(Money Metals News Service) In a recent Money Metals podcast, host Mike Maharrey interviewed gold market analyst Jan Nieuwenhuijs about critical topics impacting the gold market, including central bank gold revaluation, concerns about America’s gold reserves, and significant arbitrage activities involving gold transfers from London to New York.
(Interview Starts Around 6:30 Mark)
Who is Jan Nieuwenhuijs?
Jan Nieuwenhuijs is a respected gold market analyst and investigative journalist known for his in-depth research on gold markets, particularly in relation to central banks, monetary policy, and international gold flows.
Jan Nieuwenhuijs writes articles and analyses for Money Metals Exchange and is known for uncovering critical insights into gold auditing practices and financial policies affecting the precious metals sector. You can follow him on X (formerly Twitter) @JanGold_.
Central Bank Gold Revaluation and Inflation Concerns
Nieuwenhuijs clarified that gold revaluation refers to an accounting method by which central banks adjust the book value of their gold reserves to match current market values, creating an unrealized gain on their balance sheets.
This adjustment allows central banks to convert these gains into spendable funds without physically printing money, potentially leading to inflationary pressures.
Specifically, he noted that the U.S. Federal Reserve currently values its gold certificates, representing the Treasury’s gold holdings, at just $42 per ounce.
If revalued to present market prices, it could yield approximately $700 billion, significantly expanding the monetary base and possibly fueling inflation similar to the 1970s.
Nieuwenhuijs stated that such revaluation practices are indeed under consideration, citing discussions about funding a sovereign wealth fund through these unrealized gains, which raises concerns about substantial inflationary effects.
Auditing America’s Gold Reserves: Transparency and Trust Issues
The conversation also addressed America’s unclear gold reserve status at Fort Knox. Despite claims of holding 8,133 tons of gold, the U.S. hasn’t had a credible audit since the 1950s. Nieuwenhuijs highlighted legislative efforts like former Congressman Alex Mooney’s Gold Reserve Transparency Act, calling for regular audits and thorough checks for encumbrances like leases or swaps.
Nieuwenhuijs’s investigations revealed significant auditing flaws, missing documentation, and repeated breaches of seals on gold compartments, reinforcing the urgency for a comprehensive audit to maintain trust in the U.S. dollar.
Gold Arbitrage: London to New York Transfers
On current gold market dynamics, Nieuwenhuijs explained recent massive gold flows from London to New York driven by arbitrage opportunities due to expected U.S. tariffs on gold imports. Traders have been purchasing gold in London and simultaneously selling futures contracts in New York, exploiting the price discrepancies.
He debunked misconceptions about the U.S. government using this gold for its reserves, highlighting the impracticality of central banks trading 100-ounce COMEX contracts when they primarily deal with 400-ounce bars.
Potential Tariffs and Market Unpredictability
Regarding potential tariffs on precious metals, Nieuwenhuijs considered them unlikely since gold primarily serves as a monetary metal, not a commodity. However, he acknowledged the unpredictability of policy under former President Trump, emphasizing the importance of vigilance among investors. Nieuwenhuijs urged holding gold and silver as tangible assets to safeguard against currency instability and inflation.
Conclusion: Gold as a Secure Investment
In summary, Nieuwenhuijs emphasized gold’s critical role as a secure investment during uncertain economic conditions, advising investors to maintain tangible holdings amid ongoing geopolitical and economic volatility.
Key Questions and Answers
The following are the key questions and answers in the Money Metals podcast interview with host Mike Maharrey and gold analyst Jan Nieuwenhuijs:
What is gold revaluation, and why is it significant?
Gold revaluation is an accounting practice where central banks adjust their gold reserves’ book value to current market prices, creating unrealized gains. These gains can be converted into spendable funds without physical money printing, potentially causing inflationary pressures.
Why is an audit of America’s gold reserves necessary?
An audit is essential due to longstanding uncertainty about whether America actually holds the claimed 8,133 tons of gold. Credible audits have not occurred since the 1950s, and prior efforts revealed significant flaws and irregularities. A thorough audit is crucial to maintain trust in the U.S. dollar.
What is causing significant gold flows from London to New York?
Gold is moving from London to New York primarily due to arbitrage opportunities created by expected U.S. tariffs on gold imports. Traders buy gold in London and simultaneously sell futures contracts in New York, exploiting the resulting price discrepancies.
Are tariffs on precious metals likely, and what impact might they have?
Tariffs on precious metals like gold are considered unlikely because gold primarily serves as a monetary metal rather than a commodity. However, unpredictable policy changes under former President Trump keep investors cautious, emphasizing the importance of holding gold and silver to protect against currency instability and inflation.
