The key to the precious metals markets right now is silver. The market in physical gold may seem, for the time being, to be in balance, but this is not the case in the silver market which seems to be broken.
By that I mean that the trading in the paper market for silver doesn’t reflect the fundamentals at all. This is reflected, among other things, in very significant premiums in Shanghai and other places. So this is not a sustainable situation and it has to be addressed in some way.
I think for the people who are primarily long gold, and that would include us, this bodes very well because we can anticipate that if silver goes higher, then the gold market should follow.
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