Russia Is De-Dollarizing & Hoarding Gold at a Surprising Pace (Podcast)
Russia Is De-Dollarizing & Hoarding Gold at a Surprising Pace Podcast by Mike Gleason for Money Metals
Coming up we’ll hear an interview with Money Metals president Stefan Gleason, who was a featured guest during the recent 360 Gold Summit. Stefan addressed the fundamental question of “why precious metals” and also gave some helpful tips on how to avoid making big mistakes when investing in gold and silver. Don’t miss this foundational and enlightening conversation coming up after this week’s market update.
As precious metals markets continue to consolidate, new leadership is emerging. After the white hot palladium market suffered a severe pullback last week, its sister metal platinum hung tough. This week platinum is surging – boosted by traders unwinding their long palladium, short platinum positions.
Platinum prices rallied Thursday to a 10-month high. As of this Friday recording, the precious metal checks in at $900 per ounce on the heels of its best week of the year and is sporting a 5.5% weekly advance.
So should investors consider buying platinum on this breakout…or opt for more popular metals? Firstly, investors should understand that platinum is not widely recognized as a monetary metal like gold or silver. The market for platinum is narrower, with demand being concentrated in the automotive industry.
We generally suggest investors acquire core positions in gold and silver before venturing into other metals. That said, platinum is available in the form of coins and bullion bars just like other precious metals. And on a relative basis, it remains cheap despite the recent rally.
Determining whether platinum is a bargain compared to its main competitors is pretty simple. Historically, platinum tends to command a higher price per ounce than both gold and palladium. During times when platinum trades at a discount to both metals, it can be regarded as a good long-term value. That remains the case today.
Checking in on the gold market, spot prices are unchanged now for the week. The yellow metal currently trades at $1,292 an ounce – a near $400 premium over platinum. Palladium comes in at $1,382, up 1.2% now for the week. And finally, silver continues to hold close to the $15 level, with spot prices now trading at $15.22 – up a slight 0.2% since last Friday’s close.
Well, it turns out that there may be something to those Russia conspiracy theories. No, not the ones CNN, MSNBC, Buzzfeed, and The New York Times endlessly promoted month after month. They turned out to be little more than fake news.
The anti-Trump media suffered perhaps a final blow to whatever credibility they had left when The Mueller Report they spent so much time hyping was finally released. It essentially confirmed President Trump’s main contention all along – no evidence of any collusion between the Trump campaign and the Kremlin.
A different Russian conspiracy that The Mueller Report didn’t focus on actually deserves far more attention than it’s getting. Russia is engaging in a long-term effort to undermine the U.S. dollar’s standing as world reserve currency. And that’s not fake news.
It’s a fact that since the United States and its allies began imposing economic sanctions on Vladimir Putin’s regime, the Russians have responded by pursuing de-dollarization. For Russia, de-dollarization entails forging closer alliances with trading partners such as China and settling international trade outside the global dollar system when possible.
Russia is rapidly dumping dollars held in reserve and replacing them with Chinese yuan and gold bullion. According to the latest foreign reserve data, the Russian central bank’s gold reserves rose by 31.1 tonnes in February to a total of 2,149 tonnes. This follows on the heels of a gold buying binge in 2018 that saw Russia outstrip its own mine production and officially surpass China in hard money reserves.
Russian central bank gold stockpiles have nearly quadrupled over the past ten years. They now represent 20% of Russia’s foreign exchange reserves.
Russia shows no signs of slowing down its gold accumulation program as tensions with the United States escalate over the fate of Venezuela. The U.S. is pushing for regime change there, while Russia backs strongman Nicolas Maduro, both financially and militarily. Russia’s interference in the battle for control of Venezuela is prompting the White House and Congress to draw up even more sanctions against the Kremlin.
It’s a dangerous game. In a worst-case scenario, Russia could threaten to deploy nuclear weapons. Russia’s massive stockpile of nukes dwarfs those of North Korea or any other U.S. adversary.
For now, Russia is banking on its de-dollarization strategy and the long-term rise of China and other Far East economies. If Russia ultimately succeeds in dethroning King Dollar in international trade, it would establish a new epoch.
Instead of an arms race, there could be a global race for gold among nations. The mega trend of central bank gold buying is already in place and shows no signs of abating. The race to grow gold reserves is currently being led by Russia, China, and Islamic countries such as Turkey.
This growing monetary demand could act as a major driver of higher gold prices in the years ahead.
Well now, without further delay, let’s get to this week’s featured interview between Money Metals president Stefan Gleason and Pete Fetig during a recent summit on all things precious metals.
Stefan Gleason: You want be careful about who you are doing business with, you want to do a little research. Probably start small with that dealer and see how it goes. See how the service is. See how the delivery is. Another place to acquire precious metals would be from a local dealer. Money Metals Exchange is a national dealer. There is other several other good national dealers.