The Unraveling of Western Commodity Hegemony

 

Assessment of Western Commodity Trading Mechanisms and Future Metal Prospects

 

1. Historical Context: Alleged Price Suppression Mechanisms  

COMEX and ETFs:
The Chicago Mercantile Exchange (COMEX) and gold ETFs (e.g., SPDR Gold Shares) were perceived as tools to suppress gold prices by creating a "paper gold" market. Futures contracts and ETFs allow investors to trade gold without physical ownership, theoretically capping prices by inflating supply perception. Critics argue this mechanism bolstered fiat currencies (USD, EUR, GBP) by masking inflation risks and maintaining confidence in paper money.

Rationale for Suppression:

• Fiat Currency Stability: Rising gold prices signal distrust in central bank policies or currency devaluation.
• Financial System Control: Dominance over price discovery via Western exchanges reinforced USD hegemony in global trade.

 

2. Why Western Mechanisms Are Failing to Control Gold Prices

a. Physical vs. Paper Market Divergence

• Central Bank Demand: Central banks (e.g., China, Russia, Turkey, India) purchased record amounts of gold (1,136 tonnes in 2022, 55-year high) to diversify reserves away from USD.
• Retail Investor Shift: Post-2008 and COVID-19 crises, demand for physical gold (coins, bars) surged, bypassing paper instruments.
• Supply Constraints: Mining output stagnated (global gold production flatlined since 2016), while paper markets oversold "phantom" gold, creating a delivery risk crisis.

b. Geopolitical Decoupling

• Sanctions Evasion: Russia and China developed alternative trading platforms (e.g., Shanghai Gold Exchange) and payment systems (e.g., CIPS) to bypass COMEX and SWIFT.
• Non-Western Alliances: BRICS nations increased gold-backed trade settlements, reducing reliance on Western exchanges.

c. Erosion of Trust

• Market Manipulation Scandals: Banks like JPMorgan faced fines ($920M in 2020) for spoofing gold futures, undermining confidence in COMEX.
• ETF Outflows: Western gold ETFs saw $10B+ outflows in 2022–2023 as investors shifted to physical holdings or non-Western ETFs (e.g., China’s GoldETF).

d. Macroeconomic Pressures

• Inflation Hedge Demand: Global inflation (peaking at 9.8% in OECD nations in 2022) revived gold’s role as a store of value.
• Dollar Skepticism: Dedollarization efforts reduced USD’s share in reserves (59% in 2023 vs. 71% in 2000), lifting gold’s appeal.

 

3. Medium-Term Prospects for Key Metals

Gold

• Bullish Drivers: Central bank buying, geopolitical tensions, and recession risks.
• Price Target: $2,500–$3,000/oz by 2025, contingent on Fed policy and USD trajectory.

Silver

• Dual Demand: Industrial use (solar panels, EVs) and investment demand.
• Price Target: $30–$40/oz, leveraging gold’s rise and green energy transitions.

Copper

• Green Energy Catalyst: EVs (3x more copper than ICE vehicles) and grid infrastructure.
• Supply Deficit: 6.5M-ton deficit projected by 2030.
• Price Target: $12,000–$15,000/ton by 2030.

Aluminum

• Energy Transition Role: Lightweighting in transport and renewables.
• Price Volatility: China’s dominance (57% of global production) and energy costs drive fluctuations.
• Price Target: $3,000–$3,500/ton (long-term).

Steel

• Mixed Outlook: Slowing Chinese construction vs. global infrastructure spending.
• Decarbonization Costs: Green steel premiums may raise prices 20–30%.

 

4. Structural Shifts Undermining Western Control

• Rise of Asian Exchanges: Shanghai Gold Exchange now sets Asian benchmarks, handling 80% of global physical gold trade.
• Commodity-Backed Currencies: BRICS exploring gold- or commodity-backed trade currencies.
• Blockchain and CBDCs: Tokenized gold (e.g., PAXG) and central bank digital currencies threaten fiat dominance.

 

5. Recursive Risks to Western Financial Systems

• Loss of Pricing Power: COMEX’s share in gold futures fell from 90% (2000) to 65% (2023).
• Dollar Debasement Feedback Loop: Falling Treasury demand and gold’s rise could accelerate USD decline, exacerbating inflation.
• Industrial Metal Shortages: Western green ambitions rely on metals controlled by China (60% of rare earths) and Russia (20% of nickel), risking supply chain bottlenecks.

 

Conclusion: The Unraveling of Western Commodity Hegemony

The failure of Western mechanisms to suppress gold prices stems from structural shifts: physical demand overpowering paper markets, geopolitical decoupling, and macroeconomic necessity. In the medium term, metals critical to energy transitions (copper, silver, aluminum) will outperform, while gold remains a geopolitical and monetary hedge. The West’s diminishing control over commodity pricing signals a broader decline in financial hegemony, with profound implications for inflation, currency stability, and global power dynamics.

 

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Pagsusuri ng Mekanismo ng Pangangalakal ng Kalakal sa Kanluran at Hinaharap ng Metal

1. Kasaysayan: Mga Ipinapalagay na Mekanismo ng Pagpigil sa Presyo

COMEX at ETFs:Ang Chicago Mercantile Exchange (COMEX) at mga gold ETFs (hal. SPDR Gold Shares) ay tinitingnan bilang mga instrumento upang pigilan ang pagtaas ng presyo ng ginto sa pamamagitan ng paglikha ng isang "paper gold" market. Ang mga futures contract at ETF ay nagpapahintulot sa mga mamumuhunan na ikakalakal ang ginto nang hindi ito pisikal na pag-aari, kaya't nililimitahan ang presyo sa pamamagitan ng pagpapakita ng mas mataas na supply. Ayon sa mga kritiko, ang mekanismong ito ay nagpapanatili ng halaga ng fiat currencies (USD, EUR, GBP) sa pamamagitan ng pagtatago ng mga panganib sa implasyon at pagpapanatili ng tiwala sa pera.

Mga Dahilan ng Pagpipigil sa Presyo:

Katatagan ng Fiat Currency: Tumataas na presyo ng ginto ay nagpapahiwatig ng kawalan ng tiwala sa patakaran ng sentral na bangko o pagbaba ng halaga ng pera.

Kontrol sa Sistema ng Pinansyal: Ang dominasyon ng Western exchanges sa pagtukoy ng presyo ay nagpatibay sa hegemonya ng USD sa pandaigdigang kalakalan.

2. Bakit Nabigo ang mga Mekanismo ng Kanluran sa Pagkontrol ng Presyo ng Ginto

a. Pagkakaiba ng Pisikal at Paper Market

Pangangailangan ng Sentral na Bangko: Ang mga sentral na bangko (hal. Tsina, Russia, Turkey, India) ay bumili ng rekord na dami ng ginto (1,136 tonelada noong 2022, pinakamataas sa loob ng 55 taon) upang bawasan ang pag-asa sa USD.

Paglipat ng Mamumuhunan: Pagkatapos ng krisis noong 2008 at COVID-19, tumaas ang demand para sa pisikal na ginto (mga barya, bar), iniiwasan ang mga paper instrument.

Kakulangan sa Supply: Ang produksyon ng minahan ay nananatiling hindi lumalaki mula noong 2016, habang ang mga paper market ay nagbebenta ng "phantom" gold na nagdulot ng krisis sa paghahatid.

b. Geopolitical Decoupling

Pag-iwas sa mga Parusa: Russia at China ay bumuo ng alternatibong mga platform sa kalakalan (hal. Shanghai Gold Exchange) at mga sistema ng pagbabayad (hal. CIPS) upang iwasan ang COMEX at SWIFT.

Pakikipag-ugnayan ng mga Hindi-Kanluraning Bansa: Ang mga bansang BRICS ay nagpatibay ng gold-backed trade settlements, binabawasan ang pag-asa sa Western exchanges.

3. Mga Prospek sa Pangunahing Metal

Ginto:

Mga Pwersang Pampalakas: Pagbili ng sentral na bangko, tensyong geopolitikal, at panganib ng resesyon.

Target na Presyo: $2,500–$3,000/oz pagsapit ng 2025.

Pilak:

Dalawahang Demand: Industriyal na gamit (solar panels, EVs) at pamumuhunan.

Target na Presyo: $30–$40/oz.

Tanso:

Green Energy Catalyst: EVs (3x higit na tanso kaysa ICE na sasakyan) at imprastruktura ng grid.

Target na Presyo: $12,000–$15,000/ton pagsapit ng 2030.

4. Mga Istruktural na Pagbabago na Sumisira sa Kontrol ng Kanluran

Pagtaas ng Mga Palitan sa Asya: Ang Shanghai Gold Exchange ay nagtatalaga ng mga benchmark sa Asya, namamahala sa 80% ng pandaigdigang pisikal na kalakalan ng ginto.

5. Mga Recursive na Panganib sa Kanlurang Sistema ng Pinansyal

Pagkawala ng Kapangyarihan sa Presyo: Ang bahagi ng COMEX sa gold futures ay bumagsak mula 90% (2000) patungong 65% (2023).

Konklusyon: Ang Pagbagsak ng Hegemonya ng Kalakal sa Kanluran

Ang pagkabigo ng Western mechanisms sa pagpigil sa presyo ng ginto ay nagmula sa mga istrukturang pagbabago: ang pisikal na demand na lumalakas laban sa paper markets, geopolitical decoupling, at pangangailangang pang-ekonomiya.