Gold and silver plunge by a third, while central banks keep quietly buying
Gold has crashed from its January peak of $5,608 to $4,112, down 27%. Silver has been hit even harder, plunging from $121 to $56—nearly halved. Speculators are running for the exits faster than anyone. But physical demand hasn’t let up at all: global central banks bought 288.9 tonnes of gold in the second quarter, up 62% year over year, while this year’s silver supply deficit is set to widen to 46.3 million ounces, marking a sixth consecutive year in deficit.
Paper sell-offs are one thing; physical shortages are another. This pullback is a hole dug by the forced liquidation of leveraged longs. New mine capacity can’t make up the shortfall for three to five years, and central banks’ ongoing demand to diversify reserves is still there. Paper gold and silver could keep grinding lower in the short term, but physical demand remains an anchor—deeper sell-offs may actually provide support for spot prices. Mining stocks are getting dragged down too. Is this an unjustified sell-off or a real breakdown? The spot premium will tell you.
For those of you holding physical gold or PAXG, what’s your cost basis going into this pullback?
$PAXG $BTC $ETH
Gold has crashed from its January peak of $5,608 to $4,112, down 27%. Silver has been hit even harder, plunging from $121 to $56—nearly halved. Speculators are running for the exits faster than anyone. But physical demand hasn’t let up at all: global central banks bought 288.9 tonnes of gold in the second quarter, up 62% year over year, while this year’s silver supply deficit is set to widen to 46.3 million ounces, marking a sixth consecutive year in deficit.
Paper sell-offs are one thing; physical shortages are another. This pullback is a hole dug by the forced liquidation of leveraged longs. New mine capacity can’t make up the shortfall for three to five years, and central banks’ ongoing demand to diversify reserves is still there. Paper gold and silver could keep grinding lower in the short term, but physical demand remains an anchor—deeper sell-offs may actually provide support for spot prices. Mining stocks are getting dragged down too. Is this an unjustified sell-off or a real breakdown? The spot premium will tell you.
For those of you holding physical gold or PAXG, what’s your cost basis going into this pullback?
$PAXG $BTC $ETH