Are Bond Yields Signaling It’s Time to Buy Gold?

Jeffrey Christian: We’re still on a quarterly average basis. We’re still at record level prices for gold and for silver and we’re seeing bullishness and bullish projections for prices from everybody from the largest banks and brokerage houses, to retail shops, to retail investors. So, I think that, our view is that the price is going to rise. We think that the interest rate environment is playing to gold’s favor and silver’s favor, and we think that you’re seeing this uncertainty being interpreted into, “I should have more of my wealth in gold and silver.”

Introduction: Anchors in a shifting world, the strategic case for precious metals with MONEX and CPM Group.

Sean Brazney: We are kind of at a time in the market right now where I get a lot of investors, people asking me is now the time, right? It’s been a little quiet in the investing space, a sideways market. You know, we’re not in the business of picking tops and bottoms, that’s for sure, but we do look for signs and maybe some signals out there in the broader general market to say maybe this might be a good time.

There’s a couple areas that I’d like to make mention. One is ETFs. ETF flows have been really good and strong from what I’m reading. Would love to get your take on whether that’s true, and also on the bond yields. When you think about yields going up, bonds going down, it’s been in the news a lot lately. Well, starting from a chart perspective to look like that’s got a little stretched. So, if I look at timing in the bond market, if yields at some point are going to start to come down, then that should mean bonds go up and gold has a chance to rally off that. I’m wondering what your take is on timing and what you see in that.

Jeffrey Christian: Our ultra-short-term view for the last week or so has been, wait to see how low prices go before you buy, but be prepared to buy. This is being recorded on Wednesday the 7th, and in the last three days, every morning, we get together as a group and talk about our market view. It’s like, do we recommend buying gold and silver today, or do we wait a couple more days? The consensus has been, let’s wait a couple more days, but probably not get into the end of this week. We may recommend buying gold and silver as early as tomorrow. The signs are there and it’s the signs you talked about. If you look at bond yields, they seem to have been kind of plateauing. I think they could rise a little bit more over the next few months and then come down in 2027. It looks to me like it’s a good time to lock in some bond rates, but it’s also probably, as you said, a good time to start thinking of gold prices rising. The amount of uncertainty and anxiety that we’re hearing from investors is just enormous. There’s so much concern about the congressional elections coming up, the overall economic activity, the uncertainty about economic trends and what’s going to happen with the US-Iran war, and in Israeli military actions, and Ukraine, and Russia. There’s just so much anxiety there. We had thought that the price would stay quiet June through August and then start rising in September. It rose sharply in August. Yeah, we saw about 3 million ounces of ETF buying in August. Then it came down over the course of September into this week. We saw another 2 million ounces of ETF buying in September. So, Investors were buying on the way up, and when the price came down, they bought more, which is a very positive sign for future trends in the price. If you go back to late last year, early this year, investors bought a lot of ETFs on the way up, and then as soon as the price started to fall, they sold them. This time, they’re taking the opportunity of lower prices to buy more.

Let’s be honest, the decline in prices in September has been minuscule compared to where the price is. We’re still on a quarterly average basis. We’re still at record level prices for gold and for silver and we’re seeing bullishness and bullish projections for prices from everybody from the largest banks and brokerage houses, to retail shops, to retail investors.

Our view is that the price is going to rise. We think that the interest rate environment is playing to gold’s favor and silver’s favor, and we think that you’re seeing this uncertainty being interpreted into, “I should have more of my wealth in gold and silver.”

Sean Brazney: You know, Jeffrey, you guys did, CPM group did a report for us several years back, and it was called “Ownership versus Promises.” One of the great, I mean, obviously I love the stuff that you do for us all the time, but that was a special report. In there you mention, you make mention of the difference between buying ETFs and buying physical gold and some of the benefits of buying physical gold. I know we probably don’t have a lot of time today to get into a lot of those aspects, but it does give me a chance to remind our viewers that you have recently done a revision to that report for us. It is now available, I believe, for people that call in and I recommend that from Monex. So, we remind our viewers and our listeners to call in to Monex, talk to an account representative, and get your free reports today. Thanks for your time with us today, Jeffrey.