Monetary Metals Supply and Demand Report: 22 Mar, 2015

This week, the price of gold was not moving much until Wednesday. And then, someone or other said something about monetary policy. And boom! Just like that, the price of everything took off like a rocket. By the end of the week, the price of gold was up $24 and the price of silver was [...]



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6 replies
  1. mikestline says:

    Keith,
    Thank You ,Still trying to understand all this,Every time i read your,Monetary Metals Report
    I think i get a little more each time,Please keep them coming.
    Mike

  2. Freeman says:

    Your methodology makes sense. It’s the source of the inputs that has me befuddled. The exchanges’ design weaknesses with regard to HFT, naked shorting, fails to deliver, naked sponsored access, etc., continually thwarting true price discovery. The mere appearance of high-volume asks (frequently with depth), eventhough quickly withdrawn, is enough to get a similar reaction from the other algol’s. Banging the bid at close is commonplace. Seems as though this action would taint our basis/cobasis data. N’est pas?

  3. Keith Weiner says:

    Thank you for the comments.

    jmf: Good question. I don’t want to answer off the cuff, but I will note the interest rate in dollars is much higher than in yen, francs, or euros.

    Freeman: The market maker is the trader who narrows the bid ask spread. He is the only one who buys at the bid and sells at the ask. Since his appearance in the coffee houses of London centuries ago, he has been regarded with suspicion if not a desire to banish him by law. He has not been well understood. Today, he is known as HFT. Not that HFT is all good, I wrote this last year: http://keithweinereconomics.com/2014/04/25/high-frequency-trading/

    I believe I have written more than anyone to debunk allegations of gold market manipulation and naked shorting. It’s all on this site, just scroll backwards through the blog. Much of it was Feb 2013 through that summer, with additional articles spread throughout.

  4. fengqin821021 says:

    Hello,
    I just have a very simple question. Which spot price of gold and silver are you using as data in your model?

    I am checking the spot price on Saxo Bank. It seems to me that both Basis and Cobasis are negative now…..which mean, there is no arbitrage trade.

    And Would you like to make long history base chart base on your model?
    I am very interesting to see that how the basis and cobasis change when the price went up since 2001.

    Best regards
    QF

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