Nugget News September

30 Day Market Moves

Silver $38.52 (+ 3.34 %)

Gold $3374.39 (+ 1.32%)

Gold Outlook...Gold has set another record high as US Fed Chair Jerome Powell confirmed the pivot to lower interest rates. While gold has been driven to these heights by Eastern buying, we're now seeing Western investors flocking to the metal as the shift to easier monetary policies begins. This is what gold investors have been waiting for, the next phase of the gold bull market has begun with the long-anticipated entrance of Western investors into the gold and mining share market.

- Cutting interest rates is a trend they can project forward for years. And it’s the trend that will take gold to much higher levels.

Poland is Flexing in Q2... The National Bank of Poland was the biggest central bank gold buyer in the second quarter this year. Poland was also the second-biggest gold buyer in 2023, adding 130 tons of gold to its holdings last year. National Bank of Poland Governor states “As such, gold’s relatively stable performance during times of crisis, as well as its inflation hedge qualities are driving factors behind the central banks picking the metal. It is also an effective way to diversify central bank portfolios and is considered to be highly liquid, with no default risk.”

-The Bank of Poland will continue to add gold to its reserves with a goal of holding at least 20 percent of the country’s reserves in gold.

Gold Vs Money...M2 money supply in the United States has grown exponentially since the Fed started tracking the metric in 1959. As we know, this has contributed to a constant increase in the prices of goods and services. Exponential increases in the money supply inevitably cause severe devaluation in the nation’s currency. The gold price tracks money supply growth. For that reason, the last 50 years have seen exponential returns in gold. Fortunately for gold investors, these parabolic money supply increases are far from over. If we divide the price of gold by M2 money supply, we get the gold/M2 ratio. This ratio tells us how overpriced or underpriced gold is compared to M2 money supply. When the ratio is low, gold is undervalued. When the ratio is high, gold is overvalued.

India Silver Demand Exploding...As Indian households gain increased purchasing power, they are embracing modern conveniences that were once out of reach. The demand for appliances like air conditioners, washing machines, and refrigerators has skyrocketed, along with automobile ownership. India's energy infrastructure is straining under the weight of increased consumption, as millions of newly affluent citizens plug in power-hungry devices. The surge in demand for modern amenities has also created an unexpected pressure point: the need for silver, a crucial component in many batteries, electronic devices and appliances due to its superior conductivity.

-India is expected to double it's silver imports this next year. This growth is primarily fueled by the rising demand from solar panel and electronics manufacturers.

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