Monday, April 28, 2014

Backwardation is Gold is Continuing

What’s going on in the gold market is just unbelievable, Eric. It’s really never happened before. We’ve had this prolonged backwardation starting in the middle of last year when the lows in gold and silver were reached....
And by the way, those lows in gold and silver have not been broken. We are now nine months into a base-building pattern, which is ultimately very bullish. But this backwardation in gold is just going on and on and on.

You have to ask yourself, ‘Why is it doing this?’ There is only one logical answer: It’s not that this is some kind of ‘new normal.’ It’s an aberration that’s occurring because of intervention by central planners to keep the gold price from rising.

What they are doing is somehow getting physical metal out of the vaults of Western central banks, and selling it into the market to supply the Asian demand. But it’s not eliminating the backwardation, which continues.

- Source, James Turk via a recent King World News interview