Is It Time To Sell Your Physical Gold & Silver

Goldfix Market Rundown - December 21, 2023: Summary

Key Concepts:

• QE (Quantitative Easing): A monetary policy where a central bank purchases government bonds or other assets to increase the money supply and lower interest rates.
• LBMA (London Bullion Market Association): A wholesale over-the-counter market for precious metals.
• COMEX (Commodity Exchange Inc.): A commodity futures exchange, part of the CME Group, primarily trading metals.
• Margin Rates: The amount of equity an investor must maintain in a margin account. Higher margin rates can reduce leverage.
• Direct Shipping Model (Mining): A mining approach where ore is transported directly to an existing mill for processing, avoiding the capital expenditure of building a new mill and tailings facility.
• Secular Changes: Long-term shifts in economic or social trends.
• Mercantilism: An economic policy advocating for maximizing a nation's wealth through trade surpluses and government intervention.

I. Market Overview & Predictions (2026)

Vince Lansancy began the broadcast with three predictions for 2026. These predictions focus on shifts in the precious metals landscape, moving away from traditional market structures.

1. Swiss Refining Support: The Swiss will enter into an agreement with the US to support their refining industry, potentially as a response to tariffs.
2. LBMA-COMEX Integration: The LBMA will functionally become a subsidiary of the US COMEX, not in name, but in operational behavior.
3. CME Margin Increases: The CME will raise margins on COMEX futures to the point where they effectively operate as a spot market, requiring 100% margin coverage.
4. ETF & Stablecoin Dominance: Exchange-Traded Funds (ETFs) and stablecoins will become the primary investment vehicles for gold and silver in the US.

Lansancy posits that these changes will ultimately discourage the selling of physical gold and silver, prompting the question: “What price must silver and gold go to to force such behavior like that?”

Current market conditions as of the broadcast show 10-year yields unchanged, the dollar up two basis points, the S&P 500 up one point, Nasdaq up six, and the VIX slightly higher. Gold is fluctuating around unchanged at $2044.81, while silver is strong but off its highs, trading at $23.77. Copper is at $3.85, WTI crude oil is unchanged, natural gas is offered, Bitcoin and Ethereum are down slightly, and palladium and platinum are also down. The metals markets were stronger overnight, particularly silver and gold, but are now experiencing profit-taking. A higher premium for gold in Shanghai compared to London and the US suggests limited metal availability and potential for government allocation to drive prices higher.

II. Treasury Secretary Bent & Inflation Targets

The discussion then turned to comments made by Treasury Secretary Scott Bent regarding the Federal Reserve’s 2% inflation target. Bent suggested the Fed could revisit the 2% target once inflation is sustainably back at that level, potentially adopting a target range instead of a fixed point. He cautioned against changing the target while inflation remains above 2%, as it could signal tolerance for higher inflation.

Lansancy highlighted Bent’s criticism of post-pandemic Quantitative Easing (QE), arguing it disproportionately benefited those with the means to invest in stocks, effectively steering capital away from safe havens like gold. He noted that Bent’s point is valid, as QE extended too far on the yield curve, removing the safe haven aspect of bonds.

Lansancy clarified that the current actions of the Fed and Treasury are a form of QE, despite differing terminology, as they are engaging in bond purchases. However, he distinguished this from previous QE programs by noting that it is currently focused on shorter-term bonds (90 days) rather than the 10-year or 20-year, which he believes is a more prudent approach. He believes QE is necessary, but extending it too far can create bubbles. He stated, “QE is necessary, but we don’t want to go too far out.”

III. Silver Rally & Historical Parallels

The broadcast addressed a piece from Real Investment Advice (via Zero Hedge) analyzing the potential end of the current silver rally. The analysis draws parallels to the 1980 and 2011 silver rallies, suggesting a similar outcome is likely.

The key factor identified is the increasing margin rates, which will force out weaker leveraged longs as sovereigns release metals into the market. The analysis emphasizes that futures markets are declining in relevance as tools for global trade. This reinforces Lansancy’s earlier prediction: “do not sell your physical.”

IV. Merchandise Store & Charitable Initiative

Lansancy announced the launch of a merchandise store featuring “MAGA” and “MAGA Gold” hats, with all proceeds dedicated to purchasing more physical gold and silver. He emphasized that there are no profits, with 100% of the revenue going towards metal acquisition.

V. Dolly Van Silver & Contango Merger – Industry Synergies

The broadcast concluded with a segment featuring Rick Van Nieuwenheis of Contango and Sean Conin discussing their recent merger. The key takeaways from their discussion include:

• Long-Standing Relationship: Van Nieuwenheis and Conin have known each other for approximately 10 years and have respected each other’s accomplishments in the mining sector.
• Direct Shipping Model: Contango successfully implemented a “direct shipping model” at their Monto project, utilizing existing milling capacity at Fort Knox to quickly bring the project into production and generate cash flow.
• Synergies with Dolly Varden: The merger with Dolly Varden allows for the application of the direct shipping model to the Johnson Track project, which contains similar metal compositions to Dolly Varden’s deposits.
• Expanded Exploration Potential: The combined entity controls a significant land package (500,000 hectares) with substantial exploration potential across four districts.
• Shift from 5-Year to 20-Year Plan: The merger transforms a 5-year plan into a 20-year plan, demonstrating the long-term potential of the combined assets.
• Financial Strength: The merged company will have approximately $100 million in the bank and generate around $100 million in free cash flow annually.

Conclusion:

The Goldfix Market Rundown highlighted a confluence of factors potentially reshaping the precious metals landscape. From evolving monetary policy and potential shifts in inflation targets to structural changes in market dynamics and industry consolidation, the broadcast emphasized the importance of holding physical gold and silver as a hedge against these uncertainties. The predictions for 2026 suggest a move towards a system where traditional market structures are challenged, and the dominance of ETFs and stablecoins could further incentivize physical metal ownership. The Dolly Van Silver and Contango merger exemplifies a strategic approach to maximizing efficiency and unlocking value in the mining sector.