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Steve St. Angelo & Bob Coleman: Institutional Investors, GLD Flows, & Gold Prices, An Unusual Disconnect

Tom welcomes back Bob Coleman and Steve St. Angelo to discuss the precious metals markets. The market is undergoing a significant shift, with more sellers than buyers and dealers finding it difficult to sell at profitable prices. This has resulted in a collapse of bids and an increase in spread risk. There are also risks associated with storing metals with dealers due to counterparty risk, storage risk, and the structure programs they may be involved in.

The market has moved from retail demand to a paper market that is shorting precious metals, causing prices to rise but sentiment to remain negative. Investors are waiting for lower prices to buy again. The spike in silver prices could be due to increased inventory buying by wholesale dealers who then sell futures contracts to finance their purchases. This carry trade can become unsustainable if the price of silver rises and dealers are forced to buy back their futures contracts at a loss, potentially fueling further price increases.

High premiums in the silver market could indicate that someone is stuck on the wrong side of a trade and trying to exit, causing the futures market price to rise. The situation is not so much a physical issue as it is a paper problem, with CTAs holding large short positions in silver.

In the gold market, GLD flows and gold prices have historically moved together, but this relationship changed when interest rates started rising rapidly in mid-2022. Institutional investors have not sold much of their gold or GLD, suggesting that most of the selling is happening outside the institutional market. The strong demand for Treasuries at high-interest rates and reduced central bank gold purchases might be driving the price of gold.

There has been a shift in capital allocation from ETFs holding metals to other asset classes, particularly technology stocks. This trend poses challenges for precious metal investors but also creates opportunities for those who can identify value and navigate the current market conditions. They note that there is a risk of reaching a “max stupid point” where the market becomes overheated and unsustainable.

Market psychology appears to be shifting towards a dot-com bubble mentality, with everyone chasing after Bitcoin and other high-tech investments, making it difficult for precious metal investors to make their case. Bob also warns of the risks associated with storing metals with dealers and suggests that investors should ensure they are doing business with a reputable and sustainable company.

Gold and silver markets are heavily influenced by paper trading, hedging, financialization, and cost of production. Shifts in demand from east to west and short squeezes in the futures market can impact prices. ETFs that hold physical metals but issue new shares based on demand carry a risk of decreasing premiums to net asset value if the price of the metal falls. It is important to understand the complexities of paper trading and hedging in these markets, as well as the potential for market manipulation by authorized participants and market makers.

Time Stamp References:
0:00 – Introduction
0:42 – Physical Demand
14:06 – Recent Premiums
17:21 – Public Sentiment
20:33 – Silver Wholesale Market
23:25 – Who’s on the Wrong Side?
32:10 – SLV/GLD & Retail Sales
36:30 – Gold Drivers & Treasuries
45:10 – Asset Values ETFS & Crypto
47:52 – Flows Out of ETFS
53:18 – Sentiment & Solvency
58:27 – Know Your Counterparty
1:04:28 – SLV Borrowing Costs?
1:07:45 – Current Rally Outlook
1:11:20 – Bitcoin Mining Stocks
1:13:27 – Treasuries & Collateral
1:14:48 – Public Momentum in PMs
1:18:22 – NatGas & Energy Inflation
1:21:05 – Central Bank Buying
1:22:34 – Financialization & ETFs
1:27:00 – U.S. Debt & Treasuries
1:29:40 – Silver & Flows
1:31:08 – Geopolitical Suppression?
1:34:10 – Eastern Price & Silver
1:43:53 – Price Impacts of Shorts
1:46:38 – GME Squeeze & Markets
1:52:33 – GLD/SLV Withdrawals
1:58:17 – West-East Metal Flows
2:00:00 – Overseas Storage?
2:04:48 – Inflation Buying
2:06:10 – Silver & Central Banks
2:12:52 – Concluding Thoughts
2:18:40 – Wrap Up

Guest Links:

Independent researcher Steve St. Angelo (SRSrocco) started to invest in precious metals in 2002. Later on, in 2008, he began researching areas of the gold and silver market that, curiously, most of the precious metal analyst community have left unexplored. These areas include how energy and the falling EROI – Energy Returned On Invested – stand to impact the mining industry, precious metals, paper assets, and the overall economy.

Steve considers studying the impacts of EROI one of the most important aspects of his energy research. For the past several years, he has written scholarly articles on some of the top precious metals and financial websites.

You can find many of Steve’s articles on noteworthy sites, such as GoldSeek-SilverSeek, Market Oracle, Financial Sense,, SilverDoctors, TFMetals Report, Outsiderclub, SGTreport, BrotherJohnF, Hartgeld, Der-Klare-Blick, PeakProsperity, SilverStrategies, DollarCollapse, FurtureMoneyTrends, Sharpspixley, FinancialSurvivalNetwork, PMBull, Deviantinvestor, PMBug, Wealthwire, and ZeroHedge.

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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