Monetary Metals Supply and Demand Report: 26 Apr, 2015

The price of the dollar rose by 0.55mg gold, and 65mg silver. This is obviously bad for gold speculators, who are betting on a falling dollar. It’s less obvious that it’s bad for borrowers, who are also effectively short the US dollar. It now takes a bit more money (gold) to get out of dollar [...]



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4 replies
  1. Jim_n says:

    Re silver and capitulation: 4 years down from the top of its historical trading range and the Comex open interest is within an ace of the all-time high that occurred prior to the 2008 collapse. Ain’t that amazin’ ? How’s about single digits price for a capitulation?

    • rosslm888 says:

      The crash will be in bonds and stocks sure gold and silver can fall futher but they have already priced in the coming carnage unlike stocks and bonds and won’t go to zero like paper assets. Out of the dust of CBs fiats stocks and bonds the metals will show why thay have stood the test of time. The negativety around Gold and silver is a pointer to limited downside.

  2. Keith Weiner says:

    Thanks for your comments.

    Jim: open interest is a function of the basis spread. And the basis spread is a function of … speculators who buy futures. I would not bet on single-digit silver prices (though I wouldn’t be terribly surprised if it happens).

    Ross: It’s a paradigm shift to think of the value of the dollar in gold, rather than the conventional view of gold valued in dollars.

  3. opusnz says:

    Keith, thanks again for your work. I agree that pricing gold with a USD measuring tape that keeps moving makes no sense. I find your basis charts great for the short term moves but when analysing in the long term is there a better way to price gold?

    Some people try to price it to real things like a commodity index. This makes sense to me but not all commodity indexes are the same. Do you do so yourself and how?

    Also, do you have longer term charts for the basis and cobasis? I would like to see the market extremes and going one year back doesn’t seem far enough.

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