Latest / Kinesis Money / White House Signals Gold Price Revaluation - LFTV Ep 287

Transcript

White House Signals Gold Price Revaluation - LFTV Ep 287 · Kinesis Money

• 0:00
  SPEAKER_01: This shift is reinforcing an unfactored bullish change in market behavior.
• 0:21
  SPEAKER_00: Welcome to Life in the Vault, brought to you by Kinesis Money, and we're certainly glad you've joined us here.
• 0:26
  SPEAKER_00: And as you can see, I'm out of the vault today and in the jungles of Costa Rica.
• 0:32
  SPEAKER_00: So pura vida to all of our Costa Rican friends.
• 0:34
  SPEAKER_00: And you know, Life in the Vault is the show that goes way beyond the headlines to uncover the truth about the precious metals industry.
• 0:41
  SPEAKER_00: And joining us today is Kinesis's very own world-renowned whistleblower and precious metals industry expert, Andrew McGuire.
• 0:49
  SPEAKER_00: And this week we'll be answering more questions from you, our Life in the Vault community.
• 0:54
  SPEAKER_00: So keep those questions coming in just by clicking on the link below in the description there.
• 0:59
  SPEAKER_00: And you never know, your question may well be chosen for Andrew to answer right here on Live from the Vault.
• 1:05
  SPEAKER_00: So let's head over to the UK and talking gold with Andrew McGuire.
• 1:11
  SPEAKER_00: Hey Andrew, first thing I want to reach out and say kudos to you on your end of July bottoming call.
• 1:17
  SPEAKER_00: And uh, you know, you had identified that gold would break out in early August, and we were talking structurally at a time when most of the specs and the house were wrong footed and they were wrong footed short.
• 1:31
  SPEAKER_00: You know, and since then, you know, our August 12th recording, just two weeks ago now, um, you had assessed again that gold and silver have confirmed the respective breakouts with gold up another$250 an ounce in silver, some$4 higher in just two weeks since our last call.
• 1:50
  SPEAKER_00: Now you also went out on a limb reaffirming that your January 4th uh call, and and you can go back, everyone, and go look at that recording on January 4th.
• 2:01
  SPEAKER_00: Uh, he called um gold target of around 8,000, which has prompted a lot of subscriber questions here.
• 2:07
  SPEAKER_00: And this is what we're talking about today, um, you know, as we head into the fourth quarter next week.
• 2:12
  SPEAKER_00: And so uh, first question is do you still think that Target is achievable on gold?
• 2:18
  SPEAKER_00: And what would you say are the key drivers that keep it in play?
• 2:23
  SPEAKER_01: Hey, thanks, Shane, uh, for uh correlating all the questions, and thanks, guys, for sending them.
• 2:29
  SPEAKER_01: Um, yeah, great questions.
• 2:31
  SPEAKER_01: So, so basically, let's pick up the thread from where we were.
• 2:35
  SPEAKER_01: And as we outlined last time, it's really about technicals.
• 2:39
  SPEAKER_01: They remain important, obviously, and to some extent, they're self-fulfilling, especially um more recent ones.
• 2:46
  SPEAKER_01: But we're challenging historical paper market extrapolations and focusing instead on how rapidly the physical market is tightening the noose on legacy paper gold complex, on the entire complex.
• 3:01
  SPEAKER_01: This shift is reinforcing an unfactored, bullish change in market behavior, with price discovery moving towards a higher quality, physically anchored regime.
• 3:15
  SPEAKER_01: Now, look, it's never been really that difficult to call for higher prices, and it's playing out well.
• 3:21
  SPEAKER_01: Ideally, the move, we don't, as we said last time, we don't want it to go too fast, too quickly.
• 3:28
  SPEAKER_01: We'll look at that in more detail in the chart session later, especially as speculators are carrying a lot of naked longs from being previously in naked short.
• 3:39
  SPEAKER_01: So, so a Fed pushback, for example, from Walsh at Jackson Hole on Friday.
• 3:45
  SPEAKER_01: So we're recording this on Wednesday, it'll be published tomorrow, it'll be ahead of Jackson Hole on Friday.
• 3:51
  SPEAKER_01: So we're just kind of looking at some opportunities here.
• 3:54
  SPEAKER_01: So it could be some really attractive diploming opportunities into which strong underlying Asian physical demand will underpin that kind of a dip.
• 4:05
  SPEAKER_01: Now, sustainable rallies really they need constructive pullbacks to prevent what it does is prevent heavily heavily leveraged futures positioning from building too much cell side uh ignition fuel.
• 4:20
  SPEAKER_01: So you get too, you leave, you know, if you've got too much above the physical, which the physical support levels are rising, but you get too much naked long longs above that, then essentially it creates cell ignition fuel for the house, which is on the long side, as in any casino.
• 4:42
  SPEAKER_01: Now, especially with the house once again wrong footed against and they're leaning short against this gold breakout.
• 4:50
  SPEAKER_01: Yes, they've been forced to short cover, but they're also trying to lean against it.
• 4:55
  SPEAKER_01: And such you know small pullbacks are absolutely healthy and they help reset positioning before the next leg higher.
• 5:05
  SPEAKER_01: That positioning reset is important because it creates a firmer base for any move towards the next in a series of definite upside targets.
• 5:15
  SPEAKER_01: Now, later we'll also review next month's third quarter um uh fourth quarter targets and our year-end fourth uh quarter projections.
• 5:27
  SPEAKER_01: Um so really basically that's what we're gonna reaffirm.
• 5:32
  SPEAKER_01: Um now recorded on uh this is being recorded on um the 26th, Wednesday 26th for publication tomorrow.
• 5:40
  SPEAKER_01: So today's market update kind of revisits the themes outlined in our previous bi-weekly report, which was recorded before Bescent unexpected QE announcement on Wednesday, the 19th.
• 5:55
  SPEAKER_01: So that was literally, literally the 19th.
• 5:59
  SPEAKER_01: Now, at that stage, the latest, um, this is before, at that stage, the latest World Gold Council data showing the PBOC gold accumulations in July had already pointed to a significant structural tailwind for gold.
• 6:16
  SPEAKER_01: And this reinforces the increasing strength of the physical market, and it highlights the growing policy constraints facing the Federal Reserve.
• 6:28
  SPEAKER_01: They don't have it all their own way anymore.
• 6:30
  SPEAKER_01: We're going to delve into the Fed in a minute, but to provide context, let's quickly look at what China lifting the veil actually means and why this leads right back to our$8,000 end of fourth quarter target.
• 6:47
  SPEAKER_01: Now, China's July uh 19.9, almost 20 ton official gold edition, is not a one-off reserve tweak.
• 6:56
  SPEAKER_01: It provides a visible step in a systematically monetary rebalancing process.
• 7:03
  SPEAKER_01: And just wait until August data, which in aggregate liquidity providers assess is far, far larger.
• 7:11
  SPEAKER_01: So referencing World Gold Council data, the PBOC's latest purchase was really the taking that at plain value, it's the largest since 2023.
• 7:21
  SPEAKER_01: It marks the 21st consecutive month of official buying, underscoring that Beijing is steadily increasing goals role behind the Yuan as confidence in the dollar reserve dominance erose.
• 7:36
  SPEAKER_01: Now, the official numbers, they're important, but they only reveal the tip of the iceberg.
• 7:44
  SPEAKER_01: Now, these sequential declared additions, they're dwarfed by credible estimates that China has accumulated vastly larger, unreported monetary gold reserves of around 60,000 tons.
• 7:59
  SPEAKER_01: Now we've looked at that in in granular detail in the past, but in that cotton text, think about it, July's 19.9 tonne should be read really just as a public signal of a much broader strategy to deepen the Yuan's uh credibility, to reduce reliance on dollar assets, and to anchor China's monetary system to physical gold.
• 8:26
  SPEAKER_01: Now, it's that they really want this to be visible.
• 8:30
  SPEAKER_01: Now, given current threats by Bescent that, quote, countries trading with Iran, they face expulsion from the dollar system.
• 8:41
  SPEAKER_01: Watch the buying expand through the next the last quarter.
• 8:46
  SPEAKER_01: Now, Hong Kong's exchange relaunch, the US dollar gold futures contract, is already flashing a major physical market signal.
• 8:55
  SPEAKER_01: Recording delivery volumes just three weeks after the launch.
• 8:59
  SPEAKER_01: Think about it, this contract was only three weeks old.
• 9:04
  SPEAKER_01: That matters.
• 9:05
  SPEAKER_01: This is not just another paper contract gaining screen liquidity.
• 9:10
  SPEAKER_01: Early physical update points to real demand for deliverable gold exposure outside the Western paper complex.
• 9:18
  SPEAKER_01: Sanction weaponization will feed this process more.
• 9:22
  SPEAKER_01: This is structural.
• 9:24
  SPEAKER_01: Hong Kong is building the rails to pull bullion east, to flow it east, with the clearing, vaulting, and delivery infrastructure, giving Asia more control over physical price discovery every single day.
• 9:40
  SPEAKER_01: Think about it.
• 9:41
  SPEAKER_01: Three weeks in, now, where are we?
• 9:44
  SPEAKER_01: Not even four weeks in.
• 9:46
  SPEAKER_01: And it's look at the extent of the control they have.
• 9:50
  SPEAKER_01: Now the contract already points to a more regionalized physical gold market with Hong Kong position to really capture the flows displaced by sanctions, delivery constraints, and Western settlement concentration, completely replacing that.
• 10:06
  SPEAKER_01: And the latest round of US sanctions and LBMA suspensions, they're already backfiring, reinforcing this shift, increasing the appeal of Hong Kong vaulting and SGE-linked delivery channels for affected Chinese refiners and miners, some of them who've been sanctioned.
• 10:27
  SPEAKER_01: Now, mainland integration through the SGE Delivery Connect mechanism gives Hong Kong direct access to Shanghai's physical gold ecosystem and ultimately its substantial plus or minus 60,000 tons of underlying liquidity.
• 10:45
  SPEAKER_01: Now, by tightly integrating Hong Kong with mainland physical flows, this framework materially strengthens the credibility of the physically deliverable HAU price, which is the Shanghai deliverable fixed price, as a true supply-demand benchmark, not another financialized contract price.
• 11:11
  SPEAKER_01: Now the distinction is absolutely critical.
• 11:14
  SPEAKER_01: The LBMA parallel over the counterfex gold market remains financialized, unallocated, unregulated to boot, it's a cash-settled structure with only a weak connection to physical supply and demand.
• 11:32
  SPEAKER_01: Now, Basel III NSFR regulations implemented in January 2023 forced the two LBMA fixed gold uh gold fixes to become physically deliverable.
• 11:43
  SPEAKER_01: And while the bullion available at these fixes represents just three to five tons of deliverable metal versus the daily 600 to 800 tons of diluted cash settlements, which obviously in turn weighs on the gold offered at the fixes, what's happening is the HAU LBMA arbitrage mechanism is now pulling lower cost 400-ounce bars out of London and into the Hong Kong SGE architecture.
• 12:13
  SPEAKER_01: Now this is structurally bullish.
• 12:16
  SPEAKER_01: Each physical flow into the Hong Kong SGE system imposes harder discipline on the LBMA CME market makers.
• 12:24
  SPEAKER_01: It tightens the noose on paper gold, the paper gold complex, and it reinforces the shift towards a higher quality, physically anchored price discovery regime.
• 12:36
  SPEAKER_01: Now, operationally, physically settled depositories improve the efficiency of ownership transfer and physical delivery, obviously.
• 12:45
  SPEAKER_01: And it's reducing friction for central banks, for sovereigns, institutional refiners, producers, and a whole host of participants that absolutely require a liquid, high-quality liquid asset settlement infrastructure that is not diluted with paper settlements.
• 13:05
  SPEAKER_01: Otherwise, it couldn't be a high-quality liquid asset.
• 13:09
  SPEAKER_01: And this enhances the practical utility of Hong Kong and it supports broader institutional participation in Hong Kong's gateway into the rapidly expanding Hong Kong SGE physical pricing architecture.
• 13:25
  SPEAKER_01: Now, paper gold confidence is absolutely cracking just as offshore physical liquidity accelerates.
• 13:34
  SPEAKER_01: This is no longer a background noise, it's a structural repricing event, a gathering force, not too dissimilar to the lull before a tsunami.
• 13:45
  SPEAKER_01: You know, we'll be on the beach when it's nothing but sand, because you know what's going to happen.
• 13:51
  SPEAKER_01: There's going to be a problem.
• 13:53
  SPEAKER_01: So let's move on.
• 13:55
  SPEAKER_01: We talked about the Fed.
• 13:56
  SPEAKER_01: This is a problem for the Fed.
• 13:58
  SPEAKER_01: Let's move on to the Fed.
• 14:00
  SPEAKER_01: Now, somewhat uncovered by Gatta's Robert Lamborn updating the level of outstanding Fed BIS gold swaps, which unsurprisingly showed a reduction, 13-ton decline at July month end squaring.
• 14:14
  SPEAKER_01: And that settled at a price$44 higher than the June close.
• 14:18
  SPEAKER_01: And that equated to an estimated$18.4 million short covering in event.
• 14:25
  SPEAKER_01: However, based on the reduction of the 400-ounce bar float, not just what's being lent and borrowed, the reduction of it, our information suggests that roughly 58 tons attributed to Fed short covering remain unaccounted for, implying that at least 45 tons of BIS swaps may have been double counted.
• 14:51
  SPEAKER_01: Now, given that discrepancy, uh, Robert had asked the very obvious question, a good question, are these BIS swaps being used to hide double counting in ETF gold?
• 15:04
  SPEAKER_01: Well, obviously we would affirm that and say yes, especially because gold and silver ETF on and off ramps operate through opaque, unallocated channels, enabling the Fed, the BIS, and the House essentially to flywheel rehypothecated claims without actually cleanly extinguishing the underlying obligations.
• 15:33
  SPEAKER_01: And this becomes far more consequential now that China is linking its estimated somewhat 60,000 tons of onshore gold reserves with Hong Kong's first of many upcoming Western accessible SGE physical gold settlement corridors.
• 15:49
  SPEAKER_01: So with strong Shanghai physical premiums driving actionable HAU LBMA fix arbitrage flows, liquidity providers increasingly assess that ongoing swap squaring events will become materially harder to execute without significantly raising the bid.
• 16:09
  SPEAKER_01: So this is a real problem.
• 16:12
  SPEAKER_01: And making this even more difficult, and almost certainly the reason double counting has shifted to the ETFs, the PBOC's uh shifting reserves from London to Hong Kong, building local inventories there supports a new clearing system and a benchmark.
• 16:31
  SPEAKER_01: And inviting others, they're inviting other central banks, obviously, join in, and particularly the Belt and Road nations are all participating.
• 16:41
  SPEAKER_01: This gives Hong Kong credibility as a physically backed gold hub while increasingly exposing the Fed's structurally wrong side positioning.
• 16:51
  SPEAKER_01: They're going to find this more and more difficult to cover.
• 16:54
  SPEAKER_01: It's not the old game.
• 16:56
  SPEAKER_01: So by contrast, London's waning dominance actually still rests on heavily on allocate, unallocated, opaque, leverage, and largely cash settled over-the-counter trading.
• 17:09
  SPEAKER_01: And as central banks increasingly prioritize allocated metal and sovereign custody and physical settlement, price discovery is naturally gravitating towards these hubs.
• 17:22
  SPEAKER_01: It's magnetic, where the real bullion is available and deliverable.
• 17:27
  SPEAKER_01: And that's why I've been drawing public attention to London's tokenized gold push, which is really, we looked at it last time and drew attention to it, got a lot of feedback from the public.
• 17:40
  SPEAKER_01: Who weren't even aware of this?
• 17:43
  SPEAKER_01: Um, and and it it's that's why we wanted to draw attention, which is because it's a defensive, attempted digital upgrade to really what is just an unref unreformed, unregulated, unallocated paper gold market.
• 18:00
  SPEAKER_01: Uh London is trying to tokenize confidence while Shanghai and Hong Kong are actually building deliverability.
• 18:08
  SPEAKER_01: That's the spread to watch.
• 18:10
  SPEAKER_01: It's that is where the action is.
• 18:13
  SPEAKER_01: And paper claims obviously can be rolled, recycled, repackaged until physical settlement that is until fickle as physical settlement puts a bid under the real metal and exposes who can actually deliver.
• 18:30
  SPEAKER_01: The Fed's trapped running on thin liquidity and it's gonna need an off-ramp.
• 18:37
  SPEAKER_01: So physical facing liquidity providers are treating this as a structural, long physical, short paper signal.
• 18:44
  SPEAKER_01: And as London's float continues to tighten while Shanghai's Hong Kong physical liquidity deepens, the risk is not one-off, a one-off squeeze.
• 18:54
  SPEAKER_01: It's a sustained repricing of deliverable metal versus synthetic claims.
• 19:00
  SPEAKER_01: And in that environment, dips driven by paper selling are viewed increasingly as forced liquidity events.
• 19:08
  SPEAKER_01: While physical premiums, lease rates, ETF flows in London, bar availability becomes the key towels for this next leg higher.
• 19:17
  SPEAKER_01: Now, unless the LBMA and the UK regulators address the over-the-counter market's core weakness, which is cash settlement over physical delivery, as again opaque, unallocated, unregulated, these unresolved re-hypothecation risks, growing re-hypothecation risks, tokenization will just it will not restore trust at all.
• 19:41
  SPEAKER_01: It'll simply make the existing leverage faster, more mobile, more efficient, really in a bad way.
• 19:48
  SPEAKER_01: And that is strategic flaw.
• 19:51
  SPEAKER_01: Shanghai and Hong Kong are offering a cleaner alternative.
• 19:55
  SPEAKER_01: So why would you play in that sandpit?
• 19:57
  SPEAKER_01: Shanghai is offering one-to-one physically backed allocated deliverable metal.
• 20:02
  SPEAKER_01: So as price discovery shifts east and physical settlement gains traction, the Fed's exposure is not just gold ownership, it's gold trust.
• 20:14
  SPEAKER_01: If as suspected, the ETF custodial or official sector gold has been re-hypothecated into multiple claims, and bear in mind that ETFs are not sanctioned to lease out metal, but they're but on the other hand, short selling and swaps get around this so-called protection.
• 20:34
  SPEAKER_01: So so basically shrinking, so into all of this, because there's no other way, they have to hide it somewhere in allocated form.
• 20:45
  SPEAKER_01: That's why we think the ETFs are being um uh uh re-hypophagated.
• 20:51
  SPEAKER_01: So essentially that prov so essentially into all of this, we've got shrinking Comex liquidity and rising physical demand.
• 21:00
  SPEAKER_01: It's gonna force those claims back towards settlement.
• 21:05
  SPEAKER_01: Now, at that point, there is no escape.
• 21:09
  SPEAKER_01: Fort Knox becomes a verification and a balance sheet credibility issue short of confiscation.
• 21:16
  SPEAKER_01: We kind of looked at this before in the past.
• 21:19
  SPEAKER_01: Short you can't confiscate, uh, you can't really default.
• 21:24
  SPEAKER_01: The cleanest policy release valve is to revalue US Treasury gold to market, turning a paper gold liability problem into a sovereign balance sheet repair mechanism.
• 21:35
  SPEAKER_01: Now, Bessent's concurrent push for lower long-end yields and um uh that intensified um last week.
• 21:47
  SPEAKER_01: So it's also intensified the weak dollar debasement trade, sharply lifting gold.
• 21:54
  SPEAKER_01: Now, given Bessent comes from a trading background, unleashing gold was even.
• 22:00
  SPEAKER_01: A major error well he's setting up the gold revaluation trigger.
• 22:07
  SPEAKER_01: So I'll leave it for you to think about, but there's no coincidences here.
• 22:13
  SPEAKER_01: Gold is returning as a gold reserve collateral because confidence is in debt-backed sovereign paper, especially US treasuries, is eroding under the weight of record debt, fiscal deterioration, ratings downgries, um, reserve weaponizations.
• 22:34
  SPEAKER_01: And we saw more of those just this week, just yesterday.
• 22:38
  SPEAKER_01: Central banks are rebuilding gold reserves because gold is liquid, universally accepted, and no one else is liability.
• 22:47
  SPEAKER_01: So marking a clear shift in official reserve preference away from paper debt and towards physical gold, um, global central bank goldings now exceed foreign official US Treasury holdings.
• 23:02
  SPEAKER_01: They have done now for some months.
• 23:05
  SPEAKER_01: Currently, it's about 5 trillion versus 4 trillion.
• 23:09
  SPEAKER_01: That's quite a crossover.
• 23:11
  SPEAKER_01: And that crossover came in the first half of this year alone, fueled by sustained official buying and gold's price surge.
• 23:20
  SPEAKER_01: Gold also overtook Treasury as a share of total reserves for the first time since the mid-1990s, reaching about 27% versus 22% by the end of 2025.
• 23:33
  SPEAKER_01: So gold's not, but this is where a lot of people get it wrong, and arguments evolve.
• 23:38
  SPEAKER_01: Gold is not replacing the dollar, it's reasserting itself alongside it.
• 23:45
  SPEAKER_01: Central banks and sovereign institutions are diversifying reserves, increasing physical gold allocations, and building settlement systems beyond the dollar framework.
• 23:55
  SPEAKER_01: It's that simple.
• 23:56
  SPEAKER_01: The dollar remains dominant, uh, but it its monopoly over monetary trust is being steadily diluted.
• 24:04
  SPEAKER_01: That's what we're seeing now.
• 24:06
  SPEAKER_01: Gold's advantage is neutrality.
• 24:10
  SPEAKER_01: No issuer risk, no counterparty exposure, no sanction risks, no dependence on another sovereign's balance sheet.
• 24:18
  SPEAKER_01: So, in short, gold's monetary value comes from what it does not require.
• 24:25
  SPEAKER_01: No issuer, no promise, no political backing, and no faith in another country's balance sheet.
• 24:32
  SPEAKER_01: That's the focus.
• 24:36
  SPEAKER_01: However, what we are currently evidencing is this gold remonetization race is hitting a physical war.
• 24:44
  SPEAKER_01: Now, at current prices, there is not enough readily deliverable gold to absorb this serious rotation out of debt-backed US treasuries into hard collateral.
• 24:56
  SPEAKER_01: And this is driving the shift from underpriced, cash-settled, unallocated gold to physically determined, fully paid up allocated ownership.
• 25:06
  SPEAKER_01: This issue is no longer just available supply, but whether trusted physical metal can be mobilized quickly, securely, and at scale.
• 25:17
  SPEAKER_01: By design, the recently expanded Hong Kong SGE physical settled gold corridor attacks that bottleneck directly.
• 25:26
  SPEAKER_01: So the SGE's expanding trusted gold collateral rails ultimately open global access to, as I say, roughly 60,000 tons of physical bullion, providing central bank sovereigns and institutions the liquidity to swap dollar debt for real metal.
• 25:44
  SPEAKER_01: That's happening.
• 25:46
  SPEAKER_01: The shift towards physical allocation at real supply-demand clearing prices is structurally repricing gold higher into tightening deliverable supply.
• 25:55
  SPEAKER_01: This is an ongoing process.
• 25:57
  SPEAKER_01: But with wholesale gold still anchored to a vast base of unallocated paper claims, the market must revalue materially to absorb this reserve migration.
• 26:08
  SPEAKER_01: And in this framework, a quarter four bullion, a fourth quarter bullion offer price near$8,000, it's not an outlier.
• 26:17
  SPEAKER_01: It is the clearing price required by a changing market structure.
• 26:24
  SPEAKER_01: And as we just looked at, post-Basle III physically settled venues such as Hong Kong and Shanghai Gold Exchange, they're accelerating the transition from paper price discovery to deliverable metal clearing.
• 26:37
  SPEAKER_01: But as synthetic dilution loses pricing power, paper-derived downside forecasts become increasingly redundant.
• 26:46
  SPEAKER_01: And we see them popping up all over the place.
• 26:48
  SPEAKER_01: People who have a head, who have an incentive to try and talk gold out, that is.
• 26:54
  SPEAKER_01: The institutional reality is a market being forced towards a substantially higher physical clearing price.
• 27:04
  SPEAKER_01: So, bottom line, gold's breakout is being driven by a shift from rate-sensitive liquidation back into structural accumulation, led by Chinese demand, technical buying, central bank support, and renewed monetary debasement hedging.
• 27:22
  SPEAKER_01: By the way, I found this report from Donald Trump very interesting, drawing attention to Jim Rickard's uh assessment that gold could hit$10,000 by the end of 2026 and possibly$20,000.
• 27:38
  SPEAKER_01: Now, Trump reposted this.
• 27:42
  SPEAKER_01: Was that a shot across Besson's bow?
• 27:45
  SPEAKER_01: I mean, Besson's push for lower long yields has intensified the weak dollar debasement trade.
• 27:51
  SPEAKER_01: So that's clearly not gonna notice.
• 27:54
  SPEAKER_01: And that's obviously sharply lifting gold.
• 27:56
  SPEAKER_01: And while Bessent comes from a trading background, unleashing gold, as I say, earlier, was either a major error or he is setting up the gold revaluation trigger.
• 28:08
  SPEAKER_01: Again, no coincidences here.
• 28:12
  SPEAKER_00: All right, Andrew, that covers uh the majority of those questions.
• 28:15
  SPEAKER_00: I do have there's one more left here uh that we get a lot, and that is ask Andrew what is he seeing in the shorter term here as we proceed.
• 28:24
  SPEAKER_01: Yeah, and absolutely.
• 28:26
  SPEAKER_01: And and I did promise we'd have a look at the charts.
• 28:28
  SPEAKER_01: So here we are on Wednesday the 26th.
• 28:30
  SPEAKER_01: It's going to be published tomorrow, just in a few hours from now.
• 28:33
  SPEAKER_01: So let's pick up the charts from where we were last time.
• 28:36
  SPEAKER_01: And I think it's really helpful not to be uh to to focus on this larger view.
• 28:43
  SPEAKER_01: I think these two-week um these bi-weekly um sort of episodes, um, they really do assist in leveling out the chat, but it gives us a chance to look back at the bigger picture.
• 28:59
  SPEAKER_01: After all, we are stackers.
• 29:01
  SPEAKER_01: Yes, there's traders amongst us, and that's important too.
• 29:05
  SPEAKER_01: And capitalizing on uh a lot of the short-term action is really important because it's an opportunity to take physical, take paper gold from from the house and convert it into physical.
• 29:17
  SPEAKER_01: Doing your doing your job too.
• 29:21
  SPEAKER_01: Um, so let's have a look.
• 29:23
  SPEAKER_01: Now, especially because this September futures contract, which is actually trading at a discount to spot at this point, that goes into option settlement today, hence the gaming.
• 29:38
  SPEAKER_01: And first notice on Friday, uh, where all bets will have to be fully funded, bearing in mind that this is still a leveraged contract.
• 29:48
  SPEAKER_01: Uh, then it goes into delivery on Monday, where anyone not delivering or squaring futures deliveries obligations will either close or roll these contracts into December.
• 29:58
  SPEAKER_01: So this contract is expiring.
• 30:01
  SPEAKER_01: Now, what will happen is it will be those that are into first notice, we're going to see a move uh for those that are not in a position to deliver or are able to deliver, to move their paper contracts, either close them or move them into this December contract, which is trading at about at this stage in the game, because it's a December expiry contract, it's just it's trading at about a 75 cent premium to spot.
• 30:34
  SPEAKER_01: So, what we've seen today into what is clearly options gaming, what we've seen is that the commercials and our liquidity providers all along have been, and we'll move over to this expiring contract because it's been standing for a long, been trading for a long time, have been pretty much stating that this is where the commercials, those exposed to uh delivery obligations and very large arbitrage flows from probably 13% to Shanghai premium, uh, are really dare not really push it that much below this confluence here of supports.
• 31:12
  SPEAKER_01: And while we don't really buy into longer-term technicals, then really from a shorter term perspective, because a lot of the action is futures-centric, obviously we then look at the futures contracts.
• 31:27
  SPEAKER_01: And this is the silver futures contract that's going to go into expiry.
• 31:32
  SPEAKER_01: And just for reference, this is the gold futures contract, which is not, it is already a December contract, not going in expiry.
• 31:41
  SPEAKER_01: Very short term, these pullbacks are constructive, as also in gold, are constructive because what they're doing is rinsing out low-hanging, naked-long, speculative froth.
• 31:53
  SPEAKER_01: Now, the overnight buying on Tuesday morning, that was in the Asian session, evidence gold futures continuing to test new highs, once again fixing at its highest levels, really for several days now, at its highest levels, AM and PM fixes, into basically 14th of May highs, all the way back here.
• 32:19
  SPEAKER_01: Now, if you remember, just while I've got this four-hour chart open, remember last time I said once this, this is where the shortstop were laying, and that any kind of breach of that 46, 27, 10 cell level, which was a bank of international settlement sell operation, any these shortstops still existed.
• 32:40
  SPEAKER_01: So any breach would actually force commercial buying of these short positions back.
• 32:46
  SPEAKER_01: So then we had a new high made.
• 32:49
  SPEAKER_01: And what have we got?
• 32:50
  SPEAKER_01: Options expiry today, even though the December contract isn't in delivery, we always tend to fill these gaps.
• 32:58
  SPEAKER_01: So this is a good support level.
• 33:00
  SPEAKER_01: Bessent's push for lower long-end yields has intensified the weak dollar debasement trade, sharply lifting gold.
• 33:07
  SPEAKER_01: And while Bessent came comes from a trading background, unleashing gold was either a major error, or as we thought, or is he really setting up gold, the gold revaluation trigger?
• 33:18
  SPEAKER_01: There are no coincidences here.
• 33:20
  SPEAKER_01: The overall view is that the fundamental case remains strong, but the near-term setup evidences momentum-driven record futures buying alongside aggressive CTA demand.
• 33:33
  SPEAKER_01: So that creates a richer upside option skew where the house can take the short side, and rising open interest all point to fresh risk chasing the move, and the house on the other side looking for opportunities to chase them out.
• 33:49
  SPEAKER_01: However, there is massive physical support here.
• 33:54
  SPEAKER_01: Unlike this rally, which was the last part of this rally, was momentum driven, this time we are evidencing a physical support level rising.
• 34:07
  SPEAKER_01: Now let's take a look at the last COT report.
• 34:10
  SPEAKER_01: And although we had one yesterday, it won't be published until Friday, which is ludicrous.
• 34:18
  SPEAKER_01: But essentially, based on the latest data, which is still the latest data when you get this tomorrow, uh, the most basic, this report indicates specs have bought 22.2 billion of gold futures comprising of 13.6 billion longs and 8 billion short covering, into which commercials rang the register on the short covering element but are on the short side of new additions.
• 34:44
  SPEAKER_01: Now, offsetting this, commercials exposed to the HAU LBMA fixed NSFR compliant T plus one delivery obligations are definitely hedging this exposure in the over-the-kerner markets, which, while dilutive, are NSFR compliant and T plus one deliverable at the fixes.
• 35:06
  SPEAKER_01: And one of our bugbears about these COT reports, when you look at a short position, they fail to indicate that the a lot of these positions are hedged in the over-the-counter market.
• 35:20
  SPEAKER_01: So taking you cannot take them at plain vanilla.
• 35:24
  SPEAKER_01: Now, very, very short term, gold has detached from the curve steepening support.
• 35:30
  SPEAKER_01: Now, if you remember, this is where the Bessent came in, and then we saw basically this was all pretty much up to around about here, the 200-day moving average here, and just above it, really started to detach slightly from this curve steepening support, leaving momentum and positioning in control.
• 35:52
  SPEAKER_01: Now, a Fed pushback from Walsh at Jackson Hole on Friday could open up dip buying opportunities into which strong underlying Asian physical demand will underpin the dip.
• 36:04
  SPEAKER_01: Personally, I don't see anything new coming out of Jackson Hole, but experience tells me never looked a gift horse in the mouth.
• 36:12
  SPEAKER_01: Especially when we can take paper gold and paper silver and convert it into physical against the house.
• 36:20
  SPEAKER_01: Now, while of course, maintaining our physical stack long and strong, we would view any dip into the spot adjusted 4580, 200 day moving average.
• 36:31
  SPEAKER_01: So that is actually right here.
• 36:33
  SPEAKER_01: And that's going to rise a bit by Friday, probably 82 or 83, 4583, probably.
• 36:39
  SPEAKER_01: We would see that as sufficient to eject all of the fresh froth and provide good value ahead of the next Asian-driven physically underpinned push higher into and above the January all-time highs.
• 36:55
  SPEAKER_01: And a move above there.
• 36:56
  SPEAKER_01: And this is this is the same charts that we were looking at in back in January.
• 37:02
  SPEAKER_01: So obviously, a lot of happened along the way, but really nothing's changed.
• 37:07
  SPEAKER_01: We're looking at 6,000 coming up, uh, probably in the next six to eight, six weeks.
• 37:13
  SPEAKER_01: Um, and by the end of the quarter, we're still looking at the end of the fourth quarter, looking at probably 8,000.
• 37:20
  SPEAKER_01: And all the reasons for that have been given earlier.
• 37:25
  SPEAKER_01: Silver also continues to evidence very strong Shanghai premiums, illustrating tight demand.
• 37:31
  SPEAKER_01: The current bull pivot setup, which we looked at a little while ago on the futures charts, has so far evidenced commercials taking the long side of underlying physical support.
• 37:44
  SPEAKER_01: So we're really just looking at what's going on in the physical markets and marrying it up with some of the low short-term technicals.
• 37:52
  SPEAKER_01: You would see any dip below this level as the commercials having to buy it.
• 37:59
  SPEAKER_01: As far as silver's concerned, the same Hong Kong SGE physical derived real supply-demand pricing architecture is increasingly influencing the market.
• 38:08
  SPEAKER_01: It is also forcing arbitrage between the consistently elevated around 13% Shanghai premium over spot and the diluted London silver spot fixes.
• 38:19
  SPEAKER_01: Now, liquidity providers report that this increasingly liquid bullish pricing architecture is now pulling silver business away from London, and this remains extremely bullish for silver.
• 38:32
  SPEAKER_01: Now, once silver breaks away from its capped 200-day moving average, it opens up a blue sky short squeeze above$100 into the 140 range, but also just when the least expected.
• 38:51
  SPEAKER_01: So, in closing, what's striking is how many new investors are waking up to gold as real wealth protection.
• 39:01
  SPEAKER_01: But so many people coming, the people who've never looked at gold.
• 39:06
  SPEAKER_01: I'm talking about large funds, hedge funds, we're talking about uh family offices, we're talking about people we meet in the pub because it's not going, it's not escaping them.
• 39:20
  SPEAKER_01: Gold is a safe haven.
• 39:23
  SPEAKER_01: It's safe haven wealth protection.
• 39:26
  SPEAKER_01: But as stackers, we are still well ahead of this curve.
• 39:31
  SPEAKER_01: Ignore the volatility, hold your physical, be part of the solution, and keep stacking.
• 39:40
  SPEAKER_01: The reset is coming.
• 39:42
  SPEAKER_01: Make sure you're holding real metal when it arrives.
• 39:46
  SPEAKER_00: All right, that wraps up another episode of Live from the Vault, brought to you by Kinesis Money, and a big thank you to Andrew McGuire for sharing his deep market knowledge, and also to you for tuning in here and being a part of this growing global community.
• 39:59
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• 40:08
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• 40:12
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• 40:20
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• 40:23
  SPEAKER_00: And you never know, your question may be selected for our next episode right here on Live from the Vault.
• 40:28
  SPEAKER_00: And with that, we'll be back next week with more truth that you just won't find anywhere else.
• 40:33
  SPEAKER_00: You won't find on the mainstream media.
• 40:34
  SPEAKER_00: And until then, remember by physical.
• 40:37
  SPEAKER_00: Make sure it's backed one to one, and we'll see you next time right here on Live from the Vault.
• 40:42
  SPEAKER_00: Bye for now.