by Alasdair MacLeod
Looking at our introductory chart, it seems bizarre that in a year when the US dollar M1 money supply is growing at 15% annualised (since 1 January), with interest rates still supressed at the zero bound and with the price effects beginning to undermine the carefully choreographed CPI statistics, that gold is unchanged on the year.
This week provided evidence that this may be changing, with both gold and silver refusing to dip despite some determined bear raids. In European trading, this morning gold was at $1895, up $5 from last Friday’s close, and silver was at $28.13, up 33 cents on the same timescale. $1900 and $28 respectively seem to be a Maginot line.
Belatedly, the gold and silver communities are waking up to new Basel 3 regulations introducing the net stable funding ratio calculation. The Basel committee finalised the regulation in October 2014, and it has taken seven years for it to be introduced.