This analysis advises long-term, patient investors in physical gold and silver to remain steadfast despite recent sharp market declines, emphasizing the enduring value of bullion as a hedge against fiat currency debasement, while cautioning against leveraged and electronic forms of investment.
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Well, hello friends. Before I begin this
video, a brief word. This video is for
the absolute long-term patient delivery
based investor and bullion who's been
with me, who's been listening to my uh
advice, who's been watching my videos
and reading my media columns since the
last couple of years at least. We've
started this journey when um silver was
sub 50,000 rupees and gold was less than
one/ird of where it is today even after
the crash. So hold on and in the
absolute near-term there is a
possibility of a great deal of distress
especially for leverage traders. I would
not even rule out a brief but very sharp
blood bath. So keep that in mind when
you watch this video. Take carees and
stay in touch. Hello friends, in this
video I want to take up where I left off
from in my this video dated 3rd of
January 2026 wherein I gave you a broad
sword a broadbased plan about what you
should be doing in the calendar year
2026 and specifically there was a
segment in which I uh pointed out to you
about what you should be doing about
boolean. Now what you've seen on Friday
which is the 30th of January when gold
and silver have shaken people down to
the bone with the bone numbumbing uh
decline or a crash as I would call it.
You would be wanting to know what to do
here onwards. And there are a few
aspects to this video which may or may
not be palatable to some of my online
family. But in the interest of reality,
in the interest of the truth, in the
interest of fact, do note it in a very
mathematical and uh uh impersonal manner
and resort to court course correction if
you have to. In that video on 3rd of
January, I very categorically told you
that I am very bullish on gold and
silver and I have been for years. You've
seen my videos of 2024. Uh to the best
of my knowledge, these were the only
videos about how to buy physical gold
and silver, how to ascertain purity
using electronic testing methods, how
not to get cheated, how to negotiate the
best possible price and repurchase or
buy back negotiation so that you avoid
paying a very wide bid and offer spread.
Now being bullish on gold does not mean
or silver does not mean being blind and
buying at whatever prices. In that video
itself I told you even though I'm very
bullish on gold and silver for the
absolute long-term I am not comfortable
buying at these present levels. Now what
were those levels back then? on 3rd of
Jan 2026 when I made that video uh that
was a Saturday
uh uh the previous days which is
Friday's closing price gold was 1 lak 35,761
35,761
rupees for 10 g on the multicommodity
exchange and silver was 2 lak 36,316
rupees per kilogram on the MCX
in spite of the fact that gold and
silver have fallen. Have they fallen to
below these prices? Hey, no, they still
not fallen below these prices. So, you
are still not in a loss. All right. So
first of all, if you've been following
my work both in u uh uh my social media
accounts, particularly my telegram
channel wherein I post all my research,
all my thoughts and all my views on the
market and I also put in a lot of data
there in formats that are not allowed by
any other social media platform. So do
connect with me there. the link to the
telegram channel and other relevant
mustwatch videos and articles etc etc
are all in the pin comment below this
video and in uh the description below
this video as well. So what I uh
basically uh told you in my uh social
media post was I do not favor electronic
gold. And there's a lot of thoughts that
I want to share with you about
electronic gold and why it's not gold or
silver for that matter. Why it will
always be a poor second choice as far as
I'm concerned. Feel free to disagree and
the comment segment is open to you to
basically reach out to me. Now why did I
make that video in 2024 and earlier in
my capacity as a consultant to a
advisory firm wherein I was a consulting
editor since 2020 I've been making
videos about how to buy gold and silver
cheap uh a certain purity etc. Why
physical? Why not electronic when it is
so easy to buy, hold in demat format and
no theft uh or fear of losses etc etc.
All that I'm going to come to. Why is
electronic gold or silver trading at
such huge discounts? As far as I'm
concerned, two quarters ago, your ETFs
were trading at maximum of two maybe 3%
discount to the future or spot. There's
a reason to it. Now, this is spot. This
is the future. Why would the future be
higher? A at the beginning of the
derivative cycle, you have two months to
play in gold and silver futures without
having to take or give delivery. So
there is always a cost of carry or
premium built into the future unless
it's a bare market when there's a
discount going. All right. Number two,
there is no GST involved in futures.
So basically uh uh you just buy and
sell. There is gross settlement which
means if you buy at 100, sell at 105,
you get five bucks. No delivery is to be
given or taken. Very easy. and therefore
traders are willing to pay a premium for
this ease for this convenience. On the
other hand, derivatives on the other
hand the ETFs or the exchange traded
funds used to always trade at a
discount. Why? Now the reason being in
spite of the fact that it's all
inclusive first of all uh uh they don't
charge you GST extra but it's all
inclusive it's still trading at a
discount for a very simple reason
not 100% of the corpus of the fund house
that is issued to investors as ETF is
invested in gold or silver before you
tell me hey this is cheating it's not
allow me to
The reason why 100% of the fund is not
invested in physical gold or silver is
because as per the mutual fund charter
some amount of money maybe five maybe
10% maybe 12% different funds different
percentages some amount of money is kept
in cash not for redemption but for
exploitation of opportunities as and
when they present themselves. So imagine
if the price of gold or silver was to
come down, the fund manager feels this
very mouthwatering. Hey, I can't miss
this opportunity. Let me buy. Where's
the money? Hey, 10% cash. Okay. Number
two, you think as a fund manager the
price is going to come down. How do you
profit from it? Because as an ETF,
you're a long only ETF. You can only buy
and hold. You can't uh uh you can't do
anything about the holdings that you
have. You can't sell them and buy them
like a trader. So what do you do? You
can hedge. You can hedge in the futures
market or in the options market. But if
at all 2008 global financial crisis has
taught us anything at all to veteran
traders like you and me, it is that no
hedge is a perfect hedge. No matter what
you do, you can still lose money in
hedging. So the market says okay
this fund has 5% cash component and this
fund has 10% cash component.
I assume that this fund holding 10% cash
component might hedge and lose more
money and this fund holding 5% cash and
hedge can lose less money. So I will
assign a higher NAV to the less
potential loser and a lower relative NAV
to the potentially higher lossmaking
fund which is why ETFs were always
trading at a discount to futures and
spot. But why have they gone to the
extent of 10 12 15 and even 20% discount
to futures and spot that I'm going to
discuss with you. Now first of all if
you've stuck with me you're still not in
a loss where gold and silver are
concerned. The weekly chart on your
screen of gold on the comics in dollars
tells you that there is an inverted
hammer. What is an inverted hammer? The
price opens at point A, flies up
significantly higher at the uh period
high, closes sharply lower. So the open
and close is what the candle is formed.
The body is the wick or the shadow is
the absolute top or the absolute bottom.
So here the body is at the bottom of the
range which makes it look like a hammer
but an inverted one. And in the case of
gold, the body of this weekly uh candle
is piercing the body of the prior week's
candle and therefore it's a bearish
piercing pattern. Now take a look at the
similar weekly chart of silver. There is
an out andout bearish engulfing pattern.
Now what's an engulfing pattern? the the
bearish candle is completely engulfing
or completely out overshadowing the
prior bullish candle. Now that is a very
negative portent by itself on uh uh the
weekly chart uh method. We've seen that
the price has fallen. There's nothing
that we can do about it. What do you do
if you're holding physical? And more
importantly, what do you do if you've
been unfortunate enough and reckless
enough? From my point of view, feel free
to disagree. From my point of view, I've
told you thousands of times, hey, do not
get into anything other than physical or
uh uh delivery based bullion, gold and
silver. I call Ebullion or ETF bullion
as toy bullion. I' I've received ample
flack on a flak from social media about
hey I I'm holding this is called uh uh
the uh ownership bias. I'm holding ETFs.
You're running me down. I'm not running
you down. I'm running the ETF down.
Anything that quotes at a 10, 12, 15,
and 20% discount to the underlying asset
which it is perpetrated to hold is not
exactly the best thing to hold. Now why
is it trading at a discount? Now here is
again something that I have been warning
you since many many months both on my
social media accounts in my videos and
in my newspaper columns in live mint and
on electronic uh uh weekly columns in moneycontrol.com.
moneycontrol.com.
Now this is something called
marginfunded trading. these super
aggressive, super modern uh young age
adrenalinefilled investors who tell me,
"Hey, Vijay, ETFs are much better than
your physical idea of buying physical
gold. Why are you trading at a
discount?" I'll tell you why. Now, not
only have these guys went and went ahead
and bought toy gold and toy silver, but
they've used leverage. Leverage by way
of margin funded trading. Now what is
margin funded trading? You buy anything
stock uh uh bullion anything at all by
paying 30% of the value of that
investment and the remaining 70% of the
value is funded by the broker. Why does
he do that? Because he charges you
interest on that 70%. Now that's a good
anything between 12 to 17 maybe even 18% perom.
perom.
Now that's good income. It's official.
It's legal. It's permitted by the
exchange. And as a matter of fact, the
data is provided with a one-day lag by
the exchange itself. Here is a chart on
your screen about where silver and gold
prices are in terms of MCX weekly
futures and with a lag where the margin
funded trading data is. Unfortunately,
the NSE as on today when I'm recording
this video on Saturday, 1 day before the
budget has not given us data for 29th of
January 2026.
What I'm interested in is the data for
30th January 2026 because that is when
the sharp fall has occurred and we need
to see what will happen on Sunday when
the markets open and more importantly on
Monday what really happens to these ETF
guys. But that's going ahead of the
narrative. Let's come back to where I
was talking about the margin funded
trading. Now here in margin funded
trading your exposure is 30% of the
value of investment and 70% is funded by
your broker. Hey what happens if the
value of the ETF goes down after you buy
gold or silver your broker gives you a
call tells you listen buddy your a share
has gone down to 25% I need 5% more
money either give it to me by the end of
this uh trading session or your trade is
squared up. So now you fund more money.
Okay. Why? Because that's a margin call.
Okay. Now when you h buy any asset with
leverage, especially in the case of
margin funded trading, you are basically
taking on two enemies. What are they?
Number one is the price. Price goes
against you, you lose money. Period.
Number two, time. Why time? Because
whether the price goes against you or
not, all it has to do is rise lower than
the interest cost. If your interest is
18% peranom, if the price goes up by 15%
peranom, you're still out at a loss of
3% peranom. Period. Okay? So you've
taken on two enemies rather than one.
One is something nobody can avoid. The
price is your enemy. Period. Anybody
whether buying with own money or
leverage money is taking a risk. But at
least don't raise your adversaries by
one more. Now what will happen when the
markets open on Sunday and particularly
on Monday. Now this is the crux of this
video. The price of these ETFs were
trading in the case of silver 55 rupees
per g discount where nippon silver bees
is concerned. It's quite simply the
largest aum. So I always keep quoting
the nippon bees. And as far as the
nippon gold bees are concerned, if my
memory serves me right, it was at a
discount of 26 to 27,000 rupees for 10
g. Why was it at such a steep discount?
Because people who had leveraged in MTF,
their positions were getting squared up
because the price was coming down and
margin calls were being triggered. These
margin calls will get escalated on
Sunday and Monday because the price of
gold and silver fell late evening on
Friday when ETFs had stopped trading in
the equity segment on the NSE and the BSC.
BSC.
Possibly when the selloff occurs the
discount might go up from 50 to 55
rupees on silver ETFs to maybe 60 70 80.
I don't know. I have no way of knowing.
This is Saturday, 31st of Jan. I don't
know where the market is going to open
on Sunday and Monday, but the discount
can go up because there will be more
sellers than there are buyers. Number
one, you lose money because the discount
goes up. Number two, the problem is that
the price itself on the MCX and the
comics on Monday particularly might come
down even more. So, you will face
another crunching problem. A the price
is down. be the discount has deepened.
So this is why the margin funded trading
guys are going to create problems and
not just a problem a headache for the
market on the whole. There is there is a
reason why every trader should be on
social media. The social media is not
really a good place to collect tips
from. Tips are not something you and me
want. In the month of May this year in
2026, I'll complete 40 years in this
market. So uh uh to the veteran uh uh
traders who I'm addressing in this
video, you and me are not here to
collect tips. But the social media gives
you an excellent platform where you know
what everybody is saying, talking,
doing, making others do. So you
basically get a sense of what the
sentiments are like. All right. Now when
I a couple of months ago when I used to
start uh putting up these MTF data on
some groups that I was on some guy used
to tell me you're splitting hair for
nothing. What is 500 crores uh borrowing
against gold ETFs or 700 crores against
silver ETFs? It's nothing. The value of
this market is too big. Now those guys
are feeling the crunch because this
borrowing is resulted in a a crowded
exit and the discount on the ETF has
gone up. Hey, do you see where I was
coming from at that point in time? Now
let me just tell you what is crunching
the uh uh uh discounts.
Now where margin funded trading is
concerned in the case of silver over 5
weeks it has gone up by 50%. Over 10
weeks 6%. Why 6%? Remember silver had
come down in price and therefore the
ETFs had got a little uh uh shunted out.
Over 20 weeks the margin funded
borrowing has gone up by 384% and over
In the case of gold over 5 weeks 226%
rise in margin funded trading 10 weeks
284% in margin funded trading 20 weeks 1,116%
1,116%
and 30 weeks 85%
increase. This is the extent of greed
that these tech bros have gone out there
the newbie traders have gone out there
and bought toy gold and toy silver. Not
only have they bought a toy, they've
even borrowed money, paid 18% interest
on it and created a huge hole in the
market because they are now trading at a
discount. And possibly this margin
funded selling or this uh uh uh margin
call selling may even trickle down to
equities and other asset classes to make
good the defaults and the deficits that
will occur by way of crowded exits. that
might occur. This is why you should not
have held ETFs at all. If you're holding
physical, I told you you're still in a
profit. If you didn't buy anymore when
on the video on 3rd of Jan 2026 told you
don't buy anymore. Now that's all in the
past. Now the price has fallen. What do
we do now? You ask me Vijay, what going
forward? Yeah, I'm coming to that. Why
did you buy gold and silver? The reason
is we expect historic levels of fiat
currency debauchment.
I'm not calling it debasement.
Debauchery is a far more profane and
abusive word as compared compared to
debasement. I'm saying the currency fiat
currency will get debauched.
It'll get brutalized. The buying power
of fiat currencies worldwide, not just
the rupee, worldwide is going to fall tremendously.
tremendously.
You go out there and it's going to be
like a slow fuse. U you know, you boil a
frog in a kettle of water that is
simmering and the fire is slowly but
surely being stepped up. The guy doesn't
realize and then suddenly he's dead.
So very slowly but surely you will see
currencies getting debased their buying
power come down. You go out there in
January you can buy two bottles of a
soft drink with a 100 rupee note in the
month of June maybe one big bottle and
one small one by December you will
basically be able to buy only one that
is welcome to inflation and fall in
purchasing power of the fiat currency.
So as a hedge as a protection against
this currency debauchment gold and
silver would be your hedges. Has the
fear of currency debauchment gone away?
If the fear has gone away from your mind
by all means book profit in gold and
silver. You're still in profit. Remember
as on 3rd June 3rd of Jan 2026 the price
was much lower than where it is today.
So even if you sell on Monday morning or
Sunday when the market opens, you are
still in profit. You want to book
profits because you think currency will
become stronger, all the more power to
you. I don't think so. I belong to the
camp that thinks that the currency deposs
long-term and by absolute long-term I
mean multi-year viewpoint.
Why should a long-term investor be
selling his gold or silver in physical
format? If you want to get out of toy
gold and toy silver and get into real
gold and real silver, you will be
booking a loss because you'll be selling
on a steep discount, but at least you'll
be buying the real McCoy stuff, the real
stuff. All right. Now, the timing of
that is something that you'll have to
take a chance with. Maybe the discount
will reduce. Why? because the fall has
been so steep that even the big money
has got stuck. Now to lift itself out of
this problem, the big money might just
pull up the price once and then saddle
the stock at the hless retail trader
maybe or maybe it could take a V-shaped
recovery route and then come up and your
discount can reduce to maybe 5 7 8 or
even 3%. That is the time you want to
switch from toy to real stuff. Go ahead
and do it. But has the long-term reality
changed and multi-year remember? No,
it's not. It's not. In spite of the fact
that gold and silver have fallen over
20% from their peaks, which makes it a
bare market as per the classic DAO uh
theory of technical analysis, the
longerterm picture hasn't changed. This
fall on Friday was because of the sheer
greed that exists in today's highly
leveraged markets with these techies
with these newbies with these fresh
blood with these overexited gung-ho
teenagers who've come into the market
after the COVID lockdown and have raised
volatility to levels that have not been
seen before. And of course in the social
media like I said you should be on
social media. It's really fun. Guys who
have nothing to do with anything, no exposure
exposure
are are giving you advice on doing any
and everything in financial markets. Do
they have an audience? Yes, they do. Do
they have an impact on the prices? Yes,
they do. No matter how big or small they
do. So, you better listen because it's
going to impact the price of your asset
that you're going to buy. So, everything
is your business. Is the social media
your business? Yes. is a guy who doesn't
do anything for uh trading as far as
trading is concerned but has uh three
lakh, four lakh, five lakh followers on
his YouTube channel. Yes, why not
monitor it? Because some guys will
listen to his advice and do what they
have to do when they impact the price.
All right? So, stick to your game plan.
Keep your ears to the ground for
approaching hooves of the horses of the
guys who are coming out there. But do
your own thing. If you look beyond 2026,
2027, 2028, you're doing just fine. What
happened on Friday, even though it was
huge, it is the biggest single day fall
in silver after 1980 when Hunt brothers
were jacking up prices like crazy. Many
of you were not even born here at that
time. But believe me, on the long-term
uh time frame, on on the long-term uh uh
uh time price continuum,
this will appear to be a serious but not
If you are not leverage, if there is no
interest cost that you have to pay and
you're willing to override and and and
basically ride out this uh uh period of
turbulence, there are far bigger
problems coming in all probability in
2026 like I've uh advocated on my
telegram channel, proyical hysteresis
will lead to hyperextensions in prices
that you have never experienced before.
Some of you have uh trolled me for using
uh uh military jargon in trading because
I consider uh uh trading to be passive
warfare. The only thing is instead of
guns and bullets, you use uh keyboards
and mice. All right. So I have been
warning my online family for more than a
year about what's going to happen in the
market in terms of deceptive style of
trading by electronic aspects of the
market, electronic segment of the
market. It's called Maserovka.
Mascarovka is military level deception.
So, uh trades would be split into
smaller bits and pieces and and and sent
down into the uh uh order uh uh flow
basket and then get executed and before
you know it, before you can get an
ingress or an egress, the price has
moved already. This will happen to you a
lot more often in 2026. It's not going
to be easy, unavoidable. Get used to the
idea. So, sit it out. learn how to
basically keep your conviction levels.
Follow me more for uh uh more such uh
databased analysis on my telegram
channel. And before I sign off from this
video, a reminder to subscribe to my
YouTube channel if you haven't already
done so. Click on the bell icon to
receive instant alerts about fresh
videos being put about here. And if you
liked what you saw, do share this video
with your friends and family so as to
help me reach out to a wider and larger
audience and help people make knowledge
based decision systems. I thank you for
staying with me in this detailed video.
Till we meet again in my next, this is
Vijayani signing off for now. Have a
very profitable day ahead. Take care. Bye-bye.
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