Published on 21 April 2017
wealth.goldmoney.com / BY ALASDAIR MACLEOD / APRIL 21, 2017
Gold and silver peaked on Monday, when much of Europe (including London) was closed for the Easter Monday holiday. Prices then eased to a low point mid-week before moving sideways. Gold peaked at $1295.5 before trading as low as $1274, and this morning in early European trade it was at $1280. Silver peaked at $18.66 before ending up at $18.00. This makes gold up 11.06% on the year so far, and silver up 13.87%. Silver is lagging gold badly, and based on its normal relative volatility should be closer to $19.00.
This is reflected in the rise of the gold/silver ratio to 70.49%, shown in our second chart.
Silver’s disappointing performance is despite open interest on Comex being at a new record. This appears to reflect a gargantuan battle between the bullion banks and the speculators, who have accumulated record net long positions. The price has been lagging under this pressure, appearing suppressed. This is illustrated in our third chart.
A reason that can be cited for silver’s poor performance is a general weakness in metal prices, with copper and iron ore being especially weak. China’s bank regulator is cleaning up the wealth management products market, which has invested in base metal commodities, possibly including silver. These funds have been driving prices higher against the government’s own programme of stockpiling energy and base metals, so it is hardly surprising the Chinese authorities are taking this action. But if silver is caught up in this regulatory battle, it does not appear to be reflected on Comex, because the WMPs would be sellers, reducing open interest.
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