Posted: 14 Mar 2014 05:11 AM PDT

Notes

The gold prices used in this interactive chart are supplied by BullionDesk. This price is quoted in US dollars. Where the gold price is presented in currencies other than the US dollar, it is converted into the local currency unit using the foreign exchange rate at the time (or as close to as possible). For example, the London PM fix on 30th October 2013 was USD 1,354.75 and the price for one USD was EUR 0.726. The gold price in euro (EUR) would therefore be calculated as €984.10.1 Like all prices, the gold price reflects not only the inherent value of gold, but also the relative strength of the currency in which it is quoted. For example, the dollar price of gold may increase more in percentage terms than the sterling price of gold, to the extent that the change in price is a reflection of dollar weakness (in this case, against the euro) rather than an intrinsic change in gold market fundamentals. For this reason, our Investment Gold market statistics contain charts showing an index of the gold price in US dollars and local currency units as well as the relevant US dollar / local currency unit exchange rate for countries other than the United States. Public holidays in different countries do not always coincide and therefore the time series that are downloaded from our data providers may contain missing values for trading days in other countries. The approach taken in this regard is to replace the missing value with the most recent value. 1 You may not be able to replicate this calculation due to rounding.

Interactive chart help

This interactive chart provides price data in several currencies, frequencies and weight units. The first price series selected will be displayed in currency units on the primary vertical axis (left). The second series added will be displayed in currency units on the secondary vertical axis (right). Thereafter, price series will be zero-indexed to the first displayed date with the axis values displayed as cumulative % changes.

Currencies:

USD = US dollar
GBP = pound sterling
EUR = euro
AUD = Australian dollar
CAD = Canadian dollar
CHF = Swiss franc
JPY = Japanese yen
ZAR = South African rand
INR = Indian rupee
CNY = Chinese renmimbi
HKD = Hong Kong dollar
MXN = Mexican peso

Weights:

Oz = 1 troy ounce
Grammes = 0.032151 troy ounces
Kg = 32.150747 troy ounces
Tonnes = 32,150,7466 troy ounces
Tael = 1.203370 troy ounces
Tola = 0.374878 troy ounces

Data frequency

Optimised data at the following frequencies:
- Between now and 5 years ago - daily
- 5 years ago and 15 years ago - weekly
- 15 years ago and 25 years ago - monthly
- more than 25 years ago - quarterly
Quarterly
Monthly
Weekly
Daily, please note loading daily data will slow down the chart system.

Supply and Demand Report: 11 May | Zero Hedge

Posted: 11 May 2014 09:34 PM PDT

by Keith Weiner

This was another short week, with Monday a bank holiday in the UK.

Through Tuesday, the prices of the metals seemed to want to hold onto the increase that was sparked by an unemployment report. It wasn't until Wednesday that the prices began to sag, almost but not quite to the pre-unemployment report levels again by Friday.

We are not going to lament the folly of man nor trader. We are not even going to comment on the accuracy, or lack thereof, of the unemployment data. We are simply interested in the evolving dynamic between the fundamental setters of the prices of the monetary metals and the speculators who are trying to front run them.

Read on…

First, here is the graph of the metals' prices.

The Prices of Gold and Silver
Gold and Silver Prices

We are interested in the changing equilibrium created when some market participants are accumulating hoards and others are dishoarding. Of course, what makes it exciting is that speculators can (temporarily) exaggerate or fight against the trend. The speculators are often acting on rumors, technical analysis, or partial data about flows into or out of one corner of the market. That kind of information can't tell them whether the globe, on net, hoarding or dishoarding.

One could point out that gold does not, on net, go into or out of anything. Yes, that is true. But it can come out of hoards and into carry trades. That is what we study. The gold basis tells us about this dynamic.

Conventional techniques for analyzing supply and demand are inapplicable to gold and silver, because the monetary metals have such high inventories. In normal commodities, inventories divided by annual production can be measured in months. The world just does not keep much inventory in wheat or oil.

With gold and silver, stocks to flows is measured in decades. Every ounce of those massive stockpiles is potential supply. Everyone on the planet is potential demand. At the right
price. Looking at incremental changes in mine output or electronic manufacturing is not helpful to predict the future prices of the metals. For an introduction and guide to our concepts and theory, click here.

Next, this is a graph of the gold price measured in silver, otherwise known as the gold to silver ratio. The ratio moved up this week, ending about 67.4.

The Ratio of the Gold Price to the Silver Price
Ratio

For each metal, we will look at a graph of the basis and cobasis overlaid with the price of the dollar in terms of the respective metal. It will make it easier to provide terse commentary. The dollar will be represented in green, the basis in blue and cobasis in red.

Here is the gold graph.

The Gold Basis and Cobasis and the Dollar Price
Gold

The dollar is up slightly, to over 24mg. The cobasis is up slightly.

We have previously discussed the extraordinarily high level of the gold cobasis across all contracts. It is not in backwardation, but it's new and different in the post-2008 world to see such a high cobasis (around -0.1%) so far out from the present date. This is evidence of a tight gold market, and suggestive that the price could go higher.

What is interesting to note is that we are in the midst of the contract roll. Those who are long gold are selling their June contracts and if they want to remain long gold they can buy August or a farther month. There is a famous scene in a Sherlock Holmes story, where the dog does not bark in the night (which proves the criminal was known to the dog).

This is the contract roll, which seems not to be able to shove the June cobasis over the zero line. The market is tight but perhaps not that tight.

Now let's look at silver.

The Silver Basis and Cobasis and the Dollar Price
Silver

The cobasis fell as the dollar fell (i.e. silver price rose), showing the move was speculative. It ended the week slightly higher than it ended last week. Not only is the silver cobasis four times lower than gold's, but the next month is almost twice lower than that. Gold may be tight, but silver not so much.

We saw one headline on Friday that silver is in backwardation. Not from where we sit, though the July basis is negative. Our definition of backwardation is strict: when one can sell metal in the spot market (bid) for more than one can buy it in the futures market (ask). This is because we are looking for an actionable trade—to decarry.

There is no profit in decarrying silver today. We promise to bellow from the rooftops when, once again, there is.

Keith wrote an article for Forbes that those interested in gold and silver may enjoy, Why Did Both Silver and Gold Become Money?

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gold price chart - News 2 Gold - Blogger

Posted: 07 May 2014 04:04 PM PDT

shutterstock_175709432

A single bitcoin broke the price of an ounce of gold five months ago. Now, it's worth less than half that – and, of the two, it's bitcoin's price that's bouncing around the most.

For people trying to evaluate bitcoin's potential against other commodities, its relative price volatility could be a worry or an opportunity, depending on your appetite for risk. So, how closely can we map bitcoin's volatility against other commodities?

Not very closely, argues Kirill Gourov, Director of Finance for Blocktech, a new company that creates open-source block chains for industries in need of disruption. He recently wrote a paper that explored whether there was an intrinsic value for bitcoin.

Gourov pointed out that it is difficult to find a direct correlation between bitcoin and other commodities:

"There may be a correlation between commodities and bitcoin because people consider both to be hedges for macro risk, but whereas oil might go up 5-10% because of some legislative issue in Europe, the price of a bitcoin might spike up 25%, then immediately drop by 30% because someone cashed out into the market."

Copper's recent price drop looks dramatic, for example, but it represented a 9% decrease in its value. That may be considerable, but it's hardly in line with some of bitcoin's more dramatic yo-yoing.

In five or 10 years, when the market is more developed, trends will be more prevalent and will force bitcoin to spike less, Krill suggested. But, today, the market is too easily manipulated.

Physical vs virtual

If bitcoin's age is one factor that stops it being correlated easily with other commodities, then are there others?

One of the issues separating bitcoin from other commodities is physicality, argues Antony Lewis, who works in business development at itBit.

Most other commodities are used and transformed into something else, which drives certain behaviours, pointed out Lewis, who used to trade interbank foreign exchange at Barclays:

"For example, people buy copper to use in construction, power, and electronics. People buy oil to use to transform into fuel which is burned. Once used, gone."

Conversely, he says, virtual currencies are bought either as a store of value or as a payment mechanism putting them in a different category to conventional commodities.

Correlations exist

Let's not write bitcoin off as entirely separate from the commodities market, though, said George Samman, Chief Operations Officer at BTC.SX, which offers derivatives services for bitcoin traders.

There are correlations today between bitcoin and at least one other commodity, Samman said, but they're only obvious if you turn them on their head. They are negative correlations, and we see them particularly between bitcoin and gold. When bitcoin goes up, gold falls, and vice versa, he suggested.

Samman pointed to longer-term pricing for evidence of this effect. For example, when bitcoin rose dramatically at the end of last year, gold can be seen to fall (see chart).

The linear chart shows bitcoin's price from around the time that it spiked, shortly after the financial crisis in Cyprus last year. However, the digital currency was showing slight gains on gold as far back as 2011, said Samman.

Bitcoin's price doesn't seem to cross that of gold because the chart isn't granular enough, but it did. That crossover happened for a period of hours, and we're plotting closing prices at two-day intervals here.

Gold's movement in relation to bitcoin might not seem that pronounced, he said, but don't be deceived. A $10 move in bitcoin wouldn't show clearly in a long-term chart because of its significant moves later on; furthermore, gold's high value makes it difficult to spot smaller price moves.

Gold has been moving back up since the beginning of the year, while bitcoin has been going down, Samman added, which is clearly visible on the graph. Since then, gold has trended downwards, while bitcoin has been "semi-stable" in the mid-$400 range, he said.

Samman admitted, though, that bitcoin has "bounced around" in that $400-$500 window, as would be natural for a young, relatively thinly-traded asset influenced by events such as the suspension of bitcoin trading in China by certain banks, and the perceptions around those events.

Fear assets

The link between bitcoin and gold makes sense. When the market flies from bitcoin, it has to go somewhere, and the argument goes that gold gets some of that action.

If you see negative correlations in this chart, then why do they exist? It's because Gordon Gecko was only half right. Greed isn't the only factor driving financial markets: the other is fear.

ItBit's Lewis calls gold a 'fear asset', and said that in time, it will make sense to compare bitcoin against the VIX.

Also known as the 'fear index', the VIX is the colloquial name for the Chicago Board Options Exchange Market Volatility Index. It is a weighted blend of 30-day options across the S&P 500 index, enabling people to use it as a broad measure of volatility over the coming month. In short, when markets get wild, the VIX goes up.

In the meantime, Samman is waiting for the time when he can more easily compare bitcoin's activities in a broader context, outside of commodities. He likes exploring intermarket dynamics, evaluating the performance of different asset classes such as equities, bonds, and commodities, in relation to one another.

What about the longer-term opportunities for bitcoin? While we read the market's entrails looking for relatively short-term correlations now, will bitcoin and other commodities draw closer over the years?

"Some people believe we are in a commodity supercycle which began around 1990, supercycles generally last 30 years, give or take, if thats the case we are likely to see another up leg in this cycle, and I think it will be caused by inflationary events," Samman said of long-term cycles in the commodity markets.

Built-in scarcity

In particular, the tendency towards quantitative easing – central banks creating more money – and the spectre of rising interest rates come to bear here. "This all bodes well for bitcoin to spike again as well," he argued.

Some also point to correlations between the price of bitcoin throughout its young life, and the longer-term price of gold, potentially supporting theories of long-term similarities.

"Whereas oil might go up 5-10% because of some legislative issue in Europe, the price of a bitcoin might spike up 25%"

Scarcity helps drive up the price of a commodity. Food prices rise when a drought chokes off supplies, for example, and bitcoin has its scarcity built in, Samman said, adding.

"The same can be said about bitcoin and its finite amount which is capped by mining algorithms that get harder and harder."

This scarcity is both a known and unknown quantity in bitcoin. Scarcity has a big impact on price action, which is caused by big disparities in supply and demand. Conventional commodities can be moved by external events that affect demand and supply, such as bad weather (wheat), or growing unrest in Ukraine (oil), for example.

With bitcoin, there is a base level of supply which is relatively known, because it is underpinned by the mining community, which produces them at a predefined rate of 3,600 coins per day.

However, bitcoin's algorithmically coded scarcity isn't the only part of the equation; just as with commodity markets, other factors come into play.

With institutional miners producing bitcoins, and with large funds holding significant percentages of the digital currency, it's hard to predict what that supply will look like in the future, and when people will begin letting more bitcoins out onto the market.

The same is true on the demand side. "Demand is the unknown here. We are hearing of many millions of dollars being lined up to buy bitcoin when the time is right," pointed out Lewis.

Looking for liquidity

If and when the volume of bitcoin trading increases substantially, we'll see bitcoin become more liquid. Liquidity dampens volatility, because there is more of an asset moving through the system.

This in turn makes it harder for people to move the market substantially with relatively small trades, or for events to move the market by spooking enough inexperienced investors into knee-jerk reactions.

One thing that will help here is the build-out of more established, reliable exchanges to provide a base level of reliability and choice to the market. The other is the building up of more sophisticated services on those exchanges, such as derivatives trading.

We're starting to see markets for bitcoin derivatives emerge, such as BTC.SX. More will come, said Gourov, although the market is too immature to support complex trades yet. He explained:

"The market is neither liquid nor mature enough to handle anything like a futures contract. I would imagine the fees would be so high on a contract that you might as well just purchase the underlying bitcoins right now."

However, he thinks that will change: "There are several companies creating products and platforms to facilitate this as I type."

Even when its price volatility smoothes out, though, the chances are that bitcoin will remain a distinctly different animal from many other assets, making it hard to see correlations with lots of commodities.

For now, the cryptocurrency is a young, idiosyncratic asset all its own. As the honey badger of money, it tends to be a solitary animal, unaccustomed to moving with a herd.

Graphs image via Shutterstock

commodities prices volatility

Interactive gold price chart | Gold Market Price | World Gold Council

Interactive <b>gold price chart</b> | Gold Market Price | World Gold Council