Tariffs CONFIRMED - Gold Breaks $2800 - Trump Threatens BRICS - Silver Supply Squeeze

Summary

The gold and silver markets are experiencing significant movements with gold surpassing $2800 per ounce and silver breaking above $31. Geopolitical factors, including tariffs on major producers and Trump's threat against BRICS nations, are contributing to these price surges. Central banks, especially from BRICS nations, continue to accumulate gold to shield their economies, further boosting demand. Silver faces a market deficit, making it highly volatile. Investors (stackers) may benefit from rising prices, but the market remains manipulated and unpredictable, offering both opportunities and risks for those holding precious metals.

Takeaways

• 😀 Gold spot price broke above $2800 for the first time in history, signaling a bullish outlook.
• 😀 Silver had a significant technical breakout, closing above $31, which now appears to act as support.
• 😀 Donald Trump threatened 100% tariffs on BRICS nations, potentially accelerating the process of dollarization.
• 😀 The dollarization phenomenon, driven by countries like China and Russia, has been ongoing for over a decade as a strategy to avoid U.S. sanctions and monetary policy.
• 😀 Central banks, especially in BRICS nations, have been accumulating gold, which is pushing the price higher despite high market prices.
• 😀 Retail investors are still hesitant to buy physical gold and silver, but institutional investors are heavily acquiring these assets.
• 😀 The confirmed tariffs on Canada, Mexico, and China are having a significant impact on the gold and silver markets due to their roles as major commodity producers.
• 😀 The Florida Goldback release has been praised for its artistic value and is being treated as a fungible asset, adding a positive outlook to the precious metals market.
• 😀 A shortage of gold in London is being driven by a rush to get precious metals into the U.S. before tariffs go into effect, creating potential supply issues.
• 😀 The silver market is in a significant deficit, and with its smaller market size compared to gold, any liquidity issues could lead to more volatile price movements.

Q & A

What significant milestone did the price of gold reach recently?

The spot price of gold rose above $2800 for the first time in history, hitting a high of $2817 during the day.

What technical breakout has silver experienced recently?

Silver closed above $31 for the first time, and this level, previously resistance, is now expected to act as support.

What could be the potential impact of Donald Trump's threat against the BRICS nations?

Trump's threat to impose 100% tariffs on the BRICS nations could accelerate their efforts to dollarize their economies or push them further towards gold accumulation, especially as an alternative to the US dollar.

How has the BRICS nations' relationship with the US dollar evolved over the years?

China and Russia have long sought to reduce their reliance on the US dollar to shield their economies from sanctions, decrease exposure to US monetary policies, and assert global economic leadership.

What role does gold play in the BRICS nations' strategies?

Even without a new BRICS currency, these nations continue to accumulate gold as a way to protect their economies from US sanctions and dollar volatility.

How did central banks contribute to the rise in gold prices?

Central banks, particularly in the BRICS nations, have been major drivers of gold demand, with record gold purchases in 2022 continuing through 2023.

What is the significance of the tariffs confirmed by the Trump administration?

The confirmation of 25% tariffs on Canada and Mexico and 10% on China is expected to have a significant impact on gold and silver markets, particularly affecting global supply.

What is the latest development regarding Florida goldbacks?

The new Florida goldbacks have been released with enhanced artwork and new denominations, including 100 goldback notes and half-goldback notes, with a focus on creating fungible assets for barter purposes.

How are the tariffs creating potential shortages in the gold and silver markets?

The tariffs have led to a rush of gold and silver stockpiling in the US, especially from industrial users, causing potential supply shortages, particularly in London where liquidity has been diminished.

Why is silver particularly vulnerable to a market squeeze?

Silver is a smaller, more heavily manipulated market than gold, and with a significant production deficit and increasing demand, it has a higher potential for price volatility, particularly in the face of tightening liquidity.