by Alasdair MacLeod
Gold and silver consolidated this week, trading in a tight range. From last Friday’s close, gold eased $9 to $1725 in early morning trade in Europe. On the same timescale silver rose 27 cents to $17.47. The difference in performance can be attributed to gold’s active June contract on Comex rolling off the board.
Conditions in both metals remain tight, with Comex speculators determined to hold their positions, rolling them forward despite a premium cost that has varied between $10-$30. In silver, the active July contract trades at a 50-cent premium to spot, the equivalent of $50 for gold. The tightness in both metals suggest supply constraints are driving futures markets; because swap dealers no longer prepared to arbitrage the premiums.