Gold and silver’s inflection point

For decades goldbugs have bemoaned that paper markets control and suppress gold and silver. Many of them have yet to realise it, but London forwards and Comex futures no longer set the price.

London forwards and Comex futures no longer set prices. It is increasingly set by Chinese savers and their demand for physical metal.

In this article, I estimate the depth of Chinese demand for gold, and assess global demand for silver in the year ahead. In gathering my evidence, I quantify China’s household savings, and point out that their alternatives to buying into rising gold values are few. This is evidenced by householders building their bank deposits, and for them there is now a more exciting alternative — gold and also silver of which more to follow.