Stefan Gleason, CEO of renowned trader Money Metals Exchange, stated that the price of gold remains firmly above $2500, while the price of silver has consistently held at the level of $30. He pointed out that the resurgence of demand for gold in the West will provide a new catalyst for gold prices and add another flame to the current strong global demand situation.

Stefan mentioned that market participants are now very confident that the Federal Reserve will initiate a long-term interest rate cut in September, especially with weak employment data.

However, the stock market is still trading near historical highs, even with increased volatility. A pullback or sustained downturn in the stock market may provide a new catalyst for gold, but a negative trend in the stock market is clearly not a necessary condition for gold to rise.

At the same time, the demand for physical gold and even ETF stocks supported by gold in the West has actually remained moderate for most of this year, especially compared to 2020-2023.

Since the end of 2023, the demand from Asian and central banks has been the driving force behind the rise in gold prices.

However, the rebound in purchasing activity in North America and Europe will add another flame to the currently strong global demand situation, and it is expected that silver prices will also rise along with gold.

According to GoldSeek, Money Metals has grandly opened a large new storage facility in Idaho, which is more than twice the size of the Fort Knox US gold and silver storage facility, attracting attention from the gold industry and numerous "mainstream" news media.

Stefan also mentioned that as spot gold prices reach historic highs, investors may expect the stock prices of precious metal mining companies to also hit historic highs. But overall, the situation is not like that.

Mining stocks represented by the HUI Gold BUGS index are still down more than 40% from their 2011 highs. Despite the significant increase in gold and silver prices this year, these stocks are still at a low level.

There are many reasons why most mining stocks lag behind metal stocks, and the mining industry is a difficult and risky business. Even if the value of the final product of the mine increases, the mining cost may rise even faster.

Gold holdings can buffer the fluctuations of a company

He explained that when product prices are extremely low, mining industry leaders overlook the golden opportunity to repurchase their own products and keep them on the balance sheet. On the contrary, they shortsightedly chose to trade in relatively meager US dollars, believing that this would look better in their quarterly earnings reports.

Throughout the history of the mining industry, it has been notorious for its poor management of investors' capital, leading to a negative sentiment on Wall Street and poor stock price performance.

Of course, with gold prices recently soaring to historic highs above $2500 per ounce, industry executives may feel that now is not a good time to take this step, "he said.

Given the current momentum and a series of favorable factors driving up the price of gold, we suspect that the situation will be like this

But even if they believe that the market price of gold is currently too high, at least in name, what reason do they have not to keep their much cheaper counterparts, silver

He finally said, "Even if the silver price reaches $30 per ounce, it is far below the historical high of nearly $50. In many ways, silver prices are undervalued, especially considering that rapidly growing industrial demand may exceed supply. Taking concrete actions to show confidence in their products will help gold and silver mining leaders break the cycle of poor stock price performance.