These are the intraday charts for Friday, subscriber-only supplement to the Supply and Demand Report for 8 October. The price action was pretty crazy on Friday, so we wanted to show what happened with the basis. Speculative or fundamental?
Here is the chart.
We see that the basis tracks the price. Although, there is this anomaly at the end of the day when price is rising but basis seems to want to go down after 19:30 GMT (3:30 in NY).
So let’s look at the cobasis plotted against the price of the dollar.
There is no corresponding rise in the cobasis. Therefore, we can say little fundamental buying occurred
We interpret everything after around 20:00 as noise, as the market participants head home for the weekend.
Here is silver basis and price.
The basis appears to want to fall away as price is rising after 18:00.
Here is the cobasis and price of the dollar in silver.
The cobasis does show a rise starting around 18:00. We would take with a grain of salt everything after 19:30. So there is about 6 or 7bps move in the cobasis. Some fundamental buying late in the day, though we would not read too much into it unless there is follow-through this week.
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