Vince Lanci Explains What Recent UAE-Africa Gold Deal Means For Market

➡ Emerging powers like China and Russia are offering an alternative to the U.S. financial system, promising more money and less hassle to many countries. Vince Lancy discusses this in his Morning Markets and Metals show, where he also talks about the UAE’s plan to buy African gold at higher prices. This move is part of a larger trend to reshape global trade by offering alternatives to the U.S. dollar. The BRICS nations (Brazil, Russia, India, China, and South Africa) are building a new financial framework for global trade, where gold will be a payment anchor, fostering trust and stability.
➡ Russia is increasing its gold reserves by selling oil and converting the revenue into gold and foreign exchange reserves. This move is seen as a way to bypass the use of the dollar in trade. Meanwhile, the market news reveals that Apple is not performing well, while Huawei is reportedly doing well. Lastly, the upcoming BRICS summit in Russia and the U.S. election are creating uncertainty in the market, which could impact gold and silver prices.

An alternative to the U.S. swift. RICs, which includes emerging powers like China and Russia, are presenting themselves as a solution to the economic chokehold many countries face under U.S. financial systems. For these nations, the promise of more money, less hassle, and greater sovereignty is appealing. Welcome to the Morning Markets and Metals with Vince Lancy. Where each morning Vince brings you the financial and precious metals news to get you ready for your day. And now, here’s Vince. Good morning everyone. I’m Vince Lancy and today’s Market Run Now we’re going to talk about UAE moving to lock up African gold flow, as the title suggests, and Russia selling oil for gold in September.

Soon, if not now. Let’s start with the markets. The dollar is unchanged. We’ll leave you some futures charts up to look at there. Ten-year yields are up one at 370.19. SMB500 is down 11 after a rip higher yesterday, 54.67. The VIX is 1980, holding firm because of all the uncertainty on deck. Gold 25.04, again sold yesterday, early, bought the rest of the day, sold last night, bought this morning now kind of unchanged-ish. Silver 28.43, up 8 cents. Copper is down a penny and a half at 409. Gold silver ratio, steady, slightly softer.

WTI 68 and change, down a buck. Cannot get out of its own way. Natural gas, 215, strong day today as well as yesterday. Up 8 cents. Bitcoin revitalized, but still below the 58,000 mark. Good morning yellow. Down 14. Ethereum 23.45, down 14. Palladium up 16 at 9.63 and platinum 9.44, $4. The mystery of the PGMs continues. Grains down 11 at soy, 10.25, that’s over a percent. Basically got a soy wheat trade going on here, maybe seasonality, maybe plant A, maybe harvesting, I’m not sure. But 10.24 in soy, down 12 and change now. Corn, unchanged at $3.94 in wheat, $5.75, up 4.7 cents.

The chart you’re looking at there on the left is gold with an estimation of seasonality that I use for discussion. I’ll be using that again later in the week and on the right we have a weekly gold chart, similar chart, but I have time to mark indicators on there courtesy of TradingPro. All right, so let’s get to it. UAE moves to lock up African gold. That’s a news item, founder mentioned it to me yesterday and raised an eyebrow because although it seemed like it was just another one of those bricks is conquering the world things that reminded me of some concepts that I think are really, really in play now.

All right, so before we get to those stories, front page, there’s the full buy season as well as sell season timeline in there. We’re going to do some more elaboration on that, but that’s a good place to start if you’re wondering what’s going on or what’s going to go on probably for the next two or three months. CFTC report, we can mention that. And there’s a story, not by us, that title is definitely not ours. Russia selling oil for gold in September. We will touch on that today. That’s unlocked. All right, this morning we set out an analysis.

There was a story that came out the other day and it was, the gist of it was, it was the translation was from another language to English, but the gist of it was the UAE is promising a better deal for African gold miners. So the UAE is basically saying, we’re going to buy your gold. We’re going to buy your gold at a higher price and a better price. And we’re going to get your money fast and there’s not going to be any delays and there’s no risk of confiscation and all that other thing.

So we published that story and then we did a report and analysis of it and we sent it out this morning. Founders got to look at it a day or two ago, but it’s a podcast as well as, as well as a write up and it’s going to hopefully shed some light on how important this is. It’s not the only thing to that effect that’s happening in the context of what’s going on. It’s pretty important. So topically, I want to run through very quickly the topics to give you a taste of what this analysis is about.

So topically, first of all, it starts with bricks replacing US dollar in trade. The UAE’s recent move to assist African gold. I’m reading up some highlights from the report here, not highlights overview. The UAE’s recent move to assist African gold miners is part of a larger trend, one that seeks to reshape global trade by offering alternatives to the US dollar. Number two, an alternative to the US swift. You know what? Let’s throw some pictures up there, right? Give you something to look at while we’re talking about this. All an alternative to the US swift bricks, which includes emerging powers like China and Russia are presenting themselves as a solution to the economic chokehold many countries face under US financial systems for these nations, the promise of more money, less hassle, and greater sovereignty is appealing.

Post COVID realities, right? This is where it becomes, it comes to light. COVID-19 highlighted vulnerabilities in global supply chains. As the West rebuilt their supply chains, the East needed to create their own network of trade and payment systems. Think of the Belt and Road Initiative. Think of Enbridge, which is an electronic cementing of that concept. All right, so those supply chains and payment chains, what are they? Well, traditionally, the US dollar has dominated payment chains, which are the mirror of supply chains through swift, but now the bricks are about building a new financial framework for global trade, an alternative payment chain based on tech, trust, and trade.

So the three T’s we’re going to call that. That should rival swift. In their payment chain, gold will be a payment anchor. So with this trust in fiat currencies rising, BRICS nations are increasingly looking at gold as a stabilizer and a foster of trust. The appeal is obvious. Gold is trusted universally, and it’s not tied to any single country’s economy or political system. The BRICS payment chain strategy is simple at its core. China, for example, is laying out a new kind of trade architecture where countries like those in Africa can sell raw materials like gold and get paid in yuan, which is then implicitly backed by gold, or literally, if you’re using their basket.

This creates a loop where countries start using Chinese currency, or maybe UAE currency, although I don’t think that’s going to happen, to buy Chinese goods. So we buy your natural resources, you buy or finish goods, and that’s what the picture is there. Now, UAE’s role in the market, well, the UAE in Dubai, there’s an exchange called the Dubai, the DGCX. And from personal experience, when it first opened, I was in the process of becoming a market maker there on their options exchange, but on the options product, but they didn’t have one ready with such a new exchange.

This was at the request of someone who was consulting with them. So I waited a long time, but here we are later, and I’m pretty much retired from doing that. But anyway, back to the UAE itself. So they’re a player. The UAE’s role in the gold market, the UAE is playing a crucial role here by offering African nations better prices for their gold. That’s what they’re offering. The UAE is ensuring those countries sell to them, rather than Western buyers. Those of you familiar? Just to refresh the concept here, in 2020, the LBMA, I’ll include those pictures, the LBMA almost threw out the UAE for what they thought was inappropriate behavior in gold, and they may well have been right.

And in 2023, the UAE, second largest economy in the Middle East, joined BRICS. And in 2024, now the UAE is saying to African nations, you don’t have to sell your gold on the LBMA. You can sell it to us. We’ll pay a higher price. All right. So this creates, as I alluded to, a closed loop model. So it’s much like a walled garden model and technology. BRICS countries are creating their own economic systems. So the supply chain, we will, you will give us your raw materials. The payment chain, we will pay you money.

Now, you have our money, you have our currency, you have our Amazon bucks, and now we’re going to say, do you need to buy anything? And they’re going to want to buy it from, say, China, rather than, say, the US. So this is how the relationship deepens. They’re seeding China and other countries, primarily China, are seeding nations with their currency. In many ways, this is just one way of doing it. Trust. The relationship between BRICS and the resource rich countries, their courting, of which they’re also a part of, relies heavily on trust.

So for now, BRICS are offering a seemingly compelling alternative to the US dollar denominated trade system. Will it succeed? The BRICS offer is tempting enough for many countries to break from the US financial grip. About a year ago, Ghana basically came out and said, we’re going to sell our gold directly for diesel. Ghana drills for oil and sells oil and sells its gold as well. Then they say, well, we’re going to buy our diesel no longer with dollars. We’re going to buy our diesel with gold itself directly. So you could see that gold is disintermediating the dollar in trade where it’s convenient for the parties.

And it will become more and more convenient if a platform like Enbridge is successful in creating a basket that is both fungible and swift, for lack of a better word. So how will we know? Well, we won’t know until we know. It’s a slow process. But we’ll find out more October 20th through the 22nd when the BRICS summit starts in Russia. And I suspect they’ll be talking a lot more about this. And the lack of propaganda this year is suspicious. But that’s my own, that’s my own paranoia. Okay, we have an in-depth analysis.

We just, it’s probably going out to people who have been recording this right now. And we also have the link at the bottom. Moving on to what actually is second tier news now, Russia is selling oil for gold in September. That’s what a writer, an author, said in a post. Now, we’re going to go to this post for you right now, okay? All right, last week news was broken here in the West, for most of the West, that Russia grows its gold and FX purchases by 600%. And the indirect implication from that news was revenues generated from oil sales, which you can see on your screen from my speaking, will go towards increased purchases of gold and FX.

The author of the article below, we have attached, unlocked, ties the two events closer together, keeping in mind, no literal quid pro quo was announced by Russia on oil for gold. The author is not wrong. China has been buying oil and settling in gold and or yuan with a gold option since 2017. The most recently discussed was in a post that we have called the petrodollar is dead to China in April. And Jeffries Chriswood anecdotally also confirmed our analysis in April 2023 from a completely different vantage point. Anyway, here’s the story.

Russia earns money from selling oil. That’s how their economy operates largely. And Russia converts revenues from oil into FX reserves like most countries do. Russia, having no use for dollars anymore or actually not actually allowed to have dollars anymore without getting them stolen, converts a good chunk of that money into gold. How much we don’t know. But more than a little market news, you can go through that. The market news is Apple isn’t doing so hot. And I’m going to say their name wrong. Hawaii is allegedly doing well. By the way, as as a phone person who studied the history of phones, I don’t think a trifold phone is going to work.

That’s a novelty. You know, it’s a novelty. I don’t think it is. But who knows? I could be wrong. Moving on to the geopolitics. However, where’s the geopolitics? There it is. President Carter tell me this doesn’t selling the 1970s folks. U.S. President Biden was reported to convene his national security system to discuss the impasse of negotiations in the hostage deal. Carter, for those of you not old enough to remember, Carter was trying to get the hostages back from Iran, even had a mission that did not succeed. Very bad publicity there. A lot of people died.

And then Reagan comes in and he gets the hostages back. How 1970s would it be if Biden was trying to get this deal done for the election as Carter probably was as well? And then they’re holding off because literally they probably want Trump to win and then Trump will do the deal for them anyway. So there you go. The data today is the NFIB. Pretty important. If you’re a data wonk, small businessmen drive the economy forward. So if they’re optimistic now that things are getting better, maybe the worst is over recession wise.

If they’re pessimistic, then the recession is probably going to be a lot worse than it looks. A quick look at the markets again. Let’s go to the hourly. And we’ll go to one screen again. Gold, you know, I would love to talk about other markets. It’s just been, but it’s been such an exciting market right now. All right. Here’s the four hour goal. There’s the lines that I referred to again. It touches it again yesterday, right? Doesn’t even go through it. You know, Michael Oliver’s yellow line there touches it, but you will see what the four hour becomes more obvious that we’re in a range up, down, up, down.

And during this timeframe, open interest has come in to elaborate, to restate what I said yesterday. It’s not unusual for the open interest to come in when a market sells off. That’s because the long funds are selling, they’re puking, they’re getting out, they’re taking profits or locking in losses. And during that time, the, the, the bullion banks buy, right? They let it come to them. They’re patient buyers, they’re market makers. However, for the open interest to come in, the last three cycles of this, the open interest has come in substantially without the market really dropping, which suggests either there is another buyer on the physical side that we’re not seeing manifested futures, which there was before, or the bullion banks, in my opinion, are not letting the market drop as much as they used to.

And they’re being a little bit more urgent with their buying, which suggests urgency, or also suggests that right underneath their buying, there is a big, you know, whale who will scoop up anything that goes below that. Anyway, convince, oh, silver. Look, if you look at gold, right? See that four hour area here during that timeframe, what did silver do? Range and lower. Silver is not trading like gold right now. Look at silver compared to say, copper. See? Range lower. So they’re lumping in silver economically. Your concern with silver and gold is if the Fed does not ease 50 basis points, which I do not, I don’t know, but I do not think they will.

If the Fed does not ease 50 basis points, then stock should sell off and silver should sell off and copper should sell off. The uncertainty around the election and the BRICS summit will keep a bid under silver, right? Will not keep a bid under copper and will keep the buying coming into gold at, you know, every moment. So enjoy the debate. If that’s what makes you excited and have a great day on this. Thanks for watching this morning’s markets and metals with Vince Lancy brought to you each day by Miles Franklin Precious Metals, who we encourage you to contact for your next gold or silver order.

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