In free markets the price of a good was a direct function of supply and demand, which found an equilibrium simply by price. That is, as demand increased, price would increase until more supply became available or until the product was no longer affordable, thus encouraging new perhaps less effcient suppliers into the market. Likewise as demand decreased, price would drop until less production occurred.

Basic economics but certainly as useful way to predict and explain activity. If there were apparent aberations from these general rules ... further investigation could almost certainly provide insight as to the nature of those aberations.

If you can find reliable information today (good luck with that) given current market dynamics in gold and silver one must wonder if that model remains applicable

http://www.reuters.com/article/2015/07/28/china-gold-imports-idUSL3N1074L920150728

this reports indicates gold demand in China is dropping - of course this is based upon a proxy estimates of movement through Hong Kong - it does not and can not advise upon activity through Shanghai and Bejing ... in other words Voodoo media ... a report that can not be substantiated and has an obvious agenda, which is voodoo reporting.

http://investmentresearchdynamics.com/chinas-gold-imports-on-track-for-a-new-record/

This report suggests the opposite, with its own analysis and assertion of the withdrawls from Shanghai indicating demand from Chinese citizens and comment that the Chinese government does not purchase through that medium making actual reserve information unavailable. (that may be true, some commentaries indicate China's recent divulgence of those numbers is impossibly low, but hey why would the Chinese government lie and why wouldn't the fed allow and audit of the gold reserves)

http://www.mineweb.com/news/gold/china-gold-demand-holding-up-well-new-record-ahead/

This report supports the second article and goes on to say that a crackdown has occured in imports through Shanghai being exported through Hong Kong ... a movement from my perspective that is counter intuitive (pay more get less) in any case since the first article indicates there is a premium paid for the physical delivery in Shanghai vs global benchmarks. (referred by some analysts as backwardation)

https://www.bullionstar.com/blogs/koos-jansen/india-precious-metals-import-explosive-august-gold-126t-silver-1400t/

http://www.goldcore.com/us/gold-blog/currency-wars-back-as-russia-buys-one-million-ounces-of-gold-in-march/

These articles for what they are worth indicate India and Russia are increasing imports of gold.

So where is the gold coming from given that miners can not make money at this level ... that the junior and micro (usually explorers) have been priced out of existence (Owww).

Speculation is all you can go by ... there is either liquidation of those resources from existing above ground supply, cheaper sources producing more gold then previously supplied when gold was almost 50% higher, or the price is fixed (please tell me that is not so ... who would do such things).

The voodoo media will keep us as confused about it as much possible since IMO there is truly an inconvenient truth about the prospects for the western economies.

One thing is increasingly apparent some of the worlds smart money is either building or beginning to use alternative methods to western infrastructure which allows for both voodoo economics and voodoo media to flourish. As a “paranoid, fear-based, far-right fringe and fanatic.” I'll continue to stick with my alternative forms of currency .. I think Mr. Rickards has it right.

over and out

orgy