One of the biggest problems with valuing precious metals is the paucity of information on volume in the physical realm. The analyst bounces between Confucius (attr.): "The hardest thing of all is to find a black cat in a dark room, especially if there is no cat" and Robert Service:
There are strange things done in the midnight sun
By the men who moil for gold;
The Arctic trails have their secret tales.
That would make your blood run cold...
There are some strange things done at the COMEX too, so it is difficult to follow the relationships between futures/options and physical. Here's a bit of light on the subject from FT Alphaville:
The collapse in “physical demand” for precious metals in the USA
Some precious metal bulls like to dismiss price declines in gold and
silver by pointing to the strength of “physical demand.” (Savers who put
their wealth into precious metals never seem to get paid for this
“physical demand”, but whatever…)...MORE
