Posted by rahrens_1 on April 29th 2011 at 05:14 pm
It was a very impressive day for gold, closing at yet a new all time high of $1563 up $32.20 on the day. The Dec 2016 contract finished at $1808.10 up a similar magnitude of $26.60. The jump today reminds me of comments by John Embry that has expected significant volatility where we’ll see swings of $50-100/oz in a day. Seems we’re getting closer to this time. It also appears that as I suggested a few days ago all we need to do is get Bernanke to make more speeches to run gold up. As soon as he started to speak at the Community Affairs Research Conference today gold ran from the $1540 range to the $1560′s, at one point almost touching $1570.
Silver on the other hand had a fairly flat day and was the total opposite of gold for the first time in a long time. It did close at $47.92 for the day up $.35/oz. The more interesting part was that the backwardation gap has narrowed and been eliminated on a shorter time frame. The Dec 2015 contract closed at $47.69 up $.93/oz, so a bit of backwardation here but the Dec 2013 contracts that closed at $48.54 up $1.38 clearly ending the backwardation over this timeframe. It would seem that everything is being thrown at constraining silver but there is likely a bit of moving back to gold given the recent run up in silver. Keeping in mind that silver had to deal with not one but two margin increases this week.
Also of note is that the US dollar was barely able to hold around 73, one has to assume its being supported to even hold this level.
Lets hope for more Bernanke speeches next week.