– You guys know I have a very optimistic view for precious metals prices, gold, silver, platinum, palladium, all of them. There’s reasons for it. I’m gonna tell you what’s going on, and I’ll show ya everything you need to know about it right now. Check this out. Now, I’m sure you guys have seen this picture at some point, or many points, in your life. It changed the Vietnam War. It’s an absolutely pivotal photo. It doesn’t have anything to do with the gold prices I’m gonna be talking about, I just wanted to share with you something about this girl that I just found out about that blew my mind the other day.

I’ll tell ya that a little bit later in the video, and we’ll get into all the good stuff with the gold right now. This chart is provided by the World Gold Council. It’s in US dollars, showing you gold was trading at at that point. If you go back, it goes all the way back to 1970 when gold was at $35, but the important point here, what you need to look at, is to compare it to other currencies. If you look at the Canadian dollar, it’s going to trade about equal to the American dollar, in terms of how much it cost for an ounce of gold, or any amount of gold. It doesn’t matter, ounce, bucket, ton, gram, kilogram. Great British pound compared to the American dollar, price of gold, the euro.

It gives you an idea, but what we’ll do is we’re gonna zoom in a bit here. Get rid of that pound. What I’m trying to demonstrate is how gold doesn’t actually have a price, per se. It’s just which currency are you buying it with. Sometimes, the currency you have, the American dollar for most of you listening, is going to increase or decrease in price. That’s why people don’t understand why they see the price of gold increasing. A lot of the times, that’s basically based on the fact that the American dollar was decreasing over that time, and vice versa, as well. The stronger the dollar gets, the lower the price of gold. Back here, you can see that the euro only took 964 to buy an ounce of gold, while the American dollar, it took $1,277.

Then what happened was that they met up at that point. What’s happened, then, is that the euro’s gotten weaker. It’s taking more euros to buy the same amount of gold from this point until this point. This is a three-year chart. Over that timeframe, it suddenly took a lot more euros, even though the American dollar was about the same. You can look at things like that and see the divergences where the euro and price of gold in US dollars was about the same. Then all the sudden, going a little further, this is a one-year chart now, you see there’s a big spread between the US dollar cost of gold and the euro cost of gold.

What this represents is that either the euro got stronger, or the US dollar got weaker or had less purchasing power. This is a two-year chart of GORO, that’s Gold Resource Corporation. It is a stock we did select for subscribers of peterleeds.com. I’m gonna compare it to the Gold and Silver Index. Now, here’s the Gold and Silver Index. This is GORO, a gold mining company. The way this chart works is it’s a comparative chart where they both start at zero, from two years ago, and then it compares how they’ve done since then. Over the two years, this stock is up 35%, but the overall Gold and Silver Index is up almost 60%.

You can see that GORO did better sometimes, but not overall, compared to the Gold/Silver Index over this two-year period. But now I’ve added a couple more companies to this. This is ASM and AUY, both stocks we’ve selected for peterleeds.com subscribers. You can see that GORO did worse, comparatively, and this is a six-month chart, than the other mining companies and the index. But the point I’m trying to make is the index, which is this line here, compared to some individual gold mining companies, you’ll see that there is a similarity to the way that they’re trading. When we talk about trading in sympathy, this is what we’re talking about. Sometimes the gold mining companies could all rise or fall together. When you see a stock that is a gold mining company, and it suddenly drops off a lot more than the overall industry, but the rest of the industry is holding strong or going in the other direction or not dropping quite so much, that may be a problem with the company, a company-specific risk, where if the entire industry trades at a same way as one another, then you can know that that’s trading in sympathy, or market-driven risk.

You need to find a good gold mining company that has all the right things going for it, and then you have the American dollar decreasing in value. Then at the same time, the price of gold increasing and the entire gold mining industry going on the upswing. But besides a declining value of the US dollar, and the companies becoming more efficient and making greater profits, lowering their production costs, there’s also the global demand trends to look at when it comes to gold.

This is a net global demand trend. Each of these chart lines is one quarter. Quarter one, quarter two, quarter three, next year, next year. It’s a net thing. If there’s 100 tons of gold being bought by central banks, and 40 tons were sold, then the net is 60 tons purchased. This line going down below the baseline, that’s overall in that quarter, more gold was sold by central banks worldwide than was bought.

But going back all the way to 2010, there’s only been one three-month period where there was a small decline in the total central bank purchases. But then going all the way up to where we are today, you can see that every quarter, there’s been significant demand, about 100 tons or more every quarter by central banks worldwide. As gold goes, so will silver, palladium, platinum, all of that stuff. What’s happening is there is a little bit lower buying demand, but there is still that demand. If there’s 80 tons of gold being bought over and above any sales of gold worldwide by central bank purchases, that’s pretty significant. That’s a strong buying demand. Just because the buying demand was even higher back here doesn’t mean that this is insignificant, especially when we’ve hit peak gold, and there is a limited supply to it. Yes, we can find new gold deposits, but even more quickly than we’re finding them, the gold that is available is being used up. We expect that this’ll just be a temporary decline, anyways, in the sense that it’s still net positive, in terms of buying gold.

We think that will rebound back to higher levels in the coming months, quarters and years as gold comes back in fashion. Right now, precious metals are so out of favor, so horribly ignored by investors. Most people who are financial advisors telling people what they should buy and not buy and what they should invest in, these people nowadays, they’re kids. They haven’t been around to see a time when gold really mattered to people’s assets and their buying power and their purchasing power. We do expect that this gold demand will increase again. Right now, precious metals are so out of favor. Nobody’s giving them any credence. They haven’t seen the power of gold and how to use it as a hedge against inflation, a store of value when currencies decline. This is just gonna become more and more of a return to even greater demand when gold does wake up and precious metals do wake up. We do believe that’s about to happen. But who’s doing the buying? You break it out, you can see that in the first 1/2 of the year, Russia bought 84 tons of gold.

China, 61 tons. That’s significant. You might see that there’s a little bit of selling here, but it’s such small amounts. Canada sold two tons of gold. That’s nothing. Next quarter, maybe they buy two tons. Then the quarter after that, maybe they sell one ton. These are small countries. They are not very active players with gold purchases. You can see Russia and China, both been just gobbling up gold. This is the first 1/2 of the year. 84 tons, 61 tons. They’ve been buying going back several years. But check this out. Venezuela and Turkey, two countries that are financially not in great shape. Venezuela is in a state of chaos, is complete social disorder, and it has been for a few years. It’s getting really bad. A lot of that has to do with the absolutely declining price of oil.

Venezuela does okay with their economy if oil’s closer to $100 a barrel. They’re having all sorts of problems now. Part of what they’re doing to help mitigate some of this craziness that’s going on over there, they’re selling their gold holdings. That’s what’s putting some gold back on the market. This is a one-off kind of idea, though, where Venezuela doesn’t have enough gold that they would actually keep putting a dent into things by selling it. They eventually will stop their sales, but this is what has made gold demand trends soften a lot. But going back to this chart, this is the net gold demand. You remember the first 1/2 of the year, Venezuela has dumped 79 tons of gold onto the market. Then you’re looking at gold trends still being positive, about 70 tons, 105 tons.

That is even with these one-time, non-recurring sales of tons of gold by Venezuela. This will not be a factor going forward. Even Turkey, they don’t have that much gold to be able to sell much more. A lot of this has to do with the social unrest and the economic unrest that they’re facing. This will either pass or it’ll just end very badly, but either way, these gold sales will be stopping. They’re the only significant ones. Then the next significant one is Jordan at seven tons, which is completely overshadowed by the actual buying that’s been going on. I do not expect Russia or China to slow down their gold buying purchases at any time soon. Even China has been masking a lot of their purchases by using third-party buyers so that it’s harder to tell how much gold they’ve been buying. Some of these numbers are only coming out now. It’s turning out that China has been accumulating a lot more gold than they let on early on. Even though everybody knew that they were doing that, they didn’t know how much.

They’re starting to realize. I think that the world’s starting to wake up to the power of gold. Now, people say, “Oh, gold’s not a good investment. “It’s ridiculous. “Why would anyone buy it?” I don’t know. Why would Russia buy 84 tons of gold in a six-month period, and do it in a six-month period before that, and they’re gonna keep on doing it going forward? Why would they do that for an asset that has no value? Or there’s no point in buying it, that they should be buying shares of Tesla and Amazon. Because there’s a change in the way that global economies are working. A lot of that, the strength that’s gonna back it up, is going to be derived from, a lot of these countries, the clout that they have, we derive from how much gold reserves they have, in addition to their gross domestic product and how their overall economy performs.

It’s a measure of stability. If Russia is sitting on 1,000 tons of gold, then you can be more confident in the fact that their economy actually is more solid. As I promised you, remember that picture of that naked girl running from the napalm attack? Which was actually called by the US commanders to drop the napalm, but it was the South Vietnamese Army that actually did the drop. Well, this is her now. She’s a motivational speaker. She’s doing well, but the thing that blew my mind, because that is such an iconic and historically monumental photo, was that she lives about 20 minutes away (laughter) from where I am right now. I never knew that. I just found out the other day. Somebody, one of my friends, found out about that and let me know.

It’s just unbelievable to see that iconic photo, and always have everything that it meant to you over your whole life in your mind, and then you find out that the actual person from that photo is actually living about 15, 20 minutes away from me. I just thought that was incredibly interesting, and it blew my mind. It’s kind of a feel-good story, even though it’s such a horrible story in the first place.

If you invest in precious metals or even ETFs or gold mining stocks and precious metals mining stocks, then I hope that today’s video was helpful. You can see that our outlook is very optimistic. We do believe we’re gonna be proven dramatically right on this whole topic. We’ll see how it goes from here. We’ll keep an eye on it, but I do think that a lot of the forces that are gonna be price drivers for precious metals are all setting up perfectly right now, and they’re all starting to kick in right now. Please keep an eye on what we’re talking about. Subscribe to the channel to do that. Click on the bell beside where you subscribe so you get all the alerts when they come out. We love helping you guys out. I hope that you found this helpful, and we’ll talk to you so soon. Thank you, take care..