August 24, 2022
- Stockhead: The massive demand for silver is testing inventories
- IWB: Is the price of gold being manipulated?
- CNBC: Buy now if you want gold
Image: Pexels, Clem Onojeghuo
Stockhead: The massive demand for silver is testing inventories
The level of silver in London vaults has fallen to its lowest since 2016 due to the massive demand from investors and industry. At the end of the second quarter of 2022, there were 31,705 tons (997 Moz) of silver in the vaults. This represents a drop of up to 15% compared to June 2021, when there was a historically high amount of 36,705 tons of silver in the vaults. The Perth Mint has reported that their entire capacity has been in use for over two years. The recovery of India's vast markets has also increased demand.
Therefore, it is interesting that despite the massive demand, the price of silver has been declining. According to an analysis by Metals Focus, this phenomenon is due to the fact that both investors and industry need silver, putting pressure on its price from two directions. The low price of silver also further fuels demand, as it is currently an affordable way to establish a precious metal portfolio. For example, the Perth Mint has sold 981,000 ounces of gold in the last 12 months – and an astonishing 17.8 Moz of silver.
One reason for the price development is that investors expect the Fed to tighten interest rates, which is good for the dollar but detrimental to the prices of gold and silver. Secondly, concerns about an impending recession have weighed on metal prices over the past 3-4 months. Strong demand for silver in industry has also influenced investor interest.
July 29, 2022, Reuben Adams
IWB: Is the price of gold manipulated?
JPMorgan has once again been caught in insider trading: three employees are accused of spoofing and manipulating the price of gold between 2008 and 2016. JPMorgan's actions last drew attention in 2019, when the bank admitted its guilt and paid fines of over 920 million dollars for manipulating the precious metals markets.
The bank is not the only irresponsible actor, as in recent years both Bank of America and Deutsche Bank have faced charges for similar offenses. It is also worth noting that the accused individuals are most likely scapegoats, as they were caught either due to their own negligence or the company's management chose them to take responsibility for the entire organization's actions.
Spoofing means creating a false impression of high demand or a lack thereof. It is usually done by creating a massive number of fake trading events that mislead the exchange about real trades. When the markets react to these false trading events, the fraudster cancels them and the real trade benefits from the changed situation. Spoofing temporarily affects short-term prices, but it does not affect the value of physical precious metals. The fraud was banned in 2010 in response to the previous financial crisis.
What should an investor learn from this case? First of all, physical gold is the only sure way to own gold. Gold (and other commodities) ETFs, futures, and options are all susceptible to frauds like spoofing. Secondly, spoofing only affects the spot price of physical gold. Its value remains unchanged. If you own physical precious metals, you know exactly what you own and how much.
The popularity of gold as a safe investment is likely to remain stable, as the Fed seems to have no other options but to abandon its anti-inflation measures or plunge the United States into a prolonged recession. Both options are favorable for gold.
July 30, 2022, Peter Reagan
CNBC: Buy now if you want gold
of CNBCAccording to Jim Cramer,the price of gold is about to turn upward, and now is the right time to buy.
His analysis is based on tracking the weekly price development of gold since 2014. Based on this, he has concluded that gold often reaches its peak just when small speculators are most bullish. Conversely, when they act bearishly, the decline in gold soon stops.
According to the data, the long-term positions of small speculators are now at their lowest since May 2019, which Cramer says is a sign of an upcoming rise. Investors should not always do the opposite of small speculators, but statistics strongly suggest a rise in gold.
August 3, 2022, Krystal Hur
