by David Brady
Sprott Money
Gold has been doing relatively well recently, but Silver and the miners have been under a lot of pressure. Silver has fallen from $32.75 on May 20 to a low of $26.50 on Aug. 8. That’s a drop of 19% in less than three months. GDX has suffered a 14% drop by comparison. Gold is the standout, approaching new record highs. Why the big difference in performance? I believe that Chinese buyers and central banks in general have been big purchasers of Gold, and they continue to be, driving the Gold price higher. There is a meaningful difference in the price in Shanghai relative to the lower price on the COMEX, a perfect arbitrage opportunity. Why buy physical Gold in Shanghai when you can buy it in New York at a lower price? That said, I believe Silver and the miners are about to play catch up.