Supply and Demand in the Gold and Silver Futures Markets

This article establishes that the price of gold and silver in the futures markets in which cash is the predominant means of settlement is inconsistent with the conditions of supply and demand in the actual physical or current market where physical bullion is bought and sold as opposed to transactions in uncovered paper claims to bullion in the futures markets.

The supply of bullion in the futures markets is increased by printing uncovered contracts representing claims to gold. This artificial, indeed fraudulent, increase in the supply of paper bullion contracts drives down the price in the futures market despite high demand for bullion in the physical market and constrained supply. We will demonstrate with economic analysis and empirical evidence that the bear market in bullion is an artificial creation.

The gold and silver markets are almost continuously manipulated with a web of paper gold and silver that consists largely of Comex futures, LBMA forward, OTC derivatives and Central Bank/bullion bank custodial hypothecation agreements.

Dr. Paul Craig Roberts and I apply the law of supply and demand – the foundation of economics and capitalism – to the dislocation between the paper bullion and physical bullion markets in order to demonstrate that the only possible conclusion is that these markets are highly manipulated.

The manipulation of the gold price by injecting large quantities of freshly printed uncovered contracts into the Comex market is an empirical fact. The sudden debunking of gold in the financial press is circumstantial evidence that a full-scale attack on gold’s function as a systemic warning signal is underway.

You can read the full article here:  Supply and Demand in the Gold and Silver Futures Markets.

12 thoughts on “Supply and Demand in the Gold and Silver Futures Markets

  1. There is a very interesting series of silver coins that the Canadian Mint has been issuing that put the buyer at no risk by way of the legal tender value (face value) of the coin. There have been various denominations including $20, $50 and $100 coins that buys can purchase for the face values (a trade of debt for bullion) .

    This does two things that are based in fact and not in speculative market action.

    1) It provides for a no risk “floor” on the trade value, based on the legal tender value of the coin.

    2) It removes real supply (of silver) from the market .

    The mint of an IMF county is telling us something ….. even if it’s about subtle intentions ….. by way of the market ???

    Facebook members can follow the story here :

    1. That’s right, rooster, the RCM (Royal Canadian Mint) is issuing silver coins with a purchase price equal to their face value. The beauty of such a transaction is that there is absolutely no downside, only upside (in other words, nothing to lose and an awful lot to possibly gain if/when the artificial price suppression of silver finally ceases).

      1. @rooster and marcus

        In ‘theory’ the 20 dollar face coins I bought from the RCM are worth 20 dollars if I go to cash them in. In practice, a bit different problem. The banks don’t want them as there is no way for them to get rid of the items (My local branch had over a thousand face in those nickel half dollars all rolled up in the vault and no buyers anywhere) unless the RCM has a return policy somewhere. It was the same problem with the 1976 Olympic 100 golds, and the Calgary Silver Olympic sets where the bullion value was less than face and no one wanted them at all.

        Nice concept, but buying a silver quarter sized coin for 20 bucks is not worth the effort I made when I made my initial and only purchase.

  2. I agree with your article 100 percent. I believe someone should out the likes of
    Deutche bank who now says based on all economic factors and statistical analysis
    their belief is that gold should be valued more like 700/750 .
    Of course they don’t mention the derivative exposure they and their co-Horts have.
    You don’t think they have been talking the gold price down since 2011 do you.
    I think so in my humble opinion.
    There message shows up on kitco and market watch articles recently.
    I guess that also speaks for itself.
    I have said that their plan probably all along was to get the gold price down by any means at least until everybody capitulates. Well capitulate this you asshole miscreants.
    I have said my piece for now . Thank you for your time.

  3. Do ya think that on Friday afternoons in the back alley behind the Federal Reserve buildings; that they throw a few pallets of freshly printed $50 bills to their buddies for Hookers & Beer money?… or does that just happen in Iraq.

    1. Happens everyday in DC – I have a good friend who used to be a Congressional aid for Colorado House Rep. He’s got a ton of hookers and booze stories.

  4. Here’s some interesting tweets and (retweets) Monday by Ned Naylor Leland. While the west disregards the rules of commodity law, where PM’s pose as commodities’ ugly stepchild, the east has the yuan renmimbi, Indian Rupee and other currencies poised to leapfrog their rigged checkerboard with an asset-backed checkMATE. Grounded in traditional finance, law and accounting, China, India, Russia and partners have had their fill of societal and institutional dislocations, upheaval and systemic risk that past genocidal policies sought to wrap up.
    As derivatives and their supporting fables unwind, the positive feedback loops and inertia will carry more weight than all the fat cat paper pushing regulators and their excrement by orders of magnitude.
    A Strong First Decade for the Chinese Renminbi Since De-Pegging
    2015-07-27 08:30 (UTC)
    Christopher Vecchio, Currency Strategist
    [Typo “depegged in July 2015” should be 2005 in their “Talking Points]

    “It’s been nothing short of a first successful ten years for the Chinese Renminbi, which was depegged a decade ago in July 2005. The Renminbi has gained acceptance as a major currency on a global scale in recent years, which bodes well for the future.

    There has been growing international adoption of Renminbi payments in the post-2008 crisis world, and by December 2013, the Renminbi had jumped ahead of the Euro as the second-most used currency in trade finance. By February 2014, Renminbi bond global issuance was surging at an all-time high. The fallout of the 2008 crisis, which originated in Western economies, proved to be fertile ground for the Renminbi to gain a footing worldwide…”

  5. Is there a doctor in the house? I have multiple lacerations from trying to repeatedly catch the falling gold and silver knives (at least they’re antimicrobial knives).

    Or how about a psychiatrist? It seems I’m hallucinating that lowering supplies + accelerating demand = years of falling prices. Its only possible in the Mad Hatter world of Keynesian crazed central planners and crony capitalists.

    Keep dreaming you delusional scumbags, I’m still stacking ounces of reality.

  6. I am a doctor and a Psychiatrist but I am afraid I can’t help with this illness.
    there is a ‘cure’ for this type of delusional ideation which I believe will be applied to the patient very soon. This cure is called ‘hyperinflation’ where reality returns and the delusions are thrown into the proverbial garbage can. We will be there very soon I am afraid because the ‘believers’ in fiat are becoming fewer by the day. The antics of governments like the Greece antics, the Chinese govt antics, and our Fed’s plunge protection team’s antics are not sitting very well with the public

  7. The golden question is When will the manipulation game end. Knowing the day, the week or even the month when the jig is up is worth all the gold and silver in your stack. When will that day/week/month be is anybody’s guess, maybe it will be this October as some have predicted, maybe 2020 or later.
    No one believed that Japan’s woes would drag on this long, but they have for two decades. Can the manipulators pull a rabbit out of the hat of manipulation one more time, or will the bunny bite their fingers this time around?

    I have a feeling, and this is just a feeling, a hunch, a lucky guess on my part, that some seemingly unimportant detail, some minor news story, some overlooked and ignored data point will appear and that minor footnote in financial news will be THE signal that the manipulators have reached the tipping point. It isn’t always the Black Swan that causes the crisis, sometimes it is the Shadow of the Black Swan that is all that is needed to knock down the financial house of cards.

    As I said, no one knows the day or hour of reckoning, but the day can’t be postponed forever. I just wish I knew the month or even the year when the house of cards starts to fall down.

    As always, Thank You Dave for being a voice of reason and a sage of sanity in a world gone mad.

  8. The whole brutal suppression of the metals over the last 4 years was, IMHO, nothing else but a backdoor bailout of some selected TBTFs which were short the metals and short the paper at the top and were about to be blown away. Now at least some of them have heavily loaded up the fizz and are neutral or net long in the paper markets. Quite an achievement, actually. And yes, the paper PM market (miners included !!!) is a gigantic fraud that will eventually blow up. I suspect some “other BIIIG event” will happen to divert the masses from when this happens. Great work Dave and PCR, keep it up, it is much appreciated.

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