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<\/p>\nThe ratio of the 1-month Gold contract to the 1-month Silver contract (Figure 1) fell from the value last week.\u00a0 With the front month silver and gold contracts closing yesterday at $18.54 and $1,793, respectively, the gold\/silver ratio is now 96.70, up 24% from the its five-year average of 78. \u00a0August Gold (Figure 2) moved to the top of the trading range listed for last week while September silver (Figure 3) is up 2.1% since last week\u2019s commentary.\u00a0 \u00a0While silver remains in the trading range between 16.5 and 19, the latest rise in silver appears to have occurred on falling open interest, so silver may be slowing its ascent.<\/p>\n
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On 6\/30\/2020 the August COMEX gold contract (Figure 2) ended the day at $1,800.5, up from $1,782 at the close on 6\/23\/2020.\u00a0\u00a0 Open interest has continued to climb during the same time and is up 2% since Tuesday 6\/23\/2020.\u00a0 As we have mentioned over the last several weeks, there is a good case for an increase in the price of gold due to demand for safe-havens due to COVID and other geopolitical issues.\u00a0 \u00a0While gold is pushing to the top of its recent trading range, we expect gold will continue to trade in the range between $1,784 and $1,812 for the next 7 days.<\/p>\n
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Palladium remains essentially unchanged since last week, even though it dipped during the week open interest continues to slowly increase.\u00a0\u00a0 As mentioned last week we will continue to watch this trend to see if there may be early signs of a directional move.\u00a0\u00a0 Without a clear signal of increasing open interest or news on increased production demand, we expect palladium to continue to trade in a similar pattern for the near future.<\/p>\n
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Finally, I leave you with the graph of ratio of copper to gold along with the yearly change in the consumer price index.\u00a0\u00a0 While not perfect, there is reasonable correlation between the two and may be useful in signaling rising inflation.\u00a0 As there are significant discussions surrounding the large influx of easy money by the Fed, inflation, and the price of gold, we wanted to present this chart.\u00a0 \u00a0(A similar chart was presented in the 2020 In Gold we Trust report, published in late May of 2020.)\u00a0\u00a0 Although it is difficult to see due to the time scale, the ratio is beginning to rise from its low on April 9 of 2020.\u00a0\u00a0 While much of this rise may be in the recovering of the price of copper, due to the fall in demand, this may be useful to watch longer term.<\/p>\n
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