Silver continued its stellar run this week, trading as high as $17.60 overnight in Asia on Thursday morning, and in mid-morning European trade today was up 24.3% on the year, overtaking gold…
It is commonly assumed that the gold price and interest rates move in opposite directions. Like all assumptions about prices, sometimes it is true and sometimes not.
The market today is all about synthetic gold, gold which is referred to but rarely delivered. The current relationship is therefore one of relative interest rates, because positions in synthetic gold are financed from wholesale money markets. This is why a rumour that interest rates might rise sooner than expected, if it is reflected in forward interbank rates, leads to a fall in the gold price. To the extent that this happens, the gold price has been captured by the modern banking system, but it was not always so…
There is a widespread and growing feeling that financial markets are slipping towards another crisis.
Now is the calm before the storm, a storm which in the absence of a good grasp of price theory, central banks are simply not equipped to weather.
The only shelter for individuals is sound money, money that cannot be expanded by governments and their licensed banks, which is gold and silver.
Yesterday was 2016’s first quarter-end, and gold has had the best first quarter since 1974, rising 16.3% in dollars.
The abject failure of expansionary central bank monetary policies is becoming more obvious by the day, placing a floor under the gold price. There is bound to be a growing realization that seeking refuge in fiat currencies is a false hope, and the timing of that realization should lead to higher gold prices in due course.
Last week, the ECB extended its monetary madness, pushing deposit rates further into negative figures.
Any Frenchman with a knowledge of his country’s history should hear alarm bells ringing. The ECB is running the Eurozone’s money and assets in a similar fashion to that of John Law’s Banque Generale Privée (renamed Banque Royale in 1719), which ran those of France in 1716-20.
The scheme at its heart was simple:
The most likely explanation for silver’s sudden spurt is a combination of poor market liquidity and a revival in demand for industrial metals. The rise in industrial metal prices was wholly unexpected in western capital markets, and may be due in part to unexpected Chinese demand, as stockpiled dollars are dumped in favor of stockpiling key metals.
The strength in industrial metal prices, as well as that of crude which is up 50% in five weeks, augers well for precious metals in the coming weeks.
With Super Mario Draghi dropping a bomb on global financial markets Thursday, Doc & Dubin welcomed Alasdair Macleod out of London back on the show to break down the implications for the markets, gold, and silver:
On Draghi’s Bazooka QE: “It’s actually quite terrifying…“
On Gold: There is a Golden Cross Underneath a Rising Gold Price, as well as a Pennant Formation! We’re looking at a minimum gold price of $1400, and it could happen quite quickly…
Full MUST LISTEN Metals and Markets is Below:
What is about to happen to the supply and price of physical gold in the end-game of record global demand and dwindling liquidity?
At a time of growing concern about the global financial system, it is time to remind ourselves why physical gold is so important, as well as those who might be considering what the benefits are of owning gold.
This article explains the role of gold as money, and the dangers of leaving money on deposit in the banking system.
On February 5th, the price action in gold was significant. At about 9.40AM New York time, a seller dumped 10,000 contracts on the Comex market, worth about $1.2bn.
Of course, we don’t know who the seller was, but he will be nursing some serious losses. If it was the US Government’s Exchange Stabilisation Fund, the cost won’t matter; what would matter is that an attempt to put a cap on the gold price was a dismal failure, and merely exposed a major change in market sentiment, from extremely bearish to growing bullishness.
Demand for physical gold has picked up strongly. In London, ETF Securities reported buying of physical gold ETFs totalling over $710m since January 1st. Tales from high street bullion dealers are of record sales of gold bars and coins. And how often do we hear of record interest in places like South Korea?
With a sudden surge in public demand for physical gold, there is no knowing how it will be satisfied.
There is a risk of a gathering snowball effect, with higher gold prices triggering yet more demand.
Western vaults are only able to supply initial demand, but because bullion banks have unallocated accounts for customers not backed fully by gold, they will be forced to cover the risk of higher prices.