Why Gold (and Precious Metals) Prices are About to Climb Fast

Why Gold (and Precious Metals) Prices are About to Climb Fast


– You guys know I have
a very optimistic view for precious metals prices, gold, silver, platinum, palladium, all of them. There’s reasons for it. I’m gonna tell you what’s
going on, and I’ll show ya everything you need to
know about it right now. Check this out. Now, I’m sure you guys
have seen this picture at some point, or many
points, in your life. It changed the Vietnam War. It’s an absolutely pivotal photo. It doesn’t have anything to do with the gold prices I’m gonna be talking about, I just wanted to share
with you something about this girl that I just found out about that blew my mind the other day. I’ll tell ya that a little bit later in the video, and we’ll get into all the good stuff with
the gold right now. This chart is provided by
the World Gold Council. It’s in US dollars, showing you gold was trading at 12.29 at that point. If you go back, it goes all the way back to 1970 when gold was at $35, but the important point
here, what you need to look at, is to compare
it to other currencies. If you look at the Canadian dollar, it’s going to trade about equal to the American dollar, in
terms of how much it cost for an ounce of gold,
or any amount of gold. It doesn’t matter, ounce, bucket, ton, gram, kilogram. Great British pound compared
to the American dollar, price of gold, the euro. It gives you an idea, but what we’ll do is we’re gonna zoom in a bit here. Get rid of that pound. What I’m trying to demonstrate is how gold doesn’t actually have a price, per se. It’s just which currency
are you buying it with. Sometimes, the currency you have, the American dollar for
most of you listening, is going to increase or decrease in price. That’s why people don’t understand why they see the price of gold increasing. A lot of the times,
that’s basically based on the fact that the American
dollar was decreasing over that time, and vice versa, as well. The stronger the dollar gets, the lower the price of gold. Back here, you can see that the euro only took 964 to buy an ounce of gold, while the American dollar, it took $1,277. Then what happened was that they met up at that point. What’s happened, then, is that the euro’s gotten weaker. It’s taking more euros
to buy the same amount of gold from this point until this point. This is a three-year chart. Over that timeframe, it suddenly took a lot more euros, even
though the American dollar was about the same. You can look at things like that and see the divergences where the euro and price of gold in US dollars was about the same. Then all the sudden,
going a little further, this is a one-year chart now, you see there’s a big spread between the US dollar cost of gold and the euro cost of gold. What this represents
is that either the euro got stronger, or the US dollar got weaker or had less purchasing power. This is a two-year chart of GORO, that’s Gold Resource Corporation. It is a stock we did
select for subscribers of peterleeds.com. I’m gonna compare it to
the Gold and Silver Index. Now, here’s the Gold and Silver Index. This is GORO, a gold mining company. The way this chart works is it’s a comparative chart where they both start at zero, from two years ago, and then it compares how
they’ve done since then. Over the two years, this stock is up 35%, but the overall Gold
and Silver Index is up almost 60%. You can see that GORO
did better sometimes, but not overall, compared
to the Gold/Silver Index over this two-year period. But now I’ve added a couple
more companies to this. This is ASM and AUY, both
stocks we’ve selected for peterleeds.com subscribers. You can see that GORO did worse, comparatively, and this
is a six-month chart, than the other mining
companies and the index. But the point I’m trying
to make is the index, which is this line here, compared to some individual gold mining
companies, you’ll see that there is a similarity to the way that they’re trading. When we talk about trading in sympathy, this is what we’re talking about. Sometimes the gold mining companies could all rise or fall together. When you see a stock that
is a gold mining company, and it suddenly drops off a lot more than the overall industry, but the rest of the industry is holding strong or going in the other direction or not dropping quite so much, that may be a problem with the company, a company-specific risk, where if the entire industry trades at a same way as one
another, then you can know that that’s trading in sympathy, or market-driven risk. You need to find a good
gold mining company that has all the right
things going for it, and then you have the American dollar decreasing in value. Then at the same time, the
price of gold increasing and the entire gold mining industry going on the upswing. But besides a declining
value of the US dollar, and the companies becoming more efficient and making greater profits, lowering their production costs, there’s also the global demand trends to look
at when it comes to gold. This is a net global demand trend. Each of these chart lines is one quarter. Quarter one, quarter two, quarter three, next year, next year. It’s a net thing. If there’s 100 tons of gold being bought by central banks, and 40 tons were sold, then the net is 60 tons purchased. This line going down below the baseline, that’s overall in that quarter, more gold was sold by central banks worldwide than was bought. But going back all the way to 2010, there’s only been one three-month period where there was a small
decline in the total central bank purchases. But then going all the way up to where we are today, you can
see that every quarter, there’s been significant demand, about 100 tons or more every quarter by central banks worldwide. As gold goes, so will silver, palladium, platinum, all of that stuff. What’s happening is there is a little bit lower buying demand, but there is still that demand. If there’s 80 tons of gold being bought over and above any sales of gold worldwide by central bank purchases, that’s pretty significant. That’s a strong buying demand. Just because the buying
demand was even higher back here doesn’t mean that this is insignificant,
especially when we’ve hit peak gold, and there is
a limited supply to it. Yes, we can find new gold deposits, but even more quickly
than we’re finding them, the gold that is available
is being used up. We expect that this’ll just be a temporary decline, anyways, in the sense that it’s still net positive,
in terms of buying gold. We think that will rebound
back to higher levels in the coming months, quarters and years as gold comes back in fashion. Right now, precious metals
are so out of favor, so horribly ignored by investors. Most people who are financial advisors telling people what they
should buy and not buy and what they should
invest in, these people nowadays, they’re kids. They haven’t been around to see a time when gold really mattered
to people’s assets and their buying power and
their purchasing power. We do expect that this gold demand will increase again. Right now, precious metals
are so out of favor. Nobody’s giving them any credence. They haven’t seen the power of gold and how to use it as a hedge against inflation, a store of value when currencies decline. This is just gonna become more and more of a return to even greater demand when gold does wake up and precious metals do wake up. We do believe that’s about to happen. But who’s doing the buying? You break it out, you can see that in the first 1/2 of the year, Russia bought 84 tons of gold. China, 61 tons. That’s significant. You might see that there’s a little bit of selling here, but
it’s such small amounts. Canada sold two tons of gold. That’s nothing. Next quarter, maybe they buy two tons. Then the quarter after that, maybe they sell one ton. These are small countries. They are not very active players with gold purchases. You can see Russia and China, both been just gobbling up gold. This is the first 1/2 of the year. 84 tons, 61 tons. They’ve been buying
going back several years. But check this out. Venezuela and Turkey, two countries that are financially not in great shape. Venezuela is in a state of chaos, is complete social disorder, and it has been for a few years. It’s getting really bad. A lot of that has to
do with the absolutely declining price of oil. Venezuela does okay with their economy if oil’s closer to $100 a barrel. They’re having all sorts of problems now. Part of what they’re doing to help mitigate some of this craziness that’s going on over
there, they’re selling their gold holdings. That’s what’s putting some gold back on the market. This is a one-off kind of idea, though, where Venezuela doesn’t have enough gold that they would actually
keep putting a dent into things by selling it. They eventually will stop their sales, but this is what has
made gold demand trends soften a lot. But going back to this chart, this is the net gold demand. You remember the first 1/2 of the year, Venezuela has dumped 79 tons of gold onto the market. Then you’re looking at gold trends still being positive, about 70 tons, 105 tons. That is even with these one-time, non-recurring sales of tons of gold by Venezuela. This will not be a factor going forward. Even Turkey, they don’t
have that much gold to be able to sell much more. A lot of this has to do
with the social unrest and the economic unrest
that they’re facing. This will either pass or it’ll just end very badly, but either
way, these gold sales will be stopping. They’re the only significant ones. Then the next significant one is Jordan at seven tons, which is
completely overshadowed by the actual buying that’s been going on. I do not expect Russia or China to slow down their gold buying purchases at any time soon. Even China has been masking a lot of their purchases by
using third-party buyers so that it’s harder to tell how much gold they’ve been buying. Some of these numbers
are only coming out now. It’s turning out that
China has been accumulating a lot more gold than they let on early on. Even though everybody knew that they were doing that, they
didn’t know how much. They’re starting to realize. I think that the world’s
starting to wake up to the power of gold. Now, people say, “Oh, gold’s
not a good investment. “It’s ridiculous. “Why would anyone buy it?” I don’t know. Why would Russia buy 84 tons of gold in a six-month period, and do it in a six-month
period before that, and they’re gonna keep on
doing it going forward? Why would they do that for an asset that has no value? Or there’s no point in buying it, that they should be buying shares of Tesla and Amazon. Because there’s a change in the way that global economies are working. A lot of that, the strength that’s gonna back it up, is going to be derived from, a lot of these countries, the clout that they have, we derive from
how much gold reserves they have, in addition to their gross domestic product and how their overall economy performs. It’s a measure of stability. If Russia is sitting
on 1,000 tons of gold, then you can be more confident in the fact that their economy
actually is more solid. As I promised you, remember that picture of that naked girl running
from the napalm attack? Which was actually called
by the US commanders to drop the napalm, but it was the South Vietnamese Army that
actually did the drop. Well, this is her now. She’s a motivational speaker. She’s doing well, but the thing that blew my mind, because
that is such an iconic and historically monumental photo, was that she lives about 20 minutes away (laughter) from where I am right now. I never knew that. I just found out the other day. Somebody, one of my friends,
found out about that and let me know. It’s just unbelievable to see that iconic photo, and always have everything that it meant to you over your whole life in your mind, and then you find out that the actual person from that photo is actually living about 15, 20 minutes away from me. I just thought that was
incredibly interesting, and it blew my mind. It’s kind of a feel-good story, even though it’s such a horrible story in the first place. If you invest in precious metals or even ETFs or gold mining stocks and precious metals mining stocks, then I hope that today’s
video was helpful. You can see that our
outlook is very optimistic. We do believe we’re gonna be proven dramatically right on this whole topic. We’ll see how it goes from here. We’ll keep an eye on it, but I do think that a lot of the forces that are gonna be price drivers for precious metals are all setting up perfectly right now, and they’re all starting
to kick in right now. Please keep an eye on
what we’re talking about. Subscribe to the channel to do that. Click on the bell beside
where you subscribe so you get all the alerts
when they come out. We love helping you guys out. I hope that you found this helpful, and we’ll talk to you so soon. Thank you, take care.

40 Comments

  1. Thanks for the video. I saw that you think that we are facing a recession soon and I agree with you but do you think there is an option that the bubble will continue even more until 2018- 2019 ?

  2. Peter thanks for another great video! I just sent this to some of my friends who were talking about gold and mining companies and wanted to invest with some of them. 👍🏻

  3. Oh yeah, I'd like to subscribe on your website. However I live in the deepest darkest reaches of the world (New Zealand) so actually purchasing US stocks is not a good option (there are only a few ways I know of, and they are not cheap if you just want an individual stock)

    Do you only recommend US stocks?

  4. Maybe it will pop when they're ready to implement their new digital system and transfer us all across amid the chaos? Possibly 2018?

  5. Though I've never actually done it, I'm thinking about buying silver (the physical metal) to add to my portfolio. With limited funds, how would you suggest going about doing that, or is it not worth the time unless you have a certain amount to spend? Thx in advance.

  6. Why did JPM start buying the physical silver when the price was 35 + usd , when they have total control over the market with their paper shorts ??

  7. Peter, I'm very appreciative of your videos. I've learned a lot and can't wait to learn more from you.

    I have a few questions:

    1. Would you consider a "multigrain portfolio" a good investment?
    1a. https://www.moneymetals.com/multigram-portfolio-qty-16-25-gram-bars-4-ea-in-gold-silver-platinum-palladium/216

    2. When I do purchase a precious metal, what's your plan with it when the crash finally hits?

    3. How bad do you anticipate this crash being?

    Random question:
    – I'm interested in signing up for your subscription. Can you go more into detail regarding that, possibly show an example?

    Again, thanks for everything you've taught thus far!

  8. Hello Peter. As I am also worshipping the shrine of precious metals, there were several companies you mentioned along with your Feb 28 pick as making the shortlist of precious metal stocks to consider. I wanted to know you opinion about two of these (HMY & BTG) and your thoughts of their prospects in the medium to long term?

  9. Hi Peter, thank you for your content. Just found your channel and really surprised how honest and straightforward you're. Talking openly about real matter among the news buzz is priceless nowadays. So, you suggest that gold would be the best option to invest? Not bitcoin ?

  10. Hey Peter. I've read that China is about to introduce gold-backed oil future contracts which I'm thinking will de-value the US by decreasing the global demand for it which should equal a big bullish trend for gold long term?

  11. Peter, which one would you invest in…gold or silver? Just have to pick one though. I invest in both, just curious which one you like more.

  12. social engineer= THE PHAROAH
    ok…… purchase power of the dollar is TRADE AGREEMENT…….. not oil vs yuan vs gold……. however the law of threes applies to this…. take silver gold and what ever metal holds price on the graph such as copper…… silver moves gold in a silver price total increment daily per 24 hour peroid…… roughly 1/2…. 1….. 1/4….. of silver price that is how silver moves much slower then gold…….. where as copper or nickle will move on a negative % ratio…… so really the steady silver pirce might controll the teader todder of these metals……. but thats like saying if the pivot point in the teeder todder is really tall ………….the price of gold would act as if……………… I now trail off……………

  13. Great vid Peter! Your chart at 5:05 tells me my suspicions, like a lot of people, are true. How can there be that much buying..tons and tons…over that time period after 2010, and the price drops or stays flat?! The CB's are taking their interest payments from the U.S. Treasury and shorting paper gold to suppress the price, all the while they are buying physical gold at their self-discounted price! However, I believe they can't do this forever, so I am looking for a big pop too. My magic number is 1350ish.

  14. Hi how are you doing, I totally believed in you years ago after watching your first youtube broadcast, and i have recently finished accumulating 100 KG of silver. please tell me, at this point, is it better to keep adding more silver to my stack or paying off my debts? I always have the idea that buying more silver now is a better idea as the price will go higher in future and then I can later pay all debts. please note that my bank deal with fixed interest so the price i'll pay back wont go up. thank you very much and please excuse my poor english.
    thank you

  15. The reason that metals are staying down is simply due to the fact that oba and associates stole 21trillion and now it’s in their best interest to Keri the USD propped up. If you stole 21 trillion what would you do? Peace.

  16. I beg to differ. Bible says people will cast their gold and silver out in to the streets. Dont listen to all the lies about the markets. Notice nothing is ever said about the bonds and are being sold off which has to do with the US debt!!! Crash coming soon. My bullets will be worth more than gold and silver and so will my canned goods

  17. Where have I heard this before?!?! Lol, be a box of old dried up forgotten about old bones before gold and silver goes up! I have my stack, gets dusted off yearly. Buy cryptos people, if you wanna make some profit.

  18. What will happen if u.s. decides to devalue gold price to $150, the countries which have stockpiled gold .
    Gold can only be used by such countries if 3rd world war takes place.

  19. There is far more gold around than anyone knows and that is a surprise secrete waiting to unfold when the time is right. (It is Poker & bluff at present) The Spanish from 1492 to 1592 had so much gold that
    they created inflation and gold went way down in value at that time. The golden rule, "those that have the gold make the rules" So then the English fraught the Spanish for some of this conquest, booty &
    gold. Remember Francis Drake! Keeping gold scarce keeps the price up.Manufacturing valuable products is where the real value is.

  20. There is far more gold around than anyone knows and that is a surprise secrete waiting to unfold when the time is right. (It is Poker & bluff at present) The Spanish from 1492 to 1592 had so much gold that
    they created inflation and gold went way down in value at that time. The golden rule, "those that have the gold make the rules" So then the English fraught the Spanish for some of this conquest, booty &
    gold. Remember Francis Drake! Keeping gold scarce keeps the price up.Manufacturing valuable products is where the real value is.

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