by Alasdair MacLeod
This was a week of continuing confusion for markets in gold and silver futures, being disconnected from indicated physical prices outside the financial system, where there is no stock at current price levels. Gold fell by $12 from last Friday’s close to $1611 in early European trade this morning, but silver was unchanged at $14.43. Turnover on Comex has declined to very low levels with the dramatic fall in open interest; almost as if it is shutting down.
Clearly, conditions are extremely testing for bullion banks. Supplies of bullion are drying up with both important mines and refiners in lockdown due to the coronavirus. The logistics of bullion transport are also confining. Meanwhile, evidence of global economic distress is mounting, and the response by governments is hyperinflationary. It is not a time to be caught short of gold or silver.
The financial establishment’s response has been to just steamroller over reality. Our next chart shows how dramatically the policy has worked for Comex’s gold contract.