Monetary Metals Supply and Demand Report: May 19, 2013

    The dollar gained 1.4g gold this week, which means gold price in dollars went down $88. This is another big move that will give a false sense of confidence to the Keynesians and Monetarists (one of the business news sites was crowing this week that “Keynes has won”). They are wrong. The strengthening [...]

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13 replies
  1. jmf says:

    It looks like they are trying to smash the price again to stop the basis widening. How ironic they cannot see that their actions will only increase the gap. They have themselves become fools in their own ‘greater fool’ game.

  2. petter_w says:

    Basis blow of in gold and silver!

    The gold basis/cobasis curves for june look like a self feeding schockwave that must either collapse because the dollar collapses – or – it collapses or corrects as a result of higher prices. I think for example if gold would go to 2000$ over a few weeks that we would not see this strong backwardation. However – this would only be temporary.
    We sure live in interesting times.

    Is the cobasis positive in silver also for the next future month?

  3. monetary says:

    Oddly enough 1/10 oz gold coins — from any mint — have become tougher to get recently, as many of the usual dealers in my area say they’re “out” and post prices 4% over those of the dealers that have them.

  4. monetary says:

    Wait… isn’t the August backwardation a month early? The June backwardation didn’t happen until April 3, two months before June. The August backwardation happened around May 10, almost three months before August.

  5. Keith Weiner says:

    Thanks for your comments.

    jmf: I would doubt that central bank would be thinking about the gold basis.

    petter: June gold is just what I call “temporary backwardation”. September silver is not in backwardation, though it’s not that far from it.

    monetary: You are spot on to look at when a contract goes into backwardation. I do think it is significant that August entered earlier in the cycle than did June. Here are the dates:
    – Apr first backwardated Feb 15, 30 trading days before April 1
    – Jun first backwardated Apr 4, 42 trading days before June 1
    – Aug first backwardated May 16, 55 trading days before Aug 1

    All else being equal, this is a bullish sign because gold is becoming scarcer and scarcer.

  6. thinkpeace says:

    When ever I read your blog or view your videos Keith, I end up buy an ounce or two of my favorite American Gold Buffalos!

    Curiously, do you consider Silver a monetary metal?

    Thanks for the insights!

  7. eugenioca says:

    Another question,
    are somewhere avalaible historical gold and silver basis and cobasis charts? Is it possible to find the highest cobasis and the lowest basis mark for every contract, going back in time, possibly till 1999?

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