. All right, so moving on. Power demand and price volatility are poised to surge, hence Freeport keynote copper presentation. So those are the five main takeaways. I want to take you right to the gold and silver commentary, and a little climate comment that touches on gold, believe it or not.

Gold could hit $3,000 an ounce on Fed rate cuts, silver could outperform gold. Okay, I’m going to start right off the top. That’s a deceptive headline, okay? Number one, that is their target. They do believe we’re going there. In this report, they say why we won’t go there, and what will make us go there. Okay, so I’m going to read it, and then give you a quick comment. There is a close correlation between investment demand and gold prices, exhibit 33. Right now, here’s basically, it’s not that big, right? Here’s basically their grid.

Investment demand goes, investment demand goes up as price goes up. So that’s basically what they’re saying, okay? We get up to a certain level, and you’re going to have investment demand on the left axis, and gold price on the right axis. So with investment demand, we’re to increase. What does this mean? I’m going to tell you what this means, okay? It means that for the last year, year and a half, banks have been talking about investment demand as a reason for gold to go up. If investment demand comes in, gold will go up, but if investment demand doesn’t come in, gold won’t go up.

And what happens? Gold keeps going up, despite investment demand. You remember the stories for the past year? ETFs have outflows, but gold’s going up. ETFs have, so everyone had been, mostly everyone had been, except us and a couple other people, have been saying that if investment demand doesn’t come back, this market’s going to crater. That’s what you kept hearing, and it started out negative, and then it went to neutral, and now it’s going positive. Positive meaning gold is trading here, and now if investment demand comes back, it’ll go to 3,000. What if I told you gold was in the 3,000 without the investment demand? That’s just a speculation, but that’s my point.

The point now is they have all, I love this part, okay? For the last six months, everyone’s been telling you correlations with gold are broken. Investors don’t matter. Gold goes up. The dollar doesn’t matter. Gold goes up. Rates, correlations are still there. They’re just not there as the market recalibrates to the new realities of a deglobalized world, of a mercantilist world, and so the correlation with all these drivers of gold, investors, dollar, and interest rates, they’re still there. They’re just readjusting their beta, which means they’re not going to affect so much from the downside as much as they used to.

They are going to affect more on the upside. Anyway, rant over. From this standpoint, a gold price average of $2,500 this year could be justified. It is justified. If investment demand increased by around 20%, same story you’ve been hearing. I’m not knocking this report, but it’s the same idea. The idea is gold shouldn’t be here unless more investors put their money in. But investors are putting their money in. They’re called central banks, okay? Yet non-commercial purchases were only up around 3% year over year in first quarter, 24. Okay, enough to justify an average gold price of just 2,200 an ounce per year to date.

Fine. Flows would not justify a gold price of $3,000, our target for the next 12 to 18 months. Yet if non-commercial demand picks up, that’s investor demand, from current levels on the back of the Fed cutting rates, the yellow metal could push higher again. Okay, so they want two things. They want two things. They want the Fed to ease rates, right? Which would put a wind underneath the sales, in the sales, however it works. And then they want investors to react to that by putting money into it. Okay, so here’s our take on this.

If the gold price is mathematically, according to their model, justified at 2,200 an ounce, it’s trading $2,366 an ounce because it’s discounting a Fed rate cut. So if the Fed does not cut rates, this market could go back to 2,200. That’s my take. If that does cut rates, it’s going to go another $150 higher, it’s $2,500. And then if investors come in again, and they will, it’s going to go to $3,000. Now, are they going to come in again? Nobody knows. But I’m just, you know, the context is basically this. Every bank out there is struggling and recalibrating their models to understand what the price of gold should be.

And they had been doing, you know, dollar rates, investor demand, dollar, and it’s like gold just keeps going up. It should not keep going up. And now they’re catching on. Now, Citibank put out a report. We haven’t seen that report yet, but we saw a blurb about it. Citibank put out a report that they’re releasing a new analytical model to value gold, which means all the banks are doing that. And I think Bank of America is doing that as well. Anyway, I guess what I’m getting at here is, and this is really good for gold and silver.

All the banks are figuring out a new way to model gold, a way that we’ve been doing for two years now, but they’re going to quantify it a little bit better. And they’re going to then use that to motivate investors with confidence to get into it. Now, then they’ll be able to say buy gold because of this, buy gold because they’re not really able to say that yet. So this is kind of an investment demand marketing situation. Anyway, what I’m saying is gold is, you know, between now and January 6th, gold is here to stay.

And after that, we’ll see what happens. Here’s where it gets interesting. Silver has similar demand drivers to gold, but it also has exposure to the energy transition from solar panels and EVs. See this, but it also has exposure to the energy transition. Nobody else says that. There’s no sections on silver. Why not? Because they’re buying it because they need to buy it. They don’t, there’s not enough of it out there. Silver is a critical metal that if they label it as a critical metal, there just won’t be enough of it out there.

That’s my opinion. So if you’re looking at, if they’re talking about copper, they’re buying silver. If they’re talking about copper, they’re buying silver. That’s what they do. Hence, we see potential for silver to outperform gold going into 2025. That’s always the case. Finally, PGM fundamentals remain challenged on slow production of cars with a combustion engine and a lack of supply discipline. Right. There could be changes coming there as well. So we have more on that underneath, and it’s a very long report. We’re going to go through it sector by sector and, you know, get something out, at least some more charts coming out later on, but it’s, data on deck today, unemployment, non-farm payrolls is the least reliable data that we’ve had.

But people are going to look for that to finally discount everything else that’s been in the economy. The economic real-time data has been slow down, slow down, slow down, except for the ISM this week. And so they’re looking for unemployment to down tick. I can’t see how that will be good for Biden, but there you have it. If this is substantially, you really could see everything rocket higher because then the Fed will probably cut between July and October. And they probably do want to cut, especially with international pressures as well. On premium, we have the table of contents, and we have a little bit more of an excerpt from you, for you, I should say.

All right. Checking with the chart here. Here we go. Here we go. You ready? We can ignore this for now. Blah, blah, blah. This is the guy who buys all the time. This is the guy who buys all the time and didn’t even get there this time, and this used to be a buyer, and it became a seller. And now it acts as support, and we’re through the 50-day moving average, and the 50-day moving average is turning up. If non-farm payrolls is weak today, I believe that this market will rocket. In fact, I’m surprised it got up here this quickly.

I thought it would just get to here, but it’s above that now. If the non-farm payroll number is extremely strong, implying that the Fed will not cut, then you should expect a dip. Two years ago, we’d have a dip like this that followed through lower. Now I think we have a dip like this that might be bought again. So if the non-farm payroll number is extremely weak, extremely strong, I’d be a buyer of a dip approaching this level. But I would also be careful below it like anyone else would. All I’m saying is you might not be able to buy it if the non-farm payrolls number is weak.

Why? Well, because see this buying here? That’s macro discretionary buying in front of the number, and when they buy before a number, they have more to buy after. They don’t buy it all before the number. They’ll also puke afterwards. Anyway, I’m Vince. Have a great day. Well, thanks for tuning into today’s markets and metals with Vince Lancy. And once again, just a reminder that this coming week is the rule symposium July 7th to 11th in person in Boca Raton, Florida, and also available online. And you can take a look at the schedule to see a lot of the topics, a lot of gold and silver coverage that will be there.

So if you’re looking to dig into these precious metals at a deeper level next week, well, the link is in the description field below. Hope you’re all having a great day out there, and we’ll see you again next week. Please note that this video is not intended as legal, licensed financial trading advice and is to be used for informational purposes only. Please contact your financial advisor before making any decisions, and thanks for watching. [tr:trw].

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