The gold and silver prices are mixed after a choppy morning of trading this past Tuesday.
The gold futures had been rallying again, although they fell about $30 in the past two hours, and are now down $5 on the day to $4,117.
Both the silver futures and the silver spot price had crossed over the $51 level, although they have also sold off, and remain in positive territory on the day.
As I mentioned recently, Bloomberg published an article about the silver that returned to London following the breakdown in the market on October 9th.
Vaults underpinning the London market added nearly 54 million troy ounces of silver in October, an amount weighing more than 100 of the UK capital’s iconic double-decker buses.
As impressive as the weight of the silver and London’s double-decker buses may be, that still leaves the LBMA inventory significantly below the daily turnover. And especially if silver continues to go into the ETFs, which becomes a greater possibility if the price should continue to rise, ruling out a more severe repeat of what we just witnessed would be premature in my opinion.
The massive increase in London vault holdings “certainly suggests that the arbitrage has worked by pulling metal across the pond,” Rhona O’Connell, head of market analysis at StoneX Financial Ltd., wrote in a note.
The arbitrage, as reflected by the inverted London/New York spread, did indeed pull metal back to the LBMA. But the question remains, was it enough?
