Monetary Metals Supply and Demand Report: August 25, 2013

Silver outperformed gold this week. Is this the big breakout? Or is it a headfake? Read on to see the emerging contango in silver! As we go forward, there is more boilerplate material in this report. This is good for first-time readers or as a refresher. But if you are reading it every week, you [...]



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5 replies
  1. bvigorda says:

    I keep reading the boilerplate and the article together and I still don’t understand the answer to the question “Silver outperformed gold this week. Is this the big breakout? Or is it a headfake? Read on to see the emerging contango in silver!”

    Could someone please answer this question for me? I own no gold or silver presently and would like to buy some when there is a true breakout or whatever is needed to confirm the bottom.

    Thank you

    • Keith Weiner says:

      A rising basis / falling cobasis is bearish. It means that the price jump is being fueled by leveraged speculators in the futures market rather than fundamental demand for silver metal. The December contract is in backwardation, which means the marginal demand for the metal is to be carried in the warehouse.

  2. drdavis2 says:

    Keith, your reply above says “The December contract is in backwardation.” Is this a mistake? It is extremely confusing to me, a new reader, studying this past report! Your chart on this page shows the December basis crossing above zero. This positive basis is labeled, “Dec silver is in contango.” Your intro says, “Read on to see the emerging contango in silver!” In general I am struggling with your terminology, writing, and conclusions that are not always clear to me.

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