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The Curious Case of Falling Gold and Silver Prices
A curious thing happened last week. The prices of both monetary metals have been falling for a week and a half through February 15. No, that’s not the curious part. There is no law of nature that says the prices have to go up, but if they go down it must be artificial somehow. The curious thing is that the price fell while open interest in futures rose, which is not typical of how the market has actually been behaving in recent years.
Now let’s look at the data.
Silver loses about 6.6%, and gold about 4%; thus the gold:silver ratio gains about 2.6%.
Next, let’s look at the open interest data, which is the number of futures contracts in each metal.
One possible explanation is the notorious “naked short sellers”. If so, they made money. Prices did fall. However, there is more data that doesn’t quite fit this theory.
As we showed, silver open interest was already quite high. It increased a few thousand contracts (under 2%) during the period through February 15. Gold open interest was not high by recent historical standards, and its open interest rose by 25,000 contracts (around 6%).
Now let’s look at the basis data (here is a short tutorial on the basis). This adds additional color to the data provided above.
The gold basis has been falling for a long time. The basis generally (but not always) moves in the opposite direction of the cobasis, and this linked article showed the cobasis rising. The falling gold basis is not news in itself.
Let’s look at the silver basis.
The silver basis for December has been in a rising trend since at least last July (which uptrend is not yet broken, in our opinion). Here in this graph, we see it is not much changed from start to end. The May basis is falling, which is interesting as it occurs against the contract “roll” from March-May, now occurring. The “roll” is when “naked longs” must sell because they cannot take delivery, and typically they buy the next month if they want to keep exposure to the metal.
The above data shows: (1) falling prices, (2) rising open interest, and (3) falling basis in gold and slightly more ambiguously in silver. We have provided all of the data comprising this curious circumstance. You can form your own conclusion.
Or you can read Part II of this article (free enrollment required for full access) for our analysis and surprising (though tentative) conclusion.
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Last time I checked in Japan, who's running whom was clear enough for any OWS guy to finally figure things out.
But nobody can help someone who doesnt want to see.
dont believe what you see (kabuki). believe what they do.
And what they do is : central banks finance government spending.
Now, all that's left your you to do is put your words into action.
central banks use gov't to strip a nation of their (your) assets. i.e. cb prints pretty confetti for the gov't and then, to repay what to gov't wasted, the gov't gives the bank your tangible assets.
Funny then that you seem to imply that without central banks, governments would not strip us of our assets...
you bet the gov't (sans cb) would strip you of your assets for the benefit of those who own the gov't. and please, dont try to tell me that 'we the people' own the gov't and the gov't works for the benefit of the people (ie. communism)
it's just a less overtly violent way of doing it then men coming to the door and sequestering everything you have.
it took a long time to work it all out, but jamie and lloyd have. and - one is slack jawed infront of the t.v. so you don't even notice.
You guys appear to think there's a difference between the people who own the government and the people who won the banks.
Stop being diverted by the camouflage.
"http://research.stlouisfed.org/fred2/series/BASE That is as much money as existed in 1980 that was added just last month."
!!!!!!!!!
Did you read this on miners?
http://www.kitco.com/ind/Maund/20130218.html
Brother John F had a youtube video about miners as well. "Stay away" is his basic conclusion, because he believes they are unprofitable because of an aritificially suppressed price.
http://www.youtube.com/watch?v=qRBW2Jv5U_8
Haha, just noticed Maund references none other than Graham Summers in his article.
> " There is no law of nature that says the prices have to go up, but if they go down it must be artificial somehow. "
That's a contradiction.
Read it this way, 'There is no law of nature that says the prices have to go up, and that if they do go down it must be artificial somehow.'
Clive Maund isnt any good at all. His analysis stinks.
Who was it on Kitco (video interview) that end last year predicted gold would go further down by February? So far he's been dead right.
Head and shoulders?
I'm with Jover, none of the tech mumbo jumbo works in a fixed game.
it looks like TPTB want the S&P at 1 to 1 with gold.