BOA Says Silver's Turn in 2025

This is a free preview of a paid episode. To hear more, visit vblgoldfix.substack.comHousekeeping: Good Morning. — “The Gold reset is a process, not an event”Today* Discussion: Silver’s Turn in 2025* Premium: BOA on Gold and SilverDiscussion: Silver’s Turn in 2025BOA’s top five 2025 themes * Trade war, strong USD may result in lower commodity prices * Brent may trade near $65/bbl on surplus, fresh OPEC+ barrels * Gold will stay rangebound for now, but still targeting $3000/oz * Copper and aluminium may fall near-term, then rally into 2H25 * Grains look soft, but sugar, silver, or nat gas could push higherGold Overview: Debt, wars and inflationAfter a series of record highs, gold sold off in the wake of the US elections on concerns over rising rates, a stronger USD and, linked to the latter, lack of appetite from EM central banks to keep adding gold if domestic currencies are under pressure from tariffs. That said, a bullish undercurrent persists, with concerns over an increase of global public debt, along with a rebound of inflation, likely bringing buyers back into the market.Silver Overview: Lack of supply growth meets strong demand Prices in China have traded at a premium for most of 2024, as shown in Exhibit 214. The backdrop in China has become more [ even] constructive, driven both by demand and supply. China’s silver consumption has strengthened on rising use from the solar industry, while production has slowed because the country’s smelters face tight global mine supply – a theme we discuss in the zinc section. Gold::silver ratio to fall by another 10 points Investors took a more constructive view on gold when the Fed started cutting rates, although the expectations around the pace of monetary easing subsided after the Republican sweep. This has also increased headwinds to silver. That said, silver is more cyclical, so once the dust settles, the white metal should outperform because it is key to the energy transition and also sensitive to manufacturing activity. Continues in premium later todayNews/Analysis: Equity Recap: US equities advanced on Monday as investors considered incoming President Trump's new Treasury secretary pick, hedge fund manager Scott Bessent. Large caps lagged small caps: S&P 500 (+0.30%) vs. Russell 2000 (+1.47%). MSCI Emerging Markets (EEM) and MSCI EAFE (EFA) gained 0.07% and 0.52% respectively.Market News: "Scott Bessent spent the past 40 years studying economic history. Now, as Donald Trump’s choice to lead the Treasury Department, he has the chance to make his mark on it... In his first interview following his selection, Bessent said his policy priority will be to deliver on Trump’s various tax-cut pledges. Those include making his first-term cuts permanent, and eliminating taxes on tips, social-security benefits and overtime pay. Enacting tariffs and cutting spending will also be a focus, he said, as will be “maintaining the status of the dollar as the world’s reserve currency"." Source: WSJ Fiscally responsible, monetarily loose"President-elect Donald Trump plans to raise tariffs by an additional 10% on all Chinese goods coming into the U.S., according to a post Monday on his social media platform Truth Social. The post immediately followed one in which Trump said his first of “many” executive orders on Jan. 20 would impose tariffs of 25% on all products from Mexico and Canada. Trump is set to be inaugurated as the next U.S. president on Jan. 20." Source: CNBC Always negotiating"Walmart is reversing course on diversity, equity and inclusion initiatives, joining a growing list of businesses retreating on DEI programs... The world’s biggest retailer will no longer consider race and gender to boost diversity when granting supplier contracts, and stop collecting demographic data when assessing financing eligibility." Source: Bloomberg- DEI Death"Tesla’s electric vehicles would be shut out from consumer rebates under a proposal by California Governor Gavin Newsom, pitting the prospective Democratic presidential hopeful against Republican power player Elon Musk. Bloomberg- Politicians always burn down barn doors after horses escape"Well-known bond investor Ken Leech was charged with criminal fraud on Monday for allegedly orchestrating a $600mn “cherry-picking” scheme that improperly allocated trades to particular portfolios at Western Asset Management. FT Shades of Hillary and Tyson FoodsPolitics/Geopolitics:Israel Broadcasting Corporation quoted an Israeli political official stating the agreement with Lebanon is not an end to the war, but a ceasefire that will be evaluated daily, according to Sky News Arabia.Israeli Channel 12 reported rocket shelling from southern Lebanon on Nahariya, according to Sky News Arabia. There were also reports of two Israeli raids on Lebanon's southern city of Nabatieh, according to Al JazeeraIsraeli Broadcasting Authority said discussions on demarcating the border with Lebanon will take place 60 days after the ceasefire, according to Al Arabiya.Heavy Israeli strikes hit the southern suburb of Beirut, according to Guy Elster citing local reports.Ukraine's Kyiv was under multi-wave Russian drone attacks, according to the Mayor, while it was separately reported that Russian air defences destroyed 39 Ukrainian drones overnight, according to Russian news agencies.Russia's Kremlin says the possibility of western countries giving Ukraine nuclear weapons is "Absolutely irresponsible"; the west should carefully listen to Putin. Elsewhere, Russia's Spy Chief says Russia are completely against a freeze in the conflict, need a long lasting peace, according to IFAX.Data on Deck: GDP, PCE, Holiday* MONDAY, NOV. 25 None scheduled* TUESDAY, NOV. 26 New home sales* WEDNESDAY, NOV. 27 GDP PCE * THURSDAY, NOV. 28 None scheduled, Thanksgiving holiday* FRIDAY, NOV. 29 Chicago Business Barometer FINAL MARKET CHECK…Detailed breakdown and write up on the BOA report today