by Alasdair MacLeod
Gold Money
This pullback in prices might provide the best opportunity buy gold and silver before China’s continuing demand drives them far higher.
[…] Gold and silver corrected sharply this week, with gold down $85 from last Friday’s close at $2342 in European trade this morning. And silver was off $1.30 at $30.56 over the same time period. While nominally these appear to be large numbers, in percentage terms and given their recent rises these corrections should be regarded as to be expected.
It is now widely accepted that both metals are being drained out of western vaults to satisfy demand in China. In particular, silver’s volatility indicates that there is an alarming lack of liquidity in western vaults, especially when one bears in mind that the large majority of vaulted gold and silver is custodial and therefore not available to market makers and bullion banks to cover their positions.