28 April 2014

Gold Daily and Silver Weekly Charts - FOMC, GDP, Non-Farm Payrolls and End of April

Lions and tigers and bears, oh my.

Gold and silver may be running quite a gauntlet this week, as we have an FOMC meeting, the first quarter US GDP, the end of the big April delivery, and a Non-Farm Payrolls report on Friday.

We are up to about 500,000 ounces claimed for the month as of last Friday, but if you were just looking at the Comex warehouse reports it would seem as though nothing has been happening.

Physical gold appears to be under some short term strain as backwardation makes its reappearance in the gold forwards on the LBMA as discussed by James Turk.

This means that someone is willing to pay money to borrow physical gold bars AND collateralize that loan with dollars. That implies that physical in hand is worth more the promise to deliver physical gold in the near future, which is backwardation.

The Comex is becoming a shell game of paper cups with a little bit of physical bullion hidden under it. This will end when the cardboard box on which it is based falls over.

Have a pleasant evening.