patrick.net

rocketjoe79 says

Are gold and silver in bubbles, and is this market manipulation?
I have a friend (no joke) who's buying - when do they get off the merry-go-round?

Not a bubble. When the money that was created out of thin air bounces around long enough, it comes to rest at the feet of those who own real assets like precious metals, and land.

Ray Dalio, founder of one of the world's largest hedge funds, believes investors should allocate as much as 15% of their portfolios to gold.

I really really wished I bought some gold before it popped. Oh well.

AD says

Ray Dalio, founder of one of the world's largest hedge funds, believes investors should allocate as much as 15% of their portfolios to gold

As does Danielle DiMartino Booth but I think she claimed that she herself has 20% or more. Something about her fear of China. She even made her kids learn Mandarin. This was a few years back.

Maga_Chaos_Monkey says

Danielle DiMartino Booth

yep

Danielle DiMartino Booth, CEO of Quill Intelligence, views China as an economic rival with an ongoing "economic cold war" with the US. She closely monitors China's economic data, identifying weaknesses and potential spillover risks for the global economy.

Danielle DiMartino Booth is bullish on gold, viewing it as a critical safe-haven asset in a volatile economic and geopolitical climate. The former Federal Reserve insider sees mounting systemic risks that support gold's historic rally, including economic weakness, rising US debt, central bank policy missteps, and geopolitical tensions.

Gold is up about 60% year over year. Asset bubbles always go further and higher than reasonable people think possible. That's because reasonable people don't fully grasp the CRAZY of people living in the bubble. Most gold is traded in commodity accounts. In the US, our commodity exchanges let people put down about 5% of the contract's value. This is about $1500 down for a $34k contract. I dunno what foreign exchanges require.

After the Great Depression, we limited stock margin ability to 2:1. With gold you can go 20:1. The sheer amount of borrowed money tied to gold contracts is stupendous.

What could possibly go wrong ???

Misc says

Gold is up about 60% year over year. Asset bubbles always go further and higher than reasonable people think possible. That's because reasonable people don't fully grasp the CRAZY of people living in the bubble. Most gold is traded in commodity accounts. In the US, our commodity exchanges let people put down about 5% of the contract's value. This is about $1500 down for a $34k contract. I dunno what foreign exchanges require.

After the Great Depression, we limited stock margin ability to 2:1. With gold you can go 20:1. The sheer amount of borrowed money tied to gold contracts is stupendous.

What could possibly go wrong ???

How do you value it to understand how inflated it is and how big the bubble is ? One way is that gold will return to the mean as far as historically (at least 15 year period) returned a real return of 4% annually ?

Gold now is around $4000 an ounce and its last all time high was $1780 in October 2012 until it started to increase by summer 2020.

So it only increased by about 6.5% annually from October 2012 to present day; and its real return is around 4% annually based on 2.5% annual inflation rate.

Below table shows annual changes in gold prices for last 50 years.

Year Annual Return for Gold (%)
1975 −24.20%
1976 −3.96%
1977 +20.43%
1978 +29.17%
1979 +120.57%
1980 +29.61%
1981 −32.76%
1982 +11.75%
1983 −14.99%
1984 −18.95%
1985 +6.17%
1986 +19.54%
1987 +24.46%
1988 −15.69%
1989 −2.23%
1990 −3.69%
1991 −8.56%
1992 −5.71%
1993 +17.64%
1994 −2.17%
1995 +0.98%
1996 −4.65%
1997 −22.21%
1998 +0.57%
1999 +0.54%
2000 −6.06%
2001 +1.41%
2002 +23.96%
2003 +21.74%
2004 +4.40%
2005 +17.77%
2006 +23.92%
2007 +31.59%
2008 +3.97%
2009 +25.04%
2010 +30.60%
2011 +7.80%
2012 +8.69%
2013 −27.61%
2014 −0.44%
2015 −11.61%
2016 +8.62%
2017 +9.54%
2018 −1.06%
2019 +18.28%
2020 +25.75%
2021 −3.73%
2022 +2.08%
2023 +13.14%
2024 +27.20%
2025 (Forecast) +39.09%

The $850 per ounce in January 1980 when adjusted for inflation was just topped in September of this year. Let's see how stupid people can be this time around.

The CEO of Newmont mining (largest gold miner in the world) bailed a few days ago (once you quit, insider sales rules don't apply). Guess he wanted to cash in now instead of waiting for a better price.

... but sure 15% of your portfolio at this price....what could go wrong ???

Misc says

The $850 per ounce in January 1980 when adjusted for inflation was just topped in September of this year. Let's see how stupid people can be this time around.

Yeah WTF happened to gold by just examining 1980 to present day as it only has appreciated by about 3.5% annually during this period.

Yeah Mark Bristow, CEO of Barrick (rival to Newmont Mining), also resigned recently along with Newmont Mining's CEO. I wonder too if these CEOs were motivated by "take the money and run" (reference: Steve Miller Band).

Same mindset goes for several or many working within Enron like Ken Harrison, Joseph Hirko and Lou Pai before it crashed.

I read Newmont has a new female CEO.
.

Just heard on Coast to Coast AM the guest Gerald Celente. He's been on many times before. Celente said gold is going up because investors losing faith in dollar as far as US debt growth.

I wonder if Trump is trying to at least "bend the curve" and show very little to no growth in US debt over the next few years and how that will effect gold prices as well as other alternatives like Bitcoin.

Congressional Budget Office – Budget and Economic Outlook 2025–2035 forecasts a $1.9 trillion deficit for calendar year 2025 compared to a $2 trillion deficit for calendar year 2024. I read Biden regime was spending at an extraordinary rate in November and December 2024 such as with grant money.

AD says

Congressional Budget Office – Budget and Economic Outlook 2025–2035 forecasts a $1.9 trillion deficit for calendar year 2025 compared to a $2 trillion deficit for calendar year 2024. I read Biden regime was spending at an extraordinary rate in November and December 2024 such as with grant money.

If the Fed ain't able to lower the mortgage rate and get some additional borrowing going through the system, Trump will be forced to send out tariff rebate checks to keep the economy from going to shitsville. That'll boost up the deficit.

Misc says

Fed ain't able to lower the mortgage rate

Their monetary policies hopefully keep government-reported annual inflation no more than 2.7% which should help with lowering the 10 Year Treasury and mortgage rates. Usually the mortgage rates are around 1.75% greater than the 10 Year Treasury.

Mortgage bond traders now want about 6% for a VA and FHA mortgage, which are the safest of mortgages.

Keep annual inflation no more than 2.5% for 6 consecutive months and that may help to lower those mortgage rates.

Schwab has a money market paying around 4% while annual inflation is around 2.7%. Safe and easy money.

Rich Dad Poor Dad author is promoting silver.

.......................................................................

Robert Kiyosaki says this 1 asset will surge 400% in a year — and he begs investors not to miss its ‘explosion’

https://www.aol.com/finance/robert-kiyosaki-says-1-asset-111100864.html

Yes, silver could/should trade higher, but it is the most manipulated of the metals. All the financial markets are heavily manipulated, but with silver, the bullion banks simply get together and have the exchanges increase the margin requirements for the silver contracts. They know their customer positions and have an idea of how many forced sales will occur by increasing the margin requirements. Price drops are steep and immediate. That and given the massive short positions the banks are willing to put on makes any massive price increase up to the whims of the banks.

Governments will also intervene if prices get too high. It has industrial uses that are not easily changed.

Funny how Musk's audit of Fort Knox kinda well you know went the way of the Epstein files.

CNN has chimed in also on the gold rally

https://www.cnn.com/2025/10/08/investing/gold-prices-market-trump

Silver broke $49 an ounce today.

I suspect it will exceed all time highs very soon.

Misc says

Funny how Musk's audit of Fort Knox kinda well you know went the way of the Epstein files.

Fort Knox reportedly has 147.3 million ounces of gold, which is around $589 billion.

That is barely enough to fund Medicaid for one year and is less than 2% of the annual economy based on GDP.

UK's Prime Minister Gordon Brown sold about 60% of Britain's gold reserves between 1999 and 2002. The sale was intended to diversify the UK's reserves away from gold, which was seen as volatile and not yielding interest payments at the time. The sale was controversial because it occurred near the bottom of a 20-year low for gold prices, and its value has since risen significantly.

.

Misc says

Yes, silver could/should trade higher, but it is the most manipulated of the metals.

A lot of industrial uses for silver especially for electronics and also solar panels. Guvmints likely have an interest to keep silver price down.

Examining the galvanic series chart, silver is on top and zinc (a metal that is most likely to corrode hence used for sacrificial anode applications).

And naturally gold is above silver on the chart.
.

Onvacation says

Silver broke $49 an ounce today.

I suspect it will exceed all time highs very soon.

Silver price hit all time high today.

Adjusted for inflation it still has a way to go to match the Hunt brothers price from last century.

https://www.coffeeandcovid.com/p/gold-fingered-friday-october-10-2025

What if, for political cover against accusations about inflation —which Biden denied was happening at all— the US government manipulated the metals markets? That would explain both why metal prices remained stable while the cost of everything else increased, and why other countries were buying so much of it: by keeping the prices artificially low, Biden was basically giving it away.

That’s not a tinfoil helmet conspiracy theory. There’s a long, well-documented tradition of governments intervening overtly and covertly in commodity and currency markets when it suited their fiscal or political needs. Indeed, before Bretton Woods, the price of gold was artificially kept at $35 an ounce worldwide and everybody knew it.

During and after the 2008 financial crisis, Western central banks quietly lent and swapped bullion through ‘bullion banks’ to create a synthetic supply. Analysts complained this kept spot prices artificially low while balance sheets ballooned.

So what if —and this is what I think must have happened— Trump discovered Biden’s covert gold stabilization program and pulled the plug? Let see if any we can connect any dots.

Remember when, early this year, Trump was noisily threatening to audit Fort Knox? And then the story magically disappeared, nevermore to be seen? ...

Around the same time, an idea floated through the trade press —I covered it— that the US could massively increase its financial stability or create a sovereign wealth fund simply, by re-pricing its own gold at current market rates. ...

Gold Observer reminded us that on February 3, 2025, President Trump signed an executive order requiring a sovereign wealth fund be created within one year. Standing right next to him when he signed the order was Treasury Secretary Scott Bessent, who told reporters, “We’re going to monetize the asset side of the U.S. balance sheet for the American people.”

What asset?

One asset that America owns is 8,100 tons of gold (262 million ounces) — officially valued at only $42.22 an ounce, a 1973 accounting relic. Twice before, the US has repriced its gold to instantly create new wealth: once in 1972 when the official gold price was raised from $35 to $38, and again in 1973 from $38 to $42.22 an ounce. ...

For years, while Washington denied inflation and quietly stabilized gold, foreign central banks were the ones cashing in— buying American bullion on the cheap, storing the real wealth offshore, and leaving U.S. taxpayers holding the empty bag. Repricing gold at today’s market rate wouldn’t just acknowledge inflation; it would end another foreign subsidy.

America first.

Letting gold float freely, then marking it on the national balance sheet to that honest price, would flip the trade: the U.S. would capture the windfall instead of exporting it. The flow of gold would reverse, foreign vaults would stop filling, and for once, the balance of monetary power might tilt back toward the people who originally mined, minted, and defended it in the first place.

If the price does float to $6,000 an ounce (or more), and if Trump intelligently prices America’s hoard to that more rational market price, one single corrective accounting entry could instantly flood a sovereign wealth fund with $1.56 trillion dollars. That’s not stimulus, not borrowing, not money-printing — just marking reality to market.

Now imagine that happening early-to-mid next year, right before the midterm election season really gets underway. And then imagine that Trump says he needs a Republican supermajority in Congress to give all that value back to citizens in their new sovereign wealth fund?

Patrick says

Twice before, the US has repriced its gold to instantly create new wealth: once in 1972 when the official gold price was raised from $35 to $38, and again in 1973 from $38 to $42.22 an ounce. ...

Three times; FDR confiscated gold and then repriced it at the beginning of the depression

Silver price seems to be settling in at all time highs.

Is $50+ per ounce the new normal?

Onvacation says

Silver price seems to be settling in at all time highs.

Is $50+ per ounce the new normal?

Yes its insane I keep thinking of selling but all hard assets keep going up.

RC2006 says

Onvacation says

Silver price seems to be settling in at all time highs.

Is $50+ per ounce the new normal?

Yes its insane I keep thinking of selling but all hard assets keep going up.

We are living in massive inflation. Housing is ballooned, gold too, silver too, stocks too, CRE too. Too much money chasing fixed goods.

We need like 18% interest rate to fix this mess, not gonna happen… so only future is massive inflation imo. Seeing commercial lots in middle of nowhere go for 900k… that’s stupid money scams.

RC2006 says

Yes its insane I keep thinking of selling but all hard assets keep going up.

Same, but only because gold dropped 30% back in the GFC - I think? I know it crashed but then came back for gains. I don't own gold though, only silver. May buy some gold, but then it will crash lol.

Ewww... Silver also crashed during the GFC, with its price falling from $15 per troy ounce before the recession to under $10 per troy ounce at the peak of market panic in late 2008.

I bought some silver for stocking stuffer gifts (and a pile for myself) 2 years ago. Mostly to try to get my fast food working 26 year old nephew to consider investing.

I gave each of my aunt's and uncles a silver eagle coin too. That backfired. They thought I was showing off or some shit.

Gold is kissing $4300's ass:



Goddamn - this might be the end of the post- WWII Dollar hegemony.

Gold skyrocketing because bad things are happening. World doesn’t think we can fix our debt problem.

Fortwaye says

Gold skyrocketing because bad things are happening. World doesn’t think we can fix our debt problem.

100%

Its looking really bad. People dont understand how fast it can fail. The meteoric rise of these assets is nothing to cheer about.

Weimar US?

RC2006 says

Fortwaye says

Gold skyrocketing because bad things are happening. World doesn’t think we can fix our debt problem.

100%

Its looking really bad. People dont understand how fast it can fail. The meteoric rise of these assets is nothing to cheer about.

Agreed, don’t want to live fighting for survival every day hoping kids don’t starve.

Fortwaye says

Gold skyrocketing because bad things are happening. World doesn’t think we can fix our debt problem.

Keep eye on 10 Year Treasury rate as perhaps the fiscal health like debt to GDP ratio at worse does not increase.

Also not only is Trump reducing the deficit (at least when adjusted for inflation), but the Federal Reserve continues to reduce
its asset holdings of US Treasuries and mortgage backed securities.

Fortwaye says

We are living in massive inflation. Housing is ballooned, gold too, silver too, stocks too, CRE too. Too much money chasing fixed goods.

We need like 18% interest rate to fix this mess, not gonna happen… so only future is massive inflation imo. Seeing commercial lots in middle of nowhere go for 900k… that’s stupid money scams.

I understand but annual inflation is only 2.7% based on PCE, and recall annual inflation based on CPI was around 9% in mid 2022.

I don't see annual inflation exceeding 3%.

Also the 10 Year Treasury rate is about 3.9% compared to it reaching nearly 5% in 2024, which was the highest its been since 2006. My estimate is the 10 Year Treasury rate will steady around 3.5% within the next few months.

Patrick says

True as silver and gold prices slid downward from 1980 to 2000, and they started to recover around 2010 in the wake of fiscal and monetary policies from the Great Recession.

Gold went from around $1800 in January 2021 to around $2800 in January 2025.

I pin a lot of this on Biden as far as the annual deficit growth during his administration such as around $180 billion for student loan forgiveness.

.

https://en.wikipedia.org/wiki/1999%E2%80%932002_sale_of_British_gold_reserves

The gold price increased at an average of 8% annually in the 25 years from 1999–2024.

Gordon Brown's government sold 395 tonnes of gold for $3.5 billion from 1999 to 2002.