Celente: An Oil Shock Could Be the Black Swan That Finally Drives Gold Higher (Podcast)
Celente: An Oil Shock Could Be the Black Swan That Finally Drives Gold Higher Podcast by Mike Gleason for Money Metals
TDC Note – During the recent Contributor Roundtable at The Gadfly I bring up the fact of China is threatening to halt shipments of rare earth elements to the U.S.. This topic along with close to two hours of discussion with Jim Willie, London Paul, Ken Schortgen Jr and Rory Hall for your up to the minute analysis of all that’s important to you – All at The Gadfly – one week FREE TRIAL and I can assure you, you will want to stay! Supporting The Gadfly you support The Daily Coin
Coming up the top trends forecaster Gerald Celente of the Trends Journal joins me to discuss a myriad of topics. Gerald gives us more insight on why the precious metals are struggling, why he recently changed his economic forecast and also shares why he believes a continuation of the rising tensions in both Venezuela and the Middle East could lead to a spike in oil prices that the world simply cannot afford. Don’t miss another wonderful interview with the great Gerald Celente, coming up after this week’s market update.
As global stock and commodity markets gyrate, gold and silver markets are gaining some safe haven strength.
Gold prices moved back into positive territory on Thursday but is little changed for week now. The yellow metal is up a slight 0.4% since last Friday’s close to trade at $1,284 per ounce.
Silver has been beaten down this spring but is at least showing some signs of life here during the later part of the week, or at the very least has appeared to stabilize a bit. The white metal is now up a 0.9% for the week to bring spot prices to $14.61 an ounce.
Turning to the platinum group metals, platinum registers a weekly loss of 2.2% to trade at $805. And finally, palladium shows a 0.7% decline to come in at $1,332 per ounce as of this Friday morning recording.
Crude oil prices plunged 8% this week on the heels of rising U.S. inventories and fears that trade wars will crimp global demand. An even more dramatic move was seen earlier this week in some of the so-called rare earth metals. Rare earths and related equities catapulted to the upside as rumors spread that China may seek to restrict exports of these critical elements.
News Reporter: There’s speculation that rare earth elements will act as the next bargaining chip for China in the ongoing trade war with the U.S. after President Xi Jinping visited a local company specializing in the sector earlier this week.
David Stringer – Bloomberg News: Rare earths are a collection of about 17 elements. And when they’re processed in their mineral form, they turn into these industrial chemicals that are absolutely critical for things like magnets and motors used right across the electronics sphere. These are things that are contained in missiles to electric vehicles to wind turbines and consumer electronics. They really are absolutely ubiquitous throughout the devices that we carry around and rely on. So clearly, any move to restrict exports out of China, to restrict the flow of these materials into the U.S. would be very problematic for the U.S. The US relies on China for about 80% of its imports of rare earths.
Beijing currently has a stranglehold on over 80% of the global market for rare earth metals. The Chinese have previously leveraged their near total control to win concessions in geopolitical clashes. In 2010, China briefly blocked exports to Japan over a territorial dispute.
Trade wars can quickly escalate into resource wars. With U.S. domestic oil production continuing to rise, America is relatively secure on the energy front – at least for now. But when it comes to rare earth metals and precious metals, the country remains heavily reliant on output from hostile and unstable countries including China, Russia, and South Africa.
South Africa is a major supplier of gold and the world’s leading producer of both platinum and palladium. But in recent months, mining output there has been declining.
Fears of a chronic supply deficit drove palladium to record highs earlier this year. No such move has occurred in the other precious metals. But they too face potential long-term supply shortfalls.
Many mining industry analysts believe peak gold and peak silver have arrived. If so, then global production of precious metals will enter a period of annual declines. Prices are disconnected from this fundamental threat. The currently low prices further disincentivize exploration and development of new mines.
At under $15.00 an ounce, some primary silver mines are actually producing at a loss. This situation obviously can’t sustain itself for long.
Historically, when a metal sells for right near its cost of production, it tends to be a good long-term buy. But the silver market will put your patience to the test. Lately, it’s been consigned to the bargain bin.
It won’t stay there forever. But for those who simply want to accumulate ounces of hard money at the lowest cost, the bargain bin is the place to shop.
If you don’t mind buying silver products that may be tarnished, scratched, or dented, then you’ll want to check out bargain bin silver from Money Metals. Our bargain bin silver includes a mix of pure silver coins, silver rounds, and different silver bar sizes…all as close to the spot price as possible.
Bargain bin silver is for those investors who know that silver is silver, and know that it’s prudent to pay as little over the silver spot price as possible. Our bargain bin products come in any variety of forms. They could be highly scuffed sovereign minted coins. Or they could be unusual silver rounds or bars that we do not carry in bulk. But they’re all pure silver, and that’s what matters most.
Maximizing the number of ounces you get for your money is always going to be a winning strategy in an up market. If silver prices rise substantially, the value of your silver will rise in tandem. With any luck, you’ll be able to sell back into the market when silver is a hot commodity rather than the bargain it is today.
Well now, without further delay, let’s get right to this week’s exclusive interview.
Mike Gleason: It is my privilege now to welcome in Gerald Celente, publisher of the renowned Trends Journal. Mr. Celente is perhaps the most well-known trends forecaster in the world and a regular guest on many financial programs, including right here on the Money Metals Podcast.
Mr. Celente, it’s a pleasure as always, and thank you for joining us again.
Gerald Celente: Always my pleasure to be on, thank you.