Why Insiders Are Driving Gold Prices Toward $3000 (Uncut) 02-11-2025

Gold Shortages & Why Insiders Are Driving Gold Prices Toward $3000 | Craig Hemke

There’s all these signs of this tightness that really began in early December. And so I just, yeah, maybe tariffs and on a mainstream sense, people are like gobbling that up and that’s caused them to bid gold higher. But I think there’s something more substantial going on behind the scenes that is leading to this rush to get metal back into the US.

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That’s 1-888-815-4237. We’re available after hours and on weekends and we look forward to speaking with you. Hey everyone, this is Elijah K. Johnson with Liberty and Finance.

And back with us today is our good friend Craig Hemke from TF Metals Report. Craig, thank you so much for joining us today. Always nice to visit with you, my old friend.

Sure, no shortage of stuff to talk about. Yeah, definitely. It’s great to have you today as we see a new all time high for gold above 2,900.

We’re seeing a bit of a pullback here as we record this 1 p.m. Eastern here. Your perspective on what we’re seeing right now, do you think these levels will hold? Well, we’re off to a great start, obviously to the week. An old adage at TF Metals Report is it’s not about how you begin the week that matters, it’s how you end it.

Because you paint the weekly charts and that kind of keeps the momentum going in either direction. We’ve had a lot of Mondays lately that have been down. So, this is different that we’re going up.

And we’ll see, it’s gonna be an interesting week. There’s that old Humphrey Hawkins Act from decades ago that demands that the chairman of the Federal Reserve come up to Capitol Hill every six months and sit before the Senate Finance Committee and the House Financial Services Committee and kind of give his biannual, semi-annual, I guess, State of the Union. And so, we’ll see what that’s tomorrow.

That starts tomorrow. Most of the news is tomorrow because Powell will have his prepared remarks. They’ll be released either right at 10 o’clock Eastern or shortly before.

All the aldos will skim that for any hints of monetary policy changes. And then, whatever questions he gets asked will create headlines all through the day. So, tomorrow’s gonna be volatile.

Then we get the Consumer Price Index. That’s coming up on Wednesday. The Producer Price Index on Thursday.

So, we’re off to a great start. There are a lot of reasons to suspect that this next extension in the gold price will go up above $3,000. We recall last time we spoke, we talked about my macrocast.

I thought that was definitely in play here in the first three or four months of the year. And then, we’d see where we go from there. So, it looks like that’s where we’re headed.

I mean, again, I wouldn’t say we’re gonna be there by next week, though we are $100 off the lows of last Sunday, the 2nd. So, anything can happen. Definitely, I mean, it’s crazy to think that $3,000 gold is now just $100 away here.

It’s really within just, you know, maybe a couple days trading here, depending on where prices go. But you have been kind of skeptical about why gold is acting this way. A lot of people are thinking it could be tariffs.

We’re seeing a lot of people bring gold back from London vaults. I think it was 4.9 million ounces in January, probably because of fears of tariffs. But do you think that’s really the whole story here? I don’t, you know, when we first noticed what appeared to be a tightness developing was back in December, you know, about a month after Trump was elected.

Initially, gold, you know, just got shellacked for about 10% down from its highs, got pounded backwards a couple of times, and it kept recovering. But then after that December FOMC meeting, it’s moved up almost in kind of a straight line, particularly since the first of the year. Back in the middle of December was the first time we saw the spreads widen from the spot price to the futures price, which at that point was the February contract and the March silver.

And it got to like 30 bucks, 35 bucks. Now there should be some spread, but it should compress over time, you know, for maybe six, eight, $10 down to nothing. Well, when it was 35, it was like, what’s going on here? And I remember the last time this happened, right before COVID.

And there was, you know, talk then about logistics and, you know, planes weren’t flying and all this kind of stuff. And again, the point of all this, there shouldn’t be that wide of a spread. It should be easily closed by arbitrage.

You know, you got the spot price here and you got that futures price here. So if you buy the spot and you sell the futures, they come together. Well, why wasn’t that being closed? I mean, it did close by the end of December.

The point is then it widened again, happened again in January. And now even here in February, it’s, you know, $30, $35 again. So why is that persisting? Why is that not being closed? To me, it’s a lack of confidence because if you’re gonna execute that trade, if you’re gonna buy at spot and sell the future, well, now you’re short the future.

Now, you could deliver, you can get out of that from two ways. You can deliver your bought, you know, that you got to take delivery of what you bought at spot and then deliver it. Well, huh, now all of a sudden there’s this alleged six to eight week, whatever delivery delay.

Maybe you won’t get it delivered in time. And if you don’t, now you’re just short, you know, the futures contract. Well, that’s no good either.

So it’s a lack of confidence in the system that’s being, you know, the problem is. Now we’ve been told, and I was buying this for a while. There’s all about tariffs, but I’ve not seen where gold or silver or even in discussion, I mean, we got aluminum and steel, you know, and stuff in general tariffs that are discussed against EU and Canada, Mexico and the like.

But I’m not saying anything specific for gold. And I started thinking a couple of weeks ago, I was in the middle of a podcast I recorded for my site with Andrew McGuire. I was like, Andy, I think we’re being gas lit.

I think we’re being told that it’s a tariff as cover. And what got me thinking about that is Elijah, we just rolled gold council just last week announced another, what? 1,045 metric tons or something of net central bank demand in 2024. Third year in a row over 1,000 metric tons of net demand.

That’s like 3,300 metric tons. That, you know, I mean, most of that I think is being taken and, you know, moved from west to east. We know about the silver supply deficit that’s now what 700 million ounces at least over the last couple of years.

And it just made me wonder, you know, London operates on a pretty tight float. I wonder if maybe they’re just running out of metal. And I think that’s a possibility.

Then lastly, I’ll just add one more thing. Again, this all began after Trump. It really started kicking in in December after that first pullback.

Maybe, and we got some hints of this over the weekend, maybe there’s some kind of, I will loosely call it monetization of gold that’s coming by the Trump administration, whether it’s gold-backed bonds or whatever, that is demanding, that is, you know, allow, you know, forcing U.S. government, Fed agents, you know, bullion banks, which are the primary dealers of the treasury market, you know, maybe they’re bringing, that’s why this metal’s coming back to the U.S. And they’re using this tariff story, you know, as cover so as not to give the game away or cause a panic. Again, these are all things that are on my mind. I can’t prove any of that stuff, but this is all the stuff you got to think about.

You know, it seems like for over a year, I’ve been hearing that, you know, Comex and London vaults are being drained of precious metals. I mean, what happens if, is it possible for them to run out? And at that point, what happens? Well, first, it’s been 10 years. I went back and fixed, I remember seeing this back in like late 2013, maybe it was January, 2014.

There was a guy named Ken Hoffman, who was an analyst for Bloomberg, commodity analyst. And he’s on Bloomberg television. This is 11 years ago.

And they’re asked, well, will gold bounce back this year? It’s kind of that kind of general discussion. He goes, look, I think the bigger story is that the London vaults are empty. You used to go in there and you’d walk and there’d be, you know, these racks of gold, you know, and you’d move vault from one side to the other.

The gold would just kind of go from one side to the other and it was no big deal. You walk in there now, there’s no gold left. I mean, I made a pretty big deal with that at the time.

That was 11 years ago. And that’s mainstream media. That’s not just some, you know, tinfoil hat, you know, lunatic blogger talking about that.

Me, that’s Bloomberg. And so you think, okay, well, if that was the case then, how much have they been able to replenish over the years ahead of then this record central bank demand we’ve seen the last three years? Now that, can the vaults be empty in a literal sense? No. You know, the LBMA came out just last Friday.

Said, oh, what’s the worry? We got 8,500 tons. It’s a lot, right? In a literal sense, there’s all kinds of gold there. But those LBMA vaults are the Bank of England vaults that hold all of the Bank of England’s gold, which is 4,000 some odd tons.

They also hold all the ETF gold like the GLD and the others that is all custodian in London, which is pretty handy actually. But that’s like 3,000 tons. So the maximum that could conceivably be for, I mean, I guess you could say the Bank of England could sell gold just like they did at Brown’s Bottom, you know, in 1999.

But you can’t, I mean, it would be pretty nefarious to be taking the, you know, the GLD gold and selling it to market. So what’s the actual float? I remember Ronan Manley writing about this a couple of years ago, 700, 800 tons. Well, now that’s a number that, you know, kind of hand-to-mouth just-in-time delivery number that could be in peril here.

And again, if there’s all this gold, why does it take four to eight weeks to deliver it? They had to, Dave, whatever the hell Dave’s last name is, Bank of England, you know, assistant vice governor or whatever his title was. Dave Ramsden, I think was his name. Anyway, just like the Fed has press conferences after their FOMC meetings.

Well, Andrew Bailey, the head of the Bank of England now does this as well. And they cut rates last week. So they’re having a press conference.

About halfway in, a young reporter stands up and says, hey, what’s this going on with gold? And this Ramsden takes the question and just gives this stuttering, stammering, four-minute rambling remark, word salad, kind of Kamala Harris style. Then just like took up a bunch of time. You look, it’s been four minutes.

Like, well, I guess he said something. And what he said was, well, you know, we can only move so much at a time and gold is heavy and all this kind of stuff. What? If you had the gold to deliver, if somebody was willing to sell it and deliver it or even lease it and deliver it, you wouldn’t have to wait in line four to eight weeks.

And again, that’s not me saying that. That was a report in the veritable old Financial Times two weeks ago. So there’s definitely something going on here, Elijah.

And you can see it in the price that has moved up really consistently, almost 45 degree up angle since the first year. And I keep making this point, but it’s just such a strange situation where we have the spot price moving higher and premiums across the industry just being cut significantly to levels that I don’t know if I’ve really, really seen these kinds of low premiums for so many products here. So your perspective on that, why it seems like the retail market is just being crushed while maybe the insiders are buying.

I mean, what’s happening here? Well, again, here comes Craig. Like I’m some kind of salesman for gold. I don’t make anything sound like gold, but I’m telling you, if you’re listening to this and you think you can buy an ounce of gold still for under $3,000 spot because the premium is only 20 bucks somewhere, take it.

Don’t, people should not conflate United States or whatever retail demand where U.S. retail investors are fixated on the mag seven, you know, and all this other stuff. Don’t, no one should ever conflate U.S. retail demand with the global wholesale institutional central bank level demand. Okay.

Our little, you know, hey, I think I’ll buy a, you know, a gold maple or I’m going to buy a tube of eagles. That does nothing. I mean, it’s like, you know, you’ve seen that picture from the Hubble telescope of all the stars, you know, and shit.

And there’s a little itty bitty thing, you know, it’s a little spot. This is earth. Okay.

What this discussion, this current present concern in the precious metal pricing structure and scheme is an institutional central bank level in size in tonnage issue. Okay. There’s 31,000 ounces, 31,125 or whatever, Troy ounces in a metric ton, right? So some guy, you know, going to miles Franklin, you know, or whatever, and buying an ounce compared to the, you know, 70 metric tons that were suddenly demanded on Comex in January.

So again, I’m not trying to say, Oh, Greg, the, you know, the, the, uh, the metal salesman or something. I’m just saying, look, I mean, I, this is all part of that tariff rationale. It’s got to keep everybody calm here for as long as we can so that there aren’t runs.

Yeah. Big spike in retail demand would certainly help exacerbate things and maybe bring more attention to what’s going on. But you can’t conflate the two together.

Retail demand versus what’s going on at the tonnage institutional level is two different things altogether. It definitely can make an impact, right? If you look at what happened with silver squeeze, but I think as you’re saying, it really is. It really is looking at pennies versus, you know, the big bucks there.

I did want to ask you about what is happening in the, I guess with the U S government in the U S treasury with Scott Besant, now leading the U S treasury, he was talking about monetizing the asset side of the U S balance sheet. And you were speculating, well, maybe this has something to do with monetizing gold, your perspective on that. What was your take regarding his comment there? I want to back up first though, to what you said about, I mean, the silver squeeze and the like, that was a similar kind of event, okay? Where everybody was trying to suck up all the available silver.

Remember there was this panic of alleged truckloads of silver being moved around in London, all that kind of, this is a similar deal on a smaller scale in a much smaller market. Okay. So, I mean, they’re not identical, but it, you know, kind of the same thing.

We’re just now doing this in the, I mean, the global gold market, you know, is the biggest market cap, if you will, you know, in the world. And so this is, you know, an ounce of gold here that you can pick up at $49 over spot, because it used to be $100 over spot. It was two different things.

And that’s the only point I was trying to make. Back to the new secretary of the treasury, who has been rumored, or people have seen his writings about, you know, looking favorably upon gold. I would further point out, you might remember, in fact, I don’t know, maybe you’ve even had the pleasure of interviewing, you know, Judy Shelton was nominated by Trump to be, you know, fed board of governors back in whatever, 18 during his first term.

And oh, she was too extreme. She was a diversity hire, but no, no, no, no, no. She’s too extreme because she’s talked about the gold standard before and ways to relink the currency to some sound backing.

Well, maybe she’s got his ear. Maybe this Besson guy’s got his ear and they’re thinking about where are we gonna go from here? I’m not sure when the little Oval Office snippet that a lot of people have seen, or maybe you can include it somewhere. Chris Marcus had a thing on Twitter yesterday and it was Trump was sitting there signing executive orders.

And he says, hey, Scott, you know, we’re talking about, you know, getting to some of the assets on the balance sheet, you know, and get them to work for us. And Besson goes on and says, well, yes, we were talking about monetizing some of our assets. You know, and things that we can do on the balance sheet to make our fiscal situation look better.

And everybody goes, oh, wow, you know, I don’t know. Yeah. Could he be talking about a new valuation of what’s stated to be the U.S.’s holdings of 8,133 metric tons? You know, it’s all carried on the books at $42 an ounce.

Well, maybe they go and they say, well, actually, no, you know, I saw this morning it’s $2,900 an ounce. I don’t even know what kind of impact that would be. Maybe it’s when they talk about monetization and the other part of his quote was like the way other countries have done or it’s accepted in the Western world.

Maybe that gets the Judy Shelton thing. You know, they’re going to take some gold and somehow back longer term, very long term securities and treasury bonds with it and maybe a lower interest rate, you know, and they can cut into the interest cost of the U.S. government. You know, that kind of, maybe that’s exactly the direction they’re going to go because, you know, they talk about doing it in traditional sense, but either way, again, what I was getting at earlier, this situation started to reveal itself back in early December and it went away at the end of the year, some future selling, dropped that spread there and then widened back out, got as high as $43 or something a week or two ago and then dropped back down when the February contract went off and then it expanded out.

I think currently it’s about 30 bucks again. We’ve seen the lease rates in London go surging higher. Well, why is that? Well, if I’m going to loan you my metal and I’m not sure you’re going to give it back to me, Elijah, I’m not going to give it to you at 1%, that sort of thing.

We’ve seen the cost to borrow shares in the GLD skyrocket. Well, why is that? Well, if the only entities that can take metal out of the GLD are the authorized participants, that’s what they call them. What are the authorized participants? The bullion banks, the ones responsible for flowing metal, physical metal at the digital derivative price.

Well, if they don’t have enough on hand, what do they do? They’re going to borrow some shares, cobble them together into a basket and redeem them for metal. Well, if there’s not that many shares out there or if you’re going to think about loaning your shares, maybe you want a higher interest rate because again, how’s that going to affect your bottom line? So there’s all these signs of this tightness that really began in early December. And so I just, yeah, maybe tariffs and on a mainstream sense, people are like gobbling that up and that’s caused them to bid gold higher.

But I think there’s more likely we’ll be gaslit with that story, that there’s something more substantial going on behind the scenes that is leading to this rush to get metal back into the US. We’ll see. Well, it definitely will be really exciting to continue to track this with you.

And really even the bigger picture of this all is, as you say, it’s kind of the end of the Keynesian experiment. And if people are interested in learning more, they can go to tfmetalsreport.com. I think one thing that kind of highlighted that we’re in that stage of this experiment is Trump saying no more pennies, right? It’s too costly to make pennies. And it’s like, wait a second, we’re having to maybe eventually make bigger bills and then reduce the amount of smaller coinage we have because it just doesn’t make sense anymore with all the inflation we’ve seen.

But where can our viewers find you online there if they’d like to track the end of the Keynesian experiment? Yeah, it’s like I mentioned earlier that Ken Hoffman video from 2014. My goodness, Elijah, that was 11 years ago. And I can remember that because the site was five years or four years old at that point.

Yeah, tfmetalsreport.com. Try to analyze things every morning with kind of a summary of what’s going on. Maybe a podcast in the afternoon as well with kind of a summary and update the charts. The community keep things going through the day.

And so, man, at a time like this, I say this probably every time because the time like this seems like it’s always crazy. But I think for 15 bucks a month, it’s a pretty good deal for keeping people up to speed on what’s going on. Again, every other subscription service.

Hey, Elijah, I just figured out, I was looking at my Visa bill. I’m now paying 50 bucks a month for two cars to get XM radio, Sirius radio. Which reminds me, I got to call them and threaten to cancel to see if maybe they’ll cut it in half.

But I mean, if we’re paying 25 bucks a month just so we can hear classic rock whenever we want, 15 bucks a month for some objective analysis of precious metals might not be a bad deal. So check us out, tfmetalsreport.com. Fantastic. Well, thank you so much, Craig, for your time today.

I will put a link in the description, tfmetalsreport.com. Thank you so much for your time. You have a great day and God bless. You too.

Good to see you, my friend. are just $1.69 over spot. And one 10th ounce gold Britannia are just $29.99 over melt per coin.

To order our specials or any of the many other options we have available, call us at 1-888-81-LIBERTY. That’s 1-888-815-4237. We’re available after hours and on weekends and we look forward to speaking with you.