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Bob Coleman: What Happens to Metals in the Next Market Crash

Tom welcomes back Bob Coleman from Idaho Armored Vaults. Bob discusses the 2021 demand picture for gold and silver and how the squeeze early in the year took the market by storm. Before covid, the industry was fairly calm but afterward, logistics became far more complicated. We’re seeing an inflationary melt-up but the prices of metals remain stagnant.

The metal consumer has been in a buyer beware position for the last year. Products were marked up in many cases and investors overpaid for metals. When prices finally do move higher we will see some secondary supply come back into the market. That supply will hamper premiums and will impact prices.

Silver tends to always catch someone off guard and once we get past thirty prices could move fairly quickly. The typical western investor tends to buy when prices are heading upwards.

In the last couple of weeks, we’ve seen a small price increase in the thousand-ounce bar market. Some of which could just be logistics issues due to holidays. Many of the sovereign coin markets including European mints have had problems sourcing supply and prices are moving higher.

Bob discusses the benefits and pitfalls of pooled metal programs. The concerns are around unallocated programs where you may not be able to take delivery. Many of these programs are likely fractional reserve metal pools and they are allowed to settle in cash. These types of programs work until they don’t and then they will probably change their rules.

Gold could do well during a Fed rate hike. Sometimes gold will move up with the tightening and that could be due to a lack of balance sheet expansion. The Fed has a short time window in which they can pull back rates. Any number of events could bring a rapid delay or even end the taper. Markets have enough liquidity for now but that could change fairly quickly and bring pressure on the general market.

When markets get rough people will flood into physical assets like gold and silver and then metals will have their day in the sun.

Time Stamp References:
0:00 – Introduction
0:42 – Year in Review
3:00 – Premiums & Supply
7:43 – Price Resistance
11:02 – Bar Market & Mints
18:19 – Pool Programs
24:41 – Hypothecation & Shares
30:20 – Powell & The Taper
40:32 – Inflation & Q.E.
44:07 – Paper Leverage & Demand
47:10 – Hyperinflation & Turkey
49:14 – Wrap Up

Talking Points From This Episode

  • Performance of physical metal markets in 2021.
  • Expectations for silver and how price moves might surprise.
  • Risks and benefits of pooled metal programs.
  • Thoughts on gold during the next Fed taper and rate hikes.

Guest Links:

Bob Coleman is a Registered Investment Advisor since 1992. In 2001, he founded Profits Plus Capital Management, LLC (RIA) and Dollars and Sense Growth Fund. Recognizing the necessity for physical metal storage, he founded Idaho Armored Vaults and Gold Silver Vault in 2008. They are a distinguished and respected leader in the precious metals industry specializing in storage, transportation, shipping logistics, and security.

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