Alasdair Macleod
@MacleodFinance
The sharp markdowns in paper gold and silver is all about futures’ contract expiry. The establishment (Swaps, bullion banks etc) need to reduce their shorts and go long between London and Comex. Remember, they can “print” contracts at will to take out buyers.
This is divorced from the physical market. Large buyers like China, central banks, sovereign wealth funds, UHNWIs etc. deal off-market, merely taking Comex and LBMA prices as reference. Without being challenged by physical demand, the paper dealers can push prices lower without being challenged.
Their fear is retail demand from HNWIs downwards, but they know it’s coming and need to be positioned for it.