Monetary Metals Supply and Demand Report: 13, Oct, 2013

The prices of the monetary metals slid this week, especially on Friday. Gold ended the week 38 bucks lower than last Friday (-2.9%), and silver ended 42 cents lower (-1.9%). We are interested in the changing equilibrium created when some market participants are accumulating hoards and others are dishoarding. Of course, what makes it exciting [...]



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4 replies
  1. James Linnstrom says:

    Hmmm… I used to think cobasis is simply the negative of basis. But looking at silver chart, basis has been declining since late August, implying declining supply of silver. But cobasis has been flat indicating that thre is no developing shortage. So I guess they are separate numbers!

    Thank you, Keith, for this great analysis. You are the light in this vast darkness called gold and silver investing!

  2. zorba6 says:

    Hi Keith

    I really appreciate that you share your knowledge and ideas here. Could you please explain why the Cobasis is not just the negative of the Basis. When i read your article you yourself describe it as:
    Basis = Future – Spot
    and Cobasis= Spot-Future.

    Should not then the difference between the two always be the same?

    Perhaps it has to do with the spreads in the market price?

    Best regards from a fan in Sweden

    • James Linnstrom says:

      As explained in Sept 8th report, bid and ask spread makes a difference:

      “To be more precise, we must define these terms that would be experienced by anyone who tries to carry or decarry. When one buys, one must pay the ask (also called the offer). To sell, one must accept the bid. With that in mind, here are the proper definitions:

      Carry = Future(bid) – Spot(ask)

      Decarry = Spot(bid) – Future(ask)

      Basis and cobasis are the annualized returns for carry and decarry. “

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