Brief Summary
This video features an interview with Dana Samson, president of American Gold Exchange, who provides an update on the gold and silver markets. She discusses the recent price movements, the impact of tariffs on physical buying, particularly in India and China, and the potential for future catalysts to drive prices higher. Samson emphasizes the significance of the current global physical buying spree, which she describes as a "run on the bank of gold," and its implications for price discovery in the precious metals market. She also touches on the silver squeeze in London, the increasing demand from Western investors, and her outlook for the US economy. Looking ahead to 2026, Samson suggests that gold and silver will continue to perform well, with silver potentially outperforming gold.
- Gold and silver markets are currently in a consolidation phase after a red-hot run driven by physical buying, primarily from India and China due to tariffs.
- A "run on the bank of gold" is occurring globally, with significant physical metal movements not seen since the 1970s.
- The silver market remains tight, particularly in London, due to increased demand and limited available supply.
- Western investors are starting to buy into the precious metals market, driven by the recent breakout run.
- Gold and silver are expected to perform well in the coming years, with silver potentially outperforming gold.
Intro
Charlotte Mloud from investing.com interviews Dana Samson, president of American Gold Exchange, to discuss the current state of the gold and silver markets. They aim to provide an update on Samson's previous forecast of $4,000 for gold and to analyze the recent pullback and consolidation phase.
Gold and silver prices
The recent surge in gold and silver prices was fueled by substantial physical buying, particularly from India, triggered by tariffs imposed by President Trump. This buying activity led to a speculative blowoff top, with gold and silver prices increasing rapidly. The market correction occurred when the COMEX raised margin requirements and the Diwali festival season ended. The consolidation phase is underway, with gold finding support around $3,900 and resistance at $4,050-$4,100, while silver finds support at $47 and resistance at $50. The silver market remains tight due to limited metal availability in London and significant holdings in COMEX warehouses, influenced by tariff concerns.
"Run on the bank of gold"
The US economy has been performing reasonably well, and the Federal Reserve has cut rates twice. However, further rate cuts may be delayed due to persistent inflation and stable employment. Future catalysts for market movement are uncertain, with potential influences including tariff adjustments. Over the past six months, there has been a global physical buying spree, accompanied by substantial movement of physical metal into COMEX warehouses, reaching record high levels. These significant physical metal movements, unseen since the 1970s, indicate a global "run on the bank of gold," characterized by widespread and deep demand.
Physical gold, silver moves
In late 2024 and early 2025, fears of tariffs on gold and silver increased the demand for physical metal in New York, making it more valuable than in London. This led to a significant transfer of metal from London to COMEX warehouses in the United States, with gold holdings more than doubling to 45 million ounces and silver holdings rising from 265 million ounces to 531 million ounces. This shift disproportionately affected the silver market due to London's smaller physical silver cushion compared to gold, where central banks store their gold holdings. In April, President Trump's increased tariffs on China to 145% spurred a massive buying spree by the Chinese public, driving the gold price up by $500. In August, tariffs on India for buying oil from Russia further fueled precious metals demand, particularly for silver during the Diwali festival, exacerbating the silver shortage in London.
Silver market remains tight
The London Bullion Market Association (LBMA) warehouses typically hold most of the world's gold and silver, but the recent metal movements have affected supplies in London. Silver is more sensitive to these shifts because central banks warehouse gold but not silver in London. Indian buying waves have further strained the already thin silver supplies. The rise of precious metals ETFs globally has also increased demand, pulling more metal out of the market. An Indian influencer with a large following has been advising his listeners to buy silver instead of gold, driving up the silver price. The surge in demand absorbed London's cushion, leading to a shortage and dysfunctional market conditions. Lenders increased lease rates due to the risk of not being able to replace the metal, halting market lubrication.
The west is starting to buy
The US investor had been more of a seller than a buyer until the recent breakout, which has brought the US public into the market as buyers for the first time in mass. The US stock market has been setting record highs, and the economy has been doing fairly well, leading to complacency among US investors. The biggest driver beyond fear of missing out for the US investors is fear. There's a growing sense of fear around the world with US trade policies and how the US is handling tariffs.
Hair trigger for gold, silver
The US economy is showing a K-shaped recovery, with the wealthy performing well while the lower 60% struggle, especially with comparative inflation. The government shutdown has created a blackout phase, making it difficult to obtain reliable economic statistics. Anecdotal evidence suggests the US economy is potentially vulnerable to a downturn. If the Federal Reserve cuts rates to stimulate the economy, it would be beneficial for metals. Despite the dollar and yields perking up, metals are not reacting as expected, indicating their global resilience. The precious metals markets are in a setup with a hair trigger due to high demand and a silver squeeze in London.
Best asset of 2026
Gold and silver are expected to perform well, with silver potentially outperforming gold. The Indian rupee has lost more purchasing power to gold and silver than any other currency, spurring Indian buying. The dollar is second in terms of loss of purchasing power relative to metals. Stocks could be vulnerable in the US. The current setup feels like 1978 for precious metals, with a hair trigger on the markets but lacking a catalyst for significant buying action in the US. A recession or lower rates in the US could turbocharge a parabolic run for gold and silver. There is a global buying wave from countries with a precious metals culture, driven by a loss of trust in the dollar.
Outro
The physical wave of buying is unprecedented in decades, representing a run on the bank that is not yet over. This extraordinary year for precious metals has been driven more by physical demand than anything else, indicating that the physical market is overtaking price discovery from the paper market.
