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One of the worst kept secrets in the precious metal’s world is the fact that the gold versus silver ratio has really been out of historical context.Gold surged to record highs recently while silver has lagged. As Kitco News put it “Gold stole the show on Friday as asset prices from stocks to cryptos saw declines following Thursday’s euphoric rally higher, while the yellow metal kept the party going, climbing above $2,620 for the first time in history to close out the trading week. “The reasons for the resurgence in gold as we have talked about before are many folds. Part of it is the confidence in the leadership of the United States.President Biden’s while spending and inefficient spending has caused the US budget deficit to explode to record high hitting over a trillion dollars.Reuters reported last week that the U.S. budget deficit reached $1.897 trillion for the first 11 months of the 2024 fiscal year, the Treasury Department said on Thursday, as annual interest costs on the public debt topped $1 trillion for the first time.The Treasury said the fiscal 2024 deficit through August was up 24% from a $1.525 trillion deficit in the comparable year-ago period, partly due to higher interest rates but also because of a $319 billion reversal of costs in August 2023 for President Joe Biden’s student loan forgiveness program, which was struck down by the U.S. Supreme Court. Last year’s reduction was not repeated this year.The market lacks the confidence that the Biden administration has the wherewithal or the knowledge to understand the gravity of their actions on the global economy.At the same time the Biden administration’s foreign policy has left the world closer to a World War.This has led to more buying of gold versus silver as a haven against the madness that we have seen on the political front.Allowing Russia to invade Ukraine was a major mistake of the Biden administration.Everybody should remember that Biden administration said that a small incursion to Ukraine would be OK. Yet those unleased major problems and has increased the risk of war, inflation and currency devaluation.People also must remember that under President Trump it was the only time that Russia did not invade one of its neighbors.And Biden’s lifting of the sanctions or failure to enforce sanctions on Iran whatever way you want to look at it also funded Hezbollah.the Houthi rebels and potentially the war that we’re seeing between Israel and Hamas and Hezbollah this madness has caused more risk aversion into the gold market.At the same time the Federal Reserve decision to get on a rate cutting cycle also is going to feed into the goal bullishness weakness People with assets in dollars will be looking to gold.maintain their will just looking to gold as at all tentative silver on the other hand heads lagged a little bit, we don’t see so we’re getting a bounce from record central bank buying like we have in gold. We have also seen weakness in the manufacturing sector across the globe which is hurting silvers demand from consumption viewpointOvernight data from the eurozone showed that their purchasing manager flash index (PMI) came in at a weaker than expected 50.5. The expectation was for the PMI to come in at 52.3 so a big miss. Also the manufacturing index also missed, coming in at 44.8 versus an expectation of 45.7.In the UK things weren’t much better.The UK composite PMI flash Actual 52.9 (Forecast 53.5, Previous 53.8) the UK Manufacturing PMI Flash Actual 51.5 (Forecast 52.2, Previous 52.5) this should increase the odds of the EU and the UK easing rates in the future. It should also support gold. Yet Siver should get a bounce because its cheap and folks may look for an alternative to gold.Kitco reported that Gold’s recent rally has all but wiped out the impact of India’s import duty cut, while Switzerland’s August gold exports showed nothing going to China, raising concerns that Asian demand could remain below seasonal norms through Q4.Indian gold demand improved slightly this week but remained far below normal seasonal levels as the yellow metal continued to trade near record highs, according to a Reuters report.India is the world’s second-largest gold consumer and a major importer, but domestic demand continued to be depressed as local prices hovered near July’s all-time high.Chinese dealers also increased their discounts by as much as $14 over global spot prices compared with last week’s $10 discount, while in Hong Kong, gold sold close to the international benchmark.Hugo Pascal, precious metals trader at Improved, told Reuters that demand in China also remains weak, which is impacting wholesale demand in Hong Kong.Wholesale demand on the mainland has also been weak, with the World Gold Council noting that August withdrawals from the Shanghai Gold Exchange are down 37% from a year earlier, Bloomberg reported. August and September typically see higher withdrawals as jewelers increase their stock ahead of gold fairs and the National Day holiday.Physical investment demand has remained strong, however, with bars and coins continuing to attract buyers. Data from the China Gold Council suggested a 27% decline in jewelry purchases in the first half of 2024, but only a 6% fall in total demand.Meanwhile, in Japan, gold was selling at a $1 discount, and the market was seeing more sellers than buyers at these prices, according to a Tokyo-based trader.Copper should also respond as the Biden Administration doubles down on its electric car obsession even as it is a keynote failure of this administration. They apparently want to run our deficit higher.Oil Price reports that he Biden Administration is backing a $1-billion fund created by asset management firm Monroe Capital LLC to facilitate access to lower-cost capital for small- and medium-sized auto manufacturers planning to invest in transitioning to electric vehicle (EV) manufacturing. The White House has selected Monroe Capital to develop a first-of-its-kind investment strategy focused on supporting businesses operating in the U.S. automotive supply chain, the asset management firm said on Monday. Monroe intends to launch the “Drive Forward Fund LP” to help address the White House’s initiative to back new commitments to support the auto workforce and increase capital access for auto suppliers.The Drive Forward Fund will seek to raise up to $1 billion and focus on investing in companies that play a pivotal role in fueling growth and innovation within the $1 trillion U.S. automotive industry, Monroe said.More By This Author:The Energy Report Fed Fighters – Friday, September 20In the Fed’s Hands – Manic Metals ReportThe Energy Report: Next Level – Wednesday, September 18
