On the heels of the Fed cutting rates, this will fuel gold prices much higher…
Michael Oliver’s audio interview has now been released! (Link below) discussing gold futures breaking above $3,700 and how smart investors are going to make a fortune! For now…
September 17 (King World News) – Selva Demiralp, Former Economist at the Fed: An increase in long term rates, following a rate cut is typically a sign of inflation expectations.
The long term reaction doesn’t look too good for the credibility of Federal Reserve so far…
Listen to the greatest Egon von Greyerz audio interview ever
by CLICKING HERE OR ON THE IMAGE BELOW.
Gerald Celente: PUBLISHER’S NOTE: As Trends Journal subscribers well know, we had called the bottom of gold prices when it closed at $1,850 per ounce in September 2023. And on 2 January 2024 we had forecast it would be a Golden Year for Gold. At that time, gold was at $2,041 per ounce. At the end of that year it went up some 27 percent. And as subscribers well know, we remained bullish on gold, and as we go to press, it is selling at $3,687 an ounce, down from the high of the day of $3,703 per ounce.
Now, as the following article notes, there is talk about launching a digital bullion coin. Should this become a major movement, it will drive the price of gold much higher and bring down stablecoins and a number of crypto currencies.
WORLD GOLD COUNCIL PROPOSES DIGITAL BULLION
The World Gold Council (WGC) is planning to test a digital venue for trading gold, settling transactions, and collateralizing the precious metal. An electronic form of gold “could revolutionize London’s $900-billion physical [gold] market,” the Financial Times said.
Currently, the London market recognizes two kinds of transactions. Trades of “allocated” gold cover specific gold bars. Trades encompassing “unallocated” gold are claims on a quantity of gold without specifying which bars are involved.
The WGC’s proposal would create a third type of transaction.
The digital gold units have been named “pooled gold interests” (PGIs) structured similarly to a trust. A small group would co-own each PGI. Banks and investors would be able to trade fractions of ownership in physical gold held in sequestered storage.
A digital ecosystem would also enable traders to “pass gold digitally as collateral for the first time”, David Tait, WGC’s CEO, said in an FT interview.
A test of the project will begin early next year in London and include “major banks and trading houses” as co-owners of the underlying gold, Allan Guild, founder of Hilltop Walk Consulting, an adviser on the project, told the FT.
London is the center of the world’s gold trade, in part because many central and commercial banks store their physical gold in the Bank of England’s vast vaults.
Gold has long been valued as a store of wealth specifically because it is physical and its value cannot be changed by governments’ decrees or manipulation.
However, gold must exist in a digital form to take its proper place in the world’s financial markets, Tait argues.
“We are trying to standardize that digital layer of gold, such that the various financial products used in other markets can be used in the gold market going forward,” he said. “My goal is that many asset managers around the world will suddenly look at [gold] differently.”
Gold has doubled in value since 2022 and set a new record above $3,600 last week. However, it remains a fixed asset for investors, offering no yield. If gold can be traded in a digital form, it could be used to meet margin calls in stock trading accounts or as collateral for loans, Tait contends.
“For banks, from a collateral perspective, they will make a lot of money, as they get an opportunity to use the gold on their balance sheet as collateral,” he said.
Some in the gold industry fear the asset will be left behind in a world in which other assets are digitized, making them easier and thus more attractive to trade. Currently, gold is traded “over the counter,” meaning directly between buyer and seller without a broker in the middle.
However, past efforts to digitize gold have not succeeded. Most projects creating a gold-backed stablecoin went nowhere. The two most successful are Tether Gold and Pax Gold. The two have $1.3 billion and $1 billion under management, respectively, while gold-focused exchange-traded funds hold about $400 billion.
That is one reason among several that critics doubt the WGC’s plan.
“Gold is already the best performing asset class,” Adrian Ash, chief researcher at trading firm BullionVault , told the FT. “This feels like a solution in search of a problem.”
Also, the blockchain database for gold, known as the Gold Bar Integrity program, has yet to catch on. It was begun in January by the London Bullion Market Association in collaboration with the WGC.
The blockchain is intended to make public the records of transactions, verify the origins of gold being traded, and, over time, quash “nefarious practice”, Tait said. “It has been at times a difficult process,” he added, but remains optimistic for the blockchain’s ultimate acceptance.
“As the database gets ubiquitous, everyone will use it…Each gold bar will end up having its own passport, its own ‘birth certificate’,” he said.
King World News note: Adrian Ash is correct, “This feels like a solution in search of a problem.”
Michael Oliver Says Fortunes Will Be Made!
To listen to Michael Oliver discuss gold futures surging above $3,700 this week, silver futures hitting $42.98 and mining stocks surging CLICK HERE OR ON THE IMAGE BELOW.
Also Just Released!
To listen to Alasdair Macleod discuss the wild trading in the gold, silver, and mining shares this week CLICK HERE OR ON THE IMAGE BELOW.
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