Any one of these news stories may rightfully merit more in-depth examination – and I might provide that on one or more of them in future blog articles. But, for the moment, I just wanted to quickly give you these snippets to try to help you keep abreast of all the rapidly unfolding news in the gold and silver markets.

Have a great day investing in precious metals!

US Mint Busted for Improperly Sourcing Gold

One of the reasons that American Gold Eagle coins have always been in high demand – and, thus, also been accompanied with high premium prices – is because the US Mint’s charter to produce the coins requires that they be minted ONLY with gold mined in the United States. Well, it turns out that an audit of the Mint’s operations uncovered the fact that, for several years now, the Mint has been far less than strictly abiding by that rule.

At the very least, the Mint has purchased gold for minting Gold Eagles from several sources that are not verified as providing only-newly-mined-in-the-US gold and that likely are providing gold mined outside of the United States. In all probability, it has minted unknown numbers of American Gold Eagles with gold that was mined in Canada or elsewhere – all the while still touting the coins as being minted purely from US-mined gold.

Gosh, an official US government agency telling lies. I’m shocked. (rolling eyes)

What effect, if any, this will have on the price of, future demand for, and purchases of, American Gold Eagles remains to be seen…

No, China DIDN’T Stop Buying Gold

It was widely reported back in early summer – by the same financial press that is constantly trashing precious metals as an investment – that China had stopped buying gold in the second quarter of this year. Yeah, everywhere I looked, the mainstream financial news outlets were screaming headlines like, “China Stops Buying Gold – Gold Demand is Dropping – Gold Prices Likely to Decline”. Yes, well, those “likely to decline” gold prices have since gone on to score new all-time highs above $2,500 per ounce. And it turns out now that China didn’t stop buying gold. It simply, as it has often done in the past, got sneaky about its buying and stopped officially reporting its purchases.

What I really love about this story is the clever way in which it was uncovered. Some smart gold market analyst, rather than looking at officially reported gold purchases by China, looked at shipping manifests of cargo being transported from London to Beijing. And, lo and behold, they found that boatloads of gold were still going from the UK to China during the timeframe when China allegedly had stopped buying gold. So, the truth was that China was likely just using an intermediary to buy more gold and not bothering to report the purchases.

As noted, it doesn’t appear that the demand for gold is slacking off, nor has the price of gold been falling. Instead, continuing demand has been pushing the price of gold continually higher.

In the future, I would suggest that one be highly skeptical of any more reports about China not buying gold. Let’s not forget that the “official” reports of China’s gold purchases showed it not buying a single ounce of gold for two whole years, from 2019 until 2021…and if you believe that was true, then I’ve got some prime beachfront property in Nebraska to sell you.

China’s Growing Appetite for Silver

Here’s some more China-related precious metals news. I’ve seen several reports recently that China is paying nearly double the market price to miners in South America for unrefined silver.

That indicates two things:

1. China wants to acquire a lot of silver, and it’s not particularly picky about the price it pays for it
2. On the other hand, it’s being smart about its buying – purchasing unrefined silver in large quantities isn’t likely to drive the spot price of refined silver up nearly as much as purchasing the same quantities of refined silver would – that means that China can also continue loading up on refined silver at favorably low prices – also, buying unrefined silver helps China conceal how much silver it has actually acquired

This news is simply more confirmation that China is striving strongly to increase its reserve holdings of both gold and silver. Some market analysts have noted that the large expansion of solar energy in China has rapidly drained China’s domestic silver mining resources.

In addition, China also appears to be making large purchases of, stocking up on, lots of other basic commodities as well. Some sources theorize that this is in preparation for an invasion of Taiwan. In any event, it obviously represents a push by the Chinese to put themselves in a strong economic self-defense position, by having large stores of necessary commodities.

Mexico May Move to Nationalize Silver Mines

This note will be of particular interest to precious metals investors who own stock in silver miners that operate substantial mining projects in Mexico. I’ve seen a number of recent reports suggesting that Mexico’s government may soon move to nationalize the country’s silver resources, just as it did with oil back in the 1930s, and with lithium more recently.

A move to nationalize silver would follow logically from the policies of former President of Mexico, Obrador, who stated his intention to secure the country’s energy future. Nationalizing Mexico’s substantial silver resources would, theoretically, help it to stabilize the economy and protect against exploitation by foreign investors.

With the possibility of silver nationalization in mind, investors are cautioned regarding investments in the stocks of silver mining firms that have substantial mining assets in Mexico. These include Endeavour Silver (NYSE: EXK), First Majestic Silver (NYSE: AG), and Pan American Silver (NASDAQ: PAAS). Endeavour Silver operates the Guanaceví mine in Durango. First Majestic owns the San Dimas mine, also in Durango. Pan American has the La Colorada mine in Zacatecas, Mexico.

On a more positive note for investors in silver stocks, I just ran across an article this morning suggesting that the prices of many silver stocks have likely bottomed out, and will be moving higher if the per ounce price of silver continues rising. Therefore, investors may want to consider investing in silver mining companies whose mining interests lie outside of Mexico. Various analysts recommend taking a look at Hecla Mining (NYSE: HL), Avino Silver & Gold Mines Ltd. (NYSE: ASM), or a silver streaming company with widely diversified investments, such as Wheaton Precious Metals (NYSE: WPM).

US Department of Labor Lied Again

Gee – another US government agency lying? Once again, I’m shocked (NOT).

The ever-reliable (sarcasm included free of charge) US Department of Labor fessed up to the fact that its jobs reports covering the 12-month period from April of 2023 to March, 2024 overstated job growth by nearly a million jobs – 818,000, to be more precise. That averages out to about 68,000 fewer jobs each month than the 12 monthly Non-Farm Payroll (NFP) Reports had reported over that time period.

If you take that minus 68,000 monthly figure and apply it to the most recent, already abysmal, jobs report of 114,000 new jobs, that would make last month’s (July) actual job growth figure a paltry 46,000 jobs added. Imagine what the market’s reaction might have been if that NFP number – which would have been less than a third of the number analysts were expecting - had been reported.

And it’s not like this is a first for the Labor Department. In fact, it’s become commonplace for the yearly NFP reports to get revised downward – waaaaay downward. This latest annual “revision” of the job numbers is almost an exact repeat of 2023 when, just like this time, the Labor Department came out and confessed that the falsely inflated new jobs reports for the past year had been overstated by close to a million jobs. It’s a little bit galling that they’d turn right around from that and do the same thing all over again the following year. But then again, shameless lying on the part of official government agencies isn’t exactly a shocking occurrence.

To go along with that good news about the jobs numbers (once again, sarcasm included for free), the July report showed unemployment rising for the fourth month in row, climbing to 4.3% (that compares with 3.6% this time a year ago). Hmm…anyone care to bet that just like the government overstated the job growth, it understated the unemployment rate?

Listen, there are some things that you can trust and rely on in life…but, in my experience, official government reports on the economy just don’t happen to be one of them.

Well, I guess the one silver lining in these bad economic reports is that they emphasize the need for investors to protect themselves from economic uncertainty (and possible looming disaster) with investments in gold and silver.

Gold and Silver News Notes - Conclusion

Well, that’s it for now. Again, have a great day investing in gold and silver – they’ve been enjoying a good week so far. Here’s hoping they finish strong going into the weekend and move higher next week. Meantime, best wishes - have a great rest of the week and a wonderful, relaxing weekend.

• J.B. Maverick

‍

Sources:

https://www.kitco.com/news/article/2024-08-13/united-states-mint-sourced-non-american-gold-decades-misled-customers-and

https://www.gainesvillecoins.com/blog/pboc-gold-conduit-revealed-chinese-central-bank-did-not-stop-buying-gold-in-may

https://www.zerohedge.com/news/2024-07-29/china-wants-all-latam-silver-part-1

https://www.cnbc.com/2024/08/21/nonfarm-payroll-growth-revised-down-by-818000-labor-department-says.html

https://substack.com/home/post/p-147845968?source=queue

‍