2018 Gold Price : Supply and Demand Trend

2018 Gold Price :  Supply and Demand Trend


– Gold prices have been coming
down a little bit lately and I want to tell you why,
and I’ll tell you what I expect to happen going forward with gold prices. This is all opinion. Check this out. (electronic music) The thing about physical gold
is that it is a commodity, which means that it can’t go bankrupt. It can’t go to zero. There will always be a value to this. Unlike a gold mining
company, where they could be breaking the law or embezzling money or running it really
badly, making poor choices, poor acquisitions, and
at the end of the day, that company could go bankrupt. Gold cannot go bankrupt. There will always be a demand for gold. Even if it drops half in value, there will just be more buying of it because there’s so many
people who trust in gold, and it is the only true
limited international currency or international money
in the entire world. All of the trends, all
of the logistics trends and technical trends are pointing to a lot more demand for gold and a lot less supply coming online. If this is your first time
here, my name is Peter Leeds. This is where we show you
how to turn a small amount of money into something
much more significant. It’s all opinion. None of this is investment advice. If you like what we’re doing here, please subscribe to the channel. That would really help us out
and really encourage my team to keep on making videos
just like this one. We are going on the eighth year in a row of net purchases by
international central banks. So if you take all of the
central banks in the world, how much gold are they buying and how much gold are they selling, this will be the eighth
year in a row coming up that they’ve bought more
gold than they’ve sold. A lot of buying is coming
from countries like Russia and China and India, but
there’s other ones as well. When Russia recently
liquidated $10 billion of their US treasury bond
holdings, basically the IOUs that America’s gonna pay to Russia, they liquidated those treasury
bonds and took the money, $10 billion, and with almost
all of it, they bought gold. The Russians bought more gold, and they were already
aggressively buying gold. And China’s aggressively buying gold. And pretty soon, there’s
gonna be a lot more demand than supply, because the supplies
are getting less and less all the time. The low-hanging fruit has
been picked off the tree. Right now, precious metals are
the most unloved asset class of all. Even digital currencies
are getting a lot more love than gold is right now. People don’t understand it. And a funny story, when we were
picking up some of this gold we got some from goldsilver.com. We bought some through
various banks, Credit Suisse. And so I didn’t go myself. I sent one of my guys. He went into the bank vault
and went to pick up the gold and he was laughing because the tellers and the people working at
the bank were all saying, “Oh. So that’s what a
gold coin looks like. “That’s what an ounce of gold looks like,” and they were all crowding
around looking at it. They’d never seen it. They’re so young. They don’t understand what it’s like, the purpose of gold and how
it acts in the environment when the economy goes a little bit nuts or we get into some kind
of military conflict. This is what is nature’s insurance. This is what a lot of people
now don’t ever understand. Most of these stockbrokers right now or the bankers right now have never seen the true gold bull run and
don’t understand what drives it and what incites it in the first place. And the value of gold will be shown again when everyone gets reminded
about the whole point of gold and why it’s been around since
long before you were born and why it will be around
long after you’re gone. People forgot all this. They were looking for
the easy, quick money, the Bitcoin stuff, the pod stock stuff, but they’re forgetting the
insurance, the stability that gold and silver,
precious metals can bring to your portfolio. One last point I would add is that if you are going to
invest in the mining companies, which will tend to do better than the precious metals themselves, so if gold goes up 100%, the mining companies
will go up by three, 400% because their profit margin
has spiked that much. The carrying costs are set. It costs them $800 to find
and produce an ounce of gold. So if gold doubles in price,
that doubling is all profit, earnings going straight to the company. So they all do better than
the actual precious metals. But I would caution if
you are going to invest in gold mining companies specifically, look for ones that have
a reserve life index of at least 10 years, a
double-digit reserve life index, which means that if they keep producing, and extracting the resource at the exact same rate they are now, how many years of resource
life does that mine have? So if they’ve got two years
left until they run out of gold, you’re gonna see a stock like
that or a company like that be trading at a very low price
and with the price/earnings really, really strong. So maybe a price/earnings
ratio of one or two sometimes. These are the ones that,
that’s a warning sign. You gotta watch out. You gotta say, “Why is stock
trading so incredibly low?” It’s because they’re about
the run out of resources. So look for a double-digit
reserve life index. Make sure the company is not
forward hedging their sales and they’ve got a certain
amount of production they expect to come out of the mine. Are they selling ahead of
time to get money early and then making contracts to
give that to a buying party at a later date for that set-upon price? Because if the price
of gold then increases, the company mining the gold
will get no benefit from it because they’re locked into the contract. And make sure that these
companies are operating in politically and militarily
friendly regions of the world. There’s a lot of exploration companies. These are companies that have an idea and are just looking for something. And they may be able to say, “Well, we’re pretty sure
there’s a lot of gold there,” but they’re looking for gold. That’s different from a
company that has found gold and is digging it out of the
ground and melting it down and stamping it and selling it for money. That’s a productive company. Stay with productive companies with double-digit reserve life index and a really good financial situation operating in the right kinds
of countries and locations all available. Gold is one of the most
unloved asset classes right now and a lot of that has to do with the way that the stock market’s
been doing so well. The overall stock market is
soaring like it has been. No one understands or remembers
what’s the point of gold. It’s just not making the kind
of gains you’re gonna get from Facebook and Amazon and
Google and Netflix, right? But the point is that these tides change. And a lot of times, when
something is unloved to a certain degree, as
much as gold is right now, what happens is that things do reverse and they come and go, ebb and flow. It’s out of favor right now, which means that there’s
the most gain to be had as it gets back into favor. I do believe we’re at a
bottom in the gold price in the short term and I’ve
been wrong on this for a while. So don’t listen to me at all. I’m wrong 100% of the time. But I do in my opinion
believe that gold prices are going to take off
eventually, I’ll say. I would think it would be a lot sooner. I would have thought it
would have already happened. But a lot of distractions have
got people’s attention lately and as these distractions start
to fade away and wane a bit, when people will start
to take a look and see when the smoke clears what
the economy’s really like. The world over is going
to start to appreciate the value of precious metals a lot more. You notice now that these
countries all over the world, central banks are just
dumping US treasuries. Next it’s going to be a move
into physical precious metals, where people say, “Well,
if we’re not gonna be “buying this currency or that currency, “what are we going to be buying?” What else is there besides oil? There’s gold and there’s
other precious metals. And that’s what’s going
to take this whole sector of this economy and
give it a wake-up call, bringing it back to where it should be, because I do expect that the price of gold should be easily moving a lot
higher, over $1,800 an ounce, no problem without breaking a sweat, and I think it’s gonna
break through $2,000 on its next run higher.

19 Comments

  1. "The metals [GOLD SILVER] you hold inside your safe are worth something regardless of what happens outside." see you at $186,000 / oz GOLD

  2. thanks Peter. I think the idea of looking at gold as insurance is a good one. We need insurance to put our minds at rest. What do you think about Goldmoney.com. ? having a credit card backed up by gold. Good idea or bad idea

  3. Thank you for sharing your insight and opinions about investing. I like the idea of having something to hold on to and not having to hassle with the ups and downs of different investments. 🙏🙏🙏

  4. In India, the govt has been pushing people to buy sovereign gold bonds in digital format that pay an interest rate of 2.5% a year in addition to any upside or downside to the actual value of gold. This is to wean the populace from owning physical gold which has been the traditional practice for centuries. These digital bonds haven't really stopped people from buying physical gold

  5. Nice… I just bought some few days ago … because I read in the (fake)newspaper a heading 'gold loses its glitter, price crashes' LOL… wait till the world crashes & then see what happens

  6. Liked and sub'd. if I may, and in your opinion, is 'silver is SILVER' ? I was wondering about just stacking trusted generic silver rounds ( Sunshine Minting-eagles) r Buffaloes vs ASE, Maples or any gov coins…..kind of a 'more bang for the buck' ? Thoughts?

  7. Hi Mr Leeds! Back again. I know you mentioned that you're invested in some gold/silver mining ETFs in addition to physical gold. Do you provide those ETFs in your newsletter or is the newsletter primarily focused on your penny stocks? I'm still prepping but trying to figure out what ETFs would be good for me in my IRA.

  8. Having worked in exploration and mining, I have been fortunate to handle visible gold in an orebody as well as holding gold bars after going through the refining process. I made most of my money from investing in resource stocks as it is an area I understand very well. Peter is right. Look at producers as well as physical gold.
    As times change, it is getting increasingly difficult to find economical orebodies. This is leading to less new gold being available and more costly to mine. As Peter said, look for mining companies with good economical reserves and at least a 10 year mine life expectancy. Also it is best to stay away from miners mining in unfavourable political countries. Governments can easily take control of the orebodies a mining company invested in developing leaving the company out in the cold. The unfavourable country might demand very high royalties from the gold being produced, resulting in lower profits or possibly a loss. Do your due diligence before investing or speculating in resource stocks such as gold, silver, copper etc. And one more thing. Do not put money into a hot tip given to you by a friend, family member or anyone. Due diligence is the best way to find the good companies with the best potential

  9. you know what make me mad, the fact that Rhodium went to 10k and things like bitcoin goes to 20k yet gold witch i put everything i have into it and its been 7-8 years and its lower then when i purchase it, i really hope gold could do as good as Rhodium one day SOONNNNNNNNNN

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