Monday, October 27, 2008

Why Gold and Silver Prices are So Low (and why there's none available)

I found this article today by Alfred Adask. I don't know anything about the guy, but he is offering the only reasonable explanation I've heard so far for the currently low gold and silver prices.

In short, what he says is this:

  • The market ("spot") prices are not set by actual metals sales, but by futures sales--which is much different.
  • Actual metals are not available at the low spot prices, but they are available. (Just look on eBay!)
  • So... to find the real price of real gold, you can't depend on the spot prices. You have to look at actual metal sales.
I can certainly confirm what he's says about the eBay prices being significantly higher than the spot prices. We'll just have to wait and see if whether the spot price follows. I'm guessing it will have to follow unless it is being artificially manipulated.

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