Drew Rathgeber: The Gold & Silver Industry - Who Wins, Who Loses, And Who Really Benefits

Tom welcomes back experienced trader and creator of ProGoldTrader, Drew Rathgeber to explore issues within the Gold and Silver industry. Drew shares his industry journey, starting in spot markets 20 years ago and transitioning to futures in 2006. He emphasizes regulation's importance, particularly for consumer protections and audits.

They discuss problems like excessive spreads exploiting elderly clients and the need for education. Drew shares his views on social media influencers and their good and bad aspects. The conversation also covers spot markets versus regulated futures markets.

Drew talks about Monex, a company offering the Atlas precious metals investment program. This financing mechanism targeted unsophisticated investors and generated revenue through high fees on trades, resulting in many millions in losses for customers.

They discuss investing in physical gold versus futures contracts, with smaller investments favoring physical gold due to absence of counterparty risk. The conversation touches upon issues surrounding precious metals investments using retirement funds, specifically Roth IRAs and 401K programs. He stresses the importance of understanding spreads and fees in these transactions.

Drew discusses a retired lady and why she was disqualified from opening a futures trading account. Drew emphasizes the importance of understanding risks involved in trading, especially with leverage positions. They briefly touch on contract sizes and risk management strategies, including removing market and volatility risks, using options for downside protection, and being cautious during uncertain times like Fed announcements. He stresses the importance of staying informed and managing risks based on individual comfort levels.

Timestamp References:
0:00 - Introduction
0:57 - Trust & Drew's Background
4:18 - Regulations & Risks
9:22 - Changes in PM Industry
14:39 - History at Monex
19:42 - Fractional Metal Programs?
23:45 - Futures Markets & Leverage
27:40 - Physical Delivery & Spreads
37:08 - Other Programs & Cautions
42:55 - Fraud Risks & Criteria
47:12 - Futures Contract Sizes
50:03 - Managing Risk
52:03 - Investor Behavior 2024
56:40 - Lessons Learned
1:01:42 - Wrap Up

Talking Points From This Episode
- Drew Rathgeber emphasizes the importance of consumer protections and education in the Gold and Silver industry.
- He highlights the risks and benefits of investing in precious metals through spot markets versus regulated futures markets.
- Drew shares warnings about high-fee investment schemes that like to 'churn' naive investors.

Guest Links:
Website: https://progoldtrader.com
Email: [email protected]
Apply Online: https://progoldtrader.com/open-an-account/

Drew Rathgeber got his start trading spot precious metals at one of the nation's largest bullion dealers in Newport Beach, CA in 2004. Then transitioned to futures in 2006, specializing in precious metals. Now is the owner and president of ProGoldTrader.com, which specializes in trading software and execution designed just for bullion traders.

TRADING FUTURES, OPTIONS ON FUTURES, AND FUTURES SPREADS INVOLVE A SUBSTANTIAL RISK OF LOSS AND IS NOT SUITABLE FOR ALL TRADERS AND/OR INVESTORS. PAST PERFORMANCE, WHETHER ACTUAL OR INDICATED BY SIMULATED HISTORICAL TESTS OF STRATEGIES, IS NOT INDICATIVE OF FUTURE RESULTS. ACCOUNTS CAN AND MAY LOSE MONEY. ONLY GENUINE RISK CAPITAL, MONEY YOU CAN AFFORD TO LOSE, SHOULD BE USED.