Futures market

Monetary Metals's picture

This week, the prices of the metals moved up on Monday. Then the gold price went sideways for the rest of the week, but the silver price jumped on Friday. We see a higher price of gold along with greater scarcity (i.e. cobasis, the red line), which means the price of gold is being pushed up by buyers of physical metal, not by buyers of futures (which would push up the basis, and reduce scarcity). In silver, the story is a bit less compelling. The scarcity of the metal is holding (not increasing), as the price rises. This implies there is some good demand for physical, and the price action had futures market assistance.

The Fed's General Counsel Is Retiring

The Federal Reserve's general counsel, Scott Alvarez, will retire this year after a 36-year career at the central bank including more than 12 years as head of the Legal Division. the Fed said Wednesday.

"We're Way Past Humpty Dumpty"

The most basic link in finance is that between risk and reward. Just like alchemists who once sought a path to gold from lead, a great deal of modern finance was built around finding a shortcut between them, but now, what is missing is reward, especially under conditions where there are no longer illusions about risk. We are way, way past Humpty Dumpty time. You can bring back prop trading, but you still have to have asymmetry for banks to trade in it. That ship sailed for good in late July 2011.

The Market Wizard's Wizard - An Interview With Jack Schwager

"...someone with a great risk-adjusted return might have employed a strategy of selling way out-of-the money puts on equities since late 2008. That strategy would have produced great return/risk performance, almost like a money machine, but the trouble is that type of strategy also embeds a large tail risk. So even though the track record of this strategy would show low volatility, there would be the risk of catastrophic losses... Ironically, many strategies with low volatility are the most susceptible to event risk.

Oil Tumbles After Unexpected Crude Inventory Build

A mixed bag of crude draw and gasoline builds from API combined with IEA comments on rising US Shale output offset by Saudi jawboning about more production cuts possible has pushedoil green before today's DOE data. However, oil prices tumbled when DOE printed an unexpected 2.347mm barrel crude build (1mm draw expected) and another major build in gasoline inventories. US crude production remains at 9-month highs.

Hypernormalisation

During the last 20 years of the Soviet Union, everyone knew the system wasn’t working, but as no one could imagine any alternative, politicians and citizens were resigned to pretending that it was. Eventually this pretending was accepted as normal and the fake reality thus created was accepted as real, an effect which Yurchak termed “hypernormalisation.” Looking at events over the past few years, one wonders if our own society is experiencing the same phenomenon.

Dave Collum's 2016 Year In Review - "And Then Things Got Really Weird..."

"Markets don’t have a purpose any more - they just reflect whatever central planners want them to. Why wouldn’t it lead to the biggest collapse? My strategy doesn’t require that I’m right about the likelihood of that scenario. Logic dictates to me that it’s inevitable..."

Silver Slammed As Gold Crashes Below $1150 On $10 Billion Post Fed Hike Puke

Gold is suffering the worst 6-week tumble since May 2013 and the last 24 hours have seen the losses accelerate as following The Fed's second rate hike in a decade, someone dumped over $10 billion notional of the precious metal through the futures market. As the dollar surges to 14 year highs (and EUR tumbles) so silver also is plunging most since the election near a $15 handle once again.