Vince Lanci: After Gold Silver Rally Attention Shifts To The Miners | Arcadia Economics

➡ Vince Lanci market report discusses the current state of various markets, including gold, silver, and cryptocurrencies. He suggests that the market is recalibrating and that normalcy will return once gold and silver reach their proper prices. The report also mentions potential government regulation on Bitcoin and the impact of various global factors on the market. Lastly, it highlights a report that provides reasons to own gold, but clarifies that they are not advising to buy miners.

➡ This article talks about the potential for gold prices to rise, as they are currently not at their all-time high. It also discusses how many countries and asset managers have a low percentage of their reserves in gold, suggesting they might buy more. The article also mentions the weakening of the Japanese yen and its potential impact on the US dollar. Lastly, it covers various market news, including Elon Musk’s visit to Beijing and the future of AI in big tech companies.

Those correlations we have contended are not broken. Those correlations are suspended while the market again recalibrates rebalances at higher levels. Okay. Normalcy will return after gold and silver are at their proper price. Welcome to the morning markets and metals with Vince Lancy, where each day he brings you the precious metals and financial news to get you ready for your day. And now, here’s Vince. Good morning, everyone. I’m Vince Lancy and today’s good morning meeting.

We’re going to talk about UBS giving gold and silver miners, implicitly, some love. And we had previewed this on this program and in premium posts last week with an excerpt from that report that someone had passed along to us. But now we have access to the whole report and we’re sharing that with you today. Okay, we’ll also quick comment about the yen and we’ll touch on some market driving news.

All right, so there you go. UBS gives miners some love. All right, let’s go through the markets now. While we’re doing that, that’s the Goldfix homepage. The dollar is down 42, impressively weak. My guess is that’s yen related. The US ten year is 462, down four basis points. S and p 500 is up eleven handles the VIX is 1525, up 23 basis points. Gold is 23 42, up $4.

40 after being down around $9 last night. The buying, if you’re interested, started coming in at around 03:00 a. m. Which is London time. So Europe and the US are buying. Now, over the last five years it hasn’t been like that. Silver 27 40, up $0. 20. Copper again strong up three cents at four hundred fifty seven. Oil is up thirteen cents. Eighty four forty. I truly believe that the Saudis and the US are closer than people think and they are pumping oil to keep a littleness during the whole middle eastern war thing.

Old habits die hard and everybody wants normalcy when it comes to cash flow. That guess. 174, up $0. 03. Bitcoin 62 283 down 789. A lot of bearish looking news came out this weekend on bitcoin. The government is going to be regulating it more and more heinously, meaning now that they’ve got the ETF started and they’ve got the normies in it, they’re going to slowly cut off and isolate and build walls around the people that don’t comply.

And that would be in the form of lowering ability to use it as collateral throttling connectivity somehow and just generally making it pain in the ass. To use and that’s what they do. And then they’ll come after you for taxes by let me think about it, they’re going to come after you with taxes by changing the settlement prices and how they affect you’re going to end up paying taxes on an annual basis on a spot product that you havent sold yet which is screwed up.

Thats my guess. Ethereum 3162 by you I mean me too. Down 99. Palladium platinum both up 9. 59 in palladium and 932 in platinum. Its taken like five years for this to happen but its happening again. Meaning platinum should be more than palladium and ive been looking at that for years. Put a couple trades on that lost money. Grains. Soybeans up $0. 05. Corn unchanged. Wheat down 16.

That’s interesting. I bet you there’s war and seasonality involved there. There’s intermarket place here. If you’re not planting soybeans, you’re planting wheat. There’s a lot going on there. You have to understand the market itself. Anyway. Okay, let’s get to it. Oh, back to this. This page here. I repin this. This is a broadcast from last week touching on the overview of what we’re going to get into a little bit more of.

Now. This is tectonic gold gyrations, greed and fear. Had a report and we discussed that with people in a post and we put this out. There it is. Why gold? Why now? That’s a free post for everyone and it gives, I think a nice overview of what’s going on in the world with regards to gold. All right, so premium, we have some charts. It’s not all boring words.

We have some charts here for you as well. This report is the best report on reasons to own gold we’ve ever seen. It touches on every reason described in Goldfix for the last two years and serves as a vindication of what readers have known for some time. One caveat, we are not telling you to buy miners. They are. It’s a bold statement and not without risk. But there it is.

Miners are near their lows with gold bullion near its highs. Which is why we’re thinking about personally, we’re long miners, right? Shorting metal against long miners. But that’s neither here nor there. All right, so we’re gonna go through the contents very quickly and very broadly to let you know what’s in this report. Executive summary, reasons to own gold. It goes through all the reasons in very overview fashion, structural reasons, stuff that we talk about here in Gulfix a lot macro reasons, stuff that we also talk about here a lot, low mechanical reasons, very tactical stuff, fundamental reasons, meaning the miners themselves.

Okay. Then they get into the actual reasons themselves and we’re going to go through them with a quick comment. So you know what they’re really getting out here? The reasons. Central bank buying, not just Brics, every central bank. And they’re not all showing their hand. Unsustainable us deficit. We all know what that means. What does it imply? Something will break. You can’t keep spending the money that we are.

China Qe soon. China has economic problems. They’re dealing with them. There’s no crisis right now, but they’re going to have to stimulate more and that means they have to print, especially with the end getting slammed like it is. Bitcoin is not gold 2. 0. Well, there’s a chart. We’ll show you that chart. For a time period, people were saying gold, bitcoin is gold 2. 0. Look at how it’s going up during inflation.

Well, you know, it wasn’t going up because of inflation. It was going up because of stimulus checks and retail being given money. The behavior in global panic, which is what you’re seeing a little bit of now, tells you this. And they show a chart to that effect. Inflation targets will be raised. Something we’ve also said here many times. Footnote we say a lot of things here. Say them a couple of times.

Then as they start to happen, we stop talking about them, talking our book. We’re not selling advertising space. It happens. We move on. Right. But everyone’s catching up now, and that’s really kind of cool. So inflation targets will be raised. Whatever they’re saying now, they will say something else later. And before they change what they’re saying now to what they’re saying later, they will start to permit things they didn’t otherwise permit.

Inflation is going to float at three to 4% if the federal government keeps spending. I don’t care what Biden’s, not what Biden, what Hal says. Unless you’re changing the numbers, you can’t get inflation down to 2% with unemployment this low. Low unemployment means high inflation now, meaning the economy is a three legged stool. The GDP, how it’s doing, unemployment and inflation. And if you continually lower two legs, the other legs got to drop.

If you continually raise two legs, the other legs got a raise or the whole thing tilts and doesn’t work. Okay, so we’ve had low unemployment for a long time. We’ve had low inflation for a long time. Okay. And weve had high GDP. Well, the GDP is now higher and the unemployment remains low with the inflation high. So either people have to get fired or inflation comes down. If people get fired, GDP comes down.

If inflation gets lower, GDP comes down. The point is, what was equilibrium is no longer. All right, correlations will return. We talk a lot here about correlations and how the dollar gold correlation isn’t working like it used to. The dollar strong gold is up. Why is that? It’s because of the war. It’s because of this. It’s because of that? No, it’s because they want the gold. Right. And they want the silver too.

They’re just not as vocal about it yet. So those correlations we have contended are not broken. Those correlations are suspended while the market again recalibrates, rebalances at higher levels. Normalcy will return after gold and silver are at their proper price. So they contend the correlations will return as tailwinds once things get balanced again. So what they’re saying is the dollar is strong and gold’s not going down. When the dollar gets weak, gold is probably going to go up, isnt it? Ok, the dollar sells off, and thats one that we all know.

But just to put a finer point on it, thats mercantile. We need a weaker dollar to export. If we dont export stuff, were not going to recover, were not going to hold our place on the world stage. The other reason, the funny thing is these are the other reasons. Geopolitical risk is another reason. Im not diminishing. Im just saying thats how big these other reasons are to them.

Cold war 2. 0 geopolitical risk, meaning it’s not necessarily manifest. It may go away. Doubtful, but it could go away. Bullion. This is very tactical bullion. 40% below all time highs gives it room to move up. They’re looking at the all time. That’s a tactical thing. I wouldn’t have that as a reason to get long, but I would say it’s a reason to not worry that gold is overbought.

Okay, gold may be overbought, but it’s not really at all time highs. Mining fundamentals, this is what they get into. A lot more of stocks are ready to run now. If they’re saying stocks are ready to run, then guess what? That’s because their clients are saying it. If their clients are saying it, that’s why they’re pitching it. It’s a very big self reinforcing cycle we’re entering now. All right, in bullion itself, spec loans are not as high as they look, includes a trade idea.

Again, it’s another tactical reason. That’s true. I don’t know if that’s the reason to buy miners. Okay, a couple charts for you. There’s like 30 charts in here, but here’s a couple that I thought were worth showing. Official sector gold mine. So the orange is official sector means central banks or sovereign funds. So you can just see it’s going up. 2024 is actually lower so far, but that’s because the price is much higher.

Next chart. Some major central banks have a low percentage of their reserves in gold. Take a look at China at 4. 5%, it looks like roughly now their central bank reserves are a low percentage in gold terms. Now thats the official number. We know China has a lot more gold in it. But what theyre getting at is, see all these countries that are, lets hope being honest, the UK, Australia, India, Switzerland, Japan, Singapores got more gold than that.

Saudi Arabia has more gold than that. UAE has more gold than that. Brazil, Korea, theyre all buyers of gold. If everyone else is buying gold, they’re going to buy gold. And there’s a lot of validity to that. Asset allocation of gold. Asset managers, asset managers have a ridiculously low allocation to gold or gold exposure to silver or silver exposure. Now that doesn’t always mean futures, it doesn’t always mean GLD or sov.

It also means miners. How low is it? Well, that’s 1%. These guys are in the 0. 6%. What are they? 30% in tech, 50% in tech. Give you an idea of how much upside there is when somebody says, you know what, I think I’ll buy a little bit of gold today. Next chart. This chart is an example of the decoupling or reintermediation. That’s the word they use, right? Yeah, reintermediation.

It’s basically like saying crypto is not a hedge for disaster anymore. So if you look in this area here, 21, 22 crypto, the blue line does extremely well, volatile but extremely well relative to gold. And that correlation is fictitious, I’m telling you. But it certainly was something to pay attention to. And people were saying, well, gold is being replaced by bitcoin. Silver is being replaced by bitcoin because this is when the inflation started.

It’s also when the stimulus checks started. So this was not bitcoin being a hedge for gold. It was bitcoin participating with meme stocks at the time. Here we are in 2024 and you have gold doing what it’s supposed to do. At all time highs. Bitcoin also doing quite well. That’s probably again because of another external factor, and that is the floodgates are being opened and the ETF is listed.

But anyway, the point is this was the aberration. Maybe the future, but it’s not the present, that’s for sure. Those are the charts. Those are some of the charts. Markets with the market news. Market news. Actually, there’s a chart I want to show you here. See, this year, people are going to start talking about the yen again. This is something else we talked about last year and its coming to the US.

Yield curve control did this. You use yield curve control and one way or another its going to weaken your currency. Look, if youre shooting a gun in a crowded room, someones going to get shot. If youre throwing a bowling ball at pins and there’s gutter guards out, youre going to hit some pins. Ok? So if youre using yield curve control to keep your long end rates low, youre going to make your short end drop.

Thats just how it works. Inflation manifests in the currency. Now this is also very important towards China. Theres a lot of implications here. Put it this way. The yen has been historically the asian dollar. It’s been the reserve currency. So I think what’s happening to the yen will happen to the dollar, maybe not as dramatically, but eventually. Give you an idea. In the last week, the japanese yen has lost, I don’t know, between four and 7% purchasing power.

So that’s like going to the store and saying, and seeing prices go up in a week, four to 7%. That’s after going up 7% over the last two months. So if it starts to feel like hyperinflation, yeah, that’s what I mean. It’s not hyperinflation, but that’s the whole concept. The concept is you get your money, you expect prices to go up, you go out and buy shit before prices go up, which makes prices go up.

All right, dangerous stuff. Market news. Tesla CEO Elon Musk arrived in Beijing on Sunday on an unannounced visit, where he’s expected to meet senior officials to discuss the rollout of full self driving software and permission to transfer data overseas. China currently has the capacity to produce some 40 million vehicles a year, though it sells only around 22 million cars domestically. That’s the press, and I’m not saying they’re wrong.

Jumping on China’s back now, NASA says SpaceX is on track to demonstrate in space refueling of starship next year. A critical technology for returning humans to the lunar surface using that vehicle. Never short Elon Musk. You can short his companies, but don’t short Elon Musk. Despite cost at the largest us banks deposit costs, not despite cost at the largest us banks rose more than interest revenue last quarter for the first time since the Federal Reserve began raising rates two years ago as savers demanded lenders share the benefits.

For over a year and a half, these banks were getting paid five and a quarter rates and giving zero. So I have no pity for them. So why Microsoft, Meta, and Google’s parent company are going to keep spending money on AI they need to spend. Germany’s economic prospects are looking up after two grueling years of near zero growth. Consumer led revival footnote this is mercantilism watch Germany was the engine of Europe, making stuff.

BMWs, Mercedes, we bought them from them, right? They were the high end China, right? We bought our junk from China. We bought our high end stuff from Germany and Japan. But now Germany can no longer compete economically as an export nation, and so they’ve been losing their industry. Eventually they will come out as a consumer. Theyll be lending money to Europe and buying stuff because Germany is apparently the wealthiest country in Europe from all the manufacturing that theyve spent.

So Germany is going to become like, look, when the euro breaks up, the deutsche mark will be the currency to own in Europe. Probably. All right, geopolitics. Israel is considering not going into Rafa if they get some hostage back. The most important news, I think, yesterday was that us intelligence found that Russian President Putin did not directly order naval death in February, according to the Wall Street Journal.

Okay, well, there you have it. Russia’s Kremlin also said there would be a severe response if russian assets are touched. And it is a pity that some in the west do not understand it. That’s right. If we repurpose their money, that’s not just freezing, that’s confiscating, and that’s stealing. All right, data, no data today. Big week for the FOMC on Wednesday. Wednesday is your focus. And there you have it.

I’m Vince. Have a great day. Talk to you tomorrow. Thanks for watching this morning’s markets and metals update with Vince Lancy, 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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