by Bill Holter, MilesFranklin.com:
Last year we watched as time after time gold and silver prices were raided lower. Each time was quite similar, often we would see huge volumes “sold” either overnight or pre market when the volume was at its lowest. These huge sales were undertaken when the fewest amount of buyers were around to absorb the sales…of paper contracts.
Precious metals bears will of course say, “It doesn’t matter, the sales were sales and if buyers were not present to absorb the sales then it just shows that there are more sellers than buyers.” Really? But what exactly is it that gets “sold?” Gold or silver? Or just “contracts?” Does the metal even exist that these contracts “represent?” We can look back at the year and clearly see what happened which should also give us an idea as to what “will” happen. I have long said that I believed a “two tier” market would eventually evolve where there is one price for “paper gold” and another for the real metal. This anomaly has already begun. The price of gold in India for example is very close to $1,500 per ounce which is somewhere close to a 30% premium.
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