Happy Sunday, GoldBuzzers!

Chaos is gold's rocket fuel, and with consumer sentiment crashing near all-time lows and the government shutdown breaking records at 38 days, gold’s still flirting with $4,000 while traders bet on December rate cuts.

Today's Deep Dive reveals something potentially HUGE - the Pentagon just changed the game for silver forever. Plus: Why Cambodia just snubbed London's vaults for Beijing, and what happens when Uncle Sam goes shopping for a metal that's already in shortage..

Ok, let’s dive in.

What a week! Gold climbed back above the crucial $4,000 psychological barrier on Friday, but then closed a whisker below it, as soft US economic data fueled hopes the Fed might finally cut rates in December.

Consumer sentiment tumbled to 50.3, just above the June 2022 record low of 50, as the record-breaking 38-day government shutdown continues to grind on.

October layoffs surged to a 20-year high, while the FAA's decision to slash flights at 40 major airports sent ripples through the travel sector. Traders now see a 70% chance of a quarter-point cut next month, up from 60% just 24 hours ago - though Fed officials remain hawkish and this week's stronger ADP employment and ISM services data are keeping bulls in check.

The softer dollar gave gold an extra boost, making it more attractive to international buyers who continue seeking safe-haven protection amid mounting economic and political chaos. With SNAP benefits cut to 65% of normal and air traffic in disarray, uncertainty remains gold's best friend heading this weekend. Stay golden! 🏆

This is interesting! On Thursday, the Pentagon changed silver's status forever.

After evaluating 1,200 supply disruption scenarios across 84 minerals, the US government officially designated silver as a critical mineral. This means that Silver now sits alongside rare earths, lithium, and cobalt on America's strategic resource list.

This wasn't a symbolic gesture.

The designation followed a comprehensive government risk assessment concluding that silver supply vulnerabilities pose substantial risks to defense capabilities and industrial production. When the Department of Interior makes this call, it unlocks tangible federal support mechanisms most investors are unaware of.

Why Silver Made The Cut

Three criteria determined Silver’s critical mineral status.

First, economic essentiality. Silver powers solar panels, electric vehicles, electronics, and defense systems. Industrial demand hit a record 680.5 million ounces in 2024, driven primarily by green economy applications.

Second, supply chain vulnerability. The US imports 64% of its silver needs, primarily from Mexico, Canada, and Peru. That concentration creates exposure most policymakers finally recognized as unacceptable.

Third, no viable substitutes exist for silver's unique properties. Its thermal conductivity, electrical conductivity, and reflectivity remain unmatched in critical applications.

The Profound Supply Problem

I think what’s interesting here is the timing.

Silver markets have run supply deficits for five consecutive years from 2020 through 2024. The cumulative shortage totals 678 million ounces, equivalent to roughly 10 months of global mine supply.

Most investors miss why this matters.

Approximately 72% of silver production comes as a by-product of base metal mining. Only 28% of silver mining responds directly to price signals. So, when demand surges, supply can't quickly adjust. Mining expansions require five to eight years from decision to production.

The inflexibility creates a serious structural problem that price alone won't solve.

The Stockpile That Disappeared

The US strategic silver stockpile was completely depleted by 2002.

The Defense Logistics Agency received 165 million ounces from the Treasury in 1968. By 1976, they determined the stockpile exceeded defense requirements and began sales. The remaining silver minted American Silver Eagles from 1986 onwards until nothing remained.

Today, the National Defense Stockpile lists zero silver holdings.

When you're importing 64% of a critical mineral with zero strategic reserves while running five consecutive years of market deficits, you've created a vulnerability that eventually demands policy response.

What The Designation Actually Does

Ok, so what does this mean in practical terms? Well, critical mineral status unlocks specific federal mechanisms.

For instance, streamlined permitting for domestic mining projects cuts years from approval timelines. Tax incentives for US mineral processing facilities make domestic operations economically viable. Direct federal investment in mining operations provides capital that markets alone won't supply.

Most significantly, the designation enables government stockpiling programs.

When federal procurement enters a market already running structural deficits, supply-demand dynamics shift permanently. The designation transforms silver from primarily a precious metal into a strategic industrial resource that government policy actively supports.

The China Angle

China installed 886.66 GW of solar capacity in 2024, a 46% year-over-year increase.

Their solar industry consumed massive amounts of silver, with photovoltaic applications accounting for 17% of total silver demand globally. China controls 57% of global refined copper production, added 97% of new copper smelting capacity since 2019, and dominates rare earth processing.

They're actively securing silver supplies while deploying technology that consumes it at unprecedented rates.

Meanwhile, the US sold its strategic stockpile and never rebuilt it. The asymmetry in resource strategy became impossible to ignore once policymakers started running disruption scenarios across critical supply chains.

The Timing Tells Us Everything

This policy shift arrives while industrial demand hits record levels, markets run consecutive deficits, and geopolitical competition for strategic resources intensifies.

Look, Washington doesn't add minerals to this list for fun. They do it when they're scared. Scared of running out. Scared of depending on countries that might cut them off. Scared of losing the tech war to China.

The Pentagon ran 1,200 disruption scenarios. They didn't like what they saw. Five straight years of deficits. Import dependence at 64%. Zero strategic reserves. China controlling the processing. It’s a grim situation.

When the federal government starts writing checks for a commodity already in shortage, things can get interesting fast. We're about to find out what happens when Uncle Sam goes shopping in a market that's already picked clean.

At $48, silver might look expensive by last year's standards. By next year's? That's the trillion-dollar question.

A handful of stories you might have missed this week:

Silver Gets Smacked But Still Shines Silver took a 2% hit Tuesday as profit-taking swept through precious metals, though at $47-48 per ounce it's still crushing it with a 55% gain year-over-year that would make any growth stock jealous. Fortune

Major Banks Call for $5,000 Gold UBS, Goldman Sachs and ING are all seeing gold hitting between $4,200 to $5,600 per ounce by next year. Finance Magnates

Cambodia Chooses China Over London for Gold Storage In a move that's ruffling feathers in the West, Cambodia just became the first country to store its gold reserves with China instead of traditional hubs like London. Bloomberg

China Kills Gold Tax Break in Surprise Move Beijing just scrapped a long-standing tax incentive for gold retailers starting November 1st. Bloomberg

Record Q3 Sees Investors Go All-In on Gold Investment demand for gold hit record highs in Q3 2025 with ETF inflows surging 134% this year. Investing News Network

Last Sunday, I asked where you think Gold will be next Halloween. Here’s how you voted.

$4,500-$5,000 was the clear winner with 41% of the votes, but a very healthy 27% of you weighed in at over $5,000!

That’s all for this week, folks. Before you go, please take a moment to rate today’s GoldBuzz and tell us how we did.

Rick Adams
Founder, GoldBuzz
rick@goldbuzz.com