One month ago, one of the largest banks

on Earth, the Industrial and Commercial

Bank of China, announced it was shutting

down paper gold trading for [music] its

everyday customers. The change takes

effect on July 24th, 2026. The

Industrial and Commercial Bank was not

alone. The Postal Savings Bank of China

moved first and then the Pingan Bank.

More followed. some of the biggest banks

in the world all ending the same product

paper gold trading all in the same

window of time. Now, the official

explanation is that this protects

ordinary people from gold's wild price

swings and gold has been wild. It hit an

all-time high in January and then

dropped nearly 30%. [music]

And people got hurt. So, the story is

the banks stepped in to protect them.

That explanation is convenient, but I

don't believe it. I think that July 24th

is the day that China starts finding

[music] out what gold is actually worth.

And I think the price that you see

quoted on your screen [music] every

single day isn't the real one. But to

show you why, we have to go back to a

room inside the Bank of England where in

March of 1968, the floor collapsed under

the weight of gold stacked on top of it.

What happened in that room is about to

happen again. There's a room in the Bank

of England where they weigh gold. And in

March of 1968, the floor of that room

gave way. Not from age, not from

neglect. It collapsed because too

[music] much gold was stacked on top of

it. The United States had been flying

gold from Fort Knox on military

airplanes into London faster than the

men in that room could weigh it and sell

it. [music] The bars piled up until the

floor physically gave way underneath

them. So the question is, why was

America emptying its vault into London?

And they were doing it because the most

powerful governments on earth had made a

promise that they could no longer keep

and the whole world had figured it out

at the same time. To understand March of

1968, you only need to understand one

promise. After World War II, the world's

governments agreed on a simple system.

The US dollar would be the money that

everybody used for trade. And to make

sure that the dollar could be trusted,

the United States made a guarantee. Any

government holding dollars could trade

them in for gold at a [music] fixed

price of $35 an ounce. $35, 1 ounce,

anytime, forever. And that guarantee

meant that holding dollars was the same

as holding gold. So the world held

dollars. But through the 1950s and the

1960s, the [music] United States began

spending a lot more money than it was

earning on wars, on social programs, on

being the world superpower. And when a

government spends more than it has, it

has to print more dollars to keep up.

Now, here's the problem with that. The

number of dollars kept growing and the

amount of gold didn't. Now, do the

arithmetic that any foreign government

would do. If there are twice as many

dollars in the world, but the same

amount of gold in the American vaults,

then each dollar is really only worth

half as much gold as promised. The price

tag still said $35 an ounce. Everyone

could see the real number was a lot

higher. So, what would you do in that

situation? You'd hand over your dollars,

take the gold at the discount price, and

say, "Thank you very much." And that is

exactly what the world started doing.

The United States and seven European

allies decided to defend the price of

gold in 1961. They formed what was

called the London Gold Pool. And it

worked in a very simple way. Whenever

buyers pushed the price of gold above

$35, the eight central banks, the

government banks that managed each

country's money, they sold their own

gold into the market to push the price

back down. Now think about what that

means. They were not selling because

they wanted to sell. They were selling

the most valuable thing they owned to

protect the claim that their paper money

was worth just as much. And for a few

years it worked. Then France did the

math and quietly left the pool and

started trading its dollars for gold

instead. Other countries followed and

soon it was a full run on the gold.

Everybody rushing to trade paper for

metal before the metal ran out. And

here's how fast it unraveled. In a

normal week, the gold pool sold about 5

tons of gold to hold the price. But on

March 8th, 1968, it sold 100 tons in a

single day. In the final week, the pool

lost roughly 1,000 tons of gold to

suppress the price. That was the week

the floor of the weighing room

collapsed. On the evening of March 14th,

Washington asked London to shut the gold

market down completely. The Queen

declared an emergency bank holiday. And

when the weekend was over, the

governments announced their solution.

They gave up. From that day on, there

were two prices for gold. The official

price, $35, used only between central

banks, and the free market price, which

immediately jumped past $40 and kept on

climbing. The official price was a

number that governments used with each

other. The real price was what people

paid when they wanted the actual metal.

Three years later, in August of 1971,

President Nixon ended the gold promise

completely. And within 10 years, gold

traded at $850 an ounce. So hold that

sequence in your head. A paper price

defended by official selling until

demand for the real metal broke it. and

then two prices, then a whole new system

because you're about to see every step

of it again. And this [music] time it's

not an accident. Which brings us back to

those Chinese banks. Because to see what

they're really doing, you need to

understand what paper gold and paper

gold trading actually is. And I promise

it's a lot simpler than it may sound.

When most people buy gold today, no gold

actually moves anywhere. Here's what

actually happens. A bank or an exchange

sells you a contract. The contract says

you own 1 ounce of gold and you can sell

this contract back whenever you like at

the going price. The gold itself, the

physical bar that you in theory own sits

in somebody else's vault supposedly. And

most buyers never ask for that bar. They

don't want to store it. They don't want

to insure it or guard it or transport

it. They just want the price to go up so

they can sell the contract for more than

they paid. And the seller knows that

that's the case. And that knowledge

changes everything because if nobody

ever picks up the actual metal, then the

seller can sell more contracts than

there are bars. They can sell claims on

the same ounce of gold twice, 10 times.

Nothing stops them because the only

moment this fails is the moment

everybody asks for their gold at once.

and everyone never does. Now ask the

important question, what does that do to

the price? The price [music] of anything

is set by supply and demand. But in the

gold market, the supply that sets the

price isn't the [music] metal, it's the

contracts. If there are 10 paper claims

for every real ounce of gold, the market

sees 10 times more gold than actually

exists. More supply means a lower price.

Every extra contract pushes the price of

gold below what the metal alone would

sell for. And in London and New York,

where the world's gold price is set,

most of the daily gold trading is

exactly this. Contracts that get settled

in cash while the actual metal never

moves. Nobody knows how many paper

claims exist for each real ounce of

gold. And that is not a small detail.

The most important price in the world is

set by a market that cannot tell you how

much of the thing it actually has. Now,

that should sound familiar. It's the

same setup as 1968, an official price on

paper and a different reality in the

vault. Now, you might be saying, "Hold

on, Jay. That's just a theory. If the

paper price of gold is lower than the

real price, how would we ever know? You

can't exactly walk into every vault in

London and count the bars." No, you

can't. But there are two tests and

anybody can run them. So, let's do that.

The first test is watch for those two

prices. In an honest market, a claim on

a thing and the thing itself cost the

same. When trust breaks down, people

start paying extra for the real thing.

In January, physical silver briefly cost

about 40% more than the paper price of

silver. 40% for the same metal on the

same day. Now, gold's gap is still

small, but remember 1968, the gap was

zero right up until the week that it

wasn't. The second test is better.

Ignore what the smart money says and

watch what it does. If you ran a central

bank and you believed the paper price

was fake and the real price was higher,

you would do two things. You would

quietly sell paper promises and you

would quietly buy real metal. So, is

anyone doing that? Central banks bought

244 tons of gold in the first quarter of

this year, January through March. That

is the strongest first quarter of gold

purchases ever recorded. They've bought

more than 200 tons in 10 of the last 11

quarters. And here's the detail most

people miss. The World Gold Council, the

gold industry's own research group,

openly estimates that a large share of

this buying is never actually [music]

reported. It's bought, but it's not

declared. And what are these same

institutions selling to pay for their

gold? They're selling US Treasury bonds,

the paper promises of the most powerful

government on Earth. Gold has now passed

US treasuries as the largest share of

reserves in central banks. Read that

behavior plainly. The institutions that

have been holding these paper promises

for a generation are now selling it to

trade for metal at the fastest pace ever

recorded. And they are not reporting the

purchases. They're not betting that the

quoted price is honest. They're betting

that it's low. Now, I want to leave the

central banks for a moment and talk

about you. Because the gold price being

held down sounds like a trader's

problem, but it's not. It's the story of

your last 50 years. And I can show it to

you in your grocery bill. In 1976, gold

cost about $125

an ounce. Here's what the average

American would be spending that year.

First in dollars and then in ounces of

gold. Let's start with housing. The

average new American house cost [music]

about $44,000

in 1976.

That was the equivalent of 335 o of

gold. A brand new car about $5,400

[music] or 43 o of gold. Groceries for a

family of four about $62 a week. 1 oz of

gold bought 2 weeks worth of groceries.

[music] And gasoline was priced at 61

cents per gallon. 1 ounce bought 200

gallons of gasoline. Now run those same

numbers today, July of 2026, with gold

over $4,000 an ounce. That house that

used to cost $44,000

now costs about $425,000.

That is nearly 10 times as many. But in

gold, the house costs $12.

That new car went from $5,400 to about

$50,000. nine times more in dollars. In

gold, it went from 43 down to 12. That

weekly grocery bill [music] went from

$62 to 320, a 5x increase in dollars.

But 1 oz of gold used to buy two weeks

of groceries. Today, it buys 13 weeks.

Gasoline went from 61 cents a gallon to

379 per gallon. And 1 oz of gold went

from buying 200 gall to buying,00 gall

of gasoline. So do you see what happened

in dollars? Everything went up. The

house, the car, the food, the fuel six

times, n times, 10 times more expensive.

50 years of politicians and [music]

economists calling it inflation, as if

prices rising were simply what prices

do. But measured in gold, nothing went

up. Everything went down. That same

house, the same car, [music]

the same food. Houses did not get more

expensive. Cars did not become more

expensive. The dollar lost its value.

And gold did not. And here's the part

that connects back to our story. Every

one of those numbers was calculated

using the paper gold price. The price we

have reason to believe is suppressed and

held down. If the real price of metal is

higher than the quoted price, then

everything I just showed you understates

how well gold protected the people who

held it and protected their purchasing

power. Which brings us back to those

Chinese banks and why anyone would spend

billions of dollars to find out gold's

real price. What starts in China this

month is not a ban on gold. Chinese

citizens can buy all the physical gold

they want. What ends is the paper, the

contracts, the promises, and what

replaces it is a system with three

parts. Watch how deliberately each part

fits into the next. Part one, Shanghai,

the Shanghai gold exchange. This

requires physical delivery. When gold

trades there, real metal has to move

from the seller's vault to the buyer's

vault. You can't sell 10 claims on one

bar because sooner or later a bar has to

show up. A market built that way can

only measure two things. How much real

metal exists and how badly people want

it. Finding out what something is truly

worth by removing everything fake from

the measurement is called price

discovery. Part two, Hong Kong. China's

currency rules make it hard for

foreigners to trade inside Shanghai

directly. So trades from outside the

country get handled through a new system

in Hong Kong. That's where the rest of

the world can buy and sell at Shanghai's

physically set price. But part three

tells you the most. Hong Kong is

expanding its gold vault space from

about 200 tons to more than 2,000 tons

of space. 10 times more room to store

physical gold built in advance. Now sit

with that number. A paper market needs

no vaults. Contracts take up no space.

You build room for 2,000 tons of gold

for one reason only, because you expect

2,000 tons of real gold to arrive and

need to be stored. China is not

predicting that the world's going to

keep trading paper claims in London.

Instead, it's building storage for what

it believes will come next. In 1968, the

run on gold was an accident. Nobody

planned it. What China has built is the

same event, but planned on purpose. Shut

down the paper markets, make the real

metal move, and find out what price the

physical market produces. And here's the

thing. They told us this was coming.

Back in 2014, the head of the Shanghai

Gold Exchange stood up at a conference

in London of all places and said it

plainly, "Gold is consumed in the east,

but it's priced in the west. And when

China gets influence in the gold market,

the real price will be revealed. 12

years later, the vaults are being built

and the [music] change takes effect on

July 24th. So go back to that room at

the Bank of England one last time. In

1968, [music] the men in that room

believed in the price they were

defending. They weighed and moved a

thousand tons of gold in a single week

because they thought the system could be

saved. [music]

But the floor collapsed the same week

that the promise did. Today, the gold is

moving again out of Western vaults,

headed east at a record pace. But notice

the difference. Nobody is defending the

price [music] this time. The

institutions that set the paper price

are the same ones quietly trading their

paper for real metal and not reporting

it. In 1968, it took a collapsing floor

to show the world that the official

price was not the real one. But this

time, the people who run the market may

prove it themselves, one unreported ton

at a time. But if I'm right, remember,

we're going to see two things happen.

Number one, a gap will emerge between

the paper price of gold and the physical

metal, just like we saw in the silver

market last January. And secondly,

central banks will keep adding gold to

their reserves instead of US treasuries.

And this matters. Remember that grocery

bill. But honest question, what am I

missing? Let me know in the comments. If

you enjoy my content, my name is Jay

Martin and this is the J Martin Show. I

publish here every Saturday and I love

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