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Ongoing correction on prices of gold may soon come to an end due to fundamental reasons, cyclicality but also because of new and old but refreshed factors, which we’ll try to describe below. One thing is certain – despite of horizontal moves many assets experienced last months – we do not have reasons to be bored.

This August, in Johannesburg, South Africa, BRICS was supposed to present its gold backed currency/token to be used for trade purposes. Or at least some sketch. It showed nothing - to major disappointment of some commentators. So was it nativity to expect ‘grand premiere’, or did BRICS’s project just failed because it is impossible to have gold-backed currency in modern days. Or maybe it was victim of inner-BRICS policies? And could we now finally say now, it is entirely ditched?

There are two main approaches helping to understand and determine price of assets. Narrower is microeconomics, which focuses on analysis of markets, entities, politics, government, legislation, demand/supply etc. Other is macroeconomics, which looks at economy as a whole, dealing with such aggregate phenomena as growth in total output and living standards, business cycles, inflation, unemployment etc. Right now both tell us, good times are gone.

With regards to silver price, it is Comex inventories usually being discussed as a main price driver. That is both because of certain level of volumes being stored in vaults, but mostly due to fact that Comex is a derivative market, hence amount of open contracts highly exceeds available physical volumes.