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wealth.goldmoney.com / BY ALASDAIR MACLEOD / MARCH 24, 2017
Gold and silver continued their rally this week, with Tuesday an especially strong day. Initially, gold was marked down to $1228 before buyers stepped in, and on heavy futures volume the price rose to $1247. Comex open interest that day rose by 16,494 contracts.
On the week, gold is up $14 from last Friday’s close by early European trade this morning, at $1243. Silver rose from $17.40 to $17.59 over the same timescale. Silver’s underlying strength relative to gold has picked up again, with the price tending to rise slightly relative to gold in consolidation periods.
Next week sees options expiry for gold, and a large position in the April futures contract must be liquidated, or rolled over into June. In the absence of good physical demand, one would expect the bullion banks, who are almost always net short, to mark prices down to encourage selling by the hedge funds. So far, this is not happening.
The likely reason is good underlying demand for physical gold. Indian demand is picking up again, following the banning of cash notes, with Switzerland exporting 37 tonnes in February. Chinese demand in February was also good, with Swiss exports at 21.5 tonnes last month. European interest appears to be strengthening as well, and the physical market is reasonably tight. Furthermore, the Russian central bank acquired a further 9.33 tonnes. ETF inflows picked up this week, rising by 9 tonnes in two days, according to Commerzbank.
The post Market Report: Physical demand underwriting prices appeared first on Silver For The People.