Important Gold & Silver Bull Market Indicators (Uncut) 02-09-2025

When Will Central Banks Stop Buying Gold? Important Gold & Silver Bull Market Indicators

Hey everyone, welcome to Bald Guy Money. I am Bald Guy, coming to you from my hotel room here in Rome, Italy. And for the last three years, the price of gold has been ripping to the upside.

In fact, since bottoming out in October 2022, the spot price of gold is up 75% and has started to pull silver up with it, because where gold goes, silver will usually follow. But as many of you know, something that has been totally unique in this bull run is that prices have been moving up, despite the fact that regular investors are selling their gold. And you can see that with the gold ETF inflows versus outflows over the last three years in this image here.

And this is a trend we’re also seeing in the silver ETFs, which have experienced a lot of outflow over the past three years, just like gold. And it’s even becoming visible in the with many people trying to sell their silver for $30 an ounce, as I suppose they’re either trying to pay their bills or they’re thinking they’re going to sell it now and buy it back later at a better price. Now, this, of course, forces us to ask the question, how are metals making these moves if retail investors are not participating in this bull market? And it will come as no surprise to you all that in the case of gold, it is central bank buying that is fueling these price gains as they now consume more than 20% of annual gold production.

But the more important question that nobody is asking is, can this level of central bank buying be sustained? And if so, for how long? Because if central banks stop buying gold, that could mean an abrupt end to this metals bull market and a significant downturn in the price of gold, which would be immediately followed by the price of silver. So to manage your expectations and give you a realistic look at how long we can expect this bull market in precious metals to continue, I dug into the numbers to see how much gold central banks have today versus how much they theoretically need in order to figure out how much gold we can still expect to see them buy. And by using their current purchase sizes as a benchmark, how many more years we should expect to see them participating at current levels in the gold market, which should be a good indicator of how much longer we can expect gold and silver to continue moving in the upward direction.

Once that’s covered, I will answer a viewer question or should I say challenge on how much gold and silver a person needs to have. So please be sure to watch to the very end for that. Now, just before we dive in, please remember to check out www.summitmetals.com if you want to buy gold and silver at a great price from a dealer you can trust, including five ounces of silver at spot.

If you use code new customer link to this deal is in the video description below. Okay. So jumping in, we have to answer the question of how much gold the central banks of the world have.

And although we can’t be absolutely certain because there may be gold that doesn’t exist as some think may be the case with us gold reserves, or even that some of the gold is being kept off record as some think is the case with China. The fact is we have a pretty good idea of how much gold central banks are holding. And that number, which is a total for all the world’s central banks is 32,860 metric tons of gold, which is a little more than a billion Troy ounces and approximately 10.6% of all the gold that has been mined in the history of man, according to the Royal Mint.

Now you may think that’s a lot. You may think that’s not a lot, but coming back to this image here, as things stand today, central banks are buying up more than 20% of the global annual production of gold. And if that number is indicative of how much of the world’s supply they’d like to hold, then it could mean that central banks are looking to add another 33,000 metric tons of gold to their coffers, which again is just above 1 billion Troy ounces.

And at 2024 production levels would mean central banks could be looking to swallow up nearly seven years of gold production at about 20% per year, which means this could theoretically go on for another 35 years. Yes, you heard that right. 35 years.

Now I assume some of you watching this video are probably saying, but most major central banks already have enough gold. Less and less are going to be buying as time goes on. And to those of you who are saying that, I have this to say.

When looking into the holdings of the world’s top 23 economies, I started looking at how much they hold in comparison to their GDP. And I took a ratio of those holdings by dividing the amount of gold they hold in metric tons by their GDP measured in billions of US dollars. And that’s the number you can see here in this column marked gold to GDP ratio.

And what I found was that of the top 23 economies, 14 were holding less gold as a ratio of their GDP versus the average, with five of the top six economies, including mega stacker China, falling underweight based on its gold holding to GDP ratio, in addition to that, some extremely developed economies are frighteningly underweight on their gold holdings, like the UK, Australia, and South Korea, all of which have respectable GDP levels while holding barely any gold, but not to be outdone by my native country, Canada, which is the only country on the list that doesn’t have any gold at all. So what does this all mean? Well, first off, it confirms that central banks aren’t done buying gold, not by a long shot, especially as having gold reserves increases in importance over the next 15 years, as it has done so over the last 15 years, since central banks became net buyers of gold again, which was in 2010. That said, I don’t fully buy the 35 year central bank driven bull market for precious metals story, because although I believe gold and silver are going to continue to play increasingly important roles in our financial lives, moving forward, we will likely reach a level of stabilization long before 2060.

So to give this exercise a dose of common sense, as I always like to do, I simply looked at how much gold the world’s top central banks would need to reach the current average gold to GDP ratio as a realistic target to where their stacking game is going. And when I ran the numbers, I found that banks that are currently underway on gold holdings would need to buy a combined 404 million troy ounces, so 12,581 metric tons of gold to get where they need to be, which if purchased at the current central bank pace of purchasing, which is 1045 metric tons per year, this realistically indicates that if we are in fact returning to a system that emphasizes central bank gold reserves, which I think we are, and I think there’s a lot of evidence to support that, we could be looking at 12 more years of bullish price action on gold, which leads me to believe that silver would also be making big moves along with it over the next 12 years. And if you want me to take a separate look into silver, please let me know in the comments section below.

Now, just before we get to this video’s viewer question, which is on the topic of how much gold and silver to own, please remember that if you want to diversify your hard asset portfolio into land for as little as $1,000, to please visit channel partner landofland.com. They make buying land easy, the process is transparent, and by using promo code baldguy, they will give you $300 off from any piece of land you buy from them, whether it’s at auction or handpicked from their online offer. So check them out at landofland.com or call them at the number on the screen to get started, as many of my viewers already have. So this week’s question comes from a viewer who watched my midweek bonus video with Eric Roach, who is the man who invented online stock trading.

And if you haven’t seen that video, I think it’s a great lesson on the reasons why finance experts and high net worth individuals are increasingly choosing gold as a savings mechanism after years of ignoring it, so please check that video out. But in that video, Eric, who is admittedly newer to precious metals, mentions the importance of having 2-10% of your net worth in metals for stability. And I know many of you have much more than 2-10%, and I suspect Steve G, who is asking, how does 2% give you stability, is one of those people.

And look, it’s a fair question, and I’ve received criticism about how much gold and silver I have as a percentage of my net worth when I revealed that number back in 2024. But what I want you all to remember, and this is a great rule of thumb for stackers who are under the age of 40, is that the higher your net worth goes, especially if you’re a business owner or entrepreneur who has a lot of capital working for you in different ways, the lower this number is going to be. Not because gold and silver are less important to you, but simply because as you become wealthier, remember, 1% of 10 million is much more than 10% of 100,000.

So, when we talk about gold and silver ownership, I usually try to focus on concrete amounts as opposed to percentage of net worth, and those of you who have been watching me for a long time will know that, and will probably recognize my 5 ounces of gold and 200 ounces of silver minimum stacking target that I presented back in 2021, which back then covered a little more than 3 months of necessary living expenses as per the numbers from the US Bureau of Labor Statistics. And despite growth in the spot prices of both gold and silver since I made that video back in 2021, this amount of gold and silver still covers a little more than 3 months of the same living expenses today despite major increases in the cost of living since then, and this exercise perfectly illustrates how gold and silver are intended to preserve your wealth as opposed to making you rich, even though that amount is now knocking on the door of 4 months of coverage driven by gold’s exceptional performance, and I wouldn’t be shocked to see it continue to grow, maybe closer to 5 or 6 months of coverage over the next 12 years as we continue in this metals bull market, as mentioned before, driven by all of this central bank gold buying. Anyhow, what I want to say is this number is probably going to vary from person to person depending on their situation and depending on their overall net worth, and this is a bit of an extreme example, but if Elon Musk were to hold his entire 3 billion dollar cash position in gold, it would only be 0.74% of his net worth, so less than 1% and would amount to a little more than 1 million troy ounces of gold, which would still be more money than most people in the world have, considering the fact that there are a little less than 3,000 billionaires in the world today, and that’s despite it being such a small portion of his overall net worth.

So, when determining how much gold and silver it is you need, instead of focusing on it as a percentage of your net worth, I suggest to focus on a concrete amount that is either aimed at supplementing your needs during retirement if you are over the age of 50, or covering a financial emergency if you are under the age of 40. And for those of you in your 40s out there, sadly you’re at the age where you have to think about both of these things, but that just means don’t get bogged down by how much gold and silver someone has as a percentage of their net worth, because when you’re talking about people with hundreds of millions or even billions of dollars, you have to remember that it’s a different game they’re playing. So, as I’ve presented in past videos, figure out how much it is that you need, how much gold and silver it is you need, and either focus on your retirement needs or focus on covering an emergency, and let that be your guide as opposed to a percentage of net worth.

I think you’ll be better served by that strategy, and that especially applies to people preparing for retirement out there. And this is just a reminder for all of you watching this video, a cold shower for those of you forgetting about how important preparing for this is. I’ve covered this in past videos, but by its own admission, Social Security is going to start running out of money by 2033 at the latest, which means you need to be prepared with alternative forms of retirement coverage to achieve real stability today.

This is not some abstract concept that you need to think about or worry about in the future, because 2033 is only 8 years from now, and if you’re watching this in another country, not in the United States, and you think this is a problem that doesn’t apply to you, let me tell you that this is absolutely a problem that applies to you too, because pension funds around the world, public pension funds, national pension funds around the world are running out of money. They do not have enough money to cover the promises that they’ve made in the past, and you need to prepare for that, at least in part with gold and silver. So with that said, that’s it for this video.

Thank you very much for watching. If you enjoyed the content, please leave a like below, and if you have any questions for me, leave them in the comments section. You never know, I may just cover it in a future video.

So with that said, I’m wishing you all a fantastic day ahead. Please remember to take care of yourselves and take care of each other. Goodbye.