Global Money Flows Show Physical Gold Moving to Strong Hands

"Currency Wars" Author Jim Rickards Reveals Inner Workings

Mike Gleason Mike Gleason
New Radio Release
June 14th, 2013 Comments

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Welcome to Money Metals Exchange's weekly market wrap podcast. Helping precious metals investors during these treacherous times. Now, here's this week's market wrap with commentary and analysis from the fastest growing precious metals dealer in America, Money Metals Exchange.

Mike Gleason:

Welcome to this week's market wrap podcast, I'm Mike Gleason.

Well even as choppy conditions persist in the precious metals markets, an important fundamental shift is taking place. It's not registering on the price charts just yet, but this dynamic does have major long-term implications for the future direction of gold and silver prices.

I'm talking about the shift of gold and silver ownership from weak hands to strong hands – and from derivative instruments to actual, physical bullion.

The momentum players who trade futures contracts, ETFs, and other paper representations of precious metals have exited the markets. They didn't get involved in precious metals for long-term fundamental reasons to begin with. So when prices fell, they bailed out.

That, in turn, gave the strong hands an opportunity to do the opposite – to accumulate more metal at lower prices. I'm talking about central banks and, of course, physical precious metals investors like Money Metals Exchange customers. These are people who own metals for safe-keeping, not for trading – people who aren't going to be shaken out by market gyrations.

Here's how investment banker and author of "Currency Wars" James Rickards described the diverging trends in the paper and physical markets *[Audio Clip Only].

When the momentum players return to precious metals on the long side, it will be with a bigger base of physical ownership that is possessed by strong hands. That will be the foundation for the next, potentially very powerful, leg higher.

As for when the gold and silver bull can finally break out of its slumber and charge ahead, we heard David Morgan three weeks ago suggest that the metals will soon rally, then perhaps take a rest in late summer before gaining some better traction this fall heading into 2014.

We can never be sure about the timing of these moves, especially when the futures markets can get pushed around by speculators and large institutions in ways that don't correspond with the fundamentals on the physical side. That's why a long-term perspective is crucial. We've seen nothing on the supply-and-demand front or the monetary front to suggest that the final top for gold and silver has come about.

As of now, the metals markets haven't established a clear path forward. Gold continues to hold above its April 15th takedown low of about $1,350 but hasn't made much net progress since then. It trades at $1,387 an ounce as of the morning of Friday, June 14th, and is essentially flat for the second week in a row. Silver comes in at $22.04 currently. It has faced repeated resistance around the $22 level. A solid close above that level could trigger some momentum buying, but it should be noted that most all rallies, even mini-rallies, have been sold for nearly two months now.

As for platinum and palladium, they got hit with some strong selling pressure on Thursday and appear headed for losses for the week. We're currently looking at prices of $1,446 per ounce for platinum and $730 for palladium. Both are down about 3% for the week.

However, for the year, platinum – and to a greater extent, palladium – have outperformed gold and silver.

The most heavily beaten-down metal of the past few months has been silver. We believe that silver now represents the best relative value of all the metals and that it will rebound the strongest when precious metals as a group break out and start a new leg higher. It's only a matter of time before paper prices catch up with the realities of very strong and unrelenting physical demand.

Before we sign off for this week we do have a quick product note. Some discounted silver!

The Australian silver kilo coin, a beautiful 32.15 troy ounce legal tender coin produced by the prestigious Perth Mint is available at huge discounts right now to Money Metals Exchange customers. You have to see this thing!

For the next few days, these unique coins can be had for just $1.69 over spot per ounce, easily making it the lowest premium government-minted bullion coin available today. Investors can save nearly $2 an ounce compared to the American Eagles. And this special price applies for orders of any size, no matter how small.

Just give us a call at 1-800-800-1865 – or order online at 24-hours a day, 7 days a week via our secure shopping cart.

Well that will do it for this week's market wrap podcast, thanks for listening. This has been Mike Gleason with Money Metals Exchange reminding you that we remain fully committed to getting you the most value for depreciating dollar... with speed, with accuracy, and with top notch service. Have a great weekend everybody.


Thank you for joining us for this edition of the Money Metals Exchange Weekly Market Wrap. Be sure to come back next week, and don't forget to subscribe to our weekly podcast through iTunes. For answers to all of your questions, or to discretely and securely buy or sell gold or silver coins, bars, and rounds, call 1-800-800-1865. Our knowledgeable and no-pressure specialists are standing by between 7:00 a.m. and 5:30 p.m. mountain time, Monday through Friday. Visit us at or call 1-800-800-1865.

Mike Gleason

About the Author:

Mike Gleason is a Director with Money Metals Exchange, a precious metals dealer recently named "Best in the USA" by an independent global ratings group. Gleason is a hard money advocate and a strong proponent of personal liberty, limited government and the Austrian School of Economics. A graduate of the University of Florida, Gleason has extensive experience in management, sales and logistics as well as precious metals investing. He also puts his longtime broadcasting background to good use, hosting a weekly precious metals podcast since 2011, a program listened to by tens of thousands each week.