03 October 2013

Gold Daily and Silver Weekly Charts - Appearance Versus Reality

As you know I have commented previously about the large drawdowns in gold bullion inventory from the COMEX and GLD among other things. And there is no similar decrease in silver bullion despite an even greater price decline YTD. There is intraday commentary on this here.

I have not yet figured out what is causing this, and I may never find it out. But it does seem to suggest that if gold should break out and run higher there is going to be a grabasstic rush to stake out all the deliverable and allocated bullion that you can find. YTD the gold bullion inventories are down in excess of 700 tonnes, but we see no decline in silver, platinum or palladium inventories across a broad spectrum of publicly disclosing entities.

So capping gold and silver makes a lot of sense here. Let's see how this impasse between supply and demand of real goods plays out into the end of December.

As you may recall we saw big takedowns in the price of gold and silver the past two Decembers. You can click on the two December Manipulation labels at the bottom of this post to see prior comments from last year.

So, one cannot predict what will happen again, but it will most likely be interesting.

Have a pleasant evening.