The Paper Precious Metals Market Precariously Close to Diverging From the Physical Market
Monday, April 22, 2013
How is it possible gold goes down $200 in the paper market while there is almost no supply available to buy around the world? Last I checked, dwindling or completely absent supply against steady and increasing demand means higher prices, not sudden price drops. Quite simply, the paper market is being manipulated one way or another.
Whether it’s nervous speculators or the more likely collusion of banks and the federal government, there can be no mistaking that the deviation in the gold paper and physical markets this last week is a major event for The End Of The Monetary Systems As We Know It.
We can expect very shortly to see in gold what we see now in silver: that is, that the paper spot price has totally diverged from the physical price. Look across the retail and distribution fabric and you see prices for silver coins and bars higher than ever compared to the spot price.
We at TDV called some of our contacts in the US about this, and found that the leading retail price for one Silver Eagle in the US is $5 over spot. This price is often below $3. That marks a rebellion by distributors and retailers against paper markets, as many of them are already hedged in paper markets against the precious metals they own.
Gold is next. Although the mainstream media attempted to argue against gold, demand for the metal has not been staved-off by the added volatility and propaganda.