➡ The article discusses the economic relationship between China and the US, focusing on the value of gold and the dollar. It suggests that China values gold equally with US treasuries and believes the dollar is overvalued. The author also discusses potential market shifts, including a possible sell-off in stocks after Trump’s inauguration and a move into bonds. The article ends with a detailed analysis of gold and silver prices, suggesting that if silver falls below a certain point, gold could also decrease in value.

➡ Vince Lanci discusses the potential for a strong rally in the gold market. He suggests that after the election, despite some sell-offs, the market didn’t drop significantly and is now free of ‘stupid money’. He predicts that once any remaining ‘stupid money’ is sold, the market will rally hard. This information is for educational purposes and not financial advice.

UBS report on silver markets for 2025 projects a bullish outlook for the metal, forecasting prices to rise to US dollars 38 per ounce by the end of next year. Their optimism stems from expectations of lower US yields, improved global industrial activity and a rebound in investor confidence. Welcome to the Morning Markets and Metals with Vince Lancey. Where each morning Vince brings you the financial and precious metals news to get you ready for your day. And now, here’s Vince. Morning, I’m Vince Lanci. Today’s market rundown is starting now. Topics for today will be the agreement on gold.

I wanted that to be its title, but we’re not going to get into it too much now. The topics will be another step higher for silver in 2025 and we have a little bit of a bonus in Premium Academy. Academy’s Peter Cheer on his 2025 commentary. We’ll discuss the agreement on gold and another conversation, but just put it this way. The gold reset is a process, not an event, something you’ve seen me say and post on here, I think, for four to six months now. The corollary is China and the US have an understanding on gold.

It’s not complete tinfoil. We’ll get into it some other time. There’s the front page. Here’s the markets. The 10-year yields are down four at 458. The dollar is 107.81 down 19 below 107. You trigger my levels as well as technician Michael Oliver’s levels to be on the alert. The S&P 500 is 59.20 down a whopping 57. Is it a light volume? Is it a heavy volume? You don’t want to put too much emphasis on it yet. However, we’ll comment on this again later on. The VIX is 18 up to gold was down eight or nine bucks, now trading 26.21 up unchanged to higher.

Silver is 29.44 up nine. Copper is 407 down one. WTI is 7107 up 54. Natural gas to star of the evening, F402 up 55. Weather related, polar vortex. I’m not sure if it’s US or it’s Europe, but it’s probably US. Bitcoin 75, 93.6, softer. Macrodiscretionary is getting out of that. Ethereum 3400 up 51. Palladium 913 unchanged bid. Platinum 919 down three. Gold silver between 86 and 98, 88.9. Soy and corn unchanged bid and weeded up about a percentage point. All right, front page. Quick note, China’s playing the US dollar and gold, which is what I was alluding to now.

Silver, another step higher in 2025. That’s what we’ll be focusing most of our time on today. Founders on de-dollarization, that’s a piece that I wrote for Jordan Roy Byrne, which will be in his forthcoming book. All right. Discussion. Silver, another step higher for silver in 2025. UBS. UBS put out our report. A note, I’d say, from the CIO. We’ve seen these before. The last time they did one of these for silver was before a rally. And the last time they did one of these before gold was timely. So I like these little notes.

There’s a lot of detail in them. Let’s give you an excerpt of our analysis of it. All right. UBS report on silver markets for 2025 projects a bullish outlook for the metal forecasting prices to rise to US dollars 38 per ounce by the end of next year. Their optimism stems from expectations of lower US yields, improved global industrial activity, and a rebound in investor confidence. We’re going to break those things down for you. We break them down in detail in the note, but we’re also going to touch on them here. There’s the pretty picture that we created.

There are two key drivers UBS makes for the rally. Lower yields and lower US dollar and an uptick in the global industry. Now we’re going to bring that back to stocks in a second. So let’s get through the silver stuff. Lower US yields and a softer dollar. UBS identifies declining US yields as a critical factor supporting silver prices. The report projects at least two rate cuts by the Fed reserve in 2025, which should lower opportunity costs for holding non yielding assets like silver. Additionally, a weaker dollar would enhance the metals appeal and non-dollar denominated markets.

Meaning the Fed’s going to cut two times. Let’s say that they only cut two times. That’s bullish for silver because they’re cutting. I wouldn’t put a lot of weight on that. We need them to come more than two times. My comment. Additionally, a weaker dollar would enhance the metals appeal. As the dollar weakens, silver and gold are like emerging markets. Silver and gold will rally. Nothing new there, but they’re not just throwing it in there. Improve global industrial activity. Silver benefits from its use in industrial applications, particularly in developed markets while industrial silver demand remains robust.

UBS argues that stronger investor confidence rather than incremental industrial demand will likely drive prices higher in 2025. Okay. So the catalyst on the industrial activity, they’re saying industrial activity is the reason it will go up, but the investor demand is why it will go up. And that sounds like a contradiction, right? Well, let me just put it in a little bit better English. Investor demand is tepid right now. Manufacturing demand is stable. The problem is investors are looking, they’re saying what I’ve been saying for two years, investors are looking at silver like an economic metal.

So they are literally selling, I mean, they’re saying in this report, they’re selling silver because they think it’s economic. And when they back off, because the global economy recovers, the industrial demand will uptake. Sure. But it hasn’t really gone down. We’ve seen China buy the crap out of it, you know, for through Helen, you know, Helen high water. The point is when the perception of the economy changes, global economy changes, then the shorts and silver will back off. We’ll come back to that in a second. So how we got here, there it is.

How we got to where we are, and by here, I mean, the market was very strong for most of the air, and then took a hit in the last, say, month or so. Well, higher US yields, a stronger dollar and concerns about global growth outside the US reverse some earlier gains, right? The Fed signal that they might not be easing so much next year. Conclusion, emerging markets will do poor, silver will do poor, gold will do poor, copper will do poor, et cetera, et cetera. And so they didn’t sell gold so much as they sold silver.

They didn’t sell silver so much as they sold copper. So kind of like rolling downhill type of thing. All right. Silver was habitually sold for all 2024 against both Fed hike fears or lack of cuts, right? And as a hedge for a speculative gold mine, I’m buying gold because Trump’s going to win because of the election, I’m going to sell silver against it, right? I’m long stocks, but the Fed says they’re going to hike, I’m going to sell silver against it. That’s how they go. All right. Now this chart, this chart, hard to see because of the contrast, but the left silver’s correlation has been largely stable.

It’s been high, but it’s been stable between 80 and 90, right? Between 88 and 82, most of the time. We can argue about what it should be, but it’s been relatively stable. But what has not been stable or what has increased significantly has been silver’s correlation with industrial metals. Okay. Now you can’t see it on that chart, but the right hand chart there, the blue line is the 12 month moving average correlation and the light gray line is the three months. So since March, when I started buying all the gold of 24, which is where my little cursor is here through now, the correlation of silver with base metals has exploded.

So if you think the Fed’s not going to hike, I mean, not going to cut, you sell silver along with copper, right? If you think Trump’s going to win the election and it’s going to be chaos, you buy gold and you sell silver. And that has forced, that has forced silver to act more economically. Now this is, will this go on forever? Sure. Let’s assume it goes on forever. If it goes on forever, that’s why UBS is saying when the global economy, when the perception of the global economy turns, silver rallies along with copper, right? So gold rallies, one day you wake up, gold’s up $50, silver’s up $5 and copper’s up, you know, 20 cents.

And you’re like, well, why did that happen? Well, you know, everyone’s easing, the economy’s recovering, yada, yada, yada. That’s basically it. All right. That’s, that’s the gist of it. They also provide levels at which they would be buyers for their own book and their clients if it did present itself. That full analysis by us is in this link right here. All right. So the China thing, the China thing, just, I’m going to probably do something bigger on this, but here’s a quick note that we put out and it really comes down to this.

About two years ago, when we all started noticing the drawdown in silver and gold, and I particularly, we were, gold fix was first to note, first publicly to note, the drawdown in gold out of the US headed for China in October of 23. We started to look at why it was so orderly. And that’s when the whole mercantilism divorce, China and the US are in a divorce. I kept saying that about the metals. You take your ball and you’re going home. I take my ball and I’m going home. So the COMEX started getting depleted, but it wasn’t in a panic.

It was, you know, okay, prices went up, but it was relatively orderly. And I was surprised by that. And I kept saying, well, they must have an agreement, but I have no proof to that. And so for the last five days, just to give you some thought on this, it’s not complete Tim foil. I started exploring the relationship that China and the US had. And there’s a guy named, believe it or not, his name is Michael Hunt. That’s his name. Uh, wrote a book about the history of China and the US. And I’ve had conversations with bias, very enlightening about the China, US relationship.

And, and it boils down to this. In 1971, we went off the gold standard, right? In 1975, we kind of deal with China, right? 1975, 76, 1976, we formalized everything with the Jamaica courts. And then from there, we have been buying China’s stuff and they have been buying our bonds. And for years during the neo Kinsey and timeframe, right, that has worked. And now we’re in the global divorce. So if it’s true that we had an understanding and an arrangement starting in 76 and it is. And I feel like this is kind of like a divorce.

Well, then these are the bookends for an error, between China and the US. And I’ll learn more about that. But the key phrase, the key takeaway, and I strongly suggest you read it and you look up whatever this guy, Michael Hunt writes. But anyway, China, this is the conclusion. China forces gold to account for the growing disparity between the Yuan and the dollar. This is bricks, but it’s China specifically. The underlying message is simple. The dollar is overvalued relative to gold. China values gold on equal footing with US treasuries. And therefore the US should devalue its currency against the metal.

Gold’s current price in dollars fails to reflect the last two decades of global economic shifts. There are multiple reasons why this is a perfect play for China, aside from the fact that it’s gold. There’s international regulatory reasons. There’s surreptitious reasons. And there are reasons why the US would agree to it because everyone stays in business as long as oil stays down in price. See, I noticed that when gold started up taking, oil started stagnating. Anyway, so there’s a lot going on there and I’m trying to get to the bottom of it. Anyway, other stories.

Silver, another step in 2025, we just discussed that. Which goods go up under China tariffs? This is really a good analysis, an economic piece by Goldman describing on three different levels what goes up in debt and price. So the inflation outlook from it, the retaliatory outlook and the inflation from that and indirectly job prospects, what industries are going to suffer, what industries are going to do well. And then obviously the investment implications. There aren’t stocks in this that’ll probably come out in a subsequent report. Why stocks will underperform going forward? That’s me giving you a little bit of a catchy title there.

What this is really about is how quant funds are now agreeing with nation states saying that pensions, especially in Europe, should have less equities and less bonds than their portfolios. And pensions determine big picture market moves in a macro sense. And this is implicitly bullish for gold and crypto. Founders, BRICS, economics, stagnation risk. This is a really good piece giving you the other side of it that everything that’s been going on for the last two years with Russia and China versus the US comes with a cost. And it’s not free, let’s put it that way.

And their economies are suffering more than I think us in our world think about. And then the founders view from a chairlift, that’s an industrial, industrialism, institutional managing directors, commentary on 2024, 2025, excellent view from a chairlift. Those are the stories. Here’s the equity recap. So now that we’re in the equity spot. Okay. I talked about this Sunday with the founders and I’ll be making that recording available. There is a pattern and I’m not telling you to get bearish on stocks, but there’s an overlapping pattern from disciplines. And I like when that happens.

The first one is this, the dollar’s been strong, stocks have been strong, gold has been stable, bonds have been weak. Okay. Now, now I’m going to be interspersing things that Hartnett says, interspersing things with Michael Oliver’s technicals with my judgment. When Trump gets inaugurated or thereabouts, maybe it’s right before, maybe it’s right after, there’s a good chance that most of the United States investors will, or hedge funds will start to sell stocks. The Trump trade, like the gold trade is over, right? So maybe stocks will keep going up. But the point is there will be selling after Trump’s inauguration.

Okay. When that selling comes, that money will go out of stocks and into bonds. If that cascades lower, as it looks like it could just be starting to happen, then you add in the fact that Powell has come across that he’s not going to be cutting more than once more. When you add that in, you could have a kind of a rampage out of stocks, right? Into bonds. And as stocks drop and bonds rally in a kind of a disinflationary crisis or a liquidity crisis, we’ll put it with liquidity crunch. You create a situation where the market now says, well, what’s next? What’s next? What’s next? If that’s going to have to ease.

And so the dollar gets weaker. So what gold will do, it could sell off first and then rally later. It could rally first, sell off, and then rally later. But the point is this, if the stock market, if you’re a technical trader and the stock market cracks your level, look at bonds. If bonds start to rally, your stock short is probably very good. And if bonds start to rally, look at the dollar. If the dollar starts to sell off, kind of like stocks drop, bonds rally, dollar weakens. If those three things happen, then we could be off to the races for a big sell off in stocks, especially with the inauguration signpost that Hartnett talks about.

Anyway, when you see this with VIX strong, normally I’d say it’s holidays faded. I’m not going to fade this. I’m not short stocks. I don’t play short stocks too much because I got destroyed with an arbitrage on that 2010. So I’ll play small. I won’t be so confident or arrogant with it because look what happens. You get killed all the time. However, gold, I don’t know what it does, but you know, this is where we are. We’re at a point now where your technical levels or your reasons for selling stocks, when they say sell stocks, look at the dollar and look at bonds.

If bonds are rallying, you’re right to be short stocks. If the dollar starts to weaken, you’re right to be short stocks. And if it’s pre-inauguration, you’re right to be short stocks. After inauguration, you’ll have a sell off, but it could be over. I’m not sure, but that’s the idea. That’s the whole stock gold thing. Market news, China bashing, drivel. We talked about this already. And they’re trying to say that China’s reaction to Trump is bad for China. We’ll see what it is. Relatively light, pending home sales are today. Case Schiller, home pricing next tomorrow, New Year’s off, jobless claim, construction spending, and IS, that’s an ISM manufacturing.

And then there’s the Academy, Academy security. So let’s take a look at the goal. I’ll show you what I’m talking about. All right. The bull scenario is this. It’s not on the screen. The open interest has creator in the market is up here. How could you not be bullish? Now I want to wait for a market to move and to give us a signal, but how could you not be bullish? Now I do want to put up the moving averages again, because the 1,500 day moving average has served us very well in gold and silver cracked the 100 day moving average, right? Handily.

Well, now silver is messing around at the 200 day moving average. So I’m about to basically say that silver is, silver is vulnerable, vulnerable. If stocks sell off, silver will have a muted rally. If, you know, if gold strong and stocks are weak, so you’re like silver should go up. Yeah, there’s still going to be idiots out there selling silver against their stock portfolio. Anyway, back to the actual chart itself. As long as silver is below the 200 day moving average or messing around with it, gold should mess around with the 100 day moving average.

If silver cracks below the 200 day moving average, hard, back to that, then gold could go between 25 and 2026. Those are the areas in the range of what UBS is also calling for. That’s the dip area they want to buy. So there you have it. I think you want to look at it that way now that the bull scenario is for gold. The bull scenario is easy. It’s very easy. I’ll show it to you. Post-election sold. Well, why did it rally? I don’t know. There were a lot of shorts that were covering.

This was banks, by the way, sold. Someone’s buying again, rally sold. Now the market did not reject these rallies with sell-offs down to here. It rejected it to here. Still haven’t made a new low post-election, but yet open interest is significantly lower post-election. The market has cleaned itself out. The market has cleaned out all the stupid money. There’s probably some more stupid money that needs to sell it. And when that happens, we’ll rally hard. Anyway, I’m Vince. Happy New Year. If I Thanks for watching this morning’s markets and metals with Vince Lancy.

We sure appreciate you tuning in and starting your day with us here. Hope you enjoyed the show and we’ll see you again tomorrow. Please note that this video is not intended as legal license 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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