Short-term pairs trade favours the dollar
Gold and silver on pause as funk-money flies to $US. It is becoming clear that Iran is no push over and the economic consequences of this war are dire, with oil at $100 and going higher.
The background to this week’s market report is spreading consequences of the joint US—Israeli attacks on Iran, with Iran effectively closing off the Hormuz bottleneck and spreading drone attacks throughout the region. Capital markets are trying to adjust to the economic and financial consequences of an oil price increasingly likely to be higher for longer.
This week, gold and silver were down on balance, gold marginally and volatile silver more so as missiles and drones in the war against Iran appeared to fly in increasing numbers. In early European trade this morning, gold was $5095, down $76 from last Friday’s close. Silver at $83.30 was down $2.75 over the same time scale.
Comex silver futures are running on vapour, with volumes declining to negligible levels, while open interest remains at 20-year lows, demonstrating a total lack of speculator interest. This is shown next:
