Commodities Weekly Wrap-Up – Friday, Dec. 15

Audio Length: 00:16:29

Lows in gold, Comex curiosities – it’s been an interesting week for precious metals. Whether or not there will be a rally in 2018 remains to be seen, but if history is anything to go by, there just may be a lift in the market as we turn the calendar to the new year.

Eric Sprott thinks so, too. “It’s been a pretty good week so far,” he says. “It’s interesting and sort of sickening in a way that the commercial banks, who were shorting gold and silver, can use these Fed meetings as an excuse to knock gold down to raise rates. That’s their cover, right? That’s their cover for their illegal trading activities, the minute the shorts knock the prices down and the Fed raises rates, up she goes. What a massive turnaround in as little as two weeks.”

While we know that it’s just cover for the banks, positions have become even more extreme in the prices of gold and silver. “It’s awful to say that the prices of gold and silver are a function of what the commercial banks want to do to the hedge funds. Since we don’t have a true market, and there are things in the market which we can find quite constructive here outside of the CoT, and we now have a rally here, the tone for rate increases next year, it might not make a serious difference to someone deciding that he wants to own gold vs owning a bond, considering that the bond yield didn’t go up anyway. Gold is certainly not less attractive post rate increase, because we didn’t really get one!”