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[stonedyou] 27/5/2024 21:37

BRICS Go Gold: Dollar Dives as Global Economy Braces for Inflation, Bank Failures, Bank Runs & QE Returns

May 24, 2024

Jon Forrest Little

The US dollar, a currency on the brink of a financial abyss, is in a critical state. With an alarming 34 Trillion debt, unfunded liabilities approaching 200 Trillion, and no signs of ceasing perpetual wars, the situation is grave.

The outcome? MORE MONEY PRINTING.

BRICS ++ can now purchase more oil (the lifeblood of our factories, cars, power grids, hospitals, schools, and militaries) with the gold proxy than they could previously using the US dollar, which has lost its petrodollar status.

The unprecedented offloading of US treasuries results in those dollars flooding back to US shores, triggering a 2nd wave of inflation.

This is the very inflation that temporarily halted QE, a significant development with potential implications for your financial assets.

So QE Infinity resumes with a vengeance the the killshots:

CBDC launch.
The parasitic class will dig in further to launch more money laundering schemes (wars, disease protocol, climate lockdowns, insider trades).

Moreover, expect heightened surveillance state and intensifying legislation.

As any empire winds down, the legislators get even busier passing worthless laws harkening back to the Diocletian Edict of Maximum Pricing or, in the Modern era, the establishment of wasteful laws and bureaucracies such as The Department of Homeland Security (when 9-11 had nothing to do with hijacking)

Increase IRS surveillance and unlawful seizure of the villager's bank deposits.
With more bailouts of the Political Class (the kleptocrats creed)

Profits are privatized, and losses are socialized.

How to Safeguard Your Wealth in the Face of Thievocracy?

Diversify your investments and HOLD Gold and Silver, (and Copper,) which historically have proven to be resilient during times of financial instability.

The threat of bank runs is looming ominously.

It's not a time for hesitation.
ACT NOW.

WITHDRAW YOUR MONEY IMMEDIATELY to protect your financial future.

Chart below shows what happens now that BRICS ++ can buy more oil using gold than US dollar, which accelerates point #3 above

image-20240524164743-3

These items bear repeating

Dollar Demise Looms as BRICS Embrace Gold, Inflation Soars

Highlights:

US dollar teeters on $34 trillion debt, unfunded liabilities nearing $200 trillion

BRICS nations can now purchase more oil with gold than greenbacks

Massive sell-off of US Treasuries fuels renewed dollar devaluation

Quantitative easing set to restart, stoking inflation fears

Central bank digital currencies poised for launch amid currency turmoil

Bank runs imminent as government tightens grip on private finances

The shifting global economic order, with the BRICS group pivoting to commodity-backed currencies, appears to be catalyzing the dollar's downfall after decades as the world's reserve currency. As inflation spirals, concerns mount over draconian government measures to maintain control.

Steve Forbes, Chairman and Editor-in-Chief of Forbes Media, expressed his perspective that there are escalating signals pointing towards the adoption of a global gold standard monetary system. Forbes articulated this viewpoint during an interview Forbes stated, "What you're seeing is more and more countries, led by Russia and China, accumulating gold reserves. They are doing this because they recognize that the U.S. dollar's reign as the world's reserve currency is becoming increasingly tenuous."

He elaborated that nations are diversifying away from the U.S. dollar due to concerns over its long-term stability and purchasing power amid rising inflation and debt levels. Forbes remarked, "They want an alternative to the U.S. dollar, and gold has always been that alternative throughout history."

Forbes highlighted that central banks globally have been net buyers of gold for over a decade, underscoring their diminishing confidence in fiat currencies. He noted, "Central banks understand that paper money, by definition, will lose value over time due to its unlimited supply."

In contrast, Forbes emphasized gold's inherent scarcity and lack of counterparty risk, making it an attractive store of value and medium of exchange. He advocated for a return to the classical gold standard, where currencies are backed by and redeemable for gold.

While acknowledging challenges in implementing a global gold standard, Forbes expressed optimism about its growing acceptance, stating, "The idea of restoring links between currency and gold is gaining traction worldwide as people become increasingly disillusioned with fiat money."

In Conclusion

BRICS nations can now buy more oil using gold instead of US dollars.
A large-scale sell-off of US Treasuries is fueling a renewed devaluation of the dollar.

The restarting of quantitative easing is raising fears of inflation combined with the US Treasuries increasing Dollar inventories will set off new wave of inflation that makes our existing inflation look measly.

Central banks are poised to launch digital currencies in the midst of currency market turmoil.

Bank runs seem likely as governments tighten their control over private finances.

Gold, Silver and Copper to skyrocket.

The 2024 election will do nothing to change any of these points.

Both sides of the aisle 100% incompetent and 100% kleptocrats (thieves)

[stonedyou] 26/5/2024 08:03

Chinese Gold Demand Will Stay Powerful

"I’m expecting the West to join the bull market soon"

"Russia is freezing €700 million of assets from Western commercial banks such as UniCredit and Deutsche Bank, further strengthening gold’s global position as a safe haven"


Bloomberg recently reported that Beijing offloaded a record of $53 billion in US Treasuries and agency bonds combined in Q1, which illustrates the PBoC is selling dollars for gold. No wonder, as enthusiasm to seize Russia’s foreign exchange reserves—deposited at Belgium-based clearinghouse Euroclear—is rising among G-7 nations. In turn, Russia is freezing €700 million of assets from Western commercial banks such as UniCredit and Deutsche Bank, further strengthening gold’s global position as a safe haven. China’s foreign exchange reserves stand at $3.2 trillion so there is plenty of firepower left for gold.

Private gold demand in China is likely to uphold as well as the end of the property slump is not in sight. Home prices have declined in 30 out of the last 33 months. The State Council is floating a plan to buy unsold houses through local governments, but these are already drowning in debt. The Chinese public, which doesn’t have many investment options due to capital controls, will continue to invest in gold and support the price.

I’m expecting the West to join the bull market soon. ETF outflows appear to have stopped, and it would only be logical for Western investors to rotate into gold at some point because of high asset valuations and an overconfidence in credit instruments.

[stonedyou] 26/5/2024 07:53

Exceptionally Strong PBoC and Chinese Private Sector Buying Continues to Boost Gold Price.

Jan Nieuwenhuijs


Chinese private sector gold imports accounted for 543 tonnes in the first quarter, while the People’s Bank of China (PBoC) added 189 tonnes to its reserves over this time horizon. Most of the PBoC’s purchases are “unreported.” China continues to be the marginal buyer in the gold market, driving up the price. I expect that China will remain a robust buyer of gold going forward in support of the price.

In my latest article on global gold flows from March 2024, “China Has Taken Over Gold Price Control from the West,” I showed that in 2022 China broke the peg between the US dollar gold price and “real yields.” Instead of being price sensitive China had become a driving force of the gold price. The data at my disposal ran until December 2023 which made me hesitant to conclude the sharp increase in the gold price since late February was also caused by the Chinese. However, as new data has been released, I can confidently say that China initiated the current bull market.

PBoC Gold Buying Increased by 38% in Q1
The media is aware that since 2022 central banks mostly buy gold covertly (often referred to as “unreported” purchases). By now it’s widely known that the World Gold Council (WGC) publishes a single statistic on aggregate central bank buying each quarter, which is markedly higher than what all monetary authorities combined report to have bought. Which central banks are causing the difference isn’t made clear though.

In February 2023 I broke the story on unreported buying being mostly acquisitions by the PBoC. Two people familiar with the matter shared with me the Chinese central bank is responsible for “the majority” of secretive additions by monetary authorities. Emerging markets such as Saudi Arabia take up the rest.

Based on field research, the WGC states central banks bought 290 tonnes of gold in the first quarter of 2024. Most of the difference—I use eighty percent—between the WGC’s estimate and total purchases as disclosed by the IMF is 162 tonnes. When we add what the PBoC has reported to have bought during this period, total purchases come in at 189 tonnes, 38% more than the previous quarter. Possibly, the PBoC had a stake in boosting the price since late February.


Taking into account unreported purchases, the Chinese central bank now holds gold reserves weighing 5,542 tonnes, according to my research (my methodology is explained here).

Exceptionally Strong Chinese Private Gold Demand in Q1
Chinese net gold imports by the private sector have been extremely strong. From January through March imports accounted for a mammoth 543 tonnes, up 74% from Q4 2023. This is definitely what pushed up the gold price. Import in April decreased somewhat to 125 tonnes.

India imported a healthful 95 tonnes in February, but less than 30 tonnes both in January and March. The Indians remain price sensitive and are not driving this rally.

Hong Kong saw notable net inflows in the past months, which mainly reflects strong demand in China in my view. Chinese housewives buy VAT free jewelry in Hong Kong and take it across the border to Shenzhen. In addition, bullion banks that export gold to China store gold in Hong Kong before re-exporting to the mainland.

In Q1 the UK and Switzerland both were net exporters, and Western ETF inventories declined. At the time of writing the West has not yet joined the bull market, which primarily has its roots in China.

Chinese Gold Demand Will Stay Powerful
Bloomberg recently reported that Beijing offloaded a record of $53 billion in US Treasuries and agency bonds combined in Q1, which illustrates the PBoC is selling dollars for gold. No wonder, as enthusiasm to seize Russia’s foreign exchange reserves—deposited at Belgium-based clearinghouse Euroclear—is rising among G-7 nations. In turn, Russia is freezing €700 million of assets from Western commercial banks such as UniCredit and Deutsche Bank, further strengthening gold’s global position as a safe haven. China’s foreign exchange reserves stand at $3.2 trillion so there is plenty of firepower left for gold.

Private gold demand in China is likely to uphold as well as the end of the property slump is not in sight. Home prices have declined in 30 out of the last 33 months. The State Council is floating a plan to buy unsold houses through local governments, but these are already drowning in debt. The Chinese public, which doesn’t have many investment options due to capital controls, will continue to invest in gold and support the price.

I’m expecting the West to join the bull market soon. ETF outflows appear to have stopped, and it would only be logical for Western investors to rotate into gold at some point because of high asset valuations and an overconfidence in credit instruments.

[stonedyou] 22/5/2024 12:39

Lastly we will take a quick look at the dollar because of the increasing likelihood of a dollar collapse which would be a big driver for strong gains not just by gold and silver but across the commodity complex generally.

The massive ruinous debts of the United States are common knowledge and they can only be maintained without a collapse into hyperinflation if the dollar retains its Reserve Currency status. That is imperilled partly because much of the world is tired of being under threat of military intervention or sanctions if they don’t play along with it. This is why the BRICS have formed and are rapidly gaining new members and some of them like China and Russia are so strong militarily that they cannot be attacked, although the US Neocons are trying – with a remarkable lack of success – to wear down Russia in Ukraine and have been “saber rattling” over Taiwan for a long time. The BRICS are already moving to circumvent the dollar and are set to launch a gold-backed currency soon that will push the dollar off its pedestal. In addition, with the US supporting Israel’s genocide of the Palestinians, it has become clear to pretty much the entire world that Israel controls the US to the extent that the US is in a political sense an extension of Israel. The way to “bring Israel and the US to heel” therefore is to destroy the dollar as a global reserve currency and thus remove the source of their power. This is a big reason for the BRICS new currency and also explains the heavy dumping of US Treasuries that is now underway. US Treasuries are toxic garbage that only an idiot would buy and it is understood that the Fed is having to intervene and monetize almost all new Treasuries issued which is massively inflationary and the vast amounts of new money created will destroy the value of the dollar which is expected to “crash and burn” leading to devastating hyperinflation. This alone will lead to gold and silver “doing a moonshot”.

[stonedyou] 21/5/2024 08:26

China has its people put a floor under gold price, Maguire tells LFTV

Dear Friend of GATA and Gold:

London metals trader Andrew Maguire tells this week's "Live from the Vault" program from Kinesis Money that repeated attempts by the U.S. Federal Reserve to knock down the price of gold via sale of futures contracts in New York just continue to feed Chinese demand for real metal as the contracts are converted to deliverable instruments in London.

Maguire asserts that the Fed is now the only central bank that is short gold and that the Chinese government has put a rising floor under the gold price by encouraging its people to acquire the metal as well.

He says the plan for a Russian-advocated "BRICS" gold-based trading currency is being actively tested and has discovered more interest than originally expected.

He adds that there just are not enough commodity trading houses still willing to undertake and stick with short positions on gold to help suppress the price..

The program is 45 minutes long and can be seen at YouTube here:

[stonedyou] 21/5/2024 08:14

Venezuela Bans Crypto-Mining To Protect Power-Grid

BY TYLER DURDENMONDAY, MAY 20, 2024 - 08:00 PM

Authored by Amaka Nwaokocha via CoinTelegraph.com,

The Venezuelan government has joined the list of countries that have frowned on crypto mining due to its hefty electricity demands.


According to a local news outlet, Venezuela’s Ministry of Electric Power has unveiled plans to disconnect cryptocurrency mining farms from the national grid. The move aims to regulate excessive energy consumption and guarantee a stable power supply for the population.

An X post from Venezuela’s National Association of Cryptocurrencies stated that crypto mining is prohibited in Venezuela.

This move follows a recent crackdown involving the confiscation of 2,000 cryptocurrency mining devices in the city of Maracay as part of an anti-corruption initiative.

The ministry emphasized the need to offer efficient and reliable electrical service across Venezuela by eliminating the strain caused by these high-energy-consuming farms. According to officials, these measures are essential to stabilize the national power supply, which has been unreliable for the past decade.

The country has been experiencing recurring blackouts, particularly since 2019, which have significantly impacted residents’ daily lives and overall economic activity.

Cryptocurrency mining has hefty electricity demands. In response, some countries such as China and Kazakhstan have implemented stringent regulations or outright bans on the practice.

The Venezuelan government’s move against cryptocurrency mining is reportedly part of a larger anti-corruption push, which has led to the arrest of several top officials. Joselit Ramírez, the ex-head of the National Superintendency of Cryptoassets, is a key figure in the corruption allegations.

Rafael Lacava, governor of Carabobo state, has reportedly highlighted the importance of public collaboration in detecting illegal mining operations, encouraging citizens to report any unlawful activities.

However, this is not Venezuela’s first act against crypto mining activities. In March 2023, Venezuela’s energy supplier shut down crypto mining facilities nationwide as part of corruption investigations involving the country’s state oil company.

Venezuela’s attorney general, Tarek William Saab, said at the time that government officials were allegedly running parallel oil operations with the assistance of the national crypto department.

Elsewhere, in 2023, eight major cryptocurrency mining operators in Kazakhstan signed an open letter to President Kassym-Jomart Tokayev, complaining about high energy prices for crypto miners.

[stonedyou] 19/5/2024 08:46

'Big Short' Investor Michael Burry Goes Hard on Gold, Invests $10 Million in Q1


Sprott Physical Gold Trust units, a closed-end fund that
invests and holds its assets in physical gold bullion.
Big Short’s Investor Michael Burry Made a
$10 Million Gold Bet

Michael Burry, an investor known for anticipating the 2007
subprime mortgage meltdown, has made a huge bet on the rise of
gold. Burry, who amassed over $100 million for its accurate
prediction, purchased 440,000 Sprott Physical Gold Trust units
through Scion Asset Management, valued at 10 million at the end
of Q1.

The Sprott Physical Gold Trust is a closed-end fund that holds its
assets as physical gold bullion, targeting investors who want to
acquire gold exposure without having the inconvenience of
handling and providing custody of physical gold bullion. Sprott
alleges that it only invests in London Good Delivery (“LGD”)
physical gold bullion, produced by London Bullion Market
Association (LBMA) refiners.

Burry’s bet highlights the investors’ renewed interest in the
precious metal, in the context of world markets’ geopolitical and
economic conditions. While Burry has not disclosed the
motivations behind this investment, other analysts have assessed
gold still has upside potential. Peter Schiff, a financial analyst and
gold bug, recently predicted an “explosive growth” in gold prices,
inviting investors to take advantage of what might be the ” biggest
precious metals bull market in history.”

Jan Nieuwenhuijs, a gold market analyst, stressed that several
factors, including the rise in central bank gold purchases and the
high stock market valuation, are signaling the start of a multiyear
gold bull market. Nieuwenhuijs’ analysis concludes gold prices
might reach $8,000 per ounce in the next 10 years.

[stonedyou] 19/5/2024 08:18

Gold prices in Dubai Today Sunday, May 19, 2024.

ALBAWABA – Gold prices in Dubai, the United Arab Emirates (UAE) today, Sunday,
May 19, opened at a selling price of AED 8,862.46 per ounce, according to UAEgoldprices.com.

24-karat gold rates in UAE Today
The price per gram of 24-karat gold in UAE stood at AED 284.94 today.

22-karat gold prices in Dubai Today
The price per gram of 22-karat gold in UAE stood at AED 261.19 early today, May 19.

21-karat gold rates in Dubai Today
The price per gram of 21-karat gold in UAE stood at AED 249.32 at the start of business today.

18-karat gold prices in UAE Today
The price per gram of 18-karat gold in UAE opened at AED 213.70 today.

14-karat gold rates in the Emirates Today
The price per gram of 14-karat gold in UAE stood at AED 166.21 early today.

International gold rates Today
Globally, the price per ounce of gold opened at AED 8,862.46 ($2,414.84) early today as reported by Goldprice.org, noting that gold in the UAE is subject to a 5% value-added tax (VAT).

[stonedyou] 15/5/2024 12:07

Gold vs. Inflation Expectations.

The RELATIONSHIP between gold and inflation is not usually a positive for gold stocks, but that is changing, writes Gary Tanashian in his Notes from the Rabbit Hole.

I want to call your attention to an article by Jordan Roy Byrne that provides information on "everything you need to know about gold stocks."

Well, that is one man's subjective view of the situation, but he is a savvy and well grounded gold market watcher, so the whole article is worth a read. However, the last item caught my attention because as you may know, I have spent a lot of time debunking the well promoted myth that gold stocks should be bought as protection from or utility against inflation.

Nothing could be further from the truth when said inflation is manufactured by monetary/fiscal policy and works to the benefit of the economy before it begins noticeably impairing the economy. There have been long stretches during which the manufactured inflation works positively for the economy.

The proof of the assertions above has been gold's under-performance to cyclical assets and hence, gold miners' negative leverage to that performance. It's not rocket science if you stay unbiased. It's just the way it is and the way it has been much more often than not during the decades of the Continuum's gentle disinflationary journey southward. A journey that was rudely sent off course in 2022.

While the 30-year Treasury yield continuum chart (among other things, an indicator of an oncoming era of impaired policymaker ability to respond to financial crises with inflationary 'bailout' policy) tempts me to veer from the post's original focus, I'll stay on track here. From Jordan's article:

Whether "the best" indicator for gold stocks or merely one of the best, there is no arguing that Gold/CPI correlates well with the gold miners.

One indication this chart holds for me is that of a transition into a counter-cycle as public fear of inflation (confidence that inflation is here to stay) has peaked but remains intact while gold creeps the counter-cyclical environment out ahead (post-election?).

Related to Jordan's chart above, I have been including this chart of Gold/RINF (inflation expectations) and HUI, on a much shorter time frame, in NFTRH since we identified the positive divergence in Gold/RINF to HUI back in February.

Since then Huey has zoomed upward to close the divergence. "Inflation expectations", "CPI"...different flavors of the same general measure of what the public thinks of as "inflation".

It will be important to keep these gold ratios (vs. inflation) in view going forward to continue to confirm the oncoming counter-cycle and as such, fundamentally positive era for gold miners, which will finally start to leverage gold's relative performance to the upside rather than the downside.

[stonedyou] 15/5/2024 10:39

Gold rush continues unabated in 2024.


The price and demand for gold have reached record highs over the past two years and show no sign of faltering in 2024. Central banks added 39 tonnes of gold to global reserves in January. We analyse the main macroeconomic factors affecting stock markets and their implications for investment assets such as gold.


Although gold demand during 2023 fell slightly short of the annual record achieved in 2022, the latest report published by the World Gold Council (WGC) confirms that it was another year of massive gold purchases by central banks.

Annual gold demand (excluding OTC) of 4,448 tonnes was only 5% lower than the previous year. Including OTC flows, it stands at 4,899 tonnes, the highest recorded since 2010. While annual net purchases of 1,037 tonnes almost matched the 2022 record, falling just 45 tonnes short.

Despite some fluctuations during the year, the price of gold rose 15% in 2023 to an all-time high of $2,135.40 per troy ounce on 4 December. The US banking crisis, geopolitical tensions, war conflicts and the US Federal Reserve’s stance on maintaining interest rates were among the main factors contributing to gold’s continued safe-haven status for investors.

Thus, yet another year confirms that the gold market continues to receive support from central banks of countries that want to diversify their reserves to shield their economies, which suggests that gold prices could continue to rise significantly throughout this year.



Central banks start the new year adding more gold to their reserves
According to IMF data, central banks’ global gold reserves increased by 39 tonnes in January this year. This is more than double December’s net purchases and the eighth consecutive month of net purchases.

Turkey’s central bank was the main buyer, adding 12 tonnes of gold to its reserves for a cumulative total of 552 tonnes. It was followed by the People’s Bank of China, which continued to accumulate the golden metal at a steady pace, increasing its reserves by 10 tonnes, the 15th consecutive month of gold purchases by the Chinese central bank.

Meanwhile, on Tuesday 5 March, the price of gold reached a new all-time high of $2,140.6 per troy ounce, surpassing the record set at the end of last year. Well into 2024, economic and geopolitical uncertainty persists.

Inflation has fallen, but the world faces similar challenges to those of recent years. The WGC notes that the rebound in gold purchases in January supports its forecast that “2024 will be another solid year for central bank demand for gold”, and warns that “the world looks no less uncertain”, so “the reasons to own gold are as relevant as ever”.



The impact of the current macroeconomic environment on the gold market
With the Federal Reserve (Fed) and the European Central Bank (ECB) expected to cut rates from June, and given that monetary and fiscal policy is one of the main drivers of precious metals prices, elections in the US and elsewhere may directly impact gold prices.

Let’s not forget that gold prices experienced a major rally in 2020, increasing in value by nearly 25% just before the US presidential election. Likewise, when Barack Obama left office in 2017, the gold price was 40% higher than when he took office in 2009.

In a recently released WGC podcast discussing the current macroeconomic environment, Karim Chedid, Head of EMEA Investment Strategy at iShares and Managing Director at BlackRock, notes that “in the context of the election calendar, historically, a traditional safe-haven asset such as gold tends to perform well and is likely to be in demand this year”.

As for the outlook for global economic growth, after a year marked by contraction or stagnation of some economies, with the European Union narrowly escaping recession, and a slow but stronger-than-expected recovery in the United States, Russia and Asia, many analysts expect growth to slow down despite falling inflation. Still, Karim Chedid explains that this will depend on the region, “for the global economy, we forecast that growth will continue to be low” but in regions such as Europe, “there will be an upward trend”.



Key factors of portfolio performance
BlackRock has introduced a framework it calls “asset allocation drivers”, which go beyond macroeconomic factors but will continue to play a key role in the economy over the long term. These are energy transition, artificial intelligence, geopolitical fragmentation, the future of finance and demographic ageing.

“Each of these major forces influences growth, influences inflation and therefore influences interest rates and asset allocation,” says the BlackRock executive. That said, Chedid reminds us that during 2023, “central bank gold purchases were a more important driver of growth than money flows”.

The correlation between stock and bond returns has been positive for much of history but is periodically negative and, as Chedid points out, “unreliable221; right now, making the importance of diversifying our investment portfolio with physical gold more relevant than ever. An observation that is in line with Goldman Sachs’ analysis from December last year, when it predicted a rise in the performance of commodities such as gold over the next 12 months.

To discover the best option to protect your savings, enter Preciosos 11Onze. We will help you buy the safe-haven asset par excellence, physical gold, at the best price.

[stonedyou] 14/5/2024 20:44

Jim Rickards: Why gold at $27,000 isn't such a crazy prospect

Submitted by admin on Tue, 2024-05-14 10:29 Section: Daily Dispatches

By James G. Rickards
Daily Reckoning, Baltimore

Tuesday, May 14, 2024

I've said that gold could reach $15,000 by 2026. Today I'm updating that forecast.

My latest forecast is that gold may actually exceed $27,000.

I don't say that to get attention or to shock people. It's not a guess; it's the result of rigorous analysis.

... Dispatch continues below ...


$27,000 Gold
I’ve previously said that gold could reach $15,000 by 2026. Today, I’m updating that forecast.

My latest forecast is that gold may actually exceed $27,000.

I don’t say that to get attention or to shock people. It’s not a guess; it’s the result of rigorous analysis.

Of course, there’s no guarantee it’ll happen. But this forecast is based on the best available tools and models that have proved accurate in many other contexts.

Here’s how I reached that price level forecast…

This analysis begins with a simple question: What’s the implied non-deflationary price of gold under a new gold standard?

No central banker in the world wants a gold standard. Why would they? Right now, they control the machinery of global currencies (also called fiat money).

They have no interest in a form of money they can’t control. It took about 60 years from 1914–1974 to drive gold out of the monetary system. No central banker wants to let it back in.

Still, what if they have no choice? What if confidence in command currencies collapses due to some combination of excessive money creation, competition from Bitcoin, extreme levels of dollar debt, a new financial crisis, war or natural disaster?

In that case, central bankers may return to gold not because they want to, but because they must in order to restore order to the global monetary system.

What’s the Proper Gold Price?

That scenario begs the question: What is the new dollar price of gold in a system in which dollars are freely exchangeable for gold at a fixed price?

If the dollar price is too high, investors will sell gold for dollars and spend freely. Central banks will have to increase the money supply to maintain equilibrium. That’s an inflationary result.

If the dollar price is too low, investors will line up to redeem dollars for gold and then hoard the gold. Central banks will have to reduce the money supply to maintain equilibrium. That reduces velocity and is deflationary.

Something like the latter case happened in the U.K. in 1925 when it returned to a gold standard at an unrealistically low price. The result was that the U.K. entered the Great Depression several years ahead of other developed economies.

Something like the former case happened in the U.S. in 1933, when FDR devalued the dollar against gold. Citizens weren’t allowed to own gold, so there was no mass redemption of gold. But other commodity prices rose sharply.

That was the point of the devaluation. Resulting inflation helped lift the U.S. out of deflation and gave the economy a boost from 1933–1936 in the midst of the Great Depression. (The Fed caused another severe recession in 1937–1938 with their customary incompetence.)

The policy goal obviously is to get the price “just right” by maintaining the proper equilibrium between gold and dollars. The U.S. is in an ideal position to do this by selling gold from U.S. Treasury reserves, about 8,100 metric tonnes (261.5 million troy ounces), or buying gold in the open market using freshly printed Fed money.

The goal would be to maintain the dollar price of gold in a narrow range around the fixed price.

What price is just right? This question is easy to answer, subject to a few assumptions.

$27,533 Gold

U.S. M1 money supply is $17.9 trillion. (I use M1, which is a good proxy for everyday money).

What is M1? This is the supply that is the most liquid and money that is the easiest to turn into cash.

It contains actual cash (bills and coins), bank reserves (what’s actually kept in the vaults) and demand deposits (money in your checking account that can be turned into cash easily).

One needs to make an assumption about the percentage of gold backing for the money supply needed to maintain confidence. I assume 40% coverage with gold. (This was the legal requirement for the Fed from 1913–1946. Later it was 25%, then zero today).

Applying the 40% ratio to the $17.9 trillion money supply means that $7.2 trillion of gold is required.

Applying the $7.2 trillion valuation to 261.5 million troy ounces yields a gold price of $27,533 per ounce.

That’s the implied non-deflationary equilibrium price of gold in a new global gold standard. Of course, money supplies fluctuate; lately they’ve been going up sharply, especially in the U.S.

There’s room for debate about whether a 40% backing ratio is too high or too low. Still, my assumptions are moderate based on monetary economics and history. A dollar price of gold of over $25,000 per ounce in a new gold standard is not a stretch.

Obviously, you get around $12,500 per ounce if you assume 20% coverage. There are many variables in play.

The Fundamental Model
This model is also straightforward. It relies on factors we learned about in our first week of Intro to Economics — supply and demand.

The most significant development on the supply side is the decrease of new mining output. As the chart shows below, mine production of gold in the U.S. has been decreasing steadily since 2017.

These figures reveal a 28% decrease over seven years, at the same time gold prices were rising and miners were motivated to expand output.

That’s not to argue that the world has reached “peak gold,” (output could expand in future for a variety of reasons). Still, my contacts in the mining community consistently report that gold is becoming more difficult to source and the quality of newly discovered ore is low-to-medium at best.

Flat output, all things equal, tends to put a floor under prices and to support higher prices based on other factors.

The Demand Side
The demand side is driven largely by central banks, ETFs, hedge funds and individual purchases. Traditional institutional investors are not large investors in gold. Much of the demand from hedge funds is conducted in derivatives such as gold futures.

Derivatives generally don’t involve physical delivery of gold. They involve “paper gold” that far exceeds the actual, physical gold supply. It’s this paper gold market that accounts for volatility in the gold market, not gold itself.

Meanwhile, central bank demand for gold has surged from less than 100 metric tonnes in 2010 to 1,100 metric tonnes in 2022, a 1,000% increase in 12 years. Central bank gold demand remained strong in 2023 with 800 metric tonnes acquired through Sept. 30.

That puts central bank gold demand on track for a new record. There’s no sign of that demand slowing in 2024.

Overall, the picture is one of flat supply and increasing demand, mostly in the form of official purchases by central banks.

A Math Lesson
Finally, a bit of elementary math is helpful in understanding how the dollar price of gold can move past $25,000 per ounce in the next two years. For this purpose, we’ll assume a baseline price of $2,000 per ounce (although gold has been in the $2,300 range lately with no signs of falling back to the $2,000 level).

But for our purposes, we’ll keep it simple.

A move from $2,000 per ounce to $3,000 per ounce is a heavy lift. That’s a 50% increase and could easily take a year or more. Beyond that, a further increase from $3,000 to $4,000 is a 33% increase: another large rally. A further gain from $4,000 per ounce to $5,000 per ounce is a further gain of 25%.

But notice the pattern. Each gain is $1,000 per ounce, but the percentage increase drops from 50% to 33% to 25%. That’s because the starting point is higher while the $1,000 gain is constant. Each $1,000 jump represents a smaller (and easier) percentage gain than the one before.

This pattern continues. Moving from $9,000 per ounce to $10,000 per ounce is only an 11% gain. Moving from $14,000 per ounce to $15,000 per ounce is only a 7% gain. Gold can move 1% in a single trading day, sometimes 2% or more.

As an extreme example, a move from $99,000 per ounce to $100,000 per ounce is about a 1% move. Those $1,000 pops get even easier as we approach my calculated gold price of $27,533.

The lesson for you as an investor is to buy gold now.

As prices continue to rally, you’ll get more gold for your money at the outset and high-percentage returns as gold rallies from a lower base. Toward the end of the long march past $25,000 per ounce, you’ll have bigger dollar gains because you started with more gold.

Others will jump on the bandwagon, but you’ll already have a comfortable seat.

[hjs] 09/5/2024 16:02

Very good RNS. Current gold price has not been reflected here! Production is increasing in 2024 and forecast for 2025 is higher as well. share price will not stay at 25 for long.

[stonedyou] 09/5/2024 12:09

Pan African Resources Plc - Revised Production Guidance for the year ending 30 June 2024, Production Guidance for 2025 Financial Year and MTR Project Update


09/05/2024 7:00am
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Pan African Resources Plc - Revised Production Guidance for the year ending 30 June 2024, Production Guidance for 2025 Financial Year and MTR Project Update
PR Newswire

LONDON, United Kingdom, May 09



Pan African Resources PLC

(Incorporated and registered in England and Wales under the Companies Act 1985 with registered number 3937466 on 25 February 2000)

Share code on AIM: PAF

Share code on JSE: PAN

ISIN: GB0004300496

ADR ticker code: PAFRY

("Pan African" or the "Company" or the "Group")

Pan African Resources Funding Company Limited

Incorporated in the Republic of South Africa with limited liability

Registration number: 2012/021237/06

Alpha code: PARI


Pan African is pleased to provide shareholders and noteholders with an update as follows:

Group production and cost guidance



Production guidance for the year ending 30 June 2024 (current financial year) narrowed to between 186,000oz to 190,000oz (previously 180,000oz to 190,000oz)
In the second half of the financial year, the Group ceased processing of marginal surface sources at Evander Gold Mines (EGM) due to this business, which contributed approximately 2,500oz in the first half of the current financial year, becoming uneconomical
If production from these sources was maintained in the second half of the financial year, Group production for the full financial year would have been in excess of 190,000oz
Group AISC guidance for the current financial year maintained at between $1,325/oz to
$1,350/oz (assumed exchange rate: ZAR/US$:18.50)

Production guidance for the 2025 financial year of 215,000oz to 225,000oz.


MTR Project (The Project)

The Project is on schedule for commissioning and steady state production during December 2024
Capital cost for the Project remains on budget, with no expenditure overruns expected
The Project's financial model, based on its definitive feasibility study (DFS), was updated to include the latest operating cost and production estimates, forecast ZAR/US$ exchange rate and US$ gold price. These updates are as follows:
Exchange rate and gold price revisions:
Exchange rate of ZAR/US$:19.00 (initial DFS model: ZAR/US$:15.50)
Gold price of US$2,200/oz (initial DFS model: US$1,750/oz)
The updated DFS financial model outputs (relative to the initial DFS model) are as follows:
The model Pre-tax NPV increased to US$183 million (initial DFS model: NPV of US$63 million)
The ungeared real IRR increased to 41.7% (initial DFS model: IRR of 20.1%)
Payback on upfront capital investment of ~US$135.1 million reduced to approximately 2 years (initial DFS model: 3.5 years), post commissioning.


An internal pre-feasibility study (PFS) for the Soweto cluster was also completed in March 2024, based on the drill results from the 2L16 and 2L24 tailings storage facility (TSF). The PFS considered numerous options, with the most feasible being:

Development of re-mining, overland piping and pumping infrastructure at the Soweto cluster resource to process the material at the MTR plant
Using this option, the MTR plant's capacity can be expanded to process 1 million tonnes per month of feed material, compared to the current design capacity of 800ktpm, resulting in a life-of-mine (LOM) of 21 years for the combined Mogale and Soweto cluster resources. The resultant tailings can be deposited into the expanded Mogale TSF at the West Wits pit and 1L23-25 footprint.


The outcomes of the PFS are as follows:

Processing of the Soweto Cluster has the potential to expand the MTR operation
The MTR plant infrastructure can be expanded to treat 1 million tonnes per month from year 6 of the MTR operation's LOM
The addition of the 110 million tonne Soweto Cluster Mineral Resource has the potential to increase MTR production to approximately 60koz/year over a 21-year LOM
Total additional capital requirement of US$113 million (approximately US$83 million would be incurred from year 4 to year 6 and US$29 million in year 10 of the MTR's operation)
At US$2,200/oz and an exchange rate of ZAR/US$:19.00, the Pre-tax NPV combined for Mogale and the Soweto Cluster is US$283 million, representing an increase of US$96 million, relative to Mogale's updated standalone financial model
The real ungeared IRR increases to 44.0%, relative to the IRR of 41.7% in the updated Mogale financial model.
The Group will now proceed with the necessary permitting and servitudes required for the re-mining and processing of the Soweto Cluster, with a final investment decision in due course.



Pan African CEO Cobus Loots commented:

"We are pleased that Pan African will achieve the upper end of our full year production guidance, and would have exceeded guidance had we continued with the processing of surface material at Evander in the second half of the financial year.



The robust production results, combined with record Rand gold prices, should see the Group deliver an excellent financial performance for the year.



Our MTR project remains on schedule and on budget, and we look forward to commissioning it later in 2024. We have now demonstrated that the addition of the Soweto Cluster resources further improves the economic attractiveness of this world class project."



Final results for the twelve months ended 30 June 2024



Pan African will announce its final results for the current financial year on 11 September 2024.

The information contained in this update is the responsibility of the Pan African board of directors and has not been reviewed or reported on by the Group's external auditors.

Certain information communicated in this announcement was, prior to its publication, inside information for the purposes of Article 7 of Regulation 596/2014.

Rosebank

9 May 2024

[juuunx2] 09/5/2024 08:43

Must be making a fortune at these prices

[faz] 09/5/2024 07:17

thats a pretty positive update today; production and projects all looking good

[johnbull1] 08/5/2024 10:47

But the top end of guidance (190) includes a five percent drop in the second bit (98 drops to 92), which is weird given Evander should be increasing. Unless they up guidance it suggests some wheel has fallen off? The company would know by now, the silence worries. This company doesnt give information until too late.

[stonedyou] 07/5/2024 18:31

Financial year-end 30 June 2024

[stonedyou] 07/5/2024 18:30

Pan African Resources on track to meet full-year guidance after strong first half.


781 views Feb 14, 2024 #investor #GoldPrice #GoldMining

Pan African Resources PLC CEO Cobus Loots takes Proactive's Stephen Gunnion through the company's interim results to 31 December 2023.

The mining firm experienced a significant uptick in performance, driven by increased production and a favourable gold price environment, particularly in South African rand. The impact of operational enhancements at its Barberton operations and its tailings retreatment portfolio including Elikhulu saw substantial production boosts, positioning the company to meet its full-year guidance of 180,000 to 190,000 ounces of gold.

Loots highlighted the successful management of costs despite inflationary pressures, attributing part of the efficiency to the depreciation of the rand against the dollar, higher gold output reducing unit costs, and prudent cost controls. Notably, the company's investment in renewable energy and water recycling initiatives has started to pay off, with the first solar plant saving approximately $13 per ounce in all-in-sustaining costs (AISC).

Cash generation surged by 130%, enabling further investments in projects like the Mogale Tailings Retreatment project, which is on schedule and budget to enhance Pan African's production for the next two decades.

The Evander mine also reported increased output, thanks to infrastructure upgrades.

Safety improvements were emphasized as a crucial part of the company's operations, especially significant given the proportion of production from tailings and surface operations.
‌

[johnbull1] 07/5/2024 17:48

Is it me or is it too late for guidance to be upped for the year? Surely theyd know a long time ago if the second hald was going to be better than the first and so up it.
Maybe something bad has hapenned? Or the company just doesnt know? Because last year they warned really late so cant have known until late. Or theyre lazy.