Tim Murphy
Precious Metals Advisor
Tim Murphy is a Precious Metals Advisor with over 15 years of experience. He started on the New York Commodity Exchange floor before founding his own brokerage firm. Tim joined Scottsdale Bullion & Coin to leverage the small-company feel with national exposure, focusing on personalized, client-first service and fostering long-term relationships.
Oh, enough is enough, I won’t take anymore. I’m pickin’ myself up off the floor. You thought you could break me but let me tell you this, I got news for you baby. I don’t break that easily. ‘Cause you can’t keep a good man down, baby. You can’t keep a good man down.–Lyrics by Alabama
Last Friday, gold and silver sold off sharply, which was no doubt a bullion bank paper raid led by JP Morgan. However, before the price mauling, it had become apparent that the physical gold market was asserting its strength over the paper contracts (even though at the same time, the paper silver price was still vulnerable, despite growing physical tightness.) As reported by WCG last week, Central Banks worldwide have been buying physical gold in record amounts and India alone purchased approximately 1/3 of all the silver produced worldwide last year.
Also mentioned was the lack of overall public interest in gold and silver, even with gold on a tear. So, all told, the case for higher gold and silver prices is now that much greater as the Central Banks are taking advantage of these lower prices and eating up even more of an already diminishing physical supply. Plus, the public is even less interested now, and that bodes well for prices because at MAJOR BOTTOMS, the public is invariably always looking the other way.
Adding to the extremely bullish set up is a report put out last week by the Bank of International Settlements (BIS). Also, known as the “Central Banks Central Bank”, the BIS announced last week that as of the end of 2022, they would no longer be leasing gold to the Central Banks.
For those of you who are unaware, the BIS has been lending physical gold up to the tune of 500 tons or more monthly. This announcement, which received very little fanfare last week, is hugely important because the bullion banks need a certain amount of physical to raid the paper markets. When gold recently went from $1, 620oz to $1,970oz in just three months time, it appeared the bullion banks lost control of their manipulation scheme, so when the BIS made their announcement last week, it all made perfect sense.
Predicting price moves in the short term can be precarious, but all evidence points towards gold moving back up very soon and economist Alasdair Macleod confirmed this very thought over the weekend:
“Physical supplies are extremely tight, with central banks still buying, and supposes that governments are also accumulating bullion in addition to reserves. Some coins are in very short supply. Anecdotal evidence in London is that sovereigns are extremely scarce with some dealers sold out. In Germany, the public is buying gold in significant quantities as well. There could be some short-term downside in the paper markets, but considering the good solid underlying physical demand, gold appears to be in the early stages of a bullish move and any reaction in price is likely to be very limited.”
In a separate publication, Macleod mentioned how the U.S. dollar is doomed and that,
“Russia and China are moving towards a gold standard and settling trade in gold. This movement alone means the bullion banks need to get their short positions as low as possible. And this translates to any sell-offs in gold and silver to be likely short lived.”
Some very sharp individuals believe the bullion banks orchestrated last week’s sharp sell-off in a last-minute desperate attempt to reduce their short positions at lower prices. Clearly the banks must see the handwriting on the wall, as the potential for sharply higher prices this year and beyond is superb. The only fly in the ointment left is the silver paper stronghold over the physical market, but that stronghold is waning as silver inventories on the NY COMEX and London Exchange are almost bone dry.
Furthermore, demand is high for silver as a hedge against inflation and protection from a weak U.S. dollar. And, industry demand is high as silver is an industrial commodity needed for the fast-growing solar panel and electric car markets.
Relative to all the money printed over recent years and relative to the current inflation rate and relative to its bullish supply/demand fundamentals, silver must be the most undervalued commodity on the planet.
So, fasten your seatbelts because when silver makes its move higher, it is going to be breathtaking. The set up for sharply higher gold and silver prices has never been better!