Fundamental Developments – Scarcity of Precious Metals Increases Slightly

Not much price action at the metals tables in the casino. Gold -$7, and silver -$0.10. Gold to silver ratio unchanged.

This will be a brief report, due to the rigors of travel this week.

Read on for the only true picture of the fundamentals of the monetary metals. But first, here’s the graph of the metals’ prices.

Gold and silver prices – click to enlarge.

Next, this is a graph of the gold price measured in silver, otherwise known as the gold to silver ratio.

Gold-silver ratio – click to enlarge.

For each metal, we will look at a graph of the basis and co-basis overlaid with the price of the dollar in terms of the respective metal. It will make it easier to provide brief commentary. The dollar will be represented in green, the basis in blue and co-basis in red.

Here is the gold graph.

Gold basis and co-cobasis an the dollar price – click to enlarge.

Gold’s scarcity (i.e., the red line, co-basis) is up this week, though the price of the dollar (i.e. green line, the inverse of the price of gold) didn’t move much.

Now let’s look at silver.

Silver basis and co-basis and the dollar price – click to enlarge.

The silver co-basis rose as well, but not as pronounced as in gold.

Charts by: Monetary Metals

Dr. Keith Weiner is the president of the Gold Standard Institute USA, and CEO of Monetary Metals. Keith is a leading authority in the areas of gold, money, and credit and has made important contributions to the development of trading techniques founded upon the analysis of bid-ask spreads. Keith is a sought after speaker and regularly writes on economics. He is an Objectivist, and has his PhD from the New Austrian School of Economics. He lives with his wife near Phoenix, Arizona.

 

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