Monetary Metals's blog
Our previous look at Nov 6 compared spot and futures. This time, let’s look at gold futures and GLD.
The cobasis briefly peaked around 11% (from around 0.5% previously).
Last week, we asked if silver would have a 14 handle again. This week, the market answered yes we can! How did we know? By looking at supply and demand.
For a gold miner with dollar-denominated debt, the right thing to do is to hedge the gold price. It's interesting that at the LBMA conference in Vienna, a panel discussed the epic collapse of hedging. Why?
The dollar dropped about half a milligram gold, and 50mg silver.
But who wants to read about the universal currency falling, failing? Few people are so barbarous as to think of the dollar’s value as being priced in terms a monetary metal.
Don't trade yesterday’s news. There was backwardation. However, it's a sensitive indicator and you need an updated picture before buying after a sizeable price move.
Consider the sport of betting on the sport of horse racing. It’s actually similar to the analysis of the gold and silver markets. How’s that?
This was a fairly quiet week in the market for the metals. The price action was elsewhere (e.g. equities and currencies).
Gold fundamentals are tight, but not so much in silver. According to popular belief, the prices of the metals are supposed to move together. What happens when a trading thesis is believed by just about everyone?
Both the October and December gold contracts are backwardated, and Feb '16 contract is not far. The gold market is tight. Why?
It began in Dec 2008. To understand it, it is necessary to understand two principles. The first is that gold is money and the dollar is credit (which is currently worth 28.4mg gold). For the second, we emphasize it's not just price, but separate bid and ask prices.
You cannot understand gold if you think it goes up and down, that the dollar is the measure of gold. Gold does not necessarily go up with interest, inflation, or commodities. Indeed, it does not go anywhere. It's the dollar going places (mostly down).
For those who are speculating on the dollar—i.e. most people—there was good news. The dollar rose to 28.3mg gold. It’s a big gain, and welcome news for those who keep all of their eggs in the one dollar basket.
Greece. China. Banking system messes. Central bank printing. And here we are, under $1140. Breakdown?
That cannot be determined from price charts. We want to know the fundamentals of supply and demand. Here's how we measure it.
The Greek default is a forcible contraction of credit, and bound to be negative for the prices of ordinary assets. But something extraordinary happened to silver this week.