- Gold Switzerland: The impending gold rush: major revaluation of precious metals on the horizon
- Schiffgold: Steady migration of gold from the West to the East
- Schiffgold: Surging demand for silver in solar energy production
The Impending Gold Rush: Major Revaluation of Precious Metals on the Horizon
The article by Egon von Greyerz highlights an impending major revaluation of gold and precious metals. The author suggests that the current global financial landscape presents a unique investment and wealth preservation opportunity. The Western Empire is witnessing a decline, while the Eastern and Southern Empires, represented by groups like BRICS and SCO, are gaining significance.
With the potential merging of these groups, gold is expected to play a central role, and the East looks set for rapid growth in the coming decades. The article also discusses the historical role of the US dollar and its connection to gold, emphasizing the shift towards currencies backed by commodities, with gold leading the way.
The author critiques the lack of strong statesmen in the West and predicts a tectonic shift away from fiat money towards commodity-based currencies. Holding Western sovereign debt is seen as a risky move, and investing in commodity-based assets, especially precious metals, is suggested as a growth area for the future.
Von Greyerz emphasizes the importance of physical gold and silver as wealth preservation tools, especially as global energy costs rise and major gold discoveries decline. The article encourages investors to consider gold as a hedge against currency crises and advocates Switzerland as a potential gold hub. Overall, the author believes that the scene is set for a significant revaluation of gold and the entire precious metals sector.
Gold’s steady migration from the West to the East
In the article, it is highlighted that there has been a steady migration of gold from the West to the East over the past three decades. China and India are described as “super consumers” of gold, accounting for nearly 50% of the world’s total gold demand. Economic growth and cultural affinity for gold have contributed to the significant rise in gold demand in the East. In India, the demand for gold increased substantially in the early to mid-1990s after the government implemented policy changes that freed up the gold market. Gold is not just a luxury item in India; even people with lower incomes purchase gold, and approximately 87% of households in the country own some amount of gold.
Similarly, China experienced a surge in gold consumption after the government eased restrictions on gold purchases in the 1990s. China has become the world’s largest gold-consuming country. The demand for gold in the East is also evident in central banks’ gold purchases, with China, India, Turkey, and Singapore consistently increasing their gold reserves.
In late 2022, there was a micro-level migration of gold from West to East, where Western investors, particularly institutional investors, were selling off gold while Asian buyers took advantage of lower prices to acquire gold jewelry, coins, and bars.
In the East, gold is widely used as the primary form of savings and wealth preservation. It holds a significant cultural and historical value, with people viewing it as a reliable way to retain purchasing power. This contrasts with the West, where financialization has led to gold being gradually removed from day-to-day life. However, in times of financial crisis, Western investors may realize the importance of holding physical gold as a form of insurance for their wealth.
Surging Demand for Silver in Solar Energy Production
As the demand for green energy surges, the production of solar panels is driving a significant need for silver. A study suggests that solar cells could consume around 85-98% of the world’s silver reserves by 2050.
The outstanding electrical conductivity of silver makes it crucial for transferring electrical charges in solar cells. Even with advancements in technology, the demand for silver is expected to rise due to the industry’s growth.
Despite potential recycling efforts, the increasing silver demand from the photovoltaic industry poses supply and price risks. As governments invest heavily in renewable energy, the solar industry’s continuous growth will likely sustain the demand for silver in the foreseeable future.