There’s an old saying that gold gets dug up to be buried again. While there are industrial uses, the vast majority is stored, used to settle accounts with the big guys, but it doesn’t physically move that much, just gets re-labeled. There have been some movement with Venezuela trying to get their gold back in the country and with Russia buying and taking possession, but these things are cryptic. For the last several years the price has barely covered production due to high energy costs. Now that fuel costs have plummeted, it should be cheaper. (Edit: the rise in price occurred about the time the Saudis and the Russians started their price war.) Of course it has always been considered a safe haven so that makes sense given the times. Despite the inflated stock market apparently the current is flowing towards gold.

Silver is actually a smaller market, more susceptible to supply and demand forces, since it actually gets used up in manufacturing. Ever since the Hunts pulled their stunt decades ago, the silver market has been very manipulated by a small number of players. It’s a dangerous game; much of it is just leveraged paperwork. Millions are made on shorting the futures markets. I’m not smart enough to follow it all. There have been some amazing swings in the market over the decades without clear market causes.

Price accelerations means a game is afoot. With gold it means that countries and big banks are moving pieces to shore up. With silver it means there is a war between the longs and the shorts and somebody made a wrong move. Or got called out on a margin. Or is running a pump-n-dump.

Could get weird. If this trend continues it’ll start to make noise on cable news. Recall what happened in 1980 with the Hunt Brothers. People lined up to sell their mother’s silver. Those with silver supposed to be held by brokers found there was no silver actually stored in their name. Finally governments stepped in to gain control. It’s an amazing story, actually, of trying to shoot the moon and corner a market but failing to count all the cards.