Are Gold & Silver Entering a High-Risk Period for Investors?

Jeffrey Christian: We’re telling our clients, yeah, you should expect sharply higher gold and silver prices over the next three or four months. Partly because of the election cycle and partly because of the impasse in the U.S. economy, but it’s not just the U.S. I mean, these issues are going on globally, and you’ve got a whole lot of problems that are all coming home to roost at the same time. In that kind of environment, you want to up your gold and silver holdings, because you want protection from financial, and economic, and political, and social unrest, which is probably going to rise and you’re going to worry about financial market stability.

Introduction: Anchors in a shifting world: The strategic case for precious metals with Monex and CPM Group.

Sean Brazney: We really need a shift in these long-term rates. The 10-year, the 30-year fixed, they are sky high. Of course, we see oil going higher for maybe some other reasons and I think precious metals investors need a shift in these rates. They need them to come down. Yesterday, the Treasury got involved in intervening in the bond market, came out and said they were going to intervene by $6 billion. Markets looked like they did not like that number. Looks like they wanted more. When you think about what other tools are out there to bring down that longer-term rate, other than the Treasury intervening, I mean, the Fed next week, short-term interest rates do nothing to the long-term rate. So, is it money printing, QE, kind of the only tool left in the bag?

Jeffrey Christian: I don’t know that it’s the only tool left in the bag, but it’s the one that the Treasury is focusing on. Yeah, they’re dumping enormous amounts of money into the economy and you’ve got this… a lot of people look at the Fed and next week we’ll have the FOMC meeting and people are going to be hemming and hawing about whether the Fed rises or keeps short-term rates flat, but that’s relatively unimportant to the economy. As you said, it’s the long rates that really matter. The long rates only react to the short rates that the FOMC determines. So, it really comes down to the Treasury. You’ve got this terrible situation right now where the Treasury is dumping, as you said, $6 billion now. I mean, that’s three times what they had been doing. They clearly are very much concerned about the state of the economy and they’re trying to put in a lot of money to shore up the economy. They’re clearly concerned about overextended stock markets and the extent to which all of this money has been poured into AI, and data centers, and crypto. You’ve got a house of cards in those sectors that could collapse at any moment. So, the Treasury is dumping in money, which is inflationary, and then the Fed is saying, “Wait a second, man. We’re trying to fight inflation.” So, it’s really looking tough and tight where you have the Fed and the Treasury working at loggerheads with each other and it’s not clear how it’s going to shake out, especially given the political paralysis that you see in the Congress and the administration.

Sean Brazney: Yeah, coming into this election cycle, it seems like everybody’s still kind of on pause, but I’ve got to think that knowing QE is probably right around the corner, you’ve got to think about buying gold right now, right? In kind of preparation for that?

Jeffrey Christian: I’m not sure if it’s QE or what it is, but clearly we’re at this very high risk period and we’re telling our clients, yeah, you should expect sharply higher gold and silver prices over the next three or four months. Partly because of the election cycle and partly because of the impasse in the U.S. economy, but it’s not just the U.S. I mean, these issues are going on globally, and you’ve got a whole lot of problems that are all coming home to roost at the same time. In that kind of environment, you want to up your gold and silver holdings, because you want protection from financial, and economic, and political, and social unrest, which is probably going to rise, and you’re going to worry about financial market stability. The BIS just yesterday or today issued a report saying that they think all of this money that’s pouring into the AI investments could lead to increased financial market instability, similar to what we saw 20 years ago during the global financial crisis.

Sean Brazney: Financial instability makes me think of precious metals and of course, our report is, A Strategic Case for Precious Metals, which you guys are the author of. Amazing information in there. I urge our viewers and our listeners to call Monex today, talk to an account representative, and get your free report today.