Hi YXI friends,

Welcome to our fortnightly update on Gold and Silver, as we track the key factors that drive their price action across global liquidity, yields, safe-haven demand, ETF flows, and price technicals.

Table of Contents

• 1. Global Liquidity Upturn

• 2. Lower Yields Have Helped

• 3. Safe Haven?

• 4. Gold ETF Flows

• 5. Scott Bessent On Gold Reserve Revaluation

• 6. Technical Analysis

DISCLAIMER: This newsletter is strictly educational. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice.

1. Global Liquidity Upturn

Gold ETF (GLD) vs. G5 M2 Money Supply (4-week lag)

Global liquidity is a major driver of non-yielding asset prices such as Gold, Silver, and Bitcoin. We use the G5 M2 Money Supply (US, China, EU, Japan, UK), denominated to USD, to approximate the changing levels in Global Liquidity.

We observe that a 3-4 week lag between the moves in the G5 M2 and Gold. This meant Gold was moving in the same direction as the G5 M2 (in USD) 4 weeks behind.

Since mid January, there has been a significant upturn in G5 M2, thanks to USD weakening by 3% in the past 6 weeks.

This has provided a benign context in which Gold made continuous new highs.

Silver ETF (SLV) vs. G5 M2 Money Supply (4-week lag)

Silver is strongly correlated with Gold on a day-to-day basis, but longer term tends to underperform.

This is because Silver is treated as a weaker Precious Metal than Gold, a crucial difference being the world’s major central banks do not hold Silver in their reserves.

Moreover, Silver is also often a commodity for industrial uses - as much as 58% of total demand. Therefore, it trades closely with commodity cycles like Copper and Lead.

Silver is yet to break a new high, but I do think it could follow Gold’s lead in the short term.

2. Lower Yields Have Helped

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