Nugget News February

30 Day Market Moves

Gold Outlook...There's a frantic global scramble for bullion as major dealers rush to move gold into the U.S. ahead of tariffs. Gold and silver markets are being roiled by the possibility that imported gold and silver could be subject to tariffs announced by the newly elected Trump Administration. This uncertainty has prompted banks and hedge funds to scramble to cover short positions as well. You will also see spikes in the Canadian price of gold, as the Canadian dollar is being weakened quickly due to what the tariffs could do to our economy. Holding gold in times like these is the reminder of why we hold it.

-As the Canadian dollar weakens and our buying power goes down, gold and silver are the ulimate protection of your savings.

Silver Outlook...The silver market may see the largest tariff impacts. Recent data shows that about 44% of U.S. silver supply comes from Mexico. Gold & Silver Imports from Canada constitute 18%. The cost of nearly two thirds of the U.S. silver supply will rise by 25% – more likely, however, is that Mexican silver will be sent to refineries located outside the U.S.

-Meanwhile, tariffs on imports from Europe may be coming. It is difficult enough to imagine the U.S. market being able to source enough non-tariffed metal to replace lost imports from Mexico and Canada.

Warning Silver Squeeze...A short squeeze may be unfolding at the COMEX; some traders are having difficulty sourcing metal and are closing out hedges to avoid getting caught on the wrong side of the trade. Last week, an analyst at TD Commodities warned the market is especially underestimating the possibility of a big move in silver, writing"explosive upside convexity in silver markets remains severely underpriced, particularly with few days remaining until the proposed deadline for tariffs for Canada & Mexico."

-High drama in the institutional markets for gold and silver unfolding mostly in the background over the past 45 days – may finally be bleeding out into the mainstream.

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