Monetary Metals Supply and Demand Report: 24 Aug, 2014

The gold and silver prices dropped $23 and $0.13, respectively. A 100oz gold future is now worth $2300 less than it was at the close a week ago on Friday. This is a loss of 1.8%. That’s not that bad, but the difficulty comes from the fact that one can buy them using leverage. Assuming [...]



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5 replies
  1. JohnGalt says:

    Interesting and stimulating as always Keith. I think some of the readers might need a review of the terms:

    Basis = Future – Spot
    Cobasis = Spot – Future

    I also appreciate the final sentence, possible “actionable advice?”

  2. kendo451 says:

    “As speculators sell, the scarcity of gold goes up and dollar price goes up with it.”

    Is that a typo? Perhaps I am completely misunderstanding you, but shouldn’t it be “As speculators buy, the scarcity of gold goes up, and the dollar price goes up with it.” ?

  3. kendo451 says:

    Or is the idea that speculators represent a pool of gold with the highest willingness to sell (high availability). When speculators sell, transferring gold to inelastic holders (hoarders & jewelry mfrs), that high availability pool shrinks, making the supply less responsive to increased demand and therefore more susceptible to price rise?

  4. ericvorg says:

    Keith did you come up with any more info on India paying interest on gold? I see on Zero hedge that “South Africa reels from unexpected bailout, one Bank has a modest proposal:give us your gold”…..they will pay a dividend/interest on your gold. How can this be?

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