Category: Silver

The (price of gold) is not going to stop because we’ve hit $2,000.

– Sr. Precious Metals Advisor Steve Rand

Global turbulence is picking up as inflation ravages markets and wars spread across two continents. While economies charter into stormy waters, central banks and investors seek shelter in safe-haven assets, especially physical gold.

In this week’s The Gold Spot, Precious Metals Advisor Joe Elkjer and Senior Precious Metals Advisor Steve Rand discuss the recent spike in gold prices, why the yellow metal is still a bargain, and where prices are expected to go soon.

Turbulence Drives Gold Past $2,000 an Ounce

Gold prices launched past the $2,000/ounce mark¹, confidently reclaiming its highest levels since mid-2023. This impressive yet anticipated surge is owed to the whopping demand across the board as investors flock to physical gold assets in droves. Although this upward movement is indicative of gold’s inherent strength, some investors can’t help but wonder if prices are already too high.

[$2,000] is a psychological barrier for many people, thinking [gold] is as high as it can go.

– Steve Rand

This is a classic example of round number bias tendency for humans to apply undue significance to round, clean numbers. Gold’s robust fundamentals and the economic turmoil suggest that gold prices have no reason to stop—the insatiable demand for gold mirrors this.

Central Bank Gold Buying Binge Continues

Whenever investors face uncertainty, looking to the world’s wealthiest and most knowledgeable investors can provide clues as to what’s happening. Central banks have been buying gold at record rates, and recent numbers suggest this modern-day gold rush is only heating up. Collectively, governments scooped up 337 tons of gold in Q3 2023, putting central banks on course to set a new gold demand record.

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Evidently, these mega-investors aren’t concerned about gold prices slowing down any time soon. That’s because they understand that the grim economic and geopolitical realities that fueled this recent gold surge aren’t going to stop because of an arbitrary price point.

Major central banks are buying as much physical gold [and silver] as they can get.

– Precious Metals Advisor Tim Murphy

The Federal Reserve is still meeting to combat inflation, Europe is flirting with a recession, and the US is funding wars on two fronts. Plus, the flipside of a gold rush is the process of de-dollarization as countries abandon the world reserve currency for the gold standard. This means more dollars coming back home, which will devalue the greenback.

Don’t Wait to Buy Gold, Buy Gold and Wait

The dire economic and geopolitical circumstances that drove gold prices past the $2,000 mark aren’t going to pay any mind to this psychological barrier. Neither should investors. Trying to time the market is a waste of time and money. Tried-and-true investment wisdom says you’re better off getting into gold now and waiting rather than sitting back and trying to predict the future.

With impeccable timing, Robert Kiyosaki, author of Rich Dad, Poor Dad, recently reminded investors that “dollar cost averaging pays off” rather than pretending “to be Warren Buffet picking bottoms.”²

👉 Suggested video: Dollar Cost Averaging: What Is It & How It Maximizes Gold Bullion Returns

If you’re worried about gold prices stagnating, wait until you see the impressive gold price predictions for 2024. Most see this shiny metal shooting to $2,100 in 2024 and beyond. Gold prices could make their highest jump in 50 years.

If you want to learn more about investing in gold and silver, grab your free copy of our Precious Metals Investment Guide. This comprehensive investor guide will explain how to diversify with precious metals and how these assets can protect your wealth from inflation and other economic pressures.

Veterans Day Discounts on Bullion & Graded Coins

In honor of Veteran’s Day, we’ll offer a discount and special offers on Friday, November 10, 2023 to all veterans and active-duty members. This is our way of giving back to the military community and thanking you for your selfless service. If you fall into that category, keep an eye out next week for the military discount and special offers on bullion and graded coins. We’ll also be featuring veteran’s charities we support for fellow Americans who want to support their troops as well.

The unfolding economic war between the US as the world’s sole superpower and China as its fastest-growing challenger hinges on a single battle: the petroyuan vs. petrodollar. For nearly half a century, the petrodollar system has upheld the dollar’s dominance as the singular world reserve currency in lieu of the gold standard.

However, in the past few years, a convergence of domestic and foreign pressures has tipped the US dollar into a downward spiral, and China is taking advantage of every weakness to position its currency as the foundation of the world’s economic future. Will the yuan replace the dollar or will the status quo prevail?

Petroyuan vs. Petrodollar: Differences and Similarities

Structurally, there’s no difference between the petroyuan and petrodollar systems. Both the petroyuan and petrodollar are currencies exclusively used to settle cross-border oil transactions, even between foreign countries. The key difference is that the petrodollar is more entrenched although the petroyuan is quickly gaining traction as a potential rival.

The petrodollar system arose in the mid-1970s when President Nixon convinced Saudi Arabia and, eventually, all OPEC nations to price their oil exports in USD in exchange for military and economic support. This meant every country had to convert their currencies into USD for cross-border oil transactions which propped up the dollar as the world reserve currency. In effect, petroleum replaced gold as the backing of the dollar.

For over 50 years, the petrodollar system remained unchallenged until America’s primary economic competition decided to steal the move out of its playbook. In 2018, China launched crude oil futures contracts denominated in yuan. This decision effectively launched the petroyuan onto the world stage, and the CCP has been making a concerted effort to supplant the petrodollar ever since. The end goal is to have the petroyuan system be the de facto foundation of the world economy to further China’s geopolitical and economic goals.

The Petrodollar: A Retrospective

How To Prepare For The Impending Dollar Failure

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“”China…wants the Yuan to be broken free of the dollar.”

– Precious Metals Advisor John Karow

How is the petroyuan fighting the petrodollar system?

The dollar might still comprise the majority of oil transactions, but China has won some decisive victories in the petroyuan vs. petrodollar showdown.

BRICS’ size and influence are growing.

The BRICS block – consisting of Brazil, Russia, India, China, and South Africa – is advertised as a collection of emerging markets promoting the economic well-being of all nations on equal footing. However, with a GDP double the size of the combined output of other members, China wields decisive influence in the group. This leads many to suspect the CCP is only using BRICS as a means to further its aim of establishing the petroyuan system. The potential development of a BRICS currency and the most recent BRICS expansion are two major victories in that pursuit. Plus, this rapidly growing powerhouse already outperforms the G7 in terms of GDP – the BRICS’ Western counterpart – underscoring America’s waning economic influence.

Use of the petroyuan is increasing.

The petrodollar system relies entirely on the cooperation of oil-producing nations to price their petroleum exports in USD. China is successfully chipping away at US-Middle East relations and building closer alliances with oil-rich countries to encourage the use of the petroyuan instead of the petrodollar. Several countries including Russia, Indonesia, Iraq, Venezuela, Iran, and the United Arab Emirates already accept the petroyuan with Russia accounting for an outsized proportion of trade. Saudi Arabia, the jewel in the petrodollar crown, has even discussed the possibility of accepting the petroyuan with President Xi Jinping. The successful admission of the Kingdom into the BRICS block is seen as a decisive blow to US-Saudi relations.

Yuan foreign reserve growth is outpacing USD.

The widespread use of Chinese or US currency is fuel to either side in the petroyuan vs. petrodollar fight. Although the dollar still far outperforms the yuan in regard to the percentage of international reserves, the yuan is growing quickly. The same can’t be said about the dollar which is actually shrinking. In 2021, USD’s share of global foreign reserves hit a 25-year low on the back of the rapid acceleration of de-dollarization. In contrast, the yuan has gone from a virtually unused currency to the third most commonly used currency for foreign exchange reserves within just a few decades. Currently, the yuan outperforms the Japanese yen and British pound.

The CIPS System is seeing increased use.

The Cross-Border Interbank Payment System (CIPS) was created by China to rival the Western-led and primarily US-denominated SWIFT system. Although the SWIFT version remains the preeminent payment system for cross-border transactions, the CIPS system has seen a spike in use recently. American adversaries such as Russia and China flock to the system to bypass sanctions implemented through the SWIFT System. However, other countries seek out the alternative to simply avoid having to convert their money into USD before making transactions. These developments advance China’s potential victory in the petroyuan vs. petrodollar battle which could ultimately determine the shape of the world’s economic and geopolitical order for decades to come.

Will the yuan replace the dollar?

There’s no way to predict the outcome of the currency struggle. However, there are a few certainties: the world has never been more motivated to pursue an alternative to the dollar, the petrodollar system has never been weaker, and the petroyuan system has never been more attractive. These realities seem to tilt the petroyuan vs. petrodollar competition in favor of China.

The world economy has only ever transitioned between world reserve currencies one time. This occurred in the aftermath of consecutive World Wars when the crumbling British pound sterling gave way to the rising US dollar. This historic transition saw a massive rise in US dominance and economic might and a comparative diminution of British influence and wealth. It’s safe to assume the US would suffer the same fate if China were to win the petroyuan vs. petrodollar contest.

Gold is the Real Winner

The overarching takeaway from this ongoing economic struggle is that a world economy based solely on fiat currency is unpredictable, volatile, and unstable. No matter which currency prevails, its reign will only be temporary. That’s why smart money has been hedging against uncertainty by shoring up its wealth with physical gold assets including gold bars, bullion, and coins. In fact, central banks have been scooping up gold at a record pace, highlighting the world’s growing distrust in the dominant fiat system.

The more tumultuous the petroyuan vs. petrodollar struggle grows, the higher the gold demand will rise. As the pervasive law of supply and demand requires, this will inevitably lead to a jump in gold prices. In other words, no matter the outcome of this currency clash, gold is going to be the real winner.

Stay Up to Date to Stay Protected

You shouldn’t wait until the petroyuan vs. petrodollar competition is resolved to make investment decisions. Right now is the time to act to protect your wealth from the predictable instability on the horizon. The shifting tides of global currencies bring both risks and opportunities.

Staying up to date on the latest events in this ongoing sage is the best way to avoid the pitfalls and reap the rewards. To help keep investors informed, we’ve put together a comprehensive FREE Petrodollar Report covering the key events in the petrodollar’s decline and the petroyuan’s growth. Request your FREE COPY of the Petrodollar Report today!