China's $38k Gold Target & July 24th Market Changes! A Hidden Bullish Message?

Hello everyone, welcome to BaldGuyMoney, and we start this one off immediately talking about escalations in the war with Iran, where both sides have now admitted to hitting civilian infrastructure, including a water desalination plant in Kuwait, which, and I say this as a person who lived in the Middle East for 7 years, is kind of a big deal and tells me this is likely to get worse before it gets better. And for gold, which was only just able to get back above the $4,000 per ounce support line on Friday, and silver, which is holding support between $55 and $57 an ounce, it means pressure remains on prices as this military operation, that many had expected to last 8 weeks at the most, drags on, and I'd say when it comes to gold, silver, and even the stock market now, we should all prepare for more pain as a result of this over the short term, because the market is convinced this is bad for energy prices, bad for inflation, and will force the Federal Reserve to increase interest rates. That said, and for those of you thinking about selling your metals and walking away for good, we can't sit here and pretend as if everything is okay in the world, and as some analysts and content creators shift their gold and silver pullback targets, and adjust their recovery timelines, with some pushing higher prices back in time, and others now moving them up to July 24th to coincide with China ending paper gold trading, my position is, and it's why I've said I won't revise any targets or timelines until at least August, is that we are getting closer to something breaking and strange behaviors in key assets like the U.S. dollar, and oil prices are telling us something much bigger is happening that we aren't being told about, just like in 2007 when banks already knew something was wrong in the real estate market, but we didn't find out until much later. So in this video, I want to dig into this by first sharing my thoughts on why I am suspicious of this market, and why I am preparing for a crisis that sends metal prices up, instead of focusing on the short term downward pressures that exist in the market today, and we'll finish this video on the topic of China, the July 24th paper trading cutoff date, as well as rumors that China is going to push gold price to $38,000 an ounce, we'll cut through the noise on this topic, just like we did when we accurately debunked the July 4th gold revaluation and gold bond story, to determine what's true and what's not. Now before we get started, for those of you who are gold and silver buyers right now, please remember that Summit Metals is an A-plus rated dealer by the Better Business Bureau, their prices are fantastic, their products are authentic, and their customer service is first class, and right now Summit Metals is offering three months of free vaulting services on physical metals, segregated and stored in your name, and this is great for people who want to diversify storage of a large gold and silver stack, as well as for European viewers who want to buy physical metals at Summit prices and legally avoid VAT, especially on silver, and if you want more details on this, I will leave the link to this in the video description below. So diving in, in 2007, banks and financial institutions colluded and cooperated to make it appear as if the market was perfectly fine as they dumped billions of dollars of worthless assets on unsuspecting retail investors, pension funds, and even other financial institutions in some cases, leading up to one of the biggest financial catastrophes in modern history, the global financial crisis, giving us two amazing films, Margin Call and The Big Short, both of which tell the story in a clear and entertaining way. Now as I said at the start of the video, I think we are once again being misled and misdirected when it comes to the state of the economy, the state of financial markets, as well as the state of the war with Iran, which I am finding it almost impossible to get real-time updates on, and let me know in the comments section if you've had the same issue. Anyhow, the first thing that tells me things are not right in the market right now is how expectations of the Fed raising interest rates have impacted the commodity market, they've impacted the bond market, yet the S&P 500 remains near its all-time high. Now this may not be so strange to some of you out there, as earnings for the S&P 500 have been going up, and for many, that's enough to justify the higher valuations, as consumers seem to be resilient enough to survive the current inflationary environment. But under the facade of rising stock market earnings, the fact is, the American consumer, and in a broader sense, the global consumer too, is extremely weak right now, and you can see just how weak when we look at the latest personal savings rate data out of the United States showing how the typical American is only saving about 3% of what they earn right now versus a recent high of 6.4% back in January 2024, and an average of about 6% to about 6.5% before 2020. The situation right now is ugly, and declines in the savings rate have typically coincided with declines in stock market earnings as well as stock prices. But with so much of the stock market's earnings being tied to borrowed money exchanging hands between AI companies, the truth is, this is an illusion of strength, especially when you consider the fact that about 33 cents of every $1 in net income being reported by S&P 500 companies right now in earnings reports is tied directly to the AI ecosystem with approximately 40% of that money being borrowed money. Which is why I find it curious, almost unbelievable in fact, that as the market prices in higher interest rates in the bond market as well as commodities prices due to expectations that the war with Iran is inflationary and will cause energy prices to go up, despite the fact that oil remains mysteriously well below $100 a barrel, well I find it curious that the forward looking market, the same one that priced in higher interest rates in 2022 despite achieving record earnings at the very same time those higher rates were being priced in, which caused the stock market to pull back a total of 25% by October 2022 is not pricing any of this in, when such a great deal of earnings are based on the ability to borrow money cheaply and is being exchanged between AI companies and that is why I think the market is either wrong about the Fed hike narrative or more likely hiding something like it was in 2007. And to be perfectly clear, it's not going to be long before we find out exactly which one it is, because as things stand today, the market expects to see the Federal Reserve increase interest rates by one hike, so 0.25 percentage points, by September of this year and that is a hard deadline for the Federal Reserve to prove how strong it really thinks the American economy is, if it thinks the stock market and AI boom can continue without the availability of cheap money, as well as how serious they are about tackling the inflation problem. An inflation problem that is primarily becoming worse due to two things that the Federal Reserve has absolutely no control over, which are US government spending that continues to hit new highs, adds to rising prices, and in my opinion is at least partially masking a real recession as this government spending shows up in GDP data, with the second factor being the impact of the Iran war on energy prices, which higher interest rates can't really cure as the issue is going to be availability of oil as opposed to availability of dollars. And this partially explains why, despite a new war raging in the Middle East, increasing volatility in the stock market, a major correction already happening in the prices of gold and silver and a Japanese yen, which is one of the three historical global safe haven currencies being on the brink of a crisis, the US dollar is just hovering around 100 on the DXY and is down more than 3% year to date, the US dollar versus the Chinese Yuan, even though rate hikes are being priced back into the market, which was something that spiked the US dollar versus the Yuan in 2022. And although only insiders likely know what's really going on here, the exaggerated crash in metals prices, strangely low oil prices, and a US dollar that has barely reacted to the market, pricing out two to three rate cuts and pricing in one to two rate hikes tells me someone is lying here and either the rate hikes aren't coming and commodities like gold and silver are going to blast off again in 2026 along with copper and the mining stocks or oil price is about to spike massively and the entire global economy is going to suffer badly as a result of it, at which point central banks are going to be forced to come in and save the day, which likely results in that blast off for metals coming in 2027. But like I said, we will review these timelines shortly, maybe even in September after the Federal Reserve meeting to see what they do with that critical deadline. But as the United States scrambles to make deals to get oil to the market, bypassing the Strait of Hormuz, I can't help but start leaning towards the second scenario where we have to wait a bit longer for higher metals prices while experiencing a massive crisis and deepening of the current recession I already think we're in. But either way, hold your metals and buckle up. Now, moving on to this video's viewer question, and remember, I answer one question, at least one viewer question in every video I do. Put your questions in the comments section below right now, and you never know, your question may be next in my video. And this week, we're looking at the situation in China with questions from Money Checkup and Flowers Grow asking what is really going on with the end of Chinese paper gold trading? Is it bullish for gold? Like some are saying, could it cause a short term sell off for gold and be bearish like some others are saying? And what about this $38,000 price target people are talking about? Is there any truth to it? But just before we answer those questions, I want to remind you all that owning land is another way to protect yourself from inflation and currency debasement while also being a very useful asset for preppers. Land is a hard asset. I have recently purchased some land for myself, and if you've been wanting to get some land for yourself but have had trouble getting started, please remember that channel partner Land of Land can help you get started easily and affordably. They even have lots starting right around $1,000 with their weekly auctions offering fantastic deals all across America. Buying is made easy, and they even accept credit cards for payment for people looking to earn points on the purchase. So check them out at landofland.com or call them at the number on the screen. And remember that the code BALDGUY gets you $300 off your purchase. So the topic of $38,000 an ounce gold and the math behind it is gaining traction in the metals community right now thanks to a video done by Andre Jik and at least according to my Patreon members later on copied almost verbatim by the channel Felix and Friends. And in that video, Andre Jik discusses the Trump administration's desire to return the USA to Hamiltonian economics, which, among many finer points, is focused on building the country's ability to manufacture or produce goods to replace foreign imports so the USA can run a trade surplus to grow the wealth and safety of the country while keeping its valuable gold in the country instead of sending it off in exchange for imports. Now, of course, in 2026, we settle, for the most part, most international trade using paper U.S. dollars, and it's been that way since 1971 when Richard Nixon took the United States off the gold standard, meaning instead of exchanging valuable gold for foreign imports, as was the case during the time of Alexander Hamilton, the USA exchanges them for printed U.S. dollars, which they can just print at will. That said, Jik makes a very good point in his video by pointing out how China is using the dollars they receive to buy gold, in many cases coming straight out of vaults in the United States, as a part of a greater plan to settle trade in a fairer manner using gold instead of printed paper dollars. And he wraps the video up by talking about how China is effectively putting an end to paper gold trading on July 24th, I'm sure many of you are already familiar with that date, as a way to get people out of the paper market, push them into physical metals to allow China to boost its long-term influence on setting the price of gold. As the country prepares to extract more value for the goods they are exporting to other countries, as well as it prepares for the price of gold to possibly reflect a true value of roughly $38,000 an ounce, based on a calculation popularized by Luke Groman that is derived by dividing China's trade surplus of $1.2 trillion in 2025 by the amount of gold they imported, which was 940 metric tons. Now all of this sounds good in theory, in fact it sounds great in theory, I would love to see $38,000 an ounce gold, but the first fact that we have to address is that where many people are calling this an outright ban on paper gold trading in China, the truth is that it's major Chinese banks that are ending services allowing regular people to trade leveraged gold contracts, and while this will impact many people in China who are trading gold in the paper market and is likely being done at the behest or at the request of the Chinese government, these people will still be able to own physical gold as an alternative, as well as buy gold ETFs, which aren't going away, but have seen investors pull out a record $2.9 billion in the month of June, driven by Chinese traders taking profits and moving cash into the stock market, which is up 60% versus the 2024 lows, on the backdrop of a strengthening yuan which has made owning gold less attractive for some Chinese investors. So the question here remains, is this bullish for gold and silver, or is this bearish for gold and silver? Well, to start with the bearish argument, some people like FlowersGrow are pointing to the fact that the end of paper metals trading at large Chinese banks will cause selling pressure in the market, forcing people to sell off large paper positions all at once, driving prices down, and they are perfectly right to be concerned about that, because generally speaking, the Chinese market is overwhelmingly net long on precious metals, both gold and silver, meaning investors are overwhelmingly betting on prices to go up, and the end of those paper trades takes a lot of those bullish bets out of the market. That said, the process of shifting people out of the paper gold and silver market and into the physical gold and silver market has already started, with most analysts agreeing that the majority of forced selling has already happened, so it's already behind us, coinciding with an increase in the cost of trading paper gold and silver contracts, which started earlier this year, and that's what it means when you hear that margin requirements on gold and silver contracts are going up. It means the price to play in the paper market is going up, and that fact already forced most of the sellers out of the market, meaning most of the bearish consequences of this change are already priced into the market today. Now, on the flip side of this argument, you have a lot of people saying and claiming this is going to cause a massive squeeze in the market, where a lot of people who are being forced to exit the paper market all at the same time are going to demand the physical metals all at once, causing flash shortages and an immediate and volatile price increase, similar to what we saw between November 2025 and January 2026, before the big metals correction happened. And they are pointing to the large amounts of gold China is importing right now, as well as the fact that the Chinese Central Bank bought gold at its highest levels in nearly two years in June, and they're pointing to these things as proof that there is a massive squeeze on physical metals incoming, specifically coinciding with the July 24th deadline. And in addition to that fact, silver imports remain elevated right now in China, with May data showing silver imports above all months that we saw in 2024 and all but two months from 2025, proving that China is as hungry for silver as it ever has been. But this data hides one crucial fact, and that fact is that sentiment in the metals market is extremely low right now, with money leaving gold ETFs in three of the last four months with June showing outflows from gold ETFs in all geographic regions. And for now, that means a squeeze on physical supply is unlikely over the short term because the regular people needed to make that squeeze happen simply aren't participating in the metals market right now. That said, I think this creates the possibility of a squeeze on supply that makes even the December and January squeeze look small, but it requires time and a catalyst to get people back in, meaning if the Federal Reserve doesn't raise rates in September, or maybe they even give us clues that they don't intend on raising those rates in the July meeting, or they raise rates but we end up seeing a crisis like I suggested in the first part of the video, that is a catalyst that gets people back into the precious metals market. And that creates an environment for a squeeze on the physical metals themselves as people around the world pile back into the physical metals market, which this time around is going to be amplified by the fact that the world's largest gold and silver market, that being China, is forcing its retail investors into the physical metal this time around with no options of playing it in the paper market. And that could be the squeeze that sends gold to $10,000 an ounce, but not $38,000 an ounce, not now and not by July 24th, but more likely at the end of this cycle, which I have tentatively marked as ending in 2028 before we potentially get a longer pause. But this timeline may need revision while at the same time understanding that the sudden appearance of a crisis that requires intervention from central banks could send this metals market up at really any moment. And that's really what I keep saying here and why I think you need to be prepared today and not necessarily wait too long for a specific price to buy at. With that said, I'm wishing you all a fantastic day ahead. Thank you very much for watching this video. If you enjoyed it, please remember to leave a like. Please share this content with other people in your life you may think would benefit from this video and please remember to take care of yourselves and take care of each other. It is a very wild time, not only in the markets right now, but in the world at large. I'm wishing you all safety. I'm wishing you all peace. Have a fantastic week ahead. See you in the next video. Goodbye.