Metals Minute 153: Bond Market Blowout

We have all the metals moving higher this morning, with palladium up a fraction, gold up 1.5%, platinum up 2.5%, and silver up 3.5% so far. One issue people find concerning is a new plan being explored publicly by the US Treasury, in which they will “buy back” treasury products from dealer inventories and reissue other treasury securities to replace them. The plan is to target bonds with little market demand and target replacement products with terms more appealing to bond investors today.

While a common phrase used to support the plan involves the statement, “This is not QE,” it is certainly an open admission for the need to intervene in global bond markets undergoing a liquidity crisis under the current conditions.

We also have new plans being explored for the metals exchanges to allow gold and silver products from “artisanal producers” to be considered as suitable for settlement. Typically, gold had to be supplied only in certain formats to be considered suitable for acceptance. This illustrates the extreme tight conditions in the marketplace for physical metal, and some of the challenges involved with sanctions on other metals producers.

International dollar strength means Americans can currently purchase physical gold and silver on sale.