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Written by Chris Marcus of Arcadia Economics

This week I noticed an interesting comment on the interview I recently did with gold analyst Rob Kirby on the Miles Franklin channel.

The viewer expressed dissatisfaction in saying that I didn’t use a lot of numbers in my questions to Rob. And as I’ve been thinking about that, I realize that there is some truth to what he said.

In fact in recent years I’ve noticed how a lot of my analysis is less based on numerical data, and more focused on understanding the geopolitical and manipulation elements present in today’s markets.

Primarily because that is what’s actually drives the price of many of these markets. And in particular gold and silver.

As many other analysts have noted in recent years, if you try to explain the price of gold and silver by looking at underlying fundamental supply and demand data, it just doesn’t match up. Because it is a manipulated market. And also because the mainstream financial media has left many focused on the latest trendy picks in the stock market bubble. While most are completely unaware of anything that’s been happening in the precious metals markets.

Keep in mind that part of trading successfully is not just realizing when something is out of line. But also being able to understand when others in the market will notice this, act, and move the price.

So much like in a poker game, where there is indeed a mathematical element, a lot of the real dynamics come from knowing what the other participants are doing. And are likely to do.

So while there is numerical data of value in the precious metals markets, its impact is often muted. And based on everything I’ve studied, the most dominant factor in the pricing remains the short paper contracts that cannot be delivered with physical.

My guess is that if you asked 100 investors if they were aware that the Bank of Nova Scotia just got caught manipulating the gold and silver markets (as GATA was kind enough to alert people to last week), less than 5 would answer yes. And how many are likely aware that despite the mainstream Buffett narrative of gold being a useless relic, that a lot of the banks have been loading up?

I don’t think Chris Powell is just making up the information he presented in the interview that he did on the channel.

Because aside from how I’ve always found Chris to be an honest, accurate, and incredibly talented researcher, all of the information he presents can be easily verified.

I very much hope that in my lifetime the financial markets return to an honest pricing system that is based on real and accurate data. Yet at least for now understanding the developments and actions of the key players in the game remains what’s driving the price.

And if there’s a way that the market imbalances can be resolved without substantially higher precious metal prices, I remain unable to see it.

As always, I encourage your questions at cmarcus@milesfranklin.com. Whenever the breakpoint finally occurs, there are going to necessarily have to be some major market realignments. And my intention remains to make that adjustment as easy to navigate as possible.

Chris Marcus

To buy or sell gold and silver call Miles Franklin today at (1-800-822-8080).