Monetary Metals Supply and Demand Report: 22 Dec, 2013

The dollar made a multiyear high, closing on Thursday at over 26mg gold! Not even the Fed’s propaganda squad would trumpet this as good news and not in this way. And, of course, the gold bugs regard it as bad news. Though they say that the dollar is going to zero, they measure the value [...]



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16 replies
  1. greedyPig says:

    Thanks for the weekly reports, Keith. Yes I would like to know why the basis for silver is in a freefall when co-basis is only moving sideways. I find the mechanics of these two items quite hard to grasp.

    Merry Christmas to you and all your readers!

  2. WallyB says:

    Either the contract month for futures is approaching expiration which is causing the silver basis to fall. Or perhaps it means there is/has been simply a lot of selling of futures right now in the face of relatively stable demand in spot markets…

    Or both at the same time?

    This subscriber is also interested as to why this is happening.

    Merry Christmas Keith!

  3. Robert says:

    I’m guessing that a lack of liquidity is causing the bouncing around. I’ll attribute this lack of liquidity to MF Global. Therefore Jon Corzine is to blame for the cobasis and basis to not be mirror images.

  4. suckapump says:

    (I think) I understand the basics, meaning asymmetry can result because price changes and spreads aren’t proportionately identical between the two instruments (futures and spot). What I don’t grok is what implications this particular scenario has. Is it a relative widening of the spot spread (possibly due to relatively lower volume? (I might have that backwards….)

  5. boris495 says:

    Keith,

    Thank you for another outstanding S/D Report, informative and substantive, as always.

    My intuition is that the lack of symmetry in the trajectories of the basis and cobasis, to echo a number of previous posters, involves asymmetry in changes of the bid/ask spreads in the market. I look forward to reading, and learning from, your explanation.

    To you, and to all here: Merry Christmas! And best wishes for a happy, healthy and prosperous 2014!

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