Monetary Metals Supply and Demand Report: March 31, 2013

The Last Contango Basis Report It would take $10 less to buy an ounce of gold at the end of the week, compared to the beginning. The dollar is still range-bound. Graphs of the currencies priced in gold are here. Here is an updated chart of the gold and silver “prices”, measured in dollars. Gold [...]



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9 replies
  1. JR says:

    “the picture does not look like what we would expect if All Hell Were Breaking Loose in the world’s credit markets.”

    I’ll venture for the same reason not a single Cypriot took AMP Gold Bullion Merchants advice. They’re probably still scratching their heads wondering where the ‘money’ went.

  2. Keith Weiner says:

    JR: I would not read this as the gold basis diverging from the silver basis. We used to watch April gold and now we changed to June. June, being farther out, is not being pulled as aggressively into temporary backwardation (yet), compared to April gold or to May silver.

    rueff: Think of there being a stack of offers, ranging from the best offer (this is the one you see quoted) and many others above it. When someone buys at the offer, that offerer gets the money, gives up the goods, and leaves the market. The next offer to show on the screen is the one higher. Relentless buying will push the offer up higher and higher. By definiton, the cobasis will fall if the offer (also called the ask) on the future rises.

    • rueffisalive says:

      The hypothesis you take is the rolling position to be certain , which may be not the case in an environment where the spot price is decreasing.
      If you consider spot being constant the cobasis is always increasing (time is passing). Evenmore so if spot is decreasing , there is no abnormality to me.

  3. petter_w says:

    In your previous basis report you said you were bullish on silver in gold terms and that the silver to gold ratio could fall to 40. Why the change of heart and why are you not bullish on silver with the diverging spread of cobasis and basis?

  4. FreedomLover says:

    Keith,
    If seems like you are suggesting hoarding in gold (vs other assets) mostly. I am curious what ratio of gold/silver/other metals you might suggest for hoarding vs. investing (say 10+ years out)? I am asking because it seems unlikely that in the long run the silver ratio will remain this high, perhaps again in the 20s at some point as a “norm”. If that assumption doesn’t match yours, I’d be curious why you think so.

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