How Gold Gets To $10,000

Source: Zero Hedge

Date: May 11, 2025

---

Submitted by QTR's Fringe Finance

In April 2025, the gold market continued its unprecedented surge in physical deliveries from futures exchanges, signaling a significant shift in global financial dynamics. The COMEX reported the delivery of 64,514 gold contracts, equivalent to approximately 6.45 million ounces or $21.3 billion in value, marking the second-highest delivery volume on record.

The CME Comex is a key marketplace for trading futures in gold, silver, and other commodities, where contracts can also be converted into physical metal through delivery.

Typically, open contracts decline sharply before delivery starts, but this time, positions unexpectedly surged and were then largely cash-settled instead of delivered, raising speculation about potential behind-the-scenes shortages and high incentives for cash settlement. Despite this, demand for immediate delivery remained strong, with over 10,000 new contracts opened, the second-highest on record.

Concurrently, gold inventories have fallen since early April, possibly linked to these unusual settlements and subsequent physical withdrawals. Even with predictions that tariff changes would reduce arbitrage and slow gold flows from London to the U.S., demand for futures and physical deliveries remains robust as the market heads into May.

This extraordinary movement has prompted speculation about the underlying causes. Geopolitical tensions, such as the ongoing conflicts involving Russia and Ukraine, Iran and Israel, and the complex dynamics between India and Pakistan, have undoubtedly contributed to a heightened demand for safe-haven assets like gold. Additionally, the intensifying trade disputes between major economies have further fueled uncertainty, making gold an attractive option for preserving wealth.

However, beyond these immediate factors lies a more profound transformation in the global financial system. Since 2008ish, countries like Russia and China have been actively reducing their reliance on the U.S. dollar, a process known as de-dollarization. This trend has been accelerated by recent developments, including Saudi Arabia's decision to settle oil transactions in currencies other than the dollar. Such moves indicate a collective shift towards a more diversified and resilient monetary framework.

In this excellent new interview, Luke Gromen argues that the current dollar-centric system is unsustainable due to escalating deficits and debt levels in the United States and suggests that transitioning to gold as a neutral reserve asset could facilitate a more balanced global economic structure. This approach would allow commodities to be priced in multiple currencies, reducing dependency on any single nation's economic policies. This hour with Luke is a must listen.

Gromen also notes that the conflict in Ukraine has exposed the limitations of conventional military strategies, emphasizing the need for economic tools to assert influence. By adopting gold as a reserve asset, nations can navigate geopolitical challenges without resorting to direct military confrontation, which is increasingly untenable in a world with nuclear capabilities and deeply interconnected economies.

The implications of such a shift are profound. The market revaluing gold to levels of $7,500 and even $10,000 per ounce could enable the U.S. Treasury to significantly bolster its financial position, should a shift take place. By adjusting the official price of its gold holdings, the Treasury could effectively generate $2 to $3 trillion in value, providing a substantial infusion into the Treasury General Account without increasing debt.

In this context, the massive gold deliveries observed in April may not be coincidental, Gromen notes. They could represent strategic moves by state actors, possibly including the U.S. itself, to prepare for a redefined monetary landscape.

The scale of these transactions suggests involvement at the highest levels, as such significant movements would typically attract regulatory scrutiny unless conducted by entities with sovereign authority.

It is starting to seem clear that as the global economy stands at the cusp of a potential monetary reset, the role of gold is being reevaluated. I can’t help but feel like I should continue to closely monitor these developments, as they may herald a new era in the architecture of global finance.

Something big could be in the works…