Tag Archives: Gold

Perhaps it may be lesser known than his other Laws, but Murphy wrote one for the basis analysis. It goes like this. If we observe that the fundamental price of a metal is far removed from the market price, the two won’t likely converge the next week. On the other hand, suppose we say this (as we did last week): “The Monetary Metals fundamental price is measuring just that, the fundamentals. As with stocks or any other asset, our centrally banked, government-distorted markets can experience...

The prices of the metals rose a bit this quiet, holiday week. Merry Christmas! Speaking of Christmas, Keith’s brother who is an amateur woodworker of growing skill, gave him this present on Friday. Regular readers may recognize the design as our logo. Each “M” is made of a single piece of wood. They are stained or painted in the correct colors. The minute hand is silver and the hour hand is gold (paint, alas!) It now occupies a prominent place in the office. It is worth taking this time...

The prices of the metals were sagging. Silver was trading around $13.80. On Wednesday, Janet “Good News” Yellen said the magic words. The Federal Reserve hiked the federal funds rate by 25 basis points. The price of silver was surging in anticipation of the news (we assume). Within an hour or so of the announcement, it had spiked to $14.32, up 3.8% in a few hours. Despite our note on 8 November, this week we have seen more than one article claiming that a rising interest rate is good for...

“That [half a dollar of buying] frenzy was not stackers lining up to buy phyz. It was speculators buying paper. Why does that matter? Speculators, who typically use leverage, can’t hold the market price against the tide of the hoarders. They can push for a while, but they have to close their positions sooner or later, either to take profits (as they reckon them, in dollars) or to stop losses.” This is what we wrote last week. It turned out to be prescient. This week, the price of silver...

The prices of the metals moved mostly sideways this week. That is, until Friday. Then foom! (Foom is the sound of a rocket taking off.) From 6 to 10am (Arizona time, i.e. 8 to 12 NY time) the price of gold rose from $1,061 to $1,087. Not surprisingly, the silver price rose a greater percentage, from $14.14 to $14.59. The catalyst seems to be the Bureau of Labor Statics jobs report. There were a few more jobs created than expected, which means the economy is doing well and/or the Fed is...

In this holiday-shortened week (Thanksgiving), the price of gold dropped $20 and silver 10 cents. Friday, when the price dropped the most, could not have had much liquidity as most Americans were out of work shopping or partying. Whatever they may have been buying, it sure wasn’t gold. We might be inclined to take the basis data this week with a grain of salt. Here’s the graph of the metals’ prices. The Prices of Gold and Silver We are interested in the changing equilibrium created when...