Tag Archives: Basic Reports

On Monday the dollar had a ferocious rally, moving up from 15.87mg gold to 16.77mg and from 1.21g silver to 1.32g. In mainstream terms, the price of gold dropped about a hundred bucks, and the price of silver crashed $2.20. One notion we’re hearing a lot now is, “there is no alternative to stocks.” Certainly, stocks have been rallying. They were up in Sunday evening (as we reckon it here in Arizona) trading. Then Pfizer announced good news for its COVID vaccine, and...

On Wednesday last week, the price of silver dropped from over $24.25 to just a bit over $23 before bouncing back to around $23.50. The next day, the price dropped again, briefly to around $22.60 before mostly recovering (but a dime to a quarter down). Let’s look at the graph of the price and basis (i.e. abundance) action for 28 and 29 October. At the end of the day (second day), the price is about a buck lower. And the basis (i.e. abundance) is about 50bps lower....

On Friday, the price of silver went up from $24.25 to $25.20, or +4%. Let’s look at the graph of the price and basis (i.e. abundance) action. For the first part of the day, the action is from speculators, for the most part. Then around the time that the US west coast comes online, we see a continued rise in price but a drop in basis back to where we started. Folks, this is what buying of physical metal looks like: prices rises by about 30 cents accompanied by a drop...

There was a big drop in the price of silver last Wednesday. Then the price moved up, and down, but mostly up. Let’s look at a graph of the silver price and basis showing Sep 30 through Oct 5, with intraday resolution. Let’s take a look: It’s remarkable how the basis tracks the price, until Oct 5. When basis tracks price, this means the action is primarily in the futures market. At times when the price is rising, the basis is rising—which simply means that the spread...

While the silver price was dropping recently, we published analyses here and here. At that time, we saw a basis that fell with price, but which recovered during “off” days. In short, there was not much of a decrease in abundance of the metal to the markets commensurate with the price drops. On Monday, the price went up from about $22.95 to about $23.70, a gain of 3.3%. Let’s look at the intraday price and basis action. There are several trends. The day begins with...

A few days ago, we wrote about a big silver crash. The price dropped around 7.5%. And the basis dropped from around 2% to 0.6%. At the end, we said: “The key question is: what is the follow-through? If the price stays down and the basis goes back up, that will be a bearish signal. If the basis stays down, that means the silver market is markedly tighter at $24.50 than it was at $26.75.” Which this brings us to yesterday’s silver dive. Here’s the graph of the day’s...

We are reading now about possible regulations for air travel. In brief: passengers might be forced to spend hours at the airport. Authorities will perform medical checks, including possibly needles to draw blood, no lounges, no food or drink on board the plane, masks required at all times, and even denied the use of a bathroom except by special permission. We would wager an ounce of fine gold against a soggy dollar bill that people will hate this. The majority of...

The Federal Reserve has become more aggressive again, after several years of acting docile. As you can see on this chart of the Fed’s balance sheet, it has very rapidly expanded from a baseline from (prior to) 2015 through 2018, of about $4.4 trillion. After which, it had attempted to taper, getting down to $3.8 trillion last summer. Then it was obliged to reverse itself well before responding to the COVID lockdown. Since then, its balance sheet has gone vertical....

The price of gold dropped a few bucks this week, but the price of silver jumped about half a buck. The drumbeat for the gold bull market is well underway, and it is beginning now for silver. So let’s do a quick update on the supply and demand fundamentals. Gold Basis and Co-basis and the Dollar Price Here is the graph of the gold basis. The basis has come in quite a bit—but it is still 3.6% annualized. We do not believe that this as a “true” reading. It is a sign of...

The price of gold dropped $29 and the price of silver dropped $0.27. We’ll get back to where we think the prices are likely to go in a bit. In recent Reports, we’ve looked at the elevated bid-ask spread in gold (though not nearly as elevated as some goldbugs would have you believe) and the elevated gold basis. As an aside, we continue to see articles that get the high gold basis exactly backwards, the way John Maynard Keynes got commodity markets backwards. A high...