Fort Kobbe Vaults Newsletter

A look at Gold and Silver Charts (02.02.2023)

Yeah, not much happens...at first. Hedgeye cartoon
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In this current world climate we should be asking ourselves an extremely serious question. 

“What really constitutes freedom and in what ways are our freedoms being stripped and restricted and most importantly how do we reverse the restrictions imposed upon us?”

Take a look at our banking systems and the requirements to open an account. The war against cash, the restrictions on the access to your cash, as well as the detailed tracking of your spending included in this the onerous reporting requirements on any business in respect of your cash expenditure. 

The potential for “bail-in’s”, the tracking of every movement, the reporting requirements for business and the list of oppressive actions goes on and on. 

One of the many indicators displaying the nonsensical world of ‘economics’ we are living with would be  the under reporting of Consumer Inflation according to ShadowStats.

Consumer Inflation - official vs ShadowStats (1980-based)alternate

Below we see Central Bank gold purchases. Now who is buying the barbarous relic?

Central Bank gold purchases hit highest since 1967

What about the US Dollar slowly losing value?

$USD US dollar - Cash Settle (EOD) ICE

Platinum

In the last 12 months we have seen increased interest amongst our clients who are looking to purchase and hold physical platinum, which I have discouraged until recently because the local market for physical platinum has been so thin. This appears to no longer be the case.

About 50% of Platinum is used for catalytic converters, the balance for jewelry, other special applications and investment. Platinum looks extremely cheap at around $1000.00 bearing in mind that it is about fifteen times rarer than gold. South Africa holds over 80% of the world’s reserves,  with the situation in South Africa politically and (non) availability of electricity in South Africa, supply is tight. Russia supplies about 11% of world production, that source of platinum is not easily available at present, so Canada is left to supply platinum requirements.

Platinum supply is increasing annually by 2% while demand is increasing at about 19%, this cannot continue for very long before supply dries up or prices rise to more realistic levels or both. 

As more electric vehicles are manufactured, less catalytic converters will be required, but I have a sneaky feeling that hydrogen powered vehicles are close on the heels of electric vehicles and they need platinum in their processors. Toyota has shown its hydrogen powered vehicles and Elon Musk has alluded to it.

Holding physical platinum may be a good move when  looking to the future.

Silver

Silver has many of the features that gold has, in addition it is used as an industrial metal. Many new uses as well as traditional uses in the industrial field exist. About half of available production is used in jewelry. It is also used in photovoltaic cells, medical applications, water purification, electronics and more, too many to list here. 

Silver is leveraged to gold, so one can look forward to larger gains and larger losses compared to gold.

From a supply perspective, there are very few pure silver mines in existence, the majority of supply arising from recycling and silver recovered as a byproduct of other mining operations, such as copper zinc etc. Restricted supply should normally lead to higher prices and in my opinion will in the future.

I expect silver demand to increase, with little prospect of a surge in supply unless the silver price becomes more encouraging for prospectors and miners to search for and to mine lower grade resources.

The technical picture for an increase in silver prices looks encouraging, sadly forces greater than us appear to still be in a position to control prices, not to our advantage other than as an excellent buying opportunity, at present.

TodayLast Week
Gold Price$1,954.00$1,935.00
Silver Price$24.40$23.77
Gold: Silver Ratio80.06:181.37:1
Gold Miners Bullish Percent Index55.1755.17
Dollar Index101.13101.78
Dow: Gold Ratio
(BahaUS 34001.00/Gold price,1954.00)
17.4017.28
Current USA inflation rate (Dept. of Statistics)6.5%7.1%

Gold’s low of the week was $1,900.00 and the high was $1,961.00, now trading at around $1,953.00. An extremely tight range.

The monthly and daily chart for Gold is neutral, looking overbought.

$GOLD Gold Continuous Contract (EOD) CME 1 February, 2023
For interest’s sake here is a weekly point and figure chart showing the current position.
$GOLD Gold Continuous Contract (EOD) CME P&F Pattern
The low for Silver this week was $23.00 and the high $24.53, trading around $24.39 at present.
Silver on the monthly chart is neutral but faltering in momentum and volume. The weekly chart is holding but weakening. The daily chart gave a sell last Tuesday then reversed, gave a sell again yesterday and based on last night’s action appears to be reversing again. Let’s give it time to settle.
$SILVER Silver Continuous Contract (EOD) 1 February, 2023
Our partner has stock of both gold and silver in our vaults available in Panama, please contact us for more information.

On the Stockcharts.com charts, the blue vertical lines are our proprietary system buy signals and the red vertical lines are system sell signals – for information purposes only
Please contact us to arrange the purchase and storage of your gold and silver requirements in a safe, insured, location outside of your jurisdiction.
This is my interpretation of the market and is not to be taken as financial advice. Before making any buy or sell decisions I recommend that you consult with your professional financial advisor

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