Central banks buying what they cannot print
Central banks have bought 73.6 tons of gold since 2024 - more than China officially, and enough that this holding now tops Australia, the world's third largest gold producer. The point worth sitting with: the same central banks that print money are stacking the one thing they cannot print. Tether, a crypto company, is also buying gold. Much of this buying came over the past 6 months while the price was hit hard, so official buyers and Tether used the weakness to buy cheap. Falling prices can hide stronger real demand.
China reported another 33 tons in Q2, its biggest addition since Q4 2023, so its buying is not slowing. Buyers turn price drops into buying windows, and they rarely announce defensive moves before those moves become obvious. For an individual, waiting for certainty can mean buying after protection gets expensive.
Price targets: $5,025 today, $5,100 by year-end, $10,000 claimed
Rick Rule assumes the dollar loses about 8% of its value each year, adding up to roughly another 75% over the next 10 years. M2 money supply is running straight off the charts. A report, possibly by Goldman Sachs (GS), looked at the long-standing link between gold and global M2 money supply; valued the old way, gold already works out to $5,025 an ounce.
That math helps explain the rush of what some traders call exotic option plays aimed at $5,100 gold by year-end. Big banks are now naming that level - Goldman Sachs (GS) came out at $5,100, saying its earlier $4,500 target would badly undershoot the real outcome. Sentiment flipped fast: in June it could not have been worse, and now there is far more interest and buzz.
A separate, much bigger call puts gold at $10,000 by the end of this year, tied to expected political fallout. That is a heavy prediction. The setup makes it less wild: gold rose more than 10% in August and silver more than 16%, while markets were basically pricing in another rate hike. If monetary policy turns the other way, the metals could run much further. When policy shifts, money can reprice faster than households can react.
Why paper price moves don't touch the core
The Fed can move the paper price short term. It cannot print gold or silver, cannot erase trillion-dollar deficits, cannot make new mine supply appear, and cannot force central banks to stop adding reserves. A weakening currency quietly eats purchasing power long before an account statement looks scary. The real gap is between a fast-growing money supply and the small amount of real monetary assets that exist. That gap makes a short metals correction less important than the money trend underneath. Holding only cash can preserve the number while losing what it buys.
Japan just said it will try to support and raise the yen. If the yen goes too high or too low, it blows up the carry trade, so it is a balancing act the Fed does not want to see.
Miners, fiat, and cutting out the middlemen
Should mining companies keep some of their own gold instead of selling it all for fiat, a melting ice cube? In theory yes. Most miners are run by geologists, are underfinanced, and cannot afford to hold back product. Keith Neumeyer may be one of the only ones who withholds his production, because he runs it like a businessman and can afford to. For most, the moment metal comes out of the ground the first call goes to a bank like JP Morgan (JPM), which routes it to a refiner and pays cash on the spot - money that then covers the miners, the diesel, and the trucks. Publicly traded miners also answer to shareholders, which limits holding metal back.
A likely fix is already starting: disintermediation, where big companies go straight to miners and buy directly, cutting out traditional middlemen. That could expose the real supply limits. Cash-rich public companies sitting on billions should also put some into metals; Palantir (PLTR) bought $50 million in gold a few years back, but that remains the exception. Liquidity can look plentiful right up until physical availability becomes the choke point.
China's paper ban and price discovery
Since China's ban on paper trading started, metals have risen a lot in August. Likely more than coincidence, and more proof should show over time. It does not help China to let the price go parabolic, but it does want real price discovery - which is why it told its people to buy the real thing and skip paper gold unless they are true hedgers. If big buyers keep demanding physical metal, benchmark prices lose meaning as actual premiums drift away from them. A working screen does not guarantee working liquidity when stress hits.
The gold-silver ratio and the physical-supply trap
The gold-silver ratio (GSR) 100-year average sits around the mid-40s. When the ratio moves back into that reasonable window, swapping silver for gold should be possible, but if many people try at once, premiums will likely jump hard. Availability will always exist; the question is at what price - and a premium spike can wipe out the gain the ratio seemed to offer. The ratio can look normal on a screen while physical premiums explode underneath.
Prices themselves are fragmented: go to 10 different dealers and you will likely see 10 different spot prices, unlike a stock like Amazon (AMZN) that everyone sees at one price. Arbitrage only works when metal pricing and access line up at the same time. Retail buyers should watch premiums and availability, not just the flashing number.
Can an individual investor sell gold in China for arbitrage? No. You would need access to the Shanghai Exchange and to be an institutional trader on the level of JP Morgan (JPM); by the time you could, the arbitrage is gone.
Trust in dealer quotes
One dealer publishes both the bid and the ask on its website in real time, by the second, and says the number on its streaming banner is exactly the price you get on either side if you call to lock in. That trust holds as long as COMEX keeps functioning, and CME and LBMA have been under strain.
Gold vs. silver, and a stray fact
Should you still buy gold, or focus only on silver since silver has more upside and gold is more liquid? Buy gold too. Silver may be the better percentage play, but gold is being pulled back into the global monetary system one way or another, and silver will follow and may outperform it on a percentage basis. Owning only silver concentrates risk instead of spreading it. During stress, liquidity matters as much as upside during rallies, so there is no reason to gamble the position.
Is there gold in human blood, and how much? About 0.2 mg in the whole body.
Political backdrop
A James Rickards post, reposted by Trump and by Michelle McCauley, hinted at indictments between now and the midterms without naming names, with clues pointing to Governor Walz of Minnesota and Letitia James of New York. The frustration driving this is years of mudslinging with no cases actually reaching court. If this plays out over the next few months, it could rattle markets and the midterms - and gold and silver are expected to be major winners from the fallout.
