by Pater Tenebrarum, Acting Man:

Speculators Finally Wade Into Silver

Well, wasn’t this an interesting week! The price of gold was up a pedestrian $10, mere noise in the long-term signal. But in silver, we see plus one dollar. It was practically inevitable with the gold-silver ratio at an all-time high, after a big run up in the gold price with no corresponding run in silver.

1000 oz. good delivery silver bars – one COMEX futures contract refers to five of these shiny door stops. Recommendation: do not let them fall on your toes. [PT]

When the silver speculators get their game on, they can push the price up far more in percentage terms than in gold (which is a much larger, deeper, more liquid market).

Fundamental Developments

This will be a short Report, due to Keith’s challenging travel schedule. Now let’s look at the only true picture of supply and demand for gold and silver. But, first, here is the chart of the prices of gold and silver.

Gold and silver priced in USD

Next, this is a graph of the gold price measured in silver, otherwise known as the gold to silver ratio (see here for an explanation of bid and offer prices for the ratio). The ratio dropped substantially last week.

Gold-silver ratio, bid and offer

Here is the gold graph showing gold basis, co-basis and the price of the dollar in terms of gold price.

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