Gold Just Hit $2700...But SILVER Has Outpaced This Year
Summary
TLDRIn this discussion, Alan Hibbard, a precious metals and alternative money specialist from GoldSilver.com, shares insights on the current market trends. He highlights the volatility in equities, gold, silver, and Bitcoin, noting that while equity markets are at all-time highs, many investors are shifting to gold, silver, and Bitcoin for protection. Hibbard emphasizes the long-term bullish trends in gold and silver, driven by central bank buying and industrial demand. He also discusses Bitcoin's volatility, predicting more interest from larger investors. Overall, the conversation centers on diversifying investments amid economic uncertainty.
Takeaways
- 📈 The equity market is at or near all-time highs, and there is a risk-on sentiment, but many investors are shifting to risk-off assets like gold, silver, and Bitcoin.
- 🪙 Central banks have been steadily buying gold since 2015, marking a shift from 35 years of being net sellers, which reflects a multigenerational trend in gold investments.
- 💰 Despite fluctuating interest rates, gold prices have been consistently rising over the last nine years, signaling a different market dynamic.
- 📉 Gold has already risen over 30% this year, driven by both central bank buying and retail investors, indicating strong demand for the precious metal.
- 🔮 Gold is attractive not only as a hedge but also for price appreciation, with expectations that it will outperform other assets like equities in the coming years.
- 🥈 Silver is currently at an 11-year high and has outperformed gold in 2024, with a 34% increase versus gold's 30% rise.
- 🏭 The demand for silver, driven by its industrial applications in sectors like electric vehicles and consumer electronics, has outpaced supply, contributing to the price increase.
- 📊 Copper has also seen a recovery after a summer slump, supported by industrial demand, with stimulus measures from China potentially affecting prices.
- 💻 Bitcoin has had a volatile year, but it is still up 48% year-to-date. It is increasingly seen as a digital form of gold and is expected to attract larger investments over time.
- 🗳️ The upcoming U.S. election may introduce additional volatility to Bitcoin, as both candidates appear supportive, potentially influencing its future price.
Q & A
What is the current state of the equity market, according to Allan Hiard?
-The equity market is at or near all-time highs, with a 'risk on' mode. However, Allan Hiard emphasizes that many investors are turning to 'risk off' modes by investing in gold, silver, and Bitcoin due to volatility and uncertainty.
How does Allan Hiard describe the difference between current investors?
-Allan describes two types of investors: those in 'risk on' mode, continuing to invest in equities, and those in 'risk off' mode, seeking to buy physical assets like gold, silver, and Bitcoin to hedge against market volatility.
What makes the current gold market different from historical patterns?
-The current gold market differs because central banks have been net buyers since 2015, a shift after 35 years of being net sellers. This ongoing buying, despite changes in interest rates, has created a stable bull market in gold.
Why does Allan believe gold remains attractive despite recent gains?
-Allan believes gold remains attractive both as a hedge and for price appreciation. He mentions the Dow-gold ratio, which suggests gold could outperform equities over the coming years, making it appealing even after its recent rally.
What is the significance of silver in the current market?
-Silver has outperformed gold this year, up 34% compared to gold's 30%. Despite being at 11-year highs, it is still below its all-time high of around $50 per ounce. Silver's industrial demand, especially in electronics and renewable energy, continues to drive its price.
How does industrial demand impact silver prices?
-Industrial demand for silver, particularly in electric vehicles, consumer electronics, and photovoltaics, has created a structural deficit, with demand outpacing supply. This is a major factor driving silver prices upward.
What role does Bitcoin play in the market, according to Allan?
-Allan views Bitcoin as 'digital gold' and emphasizes that it represents sound money. Although volatile, Bitcoin has gained 48% this year. Investors are gradually realizing its value as a stable store of wealth, similar to gold.
What potential factors could influence Bitcoin's future price movements?
-Allan mentions that the upcoming election may add volatility to Bitcoin. Both political candidates are somewhat supportive of Bitcoin, which could lead to more bullish sentiment and potentially increase its price.
How does the performance of copper compare to silver in the current market?
-Copper, like silver, has seen strong performance in recent weeks after a summer slide. Allan suggests that both metals are benefitting from stimulus efforts, particularly in China, although the US economy is showing robust 3% GDP growth.
What long-term trends does Allan foresee in the precious metals market?
-Allan predicts that both gold and silver will continue to rise, driven by central bank purchases, industrial demand, and economic uncertainty. He expects silver to remain particularly attractive due to its industrial uses and the ongoing supply deficit.
Outlines
🎙️ Interview with Alan Hiard: Market Overview
In this segment, Alan Hiard, a precious metals and alternative money specialist at GoldSilver.com, joins the show to discuss the current state of equity markets and other assets like gold, silver, and Bitcoin. While equity markets are at or near all-time highs, Alan emphasizes the importance of gold and silver, noting that a large group of investors are moving towards risk-off assets. He highlights the volatility and uncertainty in the market, leading many to seek physical assets for safety. He acknowledges that this shift may be cautious, but time will reveal its validity.
📈 Central Bank Gold Buying and Retail Investor Trends
Alan discusses the long-term trend of central bank gold buying, which started in 2015 after decades of net selling. Despite various interest rate movements by the Federal Reserve, gold has consistently risen over the last nine years. This trend is now being joined by retail investors, many of whom are new to gold, as seen with retailers like Costco selling gold. With gold up over 30% this year, Alan sees this as a significant shift, both from institutional and retail buyers, indicating continued support for gold prices moving forward.
💡 Gold: Hedge or Investment Opportunity?
Alan explains the dual role of gold as both a hedge and an attractive investment for price appreciation. Currently, gold is serving both functions due to its relative undervaluation compared to equities. He cites the Dow-gold ratio, which suggests that gold is poised to outperform the Dow in the coming years, potentially by a factor of 2:1 or 4:1. Alan believes this dynamic makes gold a highly appealing option for investors looking for both protection and growth potential.
🥈 Silver's Quiet Rise and Industrial Demand
Alan turns the discussion to silver, which is at an 11-year high and has outperformed gold this year, rising 34%. Despite its gains, silver is still below its all-time high of around $50 per ounce. Silver’s rally has been driven by industrial demand from sectors like electric vehicles, consumer electronics, and photovoltaics. This demand has consistently outstripped supply, creating a structural deficit that is likely to continue driving up prices. Alan expects silver to maintain its upward trajectory as long as economic growth remains strong.
🚀 Bitcoin: Digital Gold and Investor Sentiment
Alan shifts focus to Bitcoin, noting its recent volatility but also its strong 48% gain this year. Despite a series of lower highs since its peak in March, Bitcoin’s long-term appeal as 'digital gold' remains strong. While some investors are driven by FOMO (fear of missing out), Alan emphasizes that the real story of Bitcoin is its role as a form of sound money. As more investors recognize this, he expects larger capital inflows into Bitcoin, which could lead to further price appreciation.
🗳️ Election and Bitcoin Volatility
As the conversation concludes, Alan touches on the potential impact of the upcoming election on Bitcoin. Both major political candidates have shown some level of support for Bitcoin, suggesting that the asset could experience more volatility leading into the election. He anticipates that the new administration, regardless of the outcome, may be more favorable to Bitcoin than previous ones, adding to the market's current optimism. Alan ends the discussion by reaffirming Bitcoin's strong performance and the potential for future gains.
Mindmap
Keywords
💡Equity markets
💡Gold
💡Silver
💡Central bank gold buying
💡Interest rates
💡Bitcoin
💡Dow-gold ratio
💡Supply-demand imbalance
💡Risk-on/risk-off
💡Industrial metals
Highlights
Equity markets are at or near all-time highs, with a mix of 'risk on' and 'risk off' modes among investors.
Gold, silver, and Bitcoin are attracting investors looking to protect against volatility and uncertainty.
Central banks have been net buyers of gold since 2015, marking a multigenerational shift in demand for gold.
Gold has experienced a 30% increase this year, with central bank buying and retail interest driving the market.
Gold remains attractive both as a hedge and for price appreciation, especially compared to equities.
The Dow-to-gold ratio is at 15, suggesting gold could outperform equities in the coming years.
Silver has outperformed gold this year, rising 34% compared to gold's 30% increase, and is on pace to rise 49%.
Silver’s price increase is driven by industrial demand, especially in electronics, electric vehicles, and photovoltaics.
There is a structural deficit in silver, with demand outpacing supply for the past several years.
Copper has also seen a strong performance, benefiting from global stimulus and industrial demand.
Bitcoin remains volatile, but has gained 48% year-to-date, with growing interest from institutional investors.
Bitcoin is increasingly seen as 'digital gold,' with potential for long-term price growth as more investors understand its role as sound money.
The upcoming election may bring additional volatility to Bitcoin, but both major candidates are seen as supportive of cryptocurrency.
Gold and silver continue to be valuable assets for both protection and potential appreciation, especially as central banks and retail investors show increased interest.
The interview ends with a positive outlook for gold, silver, and Bitcoin, emphasizing their role in uncertain markets.
Transcripts
now it's time to bring in our next guest
though that's going to be Alan hiard
precious metals alternative money
specialist at goldsilver.com welcome
back to the uh show Allan hey Tom thanks
for having me all right so we got Equity
markets at or near all-time highs we've
got risk on mode and gold we've got oil
falling that's probably helping equities
here a little bit what's your take here
on the equity Market in general Allan uh
as it Compares uh with other asset
classes here in the
market well equities I mean equity are
always everyone's First Choice um but
really what I'm paying more attention to
is gold and what everyone's paying less
attention to is silver so I mean I think
uh markets are absolutely crazy right
now um there is a lot of risk on as you
mentioned but there are a huge cohort of
investors that are turning to risk off
mode buying things like gold silver and
Bitcoin trying to take custody of
physical assets to protect themselves
from all the volatility and uncertainty
that we're seeing so it's really sort of
a tale of two different types of
investors and we don't know it's going
to play out uh maybe maybe the abundance
of caution is um is uh unnecessary but
you know we'll see in due time yeah you
you bring a good point here Allan and I
kind of wanted to uh dig dive a little
bit deeper on this gold move that we've
seen to record highs pulling back just a
little bit today but it seems like you
know Central Bank Buy's been pretty
robust across the globe but then now
you've got investors and you know
historically when I see the gold bugs
start hooting and hollering they get
punished uh from that type of move but
it seems maybe a little bit different
this time
Allan yeah I think it is a little bit
different so as you mentioned we've seen
the Central Bank gold buying since about
2015 so it's been 9 years and that's
coming on the heel of 35 years of
central banks being net sellers so these
are multigenerational shifts that are
taking place here and that bull market
and gold that's been going on the last
nine years has been happening despite
interest rate moves so we had the FED
take us off zero in
2015 uh you know bring us back down to
zero during the co recession and so on
so up down sideways no matter what
interest rates have been doing gold has
been going up so things are absolutely a
little bit different here and as you
mentioned retail investors are now
getting in we saw that you know at the
early part of this year uh Q4 of last
year with the Costco and the Walmarts
and so forth you know selling gold um to
to a lot of investors who have never
bought it before so there is a big shift
here a lot of people are turning to gold
and it's up already over 30% this year
so it it it's a great year for gold and
silver yeah and you've got that uh that
added boost to the FED cutting interest
rates at that at this point lending some
support to gold now would you advise
maybe you know investors at this point
to hey you know there's still upside in
gold at these levels even though you
know we've had this magnificent
rally yeah I would you know so there's
really two main ways to look at the
attractiveness of gold sometimes it's as
a hedge which is really downside
protection the other times it's actually
most attractive for Upward appreciation
compared to other asset classes so
sometimes it's one sometimes it's the
other we're in a case now where it's
actually both and you can tell that if
you look at the valuation of gold
compared to other assets like equities
if you look at the Dow gold ratio for
example we're up around 15 right now
which suggests that the Dow has been
performing better than gold lately but
in order for that to return to its long
run average gold is going to have to
outperform the Dow and so I would expect
that to happen over the next few years
maybe by a factor of 2:1 possibly 4: one
to bring that ratio back in line with
its long-term average so yes not only is
gold attractive as a hedge against so
many different things in this case it's
actually super attractive for Price
appreciation so it definitely is a good
idea all right uh let's pivot over to
you mentioned silver earlier uh that's
at 11year highs here uh as we speak so
we're getting a little bit of push back
into that a little bit more industrial
then you got copper that's done pretty
well over the last several weeks uh
after a big uh big slide in the summer
you see those as silver and uh maybe
copper some outliers here you know you
got stimulus over in China it's said
everybody's saying the economies are
weakening but not here in the US I mean
you got GDP growth at 3% are those good
areas yeah so I mean I'm a big fan of
silver and as you mentioned it's at an
11-year High but it's still off its
alltime it's still off its all-time high
so around $50 an ounce maybe 52
depending which source you look at and
so it's been a sort of uh quiet rally in
silver but silver has actually
outperformed gold this year it's up 34%
to Gold's 30 so silver is having a
fantastic year it's on Pace to do
49% which is kind of Staggering uh and
it still is extremely attractive and the
story with silver is really one of an
industrial metal less so a monitor metal
and we've actually had a structural
deficit in silver so all that silver
that's demanded by different Industries
like electronic Vehicles consumer
electronics photo voltaics I mean you
name it everything electronic uses
silver and the demand for all that
silver for the last three or four years
has been too large to keep up with
Supply so we've actually had demand
outstripping Supply and that's the main
driver of these price moves so I'm
expecting that to continue as long as
the economy keeps booming uh the price
of silver is going to keep going up so
that's what I'm expecting now let's
pivot we can't leave out Bitcoin here
Allan because uh that se a nice move to
the upside we're just above just near
about 66,000 here but since those
all-time highs in mid-march we've seen
lower highs in this so the trend's still
lower is this a breakout mode here for
Bitcoin yeah it's super hard to tell so
Bitcoin is obviously extremely volatile
and uh yeah after those March highs
we've seen a lot of chop happiness
moving slightly downward but on balance
Bitcoin is up 48% on the year and a a
lot of investors still haven't figured
out what Bitcoin is some of them just
flock to it for fomo you know they just
want to be a part of the Bitcoin story
and if it pumps again they want to say
they were in it they want to you know
experience those gains but I mean really
the story with Bitcoin is sound money
like that's the most important thing to
understand it is like digital gold and
the more investors start to realize that
the more they're going to move into it
and that includes investors of all sizes
so once Bitcoin starts to stabilize a
little bit as it has done over time and
as it will continue to do we'll see
bigger and bigger investors moving in
with larger and larger portions of their
Capital So eventually the price relative
to the dollar is going to go up just
like it does for gold yeah uh and you s
you sit here and wonder about the
election that's coming up because both
candidates at this point kind of
supportive maybe trying to get some
votes on one side maybe not on the other
so maybe some additional volatility here
into the election for Bitcoin also but
that has definitely been lending some
support uh as uh the new Administration
uh will probably be a little bit more
bullish than previous uh all right great
uh discussion here Allan have a great
day thank you thanks Tom you too all
right H that's Alan Hibbard precious
metals alternative money specialist at
goldsilver.com breaking down the
precious metals and bit Bitcoin
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