GoldMoney

The credit cycle that normally drives advanced economies through boom and bust is turning out to be different this time round

Last Monday gold ended a week-long consolidation that saw it fall from $1354 to $1329, before rising strongly to over $1370 yesterday

There are two main indices tracked by commodity tracker funds: the S&P-Goldman Sachs Commodities Index and the Dow Jones UBS Commodities Index.

Encompassing the year end and its holiday on Wednesday, this week has been notable for precious metals.

The future price of gold cannot be discussed without considering its implied discount rate expressed through time-preference.

Yes folks, it’s that time of year again; but unlike old Khayyam who reflected bucolically on the continuing availability of wine, we must turn our thoughts to the dangers and opportunities of the coming year.

This was the week the Federal Open Market Committee decided to start tapering.

By November, the most recent month for which statistics are available, the US Fiat Money Quantity (FMQ) had grown to $12.351 trillion.

Silver led with a gain of 2.5% followed by gold at 1.9%

Starting at $1,286 on Monday gold continued with the momentum of last Friday’s fall, bottoming out on Tuesday at $1,261 in US trading.

Following last week’s uncertainty over whether the Republicans and Democrats could forge a deal to prevent America defaulting on its debt payments, the impending deadline and increased urgency in negotiations appears to have encouraged significant trading in physical gold.

The purpose of this article is to explain how derivatives have distorted gold prices with particular reference to the US futures markets.