I think that we are finally witnessing a long tem change in the precious metal market. Back in the 70’s, the physical gold price was the determinant factor and then the gold securitization process (paper gold) took over and dictated price with whatever price manipulation conspiration you can/might believe in.
Many articles have been written about the true state of gold accounting reserves etc.. which lead basically to one simple conclusion: Nobody really knows about the true state of the physical gold market ! Trust is eroding and stress is growing among traditional” paper gold” players that….. they might face some difficult situation.
Resuming… the price of physical gold is going to be again the main driver.
This situation is becoming slowly but surely a battleground. Why? On one side we have some large TBTF institutions and some governements (through their central banks) who will do everything in their power to derail this shift since it represents a power switch might undermine their own .. let’s say “business and economical model”.On the other side, we have a growing physical demand from different sources across the globe, including some central banks and countries which have asked the partial and or total return of their physical reserve and… the gold /precious metal producer.
I think that the “paper gold price” lobby… will try at some point in time impose some kind of tax scheme on gold/precious metal but I am not too sure that they will suceed since… gold is still recognized as reserve and currency.
Investors interested by the metal should be patient since i believe that on the long run they will be able to enjoy some nice profits but… we have a battleground and this means a bumpy road.
Investors interested in the theme shall pay particular attention about the how they invest /trade in precious metal. In switzerland they can find a few physical ETF (ZKB and JB) which offer good guarantees in term of custody. Gold miners might become a very interesting play due to their very depressed level in relative term to gold price.
I would also pay attention to the ratios between gold, silver, platinum and palladium prices as contrarian indicators to switch from one metal to another one. Let’s say it takes 75 ounces of silver to buy one ounce of gold…. it is maybe a good time to switch your gold into silver etc..
enjoy the ride and be careful out there