Latest / Kinesis Money / $6Trillion-45,000 Tonne PetroGold Rush Begins! - LFTV Ep 273

Transcript

$6Trillion-45,000 Tonne PetroGold Rush Begins! - LFTV Ep 273 · Kinesis Money

• 0:00
  SPEAKER_01: Now bear in mind that the global oil and gas market is currently valued at around six trillion dollars.
• 0:06
  SPEAKER_01: So this beggars the question how much gold it would take to back the market.
• 0:27
  SPEAKER_00: Welcome to Life in the Vault, brought to you by Kinesis Money, and we're certainly glad you've joined us here.
• 0:33
  SPEAKER_00: Life in the Vault, you know, is the show that goes beyond the headlines to uncover the truth about the precious metals industry.
• 0:39
  SPEAKER_00: And joining us today is Kinesis' very own world-renowned whistleblower and precious metals industry expert, Andrew McGuire.
• 0:49
  SPEAKER_00: And this week we'll be answering more of your questions from the Life in the Vault community.
• 0:54
  SPEAKER_00: So keep those questions coming in just by clicking that link below in the description.
• 0:59
  SPEAKER_00: And you never know, your question may just be chosen for Andrew to answer right here on Life in the Vault.
• 1:06
  SPEAKER_00: So with that, let's head over to the UK and talking gold with Andrew McGuire.
• 1:14
  SPEAKER_00: Hey Andrew, uh, what are we seeing following the volatility that we've seen in the last two weeks since our you know last uh episode here on May 7th?
• 1:23
  SPEAKER_00: You know, I understand that you have a significant update on the de dollarization process and and where, you know, are we in this paper to physical, you know, war that we're having.
• 1:36
  SPEAKER_00: I guess it would be a war.
• 1:37
  SPEAKER_00: And and this would be exactly would tie in perfectly to what you were just talking about on last week's episode of Vault Side.
• 1:45
  SPEAKER_00: Over to you, Andy.
• 1:46
  SPEAKER_01: Yeah, thanks, Shane.
• 1:47
  SPEAKER_01: Nice to be with everyone.
• 1:48
  SPEAKER_01: Yeah, and what Shane's referring to, of course, is um last week we um Canise is from time to time, I think every few months, it was episode number seven, basically.
• 1:58
  SPEAKER_01: Um really a big update of what we're doing and all that kind of stuff.
• 2:02
  SPEAKER_01: But it one of the questions in there for me was what's going on?
• 2:06
  SPEAKER_01: You know, which what are we seeing?
• 2:08
  SPEAKER_01: And I think that kind of leads nicely into uh into more granular detail for Life from the Vault um uh subscribers, it more of a detail of what we're seeing.
• 2:21
  SPEAKER_01: So if you remember in our last Life from the Vault episode, that was uh recorded on the 6th of May.
• 2:28
  SPEAKER_01: I think it was published on the 7th.
• 2:30
  SPEAKER_01: Um, we took a closer look on how the Iran War has accelerated the ongoing uh first-tier de-dollarization process, morphing into what is really a rapidly expanding first-year gold-anchored multipolar world.
• 2:47
  SPEAKER_01: We kind of looked at that in a little more detail.
• 2:50
  SPEAKER_01: Now, evidence of this continues to roll out.
• 2:52
  SPEAKER_01: And we'll take a look at how this will play out um in gold uh and silver, both short and longer term.
• 3:01
  SPEAKER_01: Obviously, that's one of the things we'll be looking at.
• 3:04
  SPEAKER_01: Now, while the UAE exiting OPEC doesn't really appear to pose a direct uh threat to the petrodollar, it's hard to ignore that for the last 60 years, the UAE was one of OPEC's largest producers.
• 3:20
  SPEAKER_01: And it's this newfound flexibility to sell oil in directly convertible gold to a petro yarn.
• 3:29
  SPEAKER_01: Uh, and and and so basically, this is a big deal.
• 3:33
  SPEAKER_01: And so basically, Pareto's law dictates this event poses a much larger threat to the um petrodollar than is actually factored in.
• 3:45
  SPEAKER_01: Now, a lot of people are playing it down and one thing and another, but it is a huge deal.
• 3:50
  SPEAKER_01: And even setting aside the oil for gold convertibility, as oil now uh starts fragmenting across currencies, dollar demand falls.
• 4:02
  SPEAKER_01: It's it's straightforward.
• 4:04
  SPEAKER_01: Now, coming to the quick though, as oil stops backing the dollar, something else must anchor value.
• 4:12
  SPEAKER_01: And gold is the only non-fiat first-tier asset that can actually replace the dollar to provide a liquid reserve hedge settlement alternative.
• 4:22
  SPEAKER_01: There isn't anything else that isn't debt-based.
• 4:26
  SPEAKER_01: So as the petrodollar, which is oiled back demand for the dollars, begins to unravel, gold now comes back into the system, uh, providing a neutral, non-political store of value and settlement asset.
• 4:41
  SPEAKER_01: And while the yuan is still a national currency with capital controls, which is what a lot of people are saying, oh, well, it's just not going to compete.
• 4:51
  SPEAKER_01: Underlying this, following decades of unreported monetary gold inflows, Beijing has accrued a minimum of 40,000 tons, 45,000 tons of off-the-radar physical gold, which is salted in the state held banks.
• 5:07
  SPEAKER_01: We've looked at this before.
• 5:08
  SPEAKER_01: It's actually far larger than that, but we're just saying 45 is pretty much the low estimate.
• 5:14
  SPEAKER_01: And then, of course, there's 30,000 odd tons of accessible citizen L gold, which could be uh accessed in a time of war.
• 5:23
  SPEAKER_01: So, in aggregate, it's stealthily providing the PBOC an increasingly liquid gold bridge asset that is actually being collateralized.
• 5:34
  SPEAKER_01: And as this process rolls out, China's SIPS messaging system facilitates a gold bridge into the global facing 100% physically um uh settled uh SGE gold and uh gold corridor, where such collateralization arbitrates.
• 5:55
  SPEAKER_01: Now bear in mind that the global oil and gas market is currently valued at around six trillion dollars.
• 6:01
  SPEAKER_01: So this beggars the question how much gold it would take to back the market.
• 6:07
  SPEAKER_01: Now, as of today, the current gold price um it would equate to about 42,000 metric tons.
• 6:18
  SPEAKER_01: That's 20% of all the gold ever mined.
• 6:21
  SPEAKER_01: Is it a coincidence that that marries up to the PBOC's rapidly accruing gold hoard?
• 6:29
  SPEAKER_01: Easily marries up.
• 6:31
  SPEAKER_01: Now, markets don't wait for policy, a front-run that transition.
• 6:38
  SPEAKER_01: And that is exactly what's beginning to happen.
• 6:41
  SPEAKER_01: Russia, China, Iran, and an increasing number of African nations already settle oil in rubles and yuan, both of which are directly convertible to gold.
• 6:51
  SPEAKER_01: And the UAE uh pivot adds a significant liquidity to this oil for gold trade.
• 6:58
  SPEAKER_01: So a lot of this is just not really thought through.
• 7:01
  SPEAKER_01: And to give the idea of the scale, one must factor in that around 80% of the entire energy complex is either produced or consumed by global uh south-facing countries.
• 7:14
  SPEAKER_01: Iran, the Iran war, and and uh so basically the Iran war has exposed the US non-performance as the oil producer's protector, which is really what this was all about in uh when uh in this in this early 70s when oil was became the petrodollar.
• 7:36
  SPEAKER_01: And as we've just evidenced by the UAE, the incentive to use dollars to secure this protection now diminishes.
• 7:45
  SPEAKER_01: So, why would countries sell real resources for a currency that can be printed infinitely?
• 7:53
  SPEAKER_01: And when logic points directly to gold, and I mean, so really that's what it does, it points directly to gold.
• 7:59
  SPEAKER_01: So gold is finite, and it's not issued by any government or historically, but it is historically accepted globally.
• 8:08
  SPEAKER_01: Now, given the synthetically determined gold oil spread is down to about 40 barrels per ounce versus the 75 barrels per ounce that it bought before the war, this ratio was already stretched to extremes.
• 8:25
  SPEAKER_01: And the petrodollar for gold decoupling gains traction, as it does gain track traction, the oil dollar ratio will start to revert to historical benchmarks.
• 8:36
  SPEAKER_01: And that beggars the question.
• 8:38
  SPEAKER_01: So what were they?
• 8:39
  SPEAKER_01: And in mid-2008, when oil hit 145 bucks a barrel, gold was around 970 bucks.
• 8:48
  SPEAKER_01: And it only took 0.156 ounces of gold for a per barrel, as opposed to the 40 or the 75 you saw before.
• 8:58
  SPEAKER_01: Now, stepping back to just before the petrodollar was implemented in the early 1970s, after the gold standard ended, it dipped even lower.
• 9:10
  SPEAKER_01: In in late um 1970s, um, it dip it dipped in the late 1973, it was, um, into early uh 74.
• 9:21
  SPEAKER_01: And I looked this up recently when gold averaged around 100 to 220 bucks an ounce, and oil was really briefly in the single digits per barrel before the big OPEC uh hikes, you could get a barrel for 0.07 to 0.1 ounces of gold.
• 9:43
  SPEAKER_01: I mean, what a difference.
• 9:45
  SPEAKER_01: So it kind of tells you what this whole petrodollar um uh disruption has has of how far it's gone away from what was previously uh when gold backed the dollar.
• 9:57
  SPEAKER_01: So here and now, with about a plus or minus 40 trillion in gross national debt, um, that obviously there's unfunded uh liabilities are significantly higher.
• 10:10
  SPEAKER_01: And with bond yields hitting 2007 highs today, and not just in the US, but also in other in other markets, spurred by it was really spoiled, spurred by um oil-related inflationary concerns, it cannot be discounted that we evidence another bond buyer strike coming again.
• 10:33
  SPEAKER_01: And so if we benchmark the 2008 0.156 ounces per barrel historical lows, at 111, right now I'm looking at 111 rent.
• 10:48
  SPEAKER_01: So that would really at that rate, it would price oil at 712 bucks a barrel.
• 10:56
  SPEAKER_01: Well, which is of course ludicrous, but what this historical walkthrough illustrates is as oil decouples from the fiat dollar back into a gold standard, ultimately it should be possible for less than one ounce of gold to buy a barrel of oil.
• 11:16
  SPEAKER_01: It also highlights gold is historically grossly underpriced versus real assets.
• 11:23
  SPEAKER_01: And there are many, many more unfactored, uh bullish for gold uh drivers flying under the radar.
• 11:31
  SPEAKER_01: Um and I'm gonna one or two, I'm gonna capture one or two here in a link.
• 11:35
  SPEAKER_01: As was evidenced after Beijing defied the US sanctions, allowing refiners to ignore them, as Bloomberg analysis discerns, this is a major dedollarization mandate that encourages domestic refiners to circumvent these sanctions by trading oil in Yuan.
• 11:51
  SPEAKER_01: Trading oil in non-dollar currencies has not gone well for anyone who's ever attempted it.
• 11:57
  SPEAKER_01: Uh, Saddam Hussein, Gaddafi, they found that out pretty quickly.
• 12:01
  SPEAKER_01: However, given China is a nuclear power and operates an alternate SIPS clearing messaging system, there's little the US can do about it.
• 12:12
  SPEAKER_01: So fully quarantined from the dollar payments network, SIPS banks become the perfect conduit uh for China, the China-Iran trade to flourish, out of which um US tariffs um so basically uh the US the the US cannot tariff it uh and they can't prosecute it.
• 12:35
  SPEAKER_01: Also, given the global south nations either produce or consume the lion's share of trillions of uh of energy trade, this will indeed herald a post-dollar world.
• 12:48
  SPEAKER_01: There's a lot going on here.
• 12:49
  SPEAKER_01: And as we previous and the war kind of really uncovered it.
• 12:53
  SPEAKER_01: And as we previously assessed, China's cross-border payment system, the SIPS, already um interconnects uh to a rapidly well over 5,000 banking institutions, growing every day.
• 13:05
  SPEAKER_01: Uh, and and even before the Iran War drove an as-yet unfactored surge in the Yuan oil gold trade, during April, uh the SIP settlement platform had already overtaken the SWIFT transactions.
• 13:20
  SPEAKER_01: So the the UAE now joins Russia, China, and several African nations to join the gold-for-oil settlement trade.
• 13:29
  SPEAKER_01: The key takeaway here is that the yuan is freely exchangeable for gold, and vice versa.
• 13:36
  SPEAKER_01: And this is the key, key uh factor here.
• 13:39
  SPEAKER_01: Also, as you can't say that for the dollar against uh oil, you're gonna require a hell of a lot um lot more gold, which is imprison what we're just trying to demonstrate here, it's mispriced.
• 13:56
  SPEAKER_01: And also, the rapidly expanding BRICS facing real asset tokenization gateway opens up every single commodity to be traded and settled through SIPS, benchmarking BRICS national currencies against the Yuan, which in turn converts a growing number of national currency transactions to be backed by first tier.
• 14:16
  SPEAKER_01: Basel III NSFR combined, high quality liquid asset gold.
• 14:21
  SPEAKER_01: Increasingly, the physical gold is stored inside the SGE warehouses and collateralized.
• 14:28
  SPEAKER_01: So let's also pull apart some recent industry reports so as to look at some very largely missed additional evidence of how gold and silver will react to this dedollarization process.
• 14:41
  SPEAKER_01: And while not factored in to this upcoming Goldback Yuan dedollarization process, it is silver that will ultimately outperform gold.
• 14:50
  SPEAKER_01: And this is the interesting thing about it because drilling down into the larger picture and to answer a very good subsider question, if I were to focus on any of the largest unfactored upside surprises, it would be on the upcoming gold to silver ratio compression.
• 15:10
  SPEAKER_01: And we did kind of look at a bit of that last time, and what is and and what is going to overrun what is really the synthetically embedded historical correlations which are about to catch as many Western analysts offside as you can imagine.
• 15:26
  SPEAKER_01: And it is also the kind of ratio imbalance we're seeing in a oil.
• 15:31
  SPEAKER_01: It all revolves around the largely underestimated fact that any asset sold in Yuan gives the seller of that commodity the option of directly converting those Yuan receipts into gold.
• 15:45
  SPEAKER_01: So, cutting to the quick, silver priced in Yuan, traded and stored, collateralized inside the global, uh globally interconnected, 100% physically backed, uh very liquid SGE uh gold and silver corridor, consistently commands.
• 16:02
  SPEAKER_01: Why does it command this consistent 30-13% premium to Western price silver?
• 16:09
  SPEAKER_01: And it is priced and when you think about it, that is priced in Yuan and is also convertible into first-tier gold.
• 16:19
  SPEAKER_01: This is just not thought through.
• 16:22
  SPEAKER_01: The convertibility extends into the institutionally driven Halo trade.
• 16:29
  SPEAKER_01: We looked at it before, heavy assets, low obsolescence.
• 16:32
  SPEAKER_01: In other words, um, selling debasing dollars to buy all qualifying Halo hard assets, which is really what central bank sovereigns and institutions are all on it now.
• 16:44
  SPEAKER_01: That's what they're doing now.
• 16:45
  SPEAKER_01: This is one of the primary drivers that will continue to evidence the long for gold for their own books, bullion banks, projecting between 5,600, 7,000, and in one case still 8,000, but between 56 of 100 and 7,000 2026 gold targets.
• 17:04
  SPEAKER_01: They haven't come off that, those, those projections.
• 17:08
  SPEAKER_01: And this return, this return to safe haven gold, silver, and hard assets is going to be a major factor driving the prices of paper settled gold and silver to a more equitably um uh physically derived market price that when priced in yuan reflects a supply and demand fundamental.
• 17:30
  SPEAKER_01: This is this is really interesting stuff.
• 17:34
  SPEAKER_01: Um especially when you're looking at a chart where where you see, and we'll look at charts in a minute, where you see massive amounts, I mean, literally hundreds and hundreds of tons of silver getting dumped in a nanosecond.
• 17:51
  SPEAKER_01: Not real silver, clearly, and 75 tons of gold like that, as we saw yesterday, and I'll look at the chart on that in a minute.
• 18:01
  SPEAKER_01: But but basically, as the CME LBMA open interest evaporates into the increasingly liquid SGE physical exchanges, influenced by the ability to benchmark the global silver fixes in gold, silver will begin to reflect a real supply-demand price, ultimately compressing this ratio from the current ridiculous 60 to 1.
• 18:27
  SPEAKER_01: It came back up to 60 to 1, so uh to the point it reflects a real globally accepted true supply-demand exchange rate.
• 18:37
  SPEAKER_01: And this is what we're gonna see in gold oil too.
• 18:40
  SPEAKER_01: It needs to reflect a global settlement price.
• 18:45
  SPEAKER_01: And the current 13% premium in silver was going to compress to zero.
• 18:50
  SPEAKER_01: In other words, it'll force the LBMA silver fixes to bend the knee to Shanghai, not the other way around.
• 18:57
  SPEAKER_01: And the SGE physical market liquidity uh lines, they just cross sufficiently to force a realistic gold to silver exchange rate to actually return.
• 19:08
  SPEAKER_01: Now, this process is undoubtedly picked up by the Bank of America.
• 19:13
  SPEAKER_01: We looked at this last time, whose upper dollar pricing band at$309 is dependent on this gold price uh rising alongside a ratio compressing to as much to much more credible levels.
• 19:26
  SPEAKER_01: And so with export controls um uh breaking the back of the synthetically rigged casino game, 60 to 1 is a farce.
• 19:38
  SPEAKER_01: And even accepting current geological estimates that equates to around 19 to 1, which would, and and that's high, which would, as of the today's trade, would be 250 bucks.
• 19:51
  SPEAKER_01: Um I mean, that's just as of this compressed price.
• 19:57
  SPEAKER_01: Now, given gold is also in strong physical accumulation, with the aggregate bullion banks 2006 price expectations between around 57, 56, 5,700 to 7,000, that price is silver much closer to 295 to 368.
• 20:17
  SPEAKER_01: That's probably where the Bank of America are taking their 309 price from.
• 20:24
  SPEAKER_01: Now, this metals, so so I'm not going to put up another link.
• 20:28
  SPEAKER_01: This metals focus link also ties in.
• 20:33
  SPEAKER_01: These headlines fail to capture the real reason why producers have been exiting their gold hedges, missing the fact that producers, refiners, and institutional hedges open interest, have exited the unreliable, mispriced CME LBMA gold pricing rim fence, and they're now operating inside the SGE's free trade zone, high-quality liquid asset gold corridor, where they are better served with real-time supply-demand price, which they can then collateralize.
• 21:05
  SPEAKER_01: Now, this places gold hundreds and thousands of dollars below hard asset fair value.
• 21:12
  SPEAKER_01: And as mentioned a little earlier, central bank sovereigns and all the well-connected bullion banks and large institutions are front-running this transition.
• 21:22
  SPEAKER_01: And that is exactly what is beginning to happen.
• 21:25
  SPEAKER_01: And while we witness the synthetically driven, highly leveraged actors blindly chasing old historical, synthetically derived moving averages to the downside, these leverage shorts are being leaned into by unleveraged physical buyers.
• 21:43
  SPEAKER_01: And once those lines cross, watch out above.
• 22:00
  SPEAKER_01: Ecosystem, the ramp up in silver hedging is precisely what we've been evidencing, namely commercials having to hedge the impossible to deliver May delivery loadout requests, which have once again stood into the May 1st notice um and for full delivery.
• 22:19
  SPEAKER_01: And it's forced the commercials to hedge the export um controlled lockdown, 878 tons of COMEX made uh silver deliveries being delivered, and there's still 138 tons um uh yet to deliver at deeply discounted mismatch prices.
• 22:40
  SPEAKER_01: It's just not there.
• 22:42
  SPEAKER_01: The physical isn't there, and as we looked at last time, when stood for delivery, it triggers these unallocated positions to be EFP'd out of the Comex into the same actors local London LBMA's hands.
• 22:58
  SPEAKER_01: So they're juggling it between one side and the other.
• 23:01
  SPEAKER_01: Now, unfortunately, American traders are not uh not allowed to to um to actually even trade over-the-counter uh spot, uh gold or silver in London.
• 23:13
  SPEAKER_01: So they they are basically siloed to where they are.
• 23:17
  SPEAKER_01: But essentially the same actors have a foot in a footprint in each one.
• 23:21
  SPEAKER_01: So when you when you shuffle something across, you get you grab it in your other hand.
• 23:27
  SPEAKER_01: Um so that's but that's when we evidence these silver run warrants actually reported as delivered.
• 23:35
  SPEAKER_01: But now, really, all that's happened is move from one hand to the other, and and electronically that is.
• 23:42
  SPEAKER_01: And as we've outlined, they've land in unallocated form uh in London.
• 23:48
  SPEAKER_01: And in order to fill fulfill these delivery obligations so as to not to blow back on the COMEX and uh force majeure default, the unallocated silver must be cash settled at the real SGE physically determined benchmark price.
• 24:04
  SPEAKER_01: That is who's locked it in in the first place.
• 24:07
  SPEAKER_01: Where is it?
• 24:07
  SPEAKER_01: Either load it out on the back door of the Comex or give it to me, or I will call it full force majeure.
• 24:15
  SPEAKER_01: Ultimately, what this does currently is forcing close to a thousand metric tons of May delivery contracts to be purchased at market to satisfy the physical loadout obligations.
• 24:30
  SPEAKER_01: This is then cash settled on the cartel's books at the deliverable SGE price, which by no coincidence matches the plus or minus 13% SGE premium.
• 24:43
  SPEAKER_01: So it's a big round trip there.
• 24:46
  SPEAKER_01: But it's draining, it's draining the physical out of the market consistently.
• 24:52
  SPEAKER_01: It's just it isn't immediately uh immediately um transparent.
• 24:58
  SPEAKER_01: Now the next thing that gets my attention is also largely missed by analysts, namely just how large the PBOC's unreported monetary gold demand really is.
• 25:12
  SPEAKER_01: Now, while the PBOC continues to openly convert US Treasuries into gold, both officially as most recently published here, evidencing the state had health banks added another 8.3 tons to official reserves last month, but it misses that over and above 18 months of steady gold bullion accumulations, much, much larger, unreported monetary gold accumulations are flowing into Beijing.
• 25:42
  SPEAKER_01: And it's these unreported flows that are responsible for driving the lion's share of the billions of US Treasury conversions into first-tier gold.
• 25:53
  SPEAKER_01: So looking at the expanded macro view into a ramp up into this de-dollarizing to gold transition process, foreign central banks have slashed their holdings of Treasury to the lowest level since 2012.
• 26:08
  SPEAKER_01: And by the end of March, foreign central bank's US Treasury holdings are now 500 billion below the 2021 levels and 200 billion below 2012 levels, lows.
• 26:21
  SPEAKER_01: So we're going to see an even bigger outflow in the next quarterly report.
• 26:27
  SPEAKER_01: Now, Fed published data verifies the value of treasuries held in custody at the New York Fed by official institutions, uh, accelerated as the Iran war kicked off on February 28th, and dropping by 82 billion to 2.7 trillion over the last 12 months.
• 26:45
  SPEAKER_01: Now, these US Treasury sell-offs that have ramped up over the last month, six weeks really, and are forecast to accelerate further as soon as the Iran war volatility fully subside subdies.
• 26:59
  SPEAKER_01: And obviously there's a certain degree of um of safe haven flows at the moment, which is really throwing this whole thing at a kilter.
• 27:10
  SPEAKER_01: Now, because gold and silver trade as a currency cross against the dollar, buying one side of the cross sells the other.
• 27:16
  SPEAKER_01: So when everyone piles into the dollar to balance off a series of war-driven spikes in oil prices, under this plain vanilla bearish skew, it creates opportunities for central banks to dedollarize at far more favorable rates.
• 27:32
  SPEAKER_01: That's what's actually been happening this whole time.
• 27:35
  SPEAKER_01: The next report will be short-term skewed by the war anomalies and private investor accumulations, but will likely reflect the largest US Treasury sales in history.
• 27:47
  SPEAKER_01: Underscoring what we drew attention to last time reveals one more knot in the LBMA cartel's news.
• 27:56
  SPEAKER_01: This excerpt from South China Morning Post and separately Bloomberg indicates that the Dubai-based oil traders are shifting to Hong Kong and Singapore's SGE gold-related gold exchange facilities where Yuan back gold can be traded in Yuan.
• 28:15
  SPEAKER_01: Asian buying versus Western selling is countered by this central bank bid.
• 28:21
  SPEAKER_01: Now we've been focusing on the West's gross underestimation of global South nations ultimately taking full control of the gold and silver price selling mechanisms, and how through this formalizing of the financial infrastructure to support a sufficiently liquid global settlement process, the CME LBMA will increasingly become price takers, not price makers.
• 28:46
  SPEAKER_01: And this is happening under our noses, and it is definitely central bank driven.
• 28:52
  SPEAKER_00: Hey Andrew, can you look at what you're seeing right now on a more granular, granular level?
• 28:57
  SPEAKER_01: Yeah, let's start with the um derivative-driven paper to physical capitulative action.
• 29:04
  SPEAKER_01: Now, following Trump's comments the other day, he doesn't care.
• 29:08
  SPEAKER_01: I don't need Homu's open, well, which was pretty brazen comment, but what did he do?
• 29:15
  SPEAKER_01: It's that was on uh basically that was on Monday.
• 29:19
  SPEAKER_01: Um what it did was spike um the oh that was could have been even Friday, but anyway, what it did was spike uh you know spike the the the the the oil price higher, uh dollar higher.
• 29:33
  SPEAKER_01: Um and then more recently, um, I think on Monday, um he the there was an announcement that the US strike against uh Iran, which is that nobody knew about, it wasn't published, was put on hold.
• 29:49
  SPEAKER_01: So the first anyone knew about it was a strike that no one knew about was put on hold.
• 29:54
  SPEAKER_01: Well, what did that do?
• 29:55
  SPEAKER_01: It blindsided and reverse the what was already lower oil prices to spike them higher again, driving bond yields to a higher into and a higher dollar.
• 30:07
  SPEAKER_01: And this this persistent, likely official sellers, official sellers have been capitalizing on the bearish tailwind crosses to suck in as many momentum shorts as possible to ultimately short cover into.
• 30:23
  SPEAKER_01: They're not stupid, but momentums will take everything they're offered.
• 30:28
  SPEAKER_01: And we're we we were sure, we're absolutely sure this was true because following calls around the desks, affirming uh commercials exposed to large accruing T plus one delivery demand, they've been taking the long side of Comex-centric sellers to hedge into this very large Shanghai spot gold and silver premiums.
• 30:50
  SPEAKER_01: And aside from the obvious bearish war-induced crosses, the 9% increase in Indian gold and silver duties was leaned into aggressively by uh short momentums.
• 31:03
  SPEAKER_01: But as we'll look at a little later, adding shorts on this assumption that physical gold demand would reduce was a huge misstep yet to play out.
• 31:16
  SPEAKER_01: And drilling down into the action, as evidenced by strong concurrent SGE premiums, large central bank uh sovereign and related physical demand, that kicked in majorly at spot 4550, picked up significantly into the dip sub 4500, and while insiders are aware of this unleveraged physical demand, it's completely missed by the wrong at both ends, momentums blindly chasing lower.
• 31:46
  SPEAKER_01: So while this underlying unleveraged physical um uh demand continues to be aggressively sold into by leveraged naked short uh Comex sellers, commercials exposed to this upcoming uh NSFR compliant T plus winning delivery demand are one-to-one taking the long side against them.
• 32:10
  SPEAKER_01: And given there was no longs left to rinse, naked short driven momentum selling is at absolute bubble levels.
• 32:19
  SPEAKER_01: Let's take a look at the charts here.
• 32:21
  SPEAKER_01: For the record, I'm just recording this on Wednesday at uh five past or ten past five in the PM UK time.
• 32:30
  SPEAKER_01: Uh, this is for release tomorrow, and it's for release on Thursday.
• 32:35
  SPEAKER_01: We're trying to keep these um as current as possible.
• 32:38
  SPEAKER_01: So let's have a look into this morning's deeply backwardated gold futures driven low, and that was at 45.55, the low of the day.
• 32:50
  SPEAKER_01: Now, interestingly, the current current Shanghai spot physical premiums were exactly$28 above London spot at this exact moment.
• 33:00
  SPEAKER_01: What's that telling us?
• 33:01
  SPEAKER_01: And it's been level, it leveled out pretty much at plus or minus$15.
• 33:06
  SPEAKER_01: Okay, in fact, it's$13 now, but it's been kind of leveling out at those levels above spot, into which liquidity providers assessed this downside gold and also same actors silver action has become so overloaded with leverage shorts that these targeted moving average gap closes were assessed as likely capitulative.
• 33:33
  SPEAKER_01: And when I say moving average attempts, they were clearly attempting the 200-day moving average into deeply oversold conditions.
• 33:43
  SPEAKER_01: But what do I take away from this?
• 33:45
  SPEAKER_01: This is where the uh June contract opened.
• 33:48
  SPEAKER_01: This is the futures chart.
• 33:50
  SPEAKER_01: This is where the June contract opened, and look where it started to bounce.
• 33:55
  SPEAKER_01: Similar in silver, this is where the silver contract opened, the current front month silver contract, July, and we've also seen a gap close.
• 34:06
  SPEAKER_01: This is this is absolutely typical, and it has nothing to do with the physical market.
• 34:12
  SPEAKER_01: So let's drill down and look at what these actors are up to.
• 34:17
  SPEAKER_01: And this is really momentum-driven speculative.
• 34:20
  SPEAKER_01: So, as an example, on no news whatsoever, and we're talking about this was yesterday, the 19th, on no news whatsoever.
• 34:30
  SPEAKER_01: As soon as the pit opened, we sat in New York, we had 9,512 silver contracts were flash sold.
• 34:39
  SPEAKER_01: Now think about it, that's 1482 metric tons changing hands.
• 34:46
  SPEAKER_01: What a farce.
• 34:48
  SPEAKER_01: Exactly the same actors in gold.
• 34:51
  SPEAKER_01: Now, this is before they followed through overnight in at 1 a.m.
• 34:56
  SPEAKER_01: 72 metric tons of synthetic gold were flash sold with these same naked short actors returning at 1.30 a.m.
• 35:08
  SPEAKER_01: this morning to carry on and hit the low, create a low.
• 35:13
  SPEAKER_01: Believe me, they were targeting deeper, but these SGE premiums, these Chinese premiums and Asian premiums are so large it's forcing the commercials who are making markets and are forced to deliver to buy into and start to push back.
• 35:32
  SPEAKER_01: Now, early last week we evidenced silver rising alongside oil and the dollar into supply constraints and strong demand.
• 35:41
  SPEAKER_01: And while this was subsequently mechanically leaned into after the fix last Thursday, right here at the pit, and straight after the fix, it was leaned into by these very same actors who have been weighing, weighing, weighing on silver into what looks like a capitulative low.
• 36:04
  SPEAKER_01: Now, given the exit of all but the last few captive LBMA producers, refiners, and physical hedgers, open interest from the Comex into the global facing physically settled SGE settlement corridor, the paper-to-physical spread is becoming increasingly arbitrable at such underpriced supply-demand levels.
• 36:25
  SPEAKER_01: And it's no prizes for getting who's on the long side of these useful fools who are selling.
• 36:31
  SPEAKER_01: And as is once more evident in each of the most recent CME COT reports, this is the report that says it doesn't give names, but it just shows where the open interest is, in is it long, is it short, through the various categories.
• 36:46
  SPEAKER_01: And what it's it illustrates is the steady exit of institutional grade open interest.
• 36:52
  SPEAKER_01: That's the only real takeaway from this.
• 36:54
  SPEAKER_01: And if you connect the dots, it's clear that this exiting COMEX lifeblood liquidity is either moving to buy and vault metals in alternative physical exchanges, which I can personally attest to, andor have sufficient institutional size liquidity to insulate themselves inside the increasingly liquid, high-quality liquid asset physically backed SGE gold corridor, where we are seeing those premiums.
• 37:23
  SPEAKER_01: However, the real message is that this never-to-return institutional grade western-facing liquidity as it exits, inexorably settling against a physically determined supply-demand price, the resulting, globally determined higher price loop is backwashing and flushing out underpriced gold, COMEX gold, that is, which is paper gold, and COMEX silver, out of the system.
• 37:54
  SPEAKER_01: And it's moving into strong central bank and sovereign physical hands.
• 37:59
  SPEAKER_01: Pretty much all the remaining historically low levels of COMEX open interest now relate to the other otherwise neutral commercial market makers who are simply servicing the speculators, 80% of which are either naked long or short momentum-driven actors.
• 38:18
  SPEAKER_01: Now, these useful fools, if you remember, they overcooked, even though we had physical buying, they they just went long, long, long, long and overcooked, naked long, overcooked the January apex highs.
• 38:33
  SPEAKER_01: Now they're equally, and here at even higher levels than the previous low, they are absolutely nadir bubble short.
• 38:45
  SPEAKER_01: So you have apex highs long and now nadir short to the same degree, bubble short in both cases.
• 38:55
  SPEAKER_01: Such is the nature of the momentum-driven naked long upside or naked short downside driven action.
• 39:02
  SPEAKER_01: They are always at the wrong at the both ends into pivots.
• 39:05
  SPEAKER_01: However, while these leveraged synthetically driven while swings look dramatic, step away from the very short-term derivative action, and we can discern that no major support levels have been taken out.
• 39:21
  SPEAKER_01: Spot silver finding support at its bull pivot, no technical damage done, but when it was bubble short momentum's to the long side, every single long's been rinsed out.
• 39:35
  SPEAKER_01: Now they're bubble short right here.
• 39:38
  SPEAKER_01: Exactly the same situation in gold, where we have basically we've seen a rinse out support at this 236 Vibo here, and really see that uh the bottoming process well underway.
• 39:56
  SPEAKER_01: Now, momentums still have the bit between their teeth and are aggressively leveraged naked short.
• 40:03
  SPEAKER_01: However, follow-through additions of naked short momentum supply into thin conditions.
• 40:09
  SPEAKER_01: That being aside, it has to be done in thin conditions, but they're being leaned into by an underpriced supply-demand physical market and with no speculative naked longs left to rinse, liquidity providers assess naked short limits are stretched and ready to turn.
• 40:28
  SPEAKER_01: Now we're still undergoing some tweet-fueled flip-flop liquidity, but this is limits, and this is the absolute limit of there's nothing left long to rinse.
• 40:40
  SPEAKER_01: So there's only so and while we see margins being reduced, which has emboldened the momentums who are short to add more shorts, that this is where the 200-day moving average is.
• 40:50
  SPEAKER_01: If that was tagged, it would be heyday and payday for an enormous amount of central bank bids.
• 40:58
  SPEAKER_01: I would think they get front run.
• 41:00
  SPEAKER_01: So really that would be the worst case scenario, the rising 200-day moving average, but uh that is what they've been targeting.
• 41:08
  SPEAKER_01: But I think it's just too obvious.
• 41:11
  SPEAKER_01: This is a gift in the making.
• 41:14
  SPEAKER_01: Silver also extremely oversold.
• 41:19
  SPEAKER_01: And 13% premiums in Shanghai, consistent.
• 41:24
  SPEAKER_01: Really, today, price silver right now at 87, or looking on a shorter term chart, at right up here.
• 41:34
  SPEAKER_01: Now these naked short momentum sellers are so leveraged, they're unaware they're running into very large central bank sovereign and institutional size halo demand.
• 41:45
  SPEAKER_01: So any follow-through additions of naked short supply into mechanical selling will be heavily leaned due into by an under underpriced supply-demand physical market.
• 41:57
  SPEAKER_01: That leverage works well until it turns.
• 42:00
  SPEAKER_01: And with no speculative naked longs to left to rinse, the liquidity providers assess naked short limits are stretched and ready to turn.
• 42:27
  SPEAKER_01: And then there comes a point where that crosses and it blows right back against the leverage sellers who don't have anything to repay other than to buy it back.
• 42:35
  SPEAKER_01: And while this trend line has been more evident in gold and is particularly relevant, but is particularly relevant to silver, though, by design, because CME, LBMA, and allocated silver is cash settled, it cannot be recognized as high quality liquid asset.
• 42:53
  SPEAKER_01: We've done a fair bit of work on this, but the moment silver lands in the 100% physically backed Asian tracing free uh facing free trade zone uh silver exchange, it essentially can be treated as a high-quality liquid asset that can be institutionally collateralized.
• 43:12
  SPEAKER_01: This identifies silver as massively underpriced, hugely underpriced.
• 43:17
  SPEAKER_01: So netted out of the momentum-driven action, before momentum's loaded up on shorts.
• 43:23
  SPEAKER_01: This is, we'd already begun to evidence uh silver acting as the haven, really the safe haven, it really is.
• 43:31
  SPEAKER_01: And I remember early last week, um, we evidenced silver rising alongside oil and the dollar into supply constraints and strong demand.
• 43:40
  SPEAKER_01: And while this was subcut subsequently mechanically leaned into after last Thursday's um fix last Thursday, and we showed a little snippet that in the charts, what liquidity providers affirmed was that silver will increasingly reflect a war premium.
• 44:00
  SPEAKER_01: premium and and so it's really just been synthetically moved down but it but really it's needed it's actually needed in especially in the in the case of a war and and it's it further locked down supply and while we we set further ratio compression into any uh strong silver demand this synthetic um uh gold futures and silver futures unwind is making a strong underlying it is is masking it's it's hiding uh uh um a strong underlying uh rising gold price now while gold futures beta is more correlated to rising oil and dollar underlying this mechanical driven action very strong physical gold demand is decompressing this paper to physical relationship all right andrew over the years you've closely tracked the effect that higher gold and silver duties have on the 900 tons uh per year in this Indian market uh can you share your thoughts on the effect that last week's uh spike in duties had on the dynamics of the Indian market yeah especially as it's wrong footed some people here um while it was reported that momentums were massively I mean uh let me just say they they believed they assessed that the sudden nine percent increase in Indian uh import duties from 6% to 15% of course they figured that's going to be bearish for gold but quite the opposite is true and it's all to do with the incentive for the multi-decade gold smuggling cartel to step up imports and provide discounted bullion to the jewelers alongside an upsurge of very strong bullion investment demand and to give an idea of just how big the incentive is uh it topped out on Friday it's very close to it now but it gold spot gold smuggled into India was$653 per ounce cheaper in London obviously because no duty had been paid so you smuggle it in and and and we'll look at how that can happen um so you can really see that that is a huge incentive to I mean today I'm just looking now today right now it's still$589 premium over local London spot and while smuggling has always been present because it providing bullion to that's completely off the the the authorities radar uh it does actually tail off somewhat into six percent premiums providing less incentive really for jewelers to circumvent the hassle of duty free paid supply um uh so so historically um gold smuggled into India significantly uh steps up as these duties rise so of the 700 to 900 odd tons uh of official imports an additional over 300 tons are also smuggled now that's a huge amount that's a big big a substantially large chunk on top of what India officially imports now following the ramp up in gold smuggling after India raised um customs duties on gold from 6 to 15 percent in July 2022 smuggling accounted for some 30 to 35 tons per month and while the gold gold council estimates some 150 to 200 tons uh per annum these estimates miss off the radar bullion investment demand and and as a consequent are grossly underestimated uh I mean jewelers alone assess some 300 tons and the World Gold Council assesses what human the assesses what the human mules and smaller operators manage to bring in that's pretty much where their assessment comes from um however as we previously assessed in more granular detail the bulk of what is imported and enters by way of corrupt government officials and very leaky paid off border guards and an estimated six I mean look this is a$65 billion off grid per annum this is this is the largest most powerful mafia operation globally it exceeds anything that any other mafia has going and it's so embedded no one in government has ever dared to mess with it and the ingrained multi-decade mafia run smuggling operation tendrils they reach right into the top layers of government this becomes evident when looking at the official seizure reports between 2024 and 2025 just looking now they only evidenced 2.6 tons in the whole year.
• 49:01
  SPEAKER_01: This is about 30 to 35 tons a month being imported so that was the all that was officially seized and that was largely related to individual mules trying to sneak goals in mostly from Dubai.
• 49:15
  SPEAKER_01: Now the only way to slow down this multi billion dollar smuggling ring in 2024 was to slash import duties back from 15 to 6% in July 2024.
• 49:26
  SPEAKER_01: So while gold smuggling tailed off to around minus less than 30 tons a month into the current estimate 150 to 200 tons the World Gold Council talks about um the raising of duties back to 15% last week has rekindled this professionally orchestrated smuggling ring at really about plus or minus 600 bucks per ounce Indian premium overspot.
• 49:55
  SPEAKER_01: Indian smuggling is back to its historical high levels.
• 50:00
  SPEAKER_01: So basically kind of taking a look at so many things here just the various aspects that really that most people aren't really talking about.
• 50:09
  SPEAKER_01: So try to focus on those because you can get information everywhere but I kind of to sum it all up global um physical gold silver and the entire spectrum of halo asset demand is massively increasing.
• 50:24
  SPEAKER_01: And while the war-driven stronger petrodollar has short-term weighed on these hard asset prices this in itself is increasing underlining de-dollarizing velocity which benchmarked against safe haven gold and silver is in turn pushing back against the bearish mechanical correlations.
• 50:44
  SPEAKER_01: In other words selling debasing dollars to buy all qualifying Halo hard assets which under the synthetic driven smoke and mirrors COMEX action is precisely what central bank sovereigns and institutions are currently taking full advantage of.
• 51:01
  SPEAKER_01: So this is one of the primary drivers that will continue to evidence the long for gold for their own books, bullion banks rejecting 56,000 to 7000 2026 gold.
• 51:14
  SPEAKER_01: So it's ignored by so many people and so this return to safe haven um uh silver gold and silver assets is going to be a major factor driving the prices of paper settled gold and silver to reflect a more equitable physically derived market price that priced in one-to-one convertible yuan truly reflects supply-demand fundamentals now while this war-driven flip-flop volatility is driving the short-term highly leveraged action under these synthetic drivers we're evidencing the largest transfer of physical gold and silver ever recorded central banks and sovereigns are front running a gold versus a gold price reset and it will be silver that actually leads the way higher no one I know has sold a single ounce of physical gold and silver into this volatility my message to you is get ready for a beach ball decouffling of the paper to physical markets there is there are no speculate long speculators left to rinse this reveals a bubble short coiled market ready to explode and really there's only one question left how much physical gold and silver do you own right now 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 Maguire for sharing his deep market knowledge and also to you for tuning in and being a part of this growing global community.
• 52:56
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• 52:59
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• 53:05
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• 53:15
  SPEAKER_00: So get your questions in too Andrew McGuire and you never know your question may be selected for next week's episode of Live from the vault.
• 53:24
  SPEAKER_00: And with that we'll be back next week with more truth that you just won't find in the mainstream media and until then remember buy physical make sure it's backed one to one and we'll see you next time right here on Live from the vault.
• 53:38
  SPEAKER_00: Bye for now