Zimbabwe Announces Plans to Introduce Gold Backed Currency

In a bold move to revive their economy, Zimbabwe has announced plans to launch a gold-backed currency. If successful, which countries may follow in their footsteps?  

Meanwhile, tragedy strikes in Turkey as a devastating landslide at a gold mine risks the lives of nine workers and erases a billion dollars in market value. Plus, we’ve got updates on the latest in the regional banking crisis. 

But before we get to our big stories, let’s take a look at some of the latest inflation data.

Prices Rose More Than Expected in January
In a recent release by the Bureau of Labor Statistics, data shows a notable uptick in the Consumer Price Index (CPI), rising by 0.3% in January. This increase translates to a 3.1% inflation rate over the past 12 months, remaining significantly above the Federal Reserve's target of 2%.

If Your V-Day Jewelry Itches, It Might Not Be Pure Gold
Nickel, a common additive used to fortify gold jewelry, can often be the cause of allergic reactions. To avoid skin irritation, higher karat gold, like 22 or 24 karat, has little to no base metal (in this case, nickel) less alloy and should reduce allergic reactions.

Skyrocketing Ticket Prices – A Historic Comparison
If you wanted to go to the very first Super Bowl, played in 1967 at the Los Angeles Coliseum, you could buy a ticket for $6 – or around $56 in today’s dollars. Data from TickPick shows the starting price for a ticket to the latest Super Bowl soared to $8,100, while the average cost of admission was a staggering $10,658.43.

NYCB Stock Dips as Inflation Worries Compound CRE Market  
New York Community Bancorp (NYCB) shares saw a nearly 4% decline following the release of January's inflation data. Investors fear that elevated borrowing costs, coupled with low occupancy rates in office spaces, could further pressure lenders like NYCB, which are already facing risks of defaults from borrowers within the commercial real estate sector.

For years, Mike Maloney has been at the forefront, cautioning about the underlying problems within the banking sector.  

Nearly a year ago he said, “The banking system is not looking very well... Ever since 2008 the banks are allowed to keep everything on their books at face value instead of having to mark those assets to the current market conditions.”

Mike is back with more insightful analysis in his latest video, shedding new light on the ongoing banking sector issues.

If you want to get Mike’s thoughts, click here to watch his latest video.

Which country has produced the most gold in history?

A. South Africa
B. Russia
C. Mexico
D. Canada

Scroll to the bottom of this email for the answer...

Landslide Devastates Turkish Gold Mine: Nine Workers Missing

An unexpected landslide has devastated SSR Mining, a U.S.-based company, at its second-largest gold mine in Turkey, leaving nine workers missing. The catastrophe occurred earlier this week, suspending operations at a mine that has been open since 2010.

According to regulatory filings from the company, operations were suspended because of a “large slip on the heap leach pad.” In simpler terms, there was a significant structural breakdown, leading to a massive spill of crushed ore beyond its designated containment area.

In a swift response to the disaster, Turkey’s Interior Minister Ali Yerlikaya reported that over 400 search and rescue workers have been deployed in a search for the missing miners.

In addition to the potential loss of life, the landslide also led to a dramatic plunge in SSR Mining’s stock, wiping out roughly $1 billion in market value in just 6 hours on Tuesday. The accident sparked wide criticism from Turkish politicians, especially considering past issues at the site, including a cyanide waste spill in June 2022.

The Turkish government has confirmed they are launching an investigation into the incident.

The Risks With Gold Mining Stocks

In many ways, mining stocks are similar to a leveraged bet on gold itself. When the stars align, they occasionally deliver incredible returns, which is part of their allure. While gold mining stocks can have a higher upside, they also come with a wide range of risks.

Gold mining operations face challenges such as equipment failures, unexpected geological conditions, and inefficient extraction processes. Environmental issues can result in substantial cleanup costs, regulatory fines, and damage to the company's reputation. Changes in policies or legal disputes over land rights and compliance can lead to potential delays or operational shutdowns.

All these issues can disrupt operations and lead to increased costs, affecting the mines' productivity and profitability. Not to mention the safety issues, that we see today.

There’s also the simple fact that the majority of mining stocks underperform gold, especially in the long run. Over the past five years, for example, gold has returned over 52% while gold mining stocks (VanEck Gold Miners ETF) only returned 27%.

The recent catastrophe at SSR Mining's Çöpler Mine serves as a reminder of these risks. Beyond the immediate humanitarian concerns, accidents like these can erode billions in market value overnight.

Gold mining has implications on increasing the overall supply of gold, but at GoldSilver, we don’t follow any particular mining stocks too closely. We’re more interested in investing in the real thing – gold bullion.

That’s because physical gold offers a tangible asset and over the long term, it historically outpaces the speculative nature of mining stocks.

Central Banks Continue to Stockpile Gold

In response to continued economic uncertainty, central banks are increasingly turning to one of history's oldest and most trusted assets: gold.

In 2023, central banks have nearly matched their record-setting pace, purchasing 1,037 tons of gold, according to the World Gold Council. This figure falls just 45 tons short of the peak reached in 2022, highlighting a continued strategic emphasis on gold as an asset.

Leading the charge in gold reserves is the United States, with over 8,000 tons. Here’s a visualization of how the United States (overwhelming majority of the North America box) stands compared to the rest of the world.

But the World Gold Council’s latest report Gold Reserves by Country, shows several nations are playing catch up, making large gold purchases in Q4 of 2023:  

• Turkey added 61.21 tons of gold
• China added 43.86 tons of gold
• And Poland added 24.98 tons of gold

As central banks worldwide navigate through economic uncertainties, this continued accumulation of gold speaks volumes about its enduring role as a cornerstone of financial stability.

For those interested in visualizing these shifts in gold reserves, the World Gold Council's website offers detailed interactive charts and data.

Zimbabwe to Launch Gold Backed Currency In Search of Financial Stability

Zimbabwe has announced plans to launch a gold-backed currency, aiming to restore value to its nearly obsolete dollar. The move is a strategic effort to steer away from the current reliance on foreign currencies like the U.S. dollar and South African rand, which have become the default for businesses due to the local currency's instability.

Minister for Finance and Economic Development Mthuli Ncube told reporters, “Going forward, we want to make sure that the growth we have achieved so far — which is very strong — is maintained and even increased,” he said. “We can only do that if we have further stability in the domestic currency... And the way to do that is perhaps to link the exchange rate to some hard asset such as gold.”

What’s Next?

The exact timeline for the currency's introduction remains a mystery, but the story is yet another in the broad theme of de-dollarization across the globe that Mike has been speaking about for years.

The BRICS economic alliance has increased its overall usage of local currencies in bilateral trade. According to a recent report from the International Chamber of Commerce (ICC), Russia, China, and India have ditched the US dollar in 95% of trade. Now others are abandoning the dollar too.

As demand for the U.S. dollar diminishes, we could continue to see escalating inflation. In the most dire scenarios, it could lead to a total collapse of the dollar... It’s hard to say when or if that will ever come to pass – but there is a simple solution to protect yourself from those scenarios.

Just buy gold.

Gold has been shown many times throughout history to preserve your wealth and protect you during times of crisis.

That’s what many of the world’s central banks are doing – and you can too.

Buy Gold or Silver Today

That will conclude this week's edition of GoldSilver Nuggets. Join us again next week as we keep you updated on the regional banking crisis and gold and silver.

Best,

Brandon S.  
GoldSilver

Which country has produced the most gold in history?

A. South Africa
B. Russia
C. Mexico
D. Canada

Answer – A. South Africa

Throughout the 20th century, South Africa was the world's largest gold producer. The country's gold production peaked in the 1970s, but since then, production has declined, and China has surpassed South Africa as the world's largest producer annually. However, when considering historical production over the years, South Africa still holds the title for having produced the most gold.

Nearly half the gold ever mined in human history has come from South Africa's Witwatersrand basin.