Again, we had another big drop in the dollar this week. No, we don't mean against the dollar derivatives known as the euro, pound, etc. We mean by the only standard capable of measuring it: gold. The dollar fell 1.4 milligrams, to 25.1mg gold. Or, if you prefer, 0.1 grams of silver.

For some reason, it's obvious when the price of gold in Zimbabwe goes up from Z$118,000,000 to Z$123,700,000 that Zimbabweans are not getting rich. But when the price of gold rises from US $1,118 to $1,237, as it did over the past two weeks, people celebrate. However, gold does not go anywhere, it's the dollar that mostly goes down. It can go up too, as it did from 2011 through 2015. And now, it seems it's time for the downward trend to resume for a while.

Of note, silver went up less than gold. Doesn't everyone know that when gold goes up, silver goes upmore? Especially when gold goes up a lot. This is one of those things that you cannot understand, if you think the dollar is the meter stick. If the dollar is the stable unit of measure, then there's no explanation for this retrograde motion in the two metals. Astronomers struggled similarly with retrograde motion so long as they believed that the Earth was the reference point, and it was the sun and planets revolving around Earth. Once they realized that the Earth went around the sun like all the other planets, things got simpler.

It's the same with the dollar revolving around gold. It's simple to explain why silver is underperforminggold. Silver is going down, measured in gold terms. There is no contradiction if both the dollar and silver are going down. There's even a logic to it, if industrial activity and credit are contracting, it would make sense, wouldn't it?

Anyways, this was a big week in the prices of the metals. We're sure everyone is dying to know what is driving these moves. Read on for the only true picture of the gold and silver supply and demand fundamentals…