Gold and silver begin their move

Investors increasingly suspect that financial markets might be radically mispriced and nowhere is this truer than for precious metals.

Gold and silver begin their move

Investors increasingly suspect that financial markets might be radically mispriced and nowhere is this truer than for precious metals.

In terms of the evolution of gold and silver prices, markets appear to be in a similar position to where they were in December 1973, after OPEC first hiked its reference price and before the second larger increase.

A reason for making the comparison with the position today is that price suppression by the US’s strategic reserves drawdown is coming to an end, and crude oil prices will almost certainly begin rising due to the prolonged Hormuz and now Bab el-Mandab closures. We appear to be following the 1973—1974 precedent.

Gold and silver have started moving higher with oil prices, reflected in both metal contracts on Comex. This is evident in the chart for gold and its open interest;