Observant precious metals investors would have recently noticed a rare – almost unheard-of – occurrence: a bullion market where prices actually respond to supply/demand fundamentals. No, obviously I’m not referring to either the gold or silver market, but rather the platinum market.
Analysis was provided by a mining website. Unlike the pseudo-analytic drivel spewed by the mainstream media concerning commodity markets; this featured long-term, hard data and cogent reasoning – versus the short-term trivia, empty rhetoric, and fear-mongering we generally get from the Corporate Media.
Specifically, the article noted that recycling in the platinum market had quadrupled over the last decade. Compounding that bearish supply factor, industrial demand has softened considerably, and even jewelry demand has been shown to be more price-sensitive than previously thought.
The combination of these factors has meant that platinum inventories are abundant, and with weak supply/demand fundamentals and abundant inventories, prices have floundered; with the price of platinum now trading below the price of gold (a very unusual situation).
With a concrete example illustrating both supply/demand fundamentals and how markets are supposed to respond to those fundamentals; the extreme/serial manipulation of the silver market appears even more blatant in comparison. Now let’s look at the “fundamentals” in the silver market.
We can begin by looking at the absurdly low, current price of silver. This artificial/suppressed/manipulated price can be illustrated in several different ways. Relative to the price of gold, silver is priced at less than 1/3 of its historical average.
During the nearly 5,000 years in which humanity has been mining/refining gold and silver; the gold/silver price ratio has averaged roughly 15:1. Yet currently (and through all the recent decades of silver manipulation) this ratio has been depressed to 50:1 (or lower)...
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