Gold dropped to new lows of $1,130 per ounce last week. This is surprising because it doesn’t square with the fundamentals. China and India continue to exert strong demand on gold, and interest in bullion coins remains high.

I explained in my October article in The Casey Report that the Comex futures market structure allows a few big banks to supply gold to keep its price contained. I call the gold futures market the “paper gold” market because very little gold actually changes hands. $360 billion of paper gold is traded per month, but only $279 million of physical gold is delivered. That’s a 1,000-to-1 ratio:

Foreign investors fleeing Nigeria as oil prices plunge are leaving stocks undervalued in Africa’s biggest economy, the bourse’s chief executive officer said.

The benchmark index’s 18 percent decline this year isn’t justified by economic changes and as a result Nigerian equities are “effectively on sale,” Oscar Onyema said in an interview yesterday at a conference in Diani, Kenya. “The fundamentals demand higher valuations.”

Nigerian stocks dropped as crude slid into a bear market and the central bank eroded reserves to support the currency, which fell to a record low this month. Nigeria is Africa’s biggest oil producer, and its $520 billion economy is forecast to grow 6.5 percent this year and next, according to a Bloomberg survey of economists.

“The local institutional investors are net buyers at the moment,” said Onyema. “They’re buying and their way of looking at it is that the prices we’re seeing today are not justified by the fundamentals.”