In the Loupe
In the Loupe
Gold At $5,000... Let's Talk About It ft. David Siminski
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We discuss gold’s leap past $5,000 (and back) and unpack why refiners are pausing intake even as demand soars. David Siminski explains the credit and capacity squeeze, the silver backlog, and how jewelers can navigate cash settlements versus physical exchanges.
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Host Setup And Stakes
SPEAKER_01Welcome back everybody to In the Loop. What is up everybody? My name is Michael Burpo. Thanks again for listening to In the Loop. And in case you didn't know, gold is really expensive right now. Even more expensive than it was less than a year ago when I last spoke to David Siminsky. He's with United Precious Metals. And I had him on for an in the loop episode on April 8th last year. And at the time I titled the episode hilariously, Why the Heck is the Price of Gold So Darn High? And at that time, it was at$3,068. And now, less than a year later, the price of gold is in the 5000s. Who knows? Maybe it's down when this episode releases in a couple of days, but I have a guess it's probably still up. And it's been a source of conversation all over the internet and some of the forums I'm in about what is going on with these refiners. And some of them are limiting the amount of supply they're taking from stores and it's causing some discourse and I don't want to say panic, but some real um conversation around it. And I wanted to speak with David because he's my expert when it comes to gold. And we start to talk all about what's causing the price to continue surging, as well as what's causing this choke point in the uh refining flow and why that has come to be. It's a really interesting conversation, probably the most interesting conversation I've had ever on In the Loop. And just wait, we'll probably have him back on in about a year when gold hits another crazy high, or maybe not, maybe it falls off a cliff. I guess I don't really know. Anyways, I really hope you enjoy this conversation. Cheers. Bye.
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Gold’s Run And What’s Different Now
SPEAKER_01How are you doing? I'm doing so well. It's been uh hasn't even been a full year since I spoke with you. I just went back. I we had done an episode, one of our best episodes of all of last year. Uh, and the title of it, so ironic, was Why is the price of gold so darn high? And now, David, I don't know if you've checked. Do you know the price of gold is over 5,000? And not only that, it's at 5,400 as of this recording on January 28th, 2026. I do know.
SPEAKER_02I'm living that pain. We're gonna have a great conversation about it. And uh let's just get started, man. Yeah.
SPEAKER_01All right, David, here's the first question. Okay. Do you know what when we recorded it? We recorded last on April 8th, 2025. Do you know without looking what the price of gold was during that recording? And we were talking about wow, it's so high. Do you know what it was back then?
SPEAKER_02Okay, let me say April 8th of okay, 2025. I'm gonna guess it was like$3,400.
SPEAKER_01That's very close. It was$3,068 and 28 cents. And as of this recording, it is five thousand four hundred and eight dollars and twenty cents. That is a ridiculous run-up. I looked year uh in the last one year, gold is up 104%. And when we were having that conversation, everybody was just freaking out because oh, gold just pushed through 3,000. And you were talking about how, oh, you know, every time it pushes, maybe there's like a moment of reflection, maybe they kind of discuss with themselves. This feels different. What are you seeing on your end about gold being at just crossing the 5,000 mark and seeming to push towards six?
How Refining Actually Works
SPEAKER_02For the business, to be honest with you, are we allowed to curse or not? You can curse all you want. It's a complete shit show. Okay, that's the best way to put it. Um, there's reasons why, there's a lot of things going on in the industry. Um, United being a refiner and a metal supplier, we're right in the middle of it. And there's a lot of uh false narratives and bad information that's out there on social media about why it's happening and all that stuff. Some people have, you know, some people are clearly they understand it, others really don't understand it, and how it's going to affect everything now and going forward. But I will tell you right to start off, Michael, like this is when I tell them don't worry about gold at 5,000. Worry about gold at 6,000. You already passed five thousand. We already passed 5,000, didn't even stop. Okay. So how does that affect everyone and all that stuff? I know what's happening from our end, which really from United's perspective, we deal with the jewelers, the pawn shops, the manufacturers, the wholesalers, the trade shops, both in the United States and globally. So every everywhere there's pluses and minuses what's happening with with the with the with the metal price. But right now, this metal price being really high is almost uh in one way crippled a part of the industry.
SPEAKER_01And and what do you mean by uh crippled it? I guess maybe I don't fully understand the relationship for refiners because I've always just assumed that you were doing essentially a service, which is taking uh designs, I guess these this jewelry or or bulk, turning it into and taking it, and you make some fringe, you know, markup on it because you're doing a service and then you're giving money back on it. But then I started, I was reading in these uh the reason why I decided to message you last night was I was reading in uh a couple of the different Facebook groups, and like folks were talking about like some refiners aren't taking more or they're limiting it, and it seems like that's that seems crazy. Uh, what are you seeing on your end? Where am I getting it wrong?
Credit Lines And Why Refineries Pause
SPEAKER_02Okay, you're not, but what happens is is it's like anything. If you look for the answer on the internet, you're gonna get whatever answer you want. Here's how it breaks down, really. So, from United's perspective, at most, there's like only a few major primary refineries in North America. Okay, those would be the end guys on the food chain. Okay, there's like four or five. Some are bigger than others. But at the end of the day, there's levels when it comes to the refining business. There's to be honest with you, friend, and this goes for the retailers, wholesalers, manufacturers. There's cash guys, guys that work the streets, okay? Then there's what I call uh scrap guys. You know, there's always one guy in one town that buys all the scrap or buys all the merchandise. Then there might be one coin shop that basically sells a little bullion, but then buys all that, all that material also. And then there's what I call uh uh secondary little smelters. And what happens is what happens, they provide a they provide a service where you know they they'll use the term a refiner, but they're not really a refiner, Michael. What happens is they'll they'll take that metal in, they'll melt it, they'll do some analytical x-ray on it, and then what happens is is they'll pay the customer, and then they'll send that bar or that melted material to someone like me or someone else to actually finish, where we'll actually take that bar, melt it again, segregate out the gold, the silver, the nickel, the copper. So we're the finisher. Okay. So that's what how the chain actually works. I see. And the problem is is a lot of these uh cash guys, uh collectors, uh you can say pawn shops, all of a sudden, what happens is they feed so a lot of times these secondary, these secondary smelters, and then those smelters have to send it to a refiner to finish. So they're basically like I said, they're providing that service. Here's the big issue. The big issue is it's not an on all major refineries like United, we hedge the metal, which basically means we have a line of we have a line of credit with the bank. So what happens is is here's the difference Michael's jeweler sends in 25 ounces of gold scrap.
SPEAKER_03Okay.
SPEAKER_02At 25 ounces of gold scrap, let's just say it's 12 carat. So it has a little combination of 10, little combination of of 14, it's 12 carat. So when it was 12 carat and gold was$3,000 an ounce, it worked, it was$36,000. Okay. So 12 times, so that's how you got it. Now the problem is it's$36,000, not a problem. Now the problem, that same, that same batch, 12, now it's worth$60,000.
SPEAKER_03Yeah. Okay.
Silver Backlogs And Soaring Lease Rates
SPEAKER_02I'm starting to see the issue. So what happens is is okay, so you do send that material into us. We we melt it, we pull a pin, we do the analytical, we do all that stuff. So and we can do that in two to three days, depending on where it stands in line, how much we have in there. So then what happens after I pay you the sixty thousand dollars plus, then it takes me maybe 10 to 14 days to turn that into fine gold, go through our production facility, okay? And that product, and then what happens is that's when we get it to the form where then we can sell it. So the the I always tell people about refining, it's not about the it's about the finance charge from the time that we pay you till we get paid. So what happens is we're using our line of credit from the banks, okay, to basically hedge that. Okay, basically we're paying, we're borrowing money to pay you, then we're gonna pay the banks back on that. Okay. That's how it works. The problem is, okay, is most major refineries have large, large lines of credits. You know, I mean, you're into literally like hundreds of millions of dollars, hundred million dollars. Let's just think. Like I said, gold at 2,000, gold at 3,000, silver at about a problem. But then what happens is take it, it's almost like a credit card. All of a sudden you have a credit card where you have your American Express or your Visa card, and let's just say you have a$30,000 limit on that card. You go from travel, then what happens? Uh-oh, you blow through the$30,000. Well, the problem is, is when the market goes up, everything gets valued inside our building, inventory. So we're we're pushing against our line, which means when you're pushing against your line, you can't do any more business past your line of credit. So as you're as so what happens is we're tapping out, and so is what some of the other refiners are. They've already maxed out their line of credit. No one's doing anything wrong, but the problem is the value of what you're sending in is gotten more expensive. So it's gotten more expensive from the time we pay you till we get paid. And then what happens? It's coming from all directions. Now, gold's five, let's say gold's$5,400,$5,300, let's say. Well, everyone's now clamoring back to grandma's jewelry box like they did in 2010. Yeah. They're whole old inventory. People are going to the pawn shops and all that stuff. There, what happens is they're cashing in. They're cashing in. So what happens is they're selling, the retailers are buying it and all that stuff. They're they're they're making their profits and they're selling it. The problem is, like I tell I tell everyone, what happens is you can buy as much as you want, but no one ever thought when the metal went this high, refiners to a point can't afford it. You know, we can't afford to take that much at one time because it's getting too hard for us to basically finish it all. You know, we can't we can't move it quick enough. And what happens is all people, all us, we hedge our metal. So what happens when you're hedging your metal? You're you're buying and selling, you're buying and selling on doing the settlements for you. So we're like at a cap. Now, there's a few major refineries now that basically said we're putting the brakes on. Yep, nobody can ship us any silver, any gold, any platinum, nothing. We have to clear out what's in-house before we take anything in new in. We're falling behind. That's really what's happening.
SPEAKER_01That is so interesting to hear explained like that. It does really feel like there is there still is crazy demand for gold. And and the thing that we've seen from this entire past year is that the uh the prices aren't scaring away the customers. And that's increasing increasingly what I'm seeing when it comes to the the price of of products. We had the almost within within 10 sales when it comes to e-commerce. So we're looking at a limited data set, but when it comes to e-commerce, we had within 10 sales the same number of transactions in 2025 versus 2024. Almost identical. However, we almost broke our our record. We we were at we're within spitting distance of 2021 because the average order value is just through the roof. And it's because of the cost of goods. Right.
Demand, ETFs, And Retail Frenzy
Physical Versus Paper And Confidence
SPEAKER_02And I'm just on that, what happens is what I tell people like this like the jewelry, the jewelry space did well in 2025. And one of the reasons is to be honest with you, is it used to be considered fine jewelry, then it turned into jewelry. But at the price of gold right now, or the price of platinum, it is considered so the word fine has been put back into jewelry. So when you go out to buy a piece of jewelry now, or what happens is you get a gift as a piece of jewelry, you know, unless you're living under a rock, somebody spent a lot of money on this. You know, like it's it's truly could be uh, you know, an heirloom, a gift or whatever, but there's a lot of money tied up in this. So what happens is you pick up a piece of jewelry now and somebody gives a gift, like, wow, there's a lot of thought and there's a lot of monetary value to that. So a lot of independent jewelry stores and stuff like that had a very good year, even though the gold price keeps going up, up, up, up, and up. So they what happens, they might be selling as many pieces, but they're selling the value, just like you said for your sales. You're hitting the gross number, and some of these people have some some obviously some margins tied into that. So that's why the jewelry industry is doing did well in 2025. But there's the problem is with the jewelry industry, Michael, is they um the jewelry industry as a whole, they don't like volatility. No, they'll deal if it's gonna be 3,000 gold, they'll deal with it. If it's gonna be four, they'll deal with five. The problem is they don't need it to be if it's five, like they'll they'll work off that. But if it's going to six, they have a problem. You know, like if it's and it's constantly escalating, like today, gold moved up to almost$200 today. At the at the high of the beginning, I saw it like$250 this morning in one day, which is insane, right? It's insane. But I tell people proportionately, if gold moved up$250,$250 at$5,000, you know, when gold was a thousand, that would only be a$50 swing. So, you know, it's it's it's being if you're looking at it percentage-wise, yes. You are, and that's what that's really what happens. But this whole problem with the what you're seeing on the web boards and all this up, I tell this actually started like 10 to 12 years ago. What happened is two major refineries, two major refineries got in trouble. And when they got in trouble, okay, they lost their status, their LBMA status. And what happens is those two major refineries in North America, in the United States, they did like 70% of the capacity in silver. Wow. So they were doing a lot of the silver refining and they did a whole bunch of gold refining. Now, what happened is when they lost it, when they lost that, when that capacity got taken out of the marketplace, no refiners, the the ones that were left, we absorbed that business. Okay. All of us absorbed that business together. The issue is, is we absorbed it, and we had no problems absorbing it from a financial end or from a capacity end because silver was 20, gold was 22,000, then it was 2,500, then it was 3,000. We could absorb that capacity. Where it started to break down is when silver shot from, let's say,$25 to$50. So then what happens is it wasn't silver jewelry coming in from a refining standpoint. It wasn't like casting trees from a jewelry manufacturer. It was grandma's T-sets and flatware and all the sterling silver. So now we got, like anyone else, got inundated with sterling silver at$50. So what happens is the capacity, because no one increased the capacity from when those two refineries went out, no one increased it. We were just handling it, but then it was an onslaught of metal. So really the the shutdown began like about three or four weeks ago when most people started cutting off silver. They started not to say, we don't want silver anymore. We don't want silver because we have so much silver, we can never get it processed. I can pay Michael's jewelers, but I'm not getting paid because I have to throw it on the pile. And when it used to take me 10 to 13 days to refine that silver, now it's taking me two months or three months because I just can't get to it. So as Michael's jewelers sends me another shipment and another shipment and a shot, another shipment, we pay Michael's jewelers, it goes on the pile. So now the problem is the piles are huge. So guess what? And at the same time, the silver lease rates, because we're we're hedging metal, the lease rates were about 3%. It was nothing. Like it was part of our cost of business. Well, just in a when what happened is how this whole thing's being driven is a lot of central banks around around the world and countries stopped buying US Treasury bills. Yes. They have no confidence in they have no confidence in the dollar. So what they did is they bought physical metal. And when they bought physical metal, they emptied the vaults in London. They emptied the physical silver in London. So it's ironic. You have a shortage of physical silver, okay, because everyone bought it. Because they're not, they're they have no confidence in the US in the dollar anymore. So they bought the physical metal, country central banks all over the place, emptied it. Refineries, especially in North America and all over, have all this silver coming in, but we can't turn it fast enough to fill because every time we we do some fine silver, make some fine silver, and we put it, you know, we send it over, it goes in the vault. Someone buys it before it's even there. So we're not, we're not, it's not gaining. So then what happens? Those silver lease rates the bank went from 3% to 92%. So think of think of a credit card that you had 3% on there was your 3% payment on your interest, and it went to 92. So there was a stretch for like two weeks where companies like ourselves were paying an extra hundred thousand dollars a day in extra interest payments on the backlog and what we had still in house because the silver lease rates went up. Oh my god. So that was about a two, three, three-week period. It finally calmed down, but it still hasn't gone back to where it was. So now everyone got very skittish on silver because you're using a big part of your working capital line to basically house silver that you can't even refine because there's too much coming in. So they stopped it there, but it's taking a big chunk out of your line. Now gold is like gold's really easy to refine. You can refine it, there's outlets, much easier. The problem is that gold is no longer 3,500, it's 5,300, and just the value of the metal is eating a big chunk of your line. Yeah, you're counting. So now what happens is you have all this metal that's extended, okay? Because people online are like, this guy's gonna go out of bankruptcy and all that. That's not what it is. It's what everyone's just being protective of we only have so much money to work with. And the problem is, is everyone, like anything else, they want to buy this metal from the street, they want to turn inventory, and they always think someone's gonna be there to take care of it. And right now, those people that are there to take care of it, they're pausing for their own business sense and protecting because what happens, they got to get things settled because there's just too much metal flowing in. That is really the issue. There's too much metal flowing in, and the cost of that metal is unbelievably high.
SPEAKER_01So I want to ask first of all, it seems like now is the time to open up a refinery. I'm sure that that's easier said than done, but wouldn't it behoove everybody? Everybody involved, it seems like we need like another one or two refineries. Uh, is that not something? I was under the impression that gold refining um is not super scientific. It's just doing it at scale that is difficult. Uh, am I wrong in that? And like, why is there such a shortage of refineries across seemingly across the US?
Who Refiners Prioritize And Why
SPEAKER_02Well, there's just it's not really it's just you only have so many primaries, okay? I see. And guys, and like anything else, um, when you have to get into that, like uh from a refinering standpoint, from a from a refinery standpoint, like anywhere else, I might have said this to you on the first podcast. Whatever comes in our front door, package of shipping has to go out the back door, okay? So every time the longer it sits in our facility from a production standpoint, getting it done, it gets more and more expensive. What the refiners have done through the years is they eat their own young at times. They've pushed their their fees and their charges like a race to the bottom, lower, lower, lower, lower. Because you're always gonna make it up on. It's almost like the Walmart mentality. We're gonna we're gonna make it up on volume. We're not gonna, you know, we're gonna sell them a thousand widgets, but what happens is is you're making two dollars a widget. Well, they want it for 25 cents, but they're gonna but they're gonna order thousands and thousands of it. So it's like, okay, we're gonna make it up on volume. The problem is here is the volume, the margins that most refineries make is so razor thin that what happens is is you can't make a mistake, and there's so much coming in the it can't handle it. It literally can't. So I would equate to that refinery comment, like you said, building refinery. Building refinery is like building an ice rink. If you, if, if you've ever played hockey or ice rink, most of the time of an ice rink, it lays dormant, like during the during the day and all that stuff, little stuff. But the ice rink is busy Saturday and Sunday when the little kids and stuff are playing hockey and there's public skate, or what happens is from four o'clock till 10 o'clock at night. But most of the time, it's it's empty. So it's not a huge profitable thing. And the capital investment, it's not just about building the building or getting the equipment. It has everything to do. Who's gonna are you gonna have an outlet for that material? And it's also too is that that outlet is it gonna be recognized? Is it the quality of gold coming out of it? Is it gonna be standard for investment purposes? Is it gonna be standard for the the jewelry industry, all that stuff, for the electronic industry, for the for the dental industry, for any industry? So you have you have to hit certain criteria on that refinery, because if it was it was that easy, they would be all over the place. I'm sure. And most smelters have the ability to to do some analytical and do that. They just haven't taken that last step of actually becoming a refinery, putting in that wastewater treatment plant that you need on a facility, having all those chemicals on hand to treat all that metal and all that stuff. So it's it's different, you know. It's just it's just it's not as simple as you would think, even for us. Well, you could, like you said, not build a refining, even for us. What let's add capacity. Like we're trying to add capacity right now. Add add equipment. It's not just about buying the equipment. Then what happens is you have to find the space. Most people don't have space in their own building, so they have to either buy a building or build a building expanse, run the utilities, have all the permits, everything that goes into it. So also, okay, we'll just we'll just buy some equipment. No, because even when you buy the equipment, it's gonna take you nine months to a year to get even functional. So it's not that we're not trying, we are trying, and others are trying too. But the issue, the the issue is at the end of the day, we can't do it fast enough because the problem's right now.
SPEAKER_01So it sounds it's just one of those things, it's so strange to me because there is demand. Like you said, people are seemingly losing confidence in the dollar. And it's so funny. I read uh read like five articles the other day about the exact same topic from a variety of sources trying to see where did they overlap. And where do they overlap? They none of them would say the fact that they're people are losing confidence in the dollars. They always seem to like tiptoe around that. And what I keep uh being concerned about is if there's demand for gold by uh a lot of different countries, because as they move off of uh the US dollar and they need they're investing in metals, and seemingly the public has demand for it as well, even myself. I just actually sold the last of my stock that I had in just um tech stocks, and I actually just bought a uh a gold chain. And the reason why is because it's like, oh, why can't why shouldn't I be smart and use my um my leverage in the industry to take my my money and go into uh and use the money from these stocks and go into gold? And it's because it sounds like it's the perfect storm for it to keep defying gravity and keep going up. Where does the what is the outside factor I'm not seeing? Because to me, it seems like all green lights going forward for gold to get to you know to double again, to go from 5,000 to 10,000, because of the fact that there's demand on the outside, there's demand on the inside, and with the exception of this um this choke, you know, choke point of refining that you had just uh explained, it seems like there it's all all gas, no breaks. Where am I what am I missing here?
Inventory Decisions And U.S. Manufacturing
SPEAKER_02So the issue, remember, from gold from a from an investment standpoint, it doesn't give you a dividend, right? So it's it's gold has already been used mostly time as a portfolio as a as a hedge against inflation. So it's it's always you know, brokers have always said, you know, your portfolio should be bonds, stocks, a little bit of precious metals. The problem now is you have not only do not only do you have the big investment houses buying ETFs of gold and stock and all that stuff, paper gold. They're not even buying real gold, they're buying paper gold. But also you have the retail investor, the the Reddit guys, the Robin Hood people, they're trying to get involved. Okay, they're trying so this is driving up the price too, because everyone's trying to buy it, buy it, buy it. But it's still what happens is it's still what happens is is we still have to process it to get it into that form that people can buy it. Like let and also, too, is then you know, there's premium. So if the U.S. Mint or the Royal Canadian Mint is printing coins and all that stuff, you know, not a chain like a 24 karat coin, you know, there's costing for them to do that. They have to they have to buy the sheet blanks, they have to have it stamped out, they have to put their, they have to put their emblem on it, and all that stuff. So you're right. There's there's an ability to sell it right now, but then what happens is like let's say if gold, if gold corrects 20%, let's say it's a dot-com bubble. It's not saying that it is, you know. I mean, I seen forecast everything from 6,500 to 8,300 to 10,000. Okay. Well, what does that do to the jewelry industry? What does that do to the you know, to the what does that do to um you know the people that are trying to get married, the the guys that are buying the engagement rings and all that type of stuff? How's that gonna affect everything? I mean, everything's tied together. The jewelry industry is a small part of the overall gold industry. We think it's large because we're at JCK, we're walking around. I just came, I just came back from Vincenza. I was in Vincenza, Italy. That show's gigantic. I'm looking at these boots, I'm looking at the you know, the people walking around the jewelry everywhere, but still we're a small part of the overall.
SPEAKER_03Yeah.
Forecasts, Corrections, And Patience
SPEAKER_02But what I what I think what happens is is it really comes down to when people look at it, it's a capacity issue night round for the refiners because there's so much coming in the door. And what happens is it's it's a credit issue for the refiners because we only have so much money to pay out. And you're right, it's constantly, but we still have to pay that out and get paid. Pay that out, get paid. And even the banks, the banks are they're very good partners of the refining industry, but even they have a limit for credit risk because every time they're loaning, it's a credit risk, it's a loan. It's a loan. And like I said, we've had major refineries in the past go out of business, which affected a lot of people. So what happens is you you know the banks are much more, much more stringent on the audit process. Personally, at United, we're audited so many times it's unbelievable. Not just from the banks we use, but we're audited, we're audited from uh we're audited from all the certifications we have and everything like that. United's a little different, Michael, because we sell jewelry products. So for us, we're the end user of a lot of our own gold. So the gold that's getting done, we don't have to always sell it on the market. We're making casting grain and alloy and solder and wire and sheet and selling it to the industry. So we like I said, I we I always look at it, we see it from two different levels. But so what most refiners are doing is they're cutting off, they're trying to take a deep breath to try to get things fixed because it's flying so fast inside the building. The money's flying, the product's flying. So it's very hard to keep up. And people are just like, you know, and what I said is everyone thinks, like everyone thinks it's just unlimited, like it's always gonna be there. Uh basically, take your electrical, you know, you walked into your room right today and you flipped on the switch. There's a hundred percent of the time you think that the power's gonna go on, that light's gonna go on until you flip it and you're like, the light doesn't go on like you said. Yeah, is there and like what happened? What happened? Well, this is really what it's the same thing that's happening for us. It's like it just was running smooth until it's a push. Now, gold goes to 56, 57, 58, 59, silver goes to 125, 150. The problem doesn't go away, it only gets larger. Yeah, so as you were saying, you see the speculative of what's going on. That's why these refiners are actually just trying to take a breath. And a lot of them we are picking and choosing from United's perspective. I think we're trying to take care of our customers. United has United has 30,000 customers. Okay, so we're trying to take care of those people. We are not taking new business, we are not taking new people, even sending gold. We shut off silver a month ago, but we're not taking new customers. What it think about from a sales perspective how hard it is where people want to give you business and you're saying no. It doesn't even work, it doesn't even work mentally if you've been doing it as long as I've been doing it. But what happens is we're just trying to take care of our regular guys, and our regular guys, they have a lot more. I'm sure you know, so they have a lot and they rely on us. And the other refiners and people, they rely on them too. So that's part of the problem. So a lot of these people, let's say you take like 47th Street in New York City, it's one of the biggest areas, biggest areas where gold is purchased. It's gold on the street, scrap, and stuff like that. Those guys are right now paralyzed because the companies that they send it to basically said, don't send us anymore.
SPEAKER_03Yeah.
SPEAKER_02So then what happens is now they're tying up all their capital if they want to keep buying from their customers and they're holding the risk. So what happens is most guys will call up and they'll be like, hey, Dave, I bought, you know, I got 100 ounces, I want to lock in at$5,200. We used to be able to do that all the time. Now most people say, we can't lock in. Because as soon as we lock in, it goes against our line of credit because we're telling the bank we've got this much. So the bank's already all right saying this much, we're gonna take this much out. The problem is, is when they lock in, they're locking in to protect themselves because that's the price they bought it at. Now what happens is no refineries are letting them lock in. So what happens is you're exposed. So as long as gold's going up and you still can ship to your partner, you're good. Shape. But if gold goes down$300 or$400 and you bought a hundred ounces or you bought 50 ounces, you're taking that bath.
Closing Thoughts And Takeaways
SPEAKER_01Yeah. Oh man. All right, everybody, we're gonna take a quick break and hear a word from our sponsor. Hey, as we start a new season of In the Loop, I just want to say thank you so much for continuing to support our podcast. If you haven't already, make sure you're subscribed on Spotify, Apple Podcasts, or wherever you get your podcasts to ensure you're getting the newest episodes every Tuesday right in the inbox. The best way for us to grow is to have a great subscribe survey. If you want to give us the extra push, make sure you leave us five-star ratings on Spotify and Apple Podcasts. It helps us appear higher in the rankings and more people will find our podcasts. If you want to leave us feedback, go to punchmark.com slash loop at L-O-U-P-E, and leave us feedback at the bottom of the page with the survey form and let us know what guests you want on, what series you enjoy the most, and how we can make the best podcast for the jewelry industry. Thanks so much for your continued support. We have another great season ahead of us, and now back to the show. And we're back. Okay, so let's just talk about you talk about uh you had mentioned the dot-com uh bubble. That was the one I I I was born in '95. So uh that was like the first one that I can even come close to remembering. But the thing that was weird, the way that I have always, you know, with with perspective, I've always been confused about is is that it was uh so speculative that when you see, when you pierce the veil of the value behind it, suddenly, you know, like they talk about like pets.com sold for like a billion dollars or something like that. But what was that value? I couldn't really begin to describe it, but for some reason, the fact that the gold can be put into my hand and worn around my neck feels like I don't uh see it being a bubble. But then I look, for example, at the exact same time we're having this conversation, I pulled this up before we even started the the podcast, is I pulled up Bitcoin. And this is the same one. This is why I I discussions about crypto, uh, besides I have a hard time seeing it because I cannot put it into my hand, and that maybe that is a very limiting factor on my own ability to make lots of money, but Bitcoin right now, as of January 28th, 2026, we're looking at it's at 88,987. It just uh on October 6th, it was at 123,000. And that is a huge dip.
SPEAKER_02And I may, I may have known I may have known someone who bought it on.
SPEAKER_01Yeah, I was listening to it, and what I'm curious about is it seems like there is a utility for um for this investment that will never go away, which is uh the fact that you can make jewelry out of it. Whereas, and then we can have the conversation, what is the value of jewelry? Well, it's a luxury, but it's not like it's uh Yeah, but it's not like it's pockets inflation.
SPEAKER_02Remember, it's bullion. Some of this bullion backs federal gov governments around the world. I mean, the US dollar is not pegged to the gold standard since like 1972. So what happens, and they talk about it every now and then. I mean, basically they they say, you know, from you know, the internet chats and all this stuff that if they the all the gold in Fort Knox is like valued at I I think it's like$400 like the per ounce. Like that's the valuation. And if they changed it to now, there'd be a lot more money. Like you said, they didn't, they've never put the new gold price on the gold that's basically there. So supposedly, yes, allegedly, right? Everything's allegedly. But what happens is is yeah, it's the same with what people say about silver. Silver has industrial uses and all stuff. Those industrial uses over silver have been around for a long time. So why did silver go from$28 to$120? All those things were still, they were in play last year, three years ago, five years ago. So what happens is a lot of this really has to do with, you'll be honest with you, countries and stuff like that. And I'm not political on this, but the amount of money the US is spending, you know, they you know the government outspends itself. You know, it's just like people are worried the value of the dollar, the valuation of the dollar, the dollar gets weaker and weaker. So, you know, and we're part of that. We're part of that whole thing. So it's really hard to put up, you know, and you can probably have people in your pockets live. So, you know, there's probably 10 I used to say there was when I used to give seminars, there were 10 reasons why gold went up and down. The valuations, the geopolitical stuff, inflation, hedging, the mining capacity, if if the you know, the mines, how much they can get out of the ground. There were 10 like factors, and one factor didn't really lead, but all 10 factors led to the rise and fall of gold. But like you were saying about you feel like the currency, you like the C touch feel, right? It's in your hand, it's in your it's literally your little lock boxes, you're safe at home. Like it's like I feel better that I've got some control of something, right? I mean, that's and I think people are feeling like that. I it's it's like remember like back in 2009, 10 when we had the financial crisis, there was a run on the banks. So it's like I tell people like the gold market right now and stuff is a lot like if you don't have the physical gold where people want more and more physical, it's a lot like the stock market. People check their 401ks, like, oh uh, you know, I got my retirement, I'm I'm saving money, and I you know, okay. All right, so I'm like, okay, what if you have to actually get that money? What if you and everyone has to get that money in the same time?
SPEAKER_01I don't even know, I don't know if I could, I don't know how to get that money. I pay it every month and every pay. It's there, right? It's there. I think it's there.
SPEAKER_02I hope it's there until it's not, and if you cash it out and it's there, it's not a problem. But if you and everyone else tries to cash out or drive up the price of it, it's like what how are you gonna get it out? You know, how do you get it? So it's funny. I was talking to someone customer today. I'm like, you could see why grandma and grandpa used to stuff money in their mattress. In their mattress, yeah. So it's no different like the gold feeling you get on the seat on the C Touch feel. Everyone likes that they know this is gold, it's shiny and all that stuff. I'll give you a quick story. I had a customer once that how he was doing his gold. This is true. He would get the fine gold, not in bars or so in grain. And what happens is how he did it, how he kept the gold stuff like that. He had fish tanks, then he would use that as the gravel. Nobody would know.
SPEAKER_01That's so sick. A nice flex. I like that one.
SPEAKER_02Nobody would know, right? Nobody would know because what happens, remember the gravel, how it would look and all that stuff. So, yeah, I get the C touch feel. And like I said, is we don't know where it's gonna go. I just know what our credit limit is and what these other people's credit limit is. So, I mean, I I mean, the problem is like you and I have said earlier, United, like a lot of other, we're trying to take care of our regular customers. Our regular customers are what considered active customers, they do business actively once a month, once once every three months, like that. I got friends that are calling me that I haven't heard from in two years, customers. Yeah, hey Dave, can you help me out? I'm like, you haven't done business with me in 21 months. Yeah, and I said, United looks at that as what happens is you're using someone else, that someone else cuts you off, and now you're looking for an outlet.
SPEAKER_03I see.
SPEAKER_02And from the standpoint, you know, like you're trying to take care of your own people. So that it's really what happens, everything's connected. There is a capacity issue in the industry, there's also a credit limit issue in the industry, and everyone's just trying to get their whole and what I'm always stressing right now is patience. This could work out, uh, work out in 30 days, two weeks, or three months. But when you get emotional, and what happens, and then you start going online and you get people that rile you up and all that stuff, cooler heads will pay prevail. It's a pause, it's really what's called a pause. The problem is people aren't used to a pause.
SPEAKER_01Yeah, instant, instant uh fixes. And just while we were discussing, I just looked at uh the value of the US dollar in the last one year. Same thing I was talking about, how gold had gone up um just in the last one year, it gone up$2,768 or 104%. Uh the US dollar, uh, what used to be worth uh mine for some reason says uh just about a just about a dollar, it is now worth uh 84 cents comparatively, uh versus I guess um uh versus the euro, it looks like. And I guess do you foresee in the short term, in I guess short to medium term, that this um roadblock is going to go away just as the refiners work through it. There's not infinite gold out there, there's not infinite uh you know, grammar's jewelry that just is going to be showing up. It seems like it'll probably slow down at some point because of just supply and demand. Uh do you foresee this to slow down at uh in the near future?
SPEAKER_02I do, I do, and what happens is is you know, we'll watch you know, there'll probably be a correction. They said silver's overbought, all this stuff's overbought. And listen, all refineries and everyone's looking at it going, like, please go down, please go down, please go down, please go down. Because to be honest, we were doing better when gold was 2000 than when it's 5200. That's crazy. So, what happens? You know, so that's it, and because you know, people understand it's not just about you know, because a lot of refiners work off percentages, and it's like you're waiting you're making more money. Our carrying costs and our interest costs, and everything is going up just as well. So these are these are the issues, so it's it's not all. Gravy is really what it comes down to. But yeah, I think what happens is if we if everyone has a little patience, you we'll be better off. But right now, every day, it's like I mean, I'm having the same explanation just as we're talking. I must have said it 10 times today on the phone to people. I can only imagine because they don't understand it, they don't understand why this, or they don't understand why this. And they're like, Why are you doing this? Why are you doing that? I'm like, guys, we're just trying to keep the doors open. And that doesn't mean the shutting involved, but just like to keep it open so there's still metal flowing back and forth. And to be honest with you, and it's here's the difference, Michael. If someone like a jewelry manufacturer, if they're sending us refining and they're taking back physical metal, physical metal, that's easy. That doesn't go against your line, doesn't hurt you or nothing. I see. So you want that business. You're trading physical for physical, you're not touching your bank line. But the minute someone sends in scrap or sends and they want to get it paid in a check, then what happens is a processing time, all that interest, it goes against our line. That's the difference. So the jewelry manufacturers, which has always been one of United's heart and soul part of our clientele, that helps us out tremendously. That's why most refiners will be like, if you take back physical metal, you you you'll be okay. But then what happens is so jewelry manufacturers get to use the physical metal, but the general public or the Michael's jewelers, they laid out fifty thousand dollars or a hundred thousand dollars. They need that fifty or hundred back so they can buy more. Yes. You know, so they want to keep that as as the as the circle going.
SPEAKER_01Man, it's so interesting. Just like right before this, I was you know, scrolling through Instagram and one of my favorite jewelry, um, jewelry uh designers, this company called Shiro Studios, and they make um, you know, relatively inexpensive uh rings and and jewelry. They had a uh piece of uh they had a product get stuck on a barge, uh, you know how it is in a shipping container, and it got stuck for almost a full year. They said it was uh 320 days on a barge, and it was one of their designs. They were probably having it, you know, um built over overseas somewhere on its way back, and they said that they doubled their profit or doubled their their investment in it without selling a thing. And I was just thinking to myself, it's like almost like some of our jewelers like imagine they were to have just skipped a year, just take all their invoice, uh, all of their product, they had shut their doors for the entire year of 2025 and just opened them in 2026, the valuation of their products would have gone up significantly purely in cost of goods.
SPEAKER_02So here's here's so here's the issue with that. Okay, so there's a lot of stuff in jewelers' cases that were bought at a thousand dollar gold, two thousand dollar gold, sat in the case, it's sat in the case. So you can actually say it's gone up in value. Okay. Now, if you're not cashing out and retiring, which most you have a you have a different type of problem. So the problem right now is let's say let's I'll take the pawn shops. So a pawn shop, let's say, has a heavy chain inside their case that hasn't moved in a long time. So what happens is that clientele might not be able to might not be able to afford a$5,300 gold price for that chain. But what happens is that that pawn shop can send it to a place like myself and scrap it out and and make money. The problem is then you have an you have a vacancy in your case, right? So the the whole thing is what happens is these guys scrap out. What are you gonna replace it with? Because you're replacing it now at the$5,300 gold price. So are you gonna try to find different things? So it's the inventory, how often you're gonna hold it, how often you're gonna turn it. And there's plenty of guys out there that do these programs, but it's just like, okay, so these guys, yeah. So what happens is, oh, but you know what? Didn't have good sales this week because you know, gold's so high and it's tax time or whatever, but I can I can cash out some refining, and you know, I can I can make payroll, I can make my pay my mortgage, I can pay pay my vendors and all that type of stuff. But now you have empty spots in the case. So there's like there's like a rub there of really what to do. And like, and listen, depending on where you stand on the tariffs, I'm gonna tell you personally and tell your audience the tariffs are bringing manufacturing in the jewelry industry back to the United States. I know of at least 10 factories that are being built in the United States right now, buying U.S. metal, making U.S. jobs. So what happens is that stuff that was once made overseas, some of that started to be made here. In New Mexico, in Texas, in Florida, in New Jersey, in Long Island, in New York. So some of that business, so there are so a lot of that new factories, they're buying a lot of that outturn metal. So they're buying a lot of that gold that we're producing. They're buying a lot of that 14 and 18 carat casting grain. So there's good things on the industry when it comes to the tariffs and all that type of stuff, too. There's bad things, but there are there are there is businesses being manufactured and is now being done here that was being done overseas. So that's another part of the business when it ties into all the metal portion.
SPEAKER_01David, in just wrapping this up, because I want to be cognizant of your time, like you said, you've had this conversation enough times today. I wanted to ask, where are you willing to speculate on where we go from here? Do you think, you know, you you're saying that you think that the refining um choke uh choke point will eventually slow down and as you know, if people just give it a pause and work itself out? Do you think that gold is due for a correction? It's just been a hockey stick right now. How how does it look in one year when we have this conversation again?
SPEAKER_02If you look at Goldman Sachs, you look at JV Morgan, most of these guys are predicting gold for 2026 to stabilize and be around 54 to$5,500. Those are like the bank predictions. You see all these, you see all these goofballs that'll predict$8,000, all this type of stuff. I personally think what happens when it all settles, you might see you might see silver, you might see silver at 150 and you might see gold at 6,000. That's me personally, but that'll be an that'll be another can of worms, but you can end up there by the end of the year. Remember, think about this. Gold when we in January 1st last year was like 2625. Okay, it's double that in a year. So when you're only going so on, what you're asking on prediction for to go from where we are now from 5,300, and just go, let's say, up$700 to$6,000. That's not a lot of money, a lot of difference when you went up$2,600 last year.
SPEAKER_01It's still lots of money to me there, David. It's a lot of money to me.
SPEAKER_02Listen, that's why you have the term CEO behind your business card. So that's that's what I understand.
SPEAKER_01David, thank you so much. I really appreciate getting the explanation on this. It's very interesting.
SPEAKER_02Yeah, listen, guys, everyone's just everyone from your from your listening group. We're all trying here, guys. Everyone's trying. Uh, we're doing the best we can and stuff like that. And just uh have some patience on the pause, you know, get through it and all that stuff, and it'll work its way out.
SPEAKER_01It's gonna work its way out. And uh hopefully this chain I buy is worth double what it is when I sell it back to you, David, because uh it's it's a fascinating thing. I like to me, something about having having this gold. It I was thinking about it. I was like, what if uh the worst happened and my dollars aren't worth what they were uh earlier? To me, I think it's just like the idea. I'm sure this is common for everybody. The idea of having something that is this alternative uh quote unquote currency.
SPEAKER_02Currency, right? Remember the pirates, remember the pirates exactly what happens, they had the chains and they would take off the links, right? That's exactly what I'm thinking. We're not there that, but think about real quick. I'll end this like think about countries like India and stuff like that. They don't give their kids and then for gifts for celebrations, they don't give them iPhones, they don't give them stuff, they give them gold. Yeah, down they have celebration, so they're getting gold for everything, for weddings for everything. They're getting gold, so they're always stockpiling metal. We don't really do that in the US, but they are in some countries overseas. So it's just like it's just it's just different. So people have been, you know, storing current, you know, hoarding, uh, hoarding uh precious metals for quite some time.
SPEAKER_01And you know what? It's uh I I know that that is what uh who who was it? Um Morgan Freeman. He had a a diamond that was worth enough, uh, and he would carry it in, he would have it in his ear. Uh, it was worth enough that if he ever died in a different country, there would be enough to um yeah, get a funeral and have a and have a proper burial. And it's just like for some reason, it's like there's something comforting in that, I guess. And and and having tech stocks, half the time I don't even see them. And like, what's the point of them if I can't? I know dividends and stuff like that, but unless you got a lot of those stocks, man, I ain't seeing any type of dividends I got.
SPEAKER_02Listen, there's nothing wrong with having a chain, some coins, some gold bars, and all that stuff. You could look at it like it's tangible, right? It's there, it's in your hand. And listen, that gives people a good feeling. It gives people a really good feeling.
SPEAKER_01So I understand it. I can't thank you enough. Hopefully, maybe we'll do this again. Uh, we'll bookmark where the price of gold is at five thousand four hundred and five dollars and eighty cents on uh January 28th, 2026. Thank you so much, everybody. Uh hold tight. Hopefully, everything goes all right with this um with this choke point, and um, we'll get through this. Just everyone have patience. Thank you so much for listening. We'll be back next week, Tuesday, with another episode. Cheers. Bye. All right, everybody. That's the end of the show. Thanks so much for listening. My guest this week was David Siminski with United Precious Metals. This episode was brought to you by Punchmark and produced and hosted by me, Michael Burpa. This episode was edited by Paul Suarez with music by Ross Concock. Don't forget to rate the podcast on Spotify and Apple Podcasts, and leave us feedback on punchmark.com slash that's L O U P E. Thanks, and we'll be back next week Tuesday with another episode. Cheers. Bye.
