Silver Eagles and the Gold Rush: Who's Winning?

Elena Reyes: Welcome back to Outside the Dollar. I'm really glad you're here because today's episode is one I've been looking forward to putting together. We're diving into some genuinely complex territory, central banks, metals markets, monetary credibility, and I want to make sure we break it down clearly. Here is where we start today. China's central bank has been buying gold—not quietly, not cautiously, but at a pace that has raised eyebrows at Forbes, at the IMF, and among analysts who track reserve movements closely. And the United States is watching. The People's Bank of China has added to its gold reserves consistently even as prices hit record highs. Think about what that tells you. When most buyers pull back, back because something gets expensive, central banks have been leaning in. That is not normal retail behavior. That is a strategic signal. So what is that signal? Here's the important thing to understand. Gold reserves are not just about wealth storage. They're about credibility. A country with substantial gold holdings is telling the world our financial footing does not depend entirely on another nation's currency. See, that is a message aimed squarely at dollar dependence. The US dollar has served as the world's reserve currency since Bretton Woods in nineteen forty four; for decades that arrangement worked in America's favor-other countries needed dollars to trade oil, to settle debts, to hold in reserve-but that arrangement also gave the United States enormous leverage over other economies, and China, along with several other nations, Speaker 2: has been trying to get out from under that thumb. Elena Reyes: Has spent the last decade quietly working to reduce that exposure. Gold is one of the most direct ways to do that-you can't sanction gold; you can't freeze it in a foreign account the way you can freeze dollar denominated assets." Russia learned that lesson sharply in twenty twenty two when the West froze roughly three hundred billion dollars of its foreign reserves. The countries watching that move took notes. Now this competition between the US. and China over gold is not new; central banks have been accumulating since around twenty ten, when net purchases turned positive for the first time in decades. What's different now is the pace and the context. Forbes reported that China's buying has continued even at elevated price levels, Which historically has not been how central banks behave; they typically buy on dips. By buying through record highs suggests the motivation has shifted from opportunistic to strategic. Here is where I want to be careful, though: Central bank gold buying does not automatically translate into gains for someone holding a gold coin in their safe at home. The relationship between official purchases and retail prices is real but indirect. Demand from central banks tightens global supply and supports a price floor over time. over time, but the actual price you see on any given day is driven by something more immediate-real interest rates, dollar strength, and market sentiment. So we have this large structural story playing out at the level of nations and central banks, and then we have the street-level price that a saver actually sees when they look at the market. Those two things are connected, but the connection has a lag, and understanding that lag matters a lot if you are thinking about the about this as part of your own financial picture. To put this in perspective, Forbes flagged China's buying as one of the most consistent demand signals in the current gold market-consistent, not reactive. That word matters. Which brings us to a question worth sitting with: If the biggest institutional buyers in the world are treating gold as a hedge against dollar denominated risk, what does that mean for the price itself? And more specifically, what has the price actually done and why? So all that central bank buying has to show up somewhere in the price, right? Here's where the mechanics get interesting, and this is important to understand clearly. Gold crossed $3,000 per ounce in early 2025 and has stayed elevated. That's not a blip. Historically, moves like that track with something specific: declining confidence in the stability of fiat currency, not panic. but a slow, steady repricing of trust. Now the two variables that most directly move gold on any given day are real interest rates and dollar strength. Real rates are what you actually earn on a bond after you subtract inflation. That's the critical part. When real rates are positive and high, gold looks less attractive because you're getting paid to hold dollars. When they're negative or falling, Speaker 2: gold looks more attractive because you're getting paid to hold dollars. Elena Reyes: When they're negative or falling, gold looks more attractive because you're getting paid to hold dollars. Gold starts looking like the smarter store of value. Right now, both signals are mixed, the dollar has held relatively firm which would normally put a lid on gold prices, and yet gold has stayed elevated. What does that tell you? It tells you the usual relationship is under stress, the market is pricing in something beyond the short term rate trade. Here's what I find genuinely worth paying attention to. And I want you to sit with this: when central banks are buying and retail investors are hesitating, that divergence has historically resolved in favor of the central bank trend. Not immediately, sometimes it takes a year or two, but central banks have longer time horizons than individual traders, and they're not buying on sentiment; they're repositioning reserves strategically. Think about it this way: if you knew a large patient buyer If a constant buyer was consistently purchasing an asset month after month, regardless of price, what would you expect to happen over time? That's not a guarantee, but it's a pattern worth understanding. Now, here's the counter argument, and I want to be fair to it because balance matters here: gold has had extended flat periods, Sometimes years, where the price goes nowhere or actually falls. Anyone who bought near the nineteen eighty peak would Speaker 2: have taken a loss. Elena Reyes: Weighted over two decades to break even, timing and purpose matter. That's not a reason to avoid it, but it is a reason to be clear eyed. So what's the take away for someone thinking about their own savings? Gold at elevated prices is not automatically a bad entry point if your purpose is long term diversification, rather than a short term trade. But you want to Speaker 2: be sure that the price is not too high. Elena Reyes: Want to go in with genuinely clear eyes about what gold actually does, it doesn't pay a dividend, it doesn't compound, what it does is hold purchasing power across long stretches of time when paper assets are losing it. That's the core story, and that framing, holding purchasing power, connects directly to something else worth considering: Gold tends to pull a companion asset along with it, usually Actually, with a delay. Silver has historically lagged these big gold moves, then caught up sharply once momentum is established, and right now the gold-to-silver ratio is sitting well above its long-run average, which suggests silver may be undervalued on a relative basis. That's the conversation coming up next. Now flip that on its head for a moment. We've been talking about gold, central banks, macro forces, the big structural story, but there's a quieter part of this market that often gets overlooked until suddenly it isn't, and understanding it is key to the whole picture: silver. Lear Capital recently released an exclusive 1.5 ounce Silver Eagle, and the size is worth noting. It sits between the standard one ounce coin and larger collector formats. The idea is to give savers more silver per coin without pushing them into bars, which carry different storage and liquidity considerations. Here's why that framing matters: Silver has historically lagged gold in terms of attention. When gold moves, silver tends to follow, but then it often moves sharply once that momentum is established. As established, the gold to silver ratio is the tool analysts use to measure this. Historically, the long run average sits somewhere around sixty five to eighty ounces of silver per ounce of gold. Right now, that ratio is running well above its historical average. What that tells you, on a relative basis, is that silver looks undervalued compared to gold at current prices. That's not a prediction, it's a comparison. Think about it this way: If you believed gold's elevated price reflects genuine stress in the monetary system and we've laid out why that case exists, then silver is pricing in considerably less of that stress. Whether that gap closes, that's the real open question worth sitting with. Now the product itself: the one point five ounce Silver Eagle from Lear Capital carries a numismatic premium above spot silver price. That's standard for exclusive mint products, and I want to be clear eyed about what that means for you as a buyer, because this distinction matters: there are two distinct layers of value in a coin like this: the spot value (just the silver content) priced at market, and the collector premium, which depends on exclusivity, condition and demand from other collectors down the road. Those are very different things. If you're buying primarily for silver exposure, you really want to understand how much of what you're paying is actual metal versus premium. Lear Capital has been in this space since nineteen ninety seven. Their customers-people like Larry G from Florida who reviewed them for retirement portfolio expansion-tend to describe the service as straightforward and transparent. And that matters. That clarity matters when you're making a purchase decision in a market that has no shortage of noise and complexity. and complexity. So the broader point here is this. Silver offers a different entry point than gold at a lower per ounce price with a ratio that historically has reverted. Whether an exclusive coin format is the right vehicle depends on whether you're buying for metal exposure or for the collector angle. And that question of purpose, what exactly are you buying and why, leads directly into what we need to close on. So, here's the question I want to leave you with this week, and it's one worth sitting with clearly: We've covered a lot of ground today-central banks loading up on gold at record prices, real interest rates and dollar strength sending mixed signals, silver trading at a historically wide discount relative to gold, a collectable product that straddles spot value and numismatic premium, but all Speaker 2: these developments are still being debated. Elena Reyes: But all of it circles back to one thing, and this is where the noise falls away: Why are you holding metals, or thinking about holding them? There's a real difference between holding gold or silver as a store of value, something that preserves purchasing power across decades, and holding it as a speculative position, betting on a price move in the next twelve to eighteen months. Neither answer is wrong, but here's the thing. And this is important: your allocation should actually reflect whichever one it is. Because if you're in it for long term value preservation, short term price volatility barely matters. If you're in it for a trade, the timing risk is real, and we talked about what happened after the nineteen eighty peak. Now consider this, and it matters: Central banks are accumulating gold deliberately at elevated prices. With no apparent urgency to sell, retail participation is still moderate by historical standards; that combination (patient institutional buyers and a smaller retail crowd) is historically the phase where purpose driven, long term holders tend to be better positioned than reactive ones. So the question to sit with this week is simply this: does your current allocation in precious metals actually reflect your intention? Not what the market is doing, not what a headline says, just your intention, clearly. That clarity is worth more than any price target. That wraps up today's episode of Outside the Dollar, and I want to leave you with the core question we spent this whole episode building toward. Does your current metals allocation actually reflect your real purpose? Are you in it for long-term value preservation or are you positioning for a shorter-term trade? Because those are two fundamentally different strategies, and they deserve two completely different approaches. The central bank patients we talked about, the retail hesitation-that divergence historically resolves in one direction-worth sitting with as you think through your own position. If you want to go deeper, visit Lear Capitals dot com or call eight hundred five seven six nine three five five to speak with a specialist, and if this episode helped you think differently about any of this, please leave a review. It genuinely helps more people find the show and understand these complex topics. Thanks for spending this time with me. I'll see you next episode.