dcsimg
Thu Feb 23, 2017 10:29
Login Password    Forgot password?    Member's Privilege  
 Advanced Search
   FEATURES:
   QuamIR
   Gazette
   Learning
   Newsletter
   Info Center
Keith Weiner | Michael Pento | Kam Hung Yu | Jean Li | Liz Kim | Laurent Ettedgui | OilPrice.com | 黃韋皓   | Chloe Luo
Keith Weiner
Keith Weiner is CEO of Monetary Metals, a precious metals fund company in Scottsdale, Arizona. He is a leading authority in the areas of gold, money, and credit and has made important contributions to the development of trading techniques founded upon the analysis of bid-ask spreads. He is founder of DiamondWare, a software company sold to Nortel in 2008, and he currently serves as president of the Gold Standard Institute USA. Weiner attended university at Rensselaer Polytechnic Institute, and earned his PhD at the New Austrian School of Economics. He blogs about gold and the dollar, and his articles appear on Zero Hedge, Kitco, and other leading sites. As a leading authority and advocate for rational monetary policy, he has appeared on financial television, The Peter Schiff Show and as a speaker at FreedomFest. He lives with his wife near Phoenix, Arizona.
Click here to toggle text size
Gold and Silver Divergence, Report 5 Feb, 2017
06 Feb 2017

This week, the prices of the metals went up, with the gold price rising every day and the silver price stalling out after rising 42 cents on Tuesday. The gold-silver ratio went up a bit this week, an unusual occurrence when the prices are rising. Everyone knows that the price of silver is supposed to outperform—the way Pavlov’s Dogs know that food comes after the bell. Speculators usually make it so.

This will be a brief Report this week, as we are busy working on something new and big.

Below, we will show the only true picture of the gold and silver supply and demand fundamentals. But first, the price and ratio charts.

 The Prices of Gold and Silver

Next, this is a graph of the gold price measured in silver, otherwise known as the gold to silver ratio. It rose slightly this week.

The Ratio of the Gold Price to the Silver Price


 

For each metal, we will look at a graph of the basis and cobasis overlaid with the price of the dollar in terms of the respective metal. It will make it easier to provide brief commentary. The dollar will be represented in green, the basis in blue and cobasis in red.

Here is the gold graph.

 The Gold Basis and Cobasis and the Dollar Price
 

Do we have rising price of gold, up $25 (i.e. falling dollar, from 26mg to 25.5mg gold)? Yes. Do we have rising scarcity of gold (i.e. the cobasis, our measure of scarcity)? Why yes, we do.

This resumes the pattern that began the last week of December. The price of gold made a low of $1,127 (i.e. the dollar made a high of 27.6mg). Since then, the price of gold has been rising (i.e. the dollar has been falling) while the scarcity of gold has been rising.

Not a lot. Not Defcon 5, gold is going to spike to $10,000 (i.e. the dollar is going to crash to 3mg gold). Not a big obvious crisis-looking sort of move. Just a gradual move from -100bps to -68bps. What makes it significant is that it occurred with rising price. Gold is becoming scarcer as its price rises.

So far, this move has been driven by buyers of physical metal.

Our calculated fundamental price is up $40 to stay about $100 over the market price.

Now let’s look at silver.

The Silver Basis and Cobasis and the Dollar Price
 

In silver, there is quite a bit more volatility in the basis. And though the March cobasis is up, farther contracts do not show the same move.

Our calculated fundamental price did move up a bit—15 cents. However, it did not keep up with the market move. So now it’s basically even with the market price. It turns out speculators did think that silver ought to outperform gold, and they tried. They caught up to and passed the buyers of physical metal.

We note that in the futures market, the open interest in gold turned down sharply starting last week. However, silver open interest diverged, and continued to skyrocket.

Disclaimer: The above views are the opinions of the author or his/her company and do not represent the views of Quamnet.
Share :TwitThis   Facebook   LinkedIn       Forward to a friend
Don’t Short This Dog, Report 20 Feb, 2017 21 Feb 2017
Silver Futures Market Assistance, Report 12 Feb, 2017 13 Feb 2017
Gold and Silver Divergence, Report 5 Feb, 2017 06 Feb 2017
Silver Speculators Gone Wild, Report 29 Jan, 2017 02 Feb 2017
The Trump Weak Dollar Report 23 Jan 2017
A Hint of Gold Backwardation 16 Jan 2017
Silver’s Got Fundamentals, Gold and Silver Report 8 Jan, 2017 09 Jan 2017
Fed Rate Hike Causes Gold Price Drop, Report 18 December, 2016 19 Dec 2016
Friction and Gravity, Report 12 Dec 2016
Dang It Gold’s Supposed to Go Up! (Report 4 December, 2016) 05 Dec 2016
Market Update
Watch List
Quamnet Research
Sands China (1928): new contribution from Cotai project; unattractive valuation 22 Feb 2017
Quammentary: Interim results from NWS (659) & investment outlook 22 Feb 2017
Conquest Virtual Portfolio: Profit taking & asset switch 22 Feb 2017
First Comment: Earnings guidance from Kunlun Energy (135) & CALC (1848) 22 Feb 2017
Results announcement for coming days 21 Feb 2017
Quamnet:

Help  |  Sitemap  |  About Us  |  Contact Us  |  Advertise with Us  |  Job Opportunities  |  Disclaimers  |  Privacy     
Quam Group:
Quam Limited Quam Capital Quam Securities  
Quam Private Wealth Quam IR Quam Asset Management  
A founding member of:
MyQuamnet members get:
[Free Real Time Stock Quote] [Stock Charting Analysis] [Chart] [Hong Kong Stock Chart] [Industry Analysis] [Hong Kong Stocks Information] [Warrants] [CBBC] [Depositary Receipt] [Financial News] [Hong Kong Stock News] [US Stock News] [HKEx News] [New Stock] [Hong Kong Stocks Analysis] [Stocks Watch List] [Portfolio] [Finance Seminar] [Investment Seminar] [FOREX] [FX]
Quamnet Financial Services:
[Hong Kong Equity] [Hong Kong Stock] [Hong Kong Stock Quote] [Stock Quote] [Bid] [Ask] [Last Price] [Open] [Previous Close] [Board Lot] [Market Cap] [P/E] [P/B] [Real Time Price] [Past Prices] [Day High] [Day Low] [52 Week High] [52 Week Low] [Buy Ratio] [Sell Ratio] [Volume][Turnover] [Warrants Quote] [CBBC Quote] [Finance] [Stocks] [Investment] [Block Trades] [Chart Analysis] [Technical Indicator]
[Hong Kong Listed Companies Information] [Hong Kong Stocks Analysis] [HK Stock Quote] [Prospectus] [IPOs News] [Market Move News] [GEM] [Hang Seng Index] [HKCEI][Shenzhen A, B Index] [Shanghai A, B Index] [Hang Seng China AH Premium Index] [Forex] [Commodities Futures] [Gazette] [Commentary][Financial Columnists] [Fund House Report] [Shenzhen Stock Market] [Shanghai Stock Market] [Hong Kong Islamic Index] [Stock Trading Strategy] [Stock Monitoring Tools] [Commerce & Industry] [Financial] [Telecom, Media & Technology] [Conglomerates] [Healthcare] [Transportation] [Energy] [Property] [Utilities] [Global Alliance Partners] [Asset Management] [Securities Brokerage] [Personal Financial Advisory Solutions] [Futures] [US Stock] [ETFs] [HSI Futures] [Options] [Japanese yen] [US dollar] [Euro] [Pound sterling] [Australian dollar] [New Zealand dollar] [Canadian dollar]

Quamnet Subscription Services:
[Quam Research Main][Quam Research][Ask Quam][Columnists][Quam Wise][Market Move Signal] [Warrant Monitor][Investment Tools] [Quam Stock Monitor] [Stock Quote Ticker][Smart Database][Metastock][Quam Radar][Stable Growth Portfolio] [Aggressive Growth Portfolio][Fund Analysis][Wealth Management][Market Analysis] [Investment Base][Red Chip][H Stock][Bond][Mid - Short Term Stocks Investment Recommendations][Traders Corner][Rico][Mid - Short Term Investors][Traders Corner Portfolio][Stock Perspective][Newest Signal][Leader Trend][New Stock Pursuit][Smart Investor] [Smart Investor Adventurer Version] [Alex Wong] [Market Forecast][Pedder St Investor][Thomas Ng][Weekly Market Comment][Mid - Long Term Stocks & Investment Recommendations][IsaacsDaily] [Isaac] [Tony's collection][Value Perspective][Vincent Lam][Value Perspective upgraded version] [The Daily Perspective] [The Macro Perspective] [Market Oracle] [Henry Chan] [Economic Review] [Intelligent Observer] [Red Monkey][KL][Investment Monitoring List][FX Hunter] [Victor Ho] [Trading Comments][Invest Pro] [Paul Pong] [Global Market Analysis][Weekly Market Analysis][Virtual Stock Portfolio][Virtual Fund Portfolio] [Strategy updating] [Investment Strategy] [Sky Cheung]