“[Inflation] could turn out to be higher and more persistent than we anticipate.”— Federal Reserve Chairman Jerome Powell on June 16, 2021[1]
Higher Federal Reserve inflation expectations, the shrinking physical silver market, and the swiftly approaching implementation of Basel III in Europe are creating the perfect setup for a significant increase in gold and silver prices.
The Fed raised its headline inflation expectation to 3.4% on June 16, 2021 from its March projection of 2.4%. However, despite the biggest jump in consumer prices in 13 years, the Fed maintained that inflation is “transitory.” Stocks fell after officials moved up their timeline for interest rate hikes from 2024 to 2023.
At the same time, the Reddit group Wall Street Silver’s efforts to tighten the physical supply of silver via its Silver Squeeze has been resulting in such shortages that wholesale silver suppliers have been calling gold and silver dealers—Scottsdale Bullion & Coin included—looking for inventory.
When Basel III takes effect on June 28, 2021 in Europe, it could help Wall Street Silver realize its goal of “squeezing” the silver market and hindering bullion banks’ ability to manipulate silver prices. This is because, as precious metals advisors Tim Murphy and Todd Graf explain in the above video, using unallocated bullion—precious metals the banks don’t own—repeatedly to fund paper contracts could become prohibitively expensive.
The result? Banks will have to have the physical metal on hand for every contract they sell. Given the shortage of physical silver due to the Silver Squeeze, this could drastically change the silver paper market. You can see Murphy and Graf’s full explanation of the situation for silver and gold in this week’s The Gold Spot video. Watch Now.
With Basel III just a little over a week away, you may have limited time to purchase gold and silver at anywhere near today’s prices, making now the ideal time to purchase these time-tested inflation hedges.
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