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Additional resources for earning interest in gold

13 responses to “They Broke the Silver Fix”

  1. “Suppose the price of the share rises relative to the price of gold metal in the spot market, and the metal in a share of GLD is $1 per ounce higher.”

    … You meant to say the share is $1 per ounce higher than the spot metal — assuming the spreads are well less than $1.

  2. With basically 24 hr trading nowadays,just exactly what is the point of a Fix anyway?
    Should not the market be open and fluid at least for a whole trading week?
    Stocks settle at COT and we are just left with an bid and ask on Monday morning.

    Thx Steve

  3. Thanks for your comments.

    Many companies, big and small, need a reference price for their business. Mining companies are one. I advise a small company who is using the fix price in its dealings with its customers. A live bid-ask pair does not serve this need. Or not as well. If the fix no longer works, everyone will make do.

    There are many other examples of the tragedy of making do: homeschooling, barter networks, chopping your own firewood, diagnosing and treating your own medical conditions… most of them (with a few exceptions) are due to the government preventing people from coordinating their activities in the economy. Impoverishing the people… a whole separate theme.

  4. Hi Keith ;

    I have a simple question, why do we need a fix in Gold and Silver ?

    Why cant Gold and Silver be sold just like a stock price in a stock-exchange and everybody can see it ?
    This will eliminate any questions about the price since it will be visible to everybody.

    1. Gold and silver futures are sold in an exchange, Gold metal is sold with prices anyone can see (though the market is not a standardized exchange). The issue is that many parties around the world need a referenceable price. “On Feb 9, gold was $1191 (PM)”. That is the fix price.

  5. Hi Keith,

    Between rounds 9 and 27 when the bid volume was ‘stuck’ at 27 lakhs, the ask volume was still increasing incrementally and quite uniformly over each round, and in a lot of cases, going up by 1 lakh per round. I find this pattern hard to align with just stop loss orders since it doesn’t look random. Its also odd (to me) that there were no buyers coming in whatsoever when the price was falling between rounds 9 and 27. This begs the question, which physical silver user clients are even participating in the auction as clients of the direct participants, that no one even amended an order.

    1. manly: it’s hard to know what they may have been thinking. But one thing’s for sure. Arbitrage was out. The banks couldn’t buy the fix and sell spot or futures. To everyone else, they’d have to be wondering what the reason is, they’d have to see the falling fix price with each round–2 cents and a few rounds later the increment would change to 3 cents.

      The bidders come in when the price has well and truly broken down–and parties who aren’t normally market makers could finally be comfortable that buying at the fix would not just be catching a falling knife.

  6. Bonjour Keith,

    After 28 years as a Stock-Broker and 10 years as an Author an Consultant, I have read

    multitudes pieces of information, but Thank you, yours is so simple and straight forward.

    Keep the good work.

    Best regards,

    Yvon Sheridan

    MONTREAL

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