BRICS Fuels Metals Boom McAlvany Weekly Commentary podcast

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BRICS Fuels Metals Boom

4d ago 26:01

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Silver pushed new highs this week, jumping up to $61.80, while gold, platinum, and palladium climb roughly 1%. Strength in metals markets continues to rise as BRICS nations push de-dollarization efforts while stockpiling gold and silver. With silver breaking out of consolidation, all indicators point towards a market that has not yet finished its run. Let’s take a look at where precious metals stand as of Wednesday, December 10: The price of gold is up 1.25% sitting at $4,230. Much of that rise is on the heels of the Fed announcement, but still kind of locked in this sideways trading channel. Silver is up about 7.5%, sitting at $61.80 and putting in a new all time high. Around this time last year, silver was still in the $20+ range. Platinum is up about 1%, sitting at $1,660. The white metal hit $1700 an ounce yesterday, but it just didn't stay there. Palladium is also up about 1% at $1,480, almost $200 below platinum. Meanwhile, looking over at the paper markets... The S&P 500 is up about 0.5% sitting at 6,895, although the index hasn't done much since Thanksgiving. The US dollar index is down about 0.3% sitting at 98.6. It was flat up until a couple hours before recording when the Fed announced a 0.25% interest rate decline. Fed cuts, record prices, and a sideways pattern The strength in gold and silver prices comes on the heels of another 25‑basis‑point Fed rate cut into the 3.5% – 3.75% range. This has weakened the dollar index back below 100 and reduced the opportunity cost of holding non‑yielding assets like gold and silver. Technically, gold has already corrected about 38% of its massive August–October run and is now grinding back toward its $4,400 area peak. Looking at the charts, the patterns have been different: instead of classic, deep corrections, gold has tended to surge, consolidate sideways for months while investors “wait for the pullback,” and then launch another leg higher—behavior consistent with a strong secular uptrend supported by macro forces, not just speculative froth. BRICS de-dollarization and monetization of gold (and now silver) BRICS‑aligned nations—China, Russia, India, Saudi Arabia and others—are actively working to use gold to reduce dependence on the dollar in trade and reserves. This is turning gold from “just a reserve asset” into true money again for a large part of the world, even as the dollar remains dominant in legacy systems. China in particular is not only buying massive quantities of gold and silver, but also moving them from domestic, state‑controlled exchanges into offshore and regional vaults in Asia, Africa and the Gulf. Meanwhile, China is also building yuan‑ and renminbi‑linked gold systems that can function as an alternative “high‑quality liquid asset” for BRICS settlement. At the same time, India and other countries are starting to recognize silver’s monetary role. India is in the process of allowing silver to be pledged as collateral for loans, a powerful signal that silver is not just an industrial input but acceptable financial collateral. Central banks in India, Russia and China are accumulating silver alongside gold. Silver’s breakout and what it means for ratio traders Silver has been the standout performer of 2025, finally taking the leadership baton from gold with well over 100% gains year‑to‑date and a push above 60 dollars per ounce, outpacing both gold and broad equity indexes. Technically, silver first broke through the long‑watched 50‑dollar ceiling, corrected roughly 50% of that move, then formed a classic “cup‑and‑handle” pattern: a double‑top that did not reverse but instead led to a sharp upside breakout as sellers were exhausted. Importantly, the Commitment of Traders data does not yet show the kind of heavily short, panicked positioning typically associated with a terminal short squeeze, suggesting this move is driven more by genuine demand and structural tightness than by forced short‑covering. At the product level, 90% “junk” silver coin (pre‑1965 U.S. dimes, quarters, halves) has recently traded at about 2.50 per ounce below thousand‑ounce COMEX bars—even as refineries that had been aggressively melting those coins to ship silver overseas have temporarily stepped back from the market. For savvy stackers, this kind of backwardation in the retail product space can offer a rare chance to acquire highly liquid, divisible silver at or near melt value, despite a record headline price. Ratio Trading Opportunities From a ratio perspective, the gold‑to‑silver ratio has already collapsed from around 104:1 in the spring to the high‑60s. We see a strong possibility of that trend continuing toward the low‑60s or even 50s as this cycle matures. That opens the door to measured ratio trades for investors who loaded up on silver when the ratio was over 90: If silver has grown to 50–70% of your metals allocation, consider swapping a slice—say 10–25% of your silver—into gold at current sub‑70 ratios to lock in “free” gold ounces while still keeping a healthy silver position. Stage these swaps over time to avoid trying to pick the exact bottom in the ratio; think in terms of bands (for example, start nibbling below 70, do more below 60). This is the essence of the McAlvany “compounding ounce” philosophy: without adding new cash, use volatility and relative value between metals to steadily grow total ounces, especially in tax‑advantaged accounts where these swaps do not trigger current taxes. What metals investors can do now Solidify your physical position. If you own little or no gold, focus first on establishing a base allocation in simple bullion coins and bars. Price levels are elevated but supported by structural drivers, which means waiting for a “perfect” pullback risks being left behind. Treat metals as long‑term monetary insurance Our clients buy gold not to get rich quickly, but to avoid being impoverished by currency debasement, policy error and systemic risk. Avoid unnecessary counterparty risk In an era where even sovereigns are repatriating gold and building alternative clearing systems, handing your metal to a third party in exchange for a few percent of yield undermines gold’s most important benefit: being no one else’s liability. Keep the bulk of your holdings unencumbered and directly accessible. Use ratio and premium opportunities to grow ounces With the gold‑silver ratio having already swung violently and product markets occasionally mispriced (like junk silver at a discount to large bars), this is an ideal environment to work with a specialist on carefully staged swaps to steadily increase ounces per dollar invested. Claim Your Free Consult The team at McAlvany Precious Metals has a collective 75 years experience investing in the precious metals market. We are happy to speak with you about your goals on a no-obligation, complimentary consultation. Reach out to us at 800-525-9556.

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