Nugget News December

30 Day Market Moves

Silver Outlook...In Case you have not heard SILVER IS ON FIRE! Up a whopping 19% in the past 30 days to now trade at $88. Our call to see silver cross the $100 threshold is getting closer to happening, a little quicker than anticipacted. Earlier this year we discussed the large gap between the price of silver to gold. Our observation was that it was significantly undervalued relative to gold after having lagged behind the yellow metal during it's very strong rally. While gold has continued to rally quite well since then. Silver has vastly outpaced it by over 3-1, returning about 90% in a less than 8-month period.

The reason why we believe silver is performing so well this year and why it should continue to perform well over the long term is that it is undergoing a long-overdue repricing due to persistent supply deficits, strong industrial demand, and a valuation reset relative to gold and broader currencies as it regains value as a monetary metal. Note that this is not a short-term momentum trade or technical analysis, but is purely rooted in fundamentals.

-Some of these important industrial demand drivers include the use of silver in things like solar panels, electric vehicles, electronics products, and semiconductors, all of which are experiencing soaring demand in the current global technology.

Gold Outlook...Gold has risen steadily after the Federal Reserve implemented its third cut of the year last week, signaling next year will likely include looser monetary policy. Analysts expect gold's next move could come on the heels of the US nonfarm payrolls data for October and November, due on Tuesday. If the data point to a meaningful slowdown, we believe this would reinforce bets on future rate cuts and push gold to test higher levels.

Gold traders initially cheered the US Fed’s announcement that it will begin buying $40 billion of Treasury bills per month starting Dec. 12 as it’s looking to rebuild reserves in the financial system, a move signaling more easing ahead. The Fed stopped shrinking its holdings earlier this month, a process known as quantitative tightening, amid signs reserves in the banking system were no longer abundant.

-Gold is still up about 57% this year and remains on target for its best annual performance since 1979.

Money Supply Alert!...As the US Federal Reserve revs up the money-creating machine even higher, the money supply is already growing at the fastest rate since July 2022, in the early stages of the tightening cycle. After peaking in April 2022, the money supply began to decline as the Fed hiked rates that year. The money supply bottomed in October 2023 and began increasing again. The money supply is now well above the pandemic peak.

Looking at the bigger picture, the central bank has expanded the money supply at an exponential rate since the 2008 financial crisis. Based on the TMS metric, the money supply has grown by over 200 percent since 2009. Looking at it another way, more than 2/3 of the current money supply has been created since the financial crisis.That’s a lot of money creation – i.e., inflation – in a short period of time!

-M2 is now at the highest level it’s ever been, at nearly $22.3 trillion. TMS hasn't returned to its 2022 peak but is running at a 34-month high.

You Dont hold it, You don't own it...In an economic or currency crisis, mining shares, ETFs, and contracts, like all paper assets, can lose all value in the blink of an eye. With a gold ETF, there is counterparty risk. You are relying on another party to hold up their end of the bargain.

Historically during periods of market crashes and instability, the ETF space for metals has had major risks and shortcomings. But physical gold & silver never has. Physical gold & silver is not someone else’s debt and is not part of a system riddled with vulnerabilities. With the recent rise of ETF's, remember your funds are not protected and your investment is parked with a company that can default at anytime.

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Choose the monthly dollar amount you wish to invest, as little as $100. Investing in gold or silver on a steady monthly basis is an excellent way to dollar-cost average. Our monthly plan removes the stress of trying to time the market.