Why are we seeing SPOT and Physical spreads widen?

66rounds

66rounds

Well-Known Member
Silver Stacker


Place this in to context with reports coming out of failure to deliver physical bars when contracts are called on, LBMA pulling out their oldest bars from the vault, and increasing number of mine closures.

$2500 USD gold by June is a given if these contracts are not fulfilled and we discover the vaults are (surprise) empty.
 
66rounds said:


Place this in to context with reports coming out of failure to deliver physical bars when contracts are called on, LBMA pulling out their oldest bars from the vault, and increasing number of mine closures.

$2500 USD gold by June is a given if these contracts are not fulfilled and we discover the vaults are (surprise) empty.
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Where’s all the gold gone? China...?
 
wrcmad said:
Never fear, cost of carry has halved in the 2 days since this story broke, as people realised it was fake news, and that there is really plenty of gold to go around

View attachment 35852

.... here is the real story:
https://www.kitco.com/news/2020-03-...s-next-week-as-U-S-becomes-new-epicenter.html
Click to expand...
Doesn't explain why comex and LBMA are failing to deliver bars THAT THEY ARE MEANT TO ALREADY HAVE STORED. I know we've only heard whispers so far and nothing solid but they're pretty frightening.
 
Because spot and physical are two different things.
Spot is based on the paper manipulated prices which works alright until there is too much demand,
then physical spreads widen as we are seeing now.
 
hardyakkagold said:
Because spot and physical are two different things.
Spot is based on the paper manipulated prices which works alright until there is too much demand,
then physical spreads widen as we are seeing now.
Click to expand...
Spot and physical are not different - ironically, the video above even explains how a futures trade into physical is "risk free".
The current premium is due to price gouging of the ignorant retail client by bullion dealers... no different to retail fuel prices, or supermarket dunny-roll prices ATM.
 
wrcmad said:
The current premium is due to price gouging of the ignorant by bullion dealers...
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Can you explain your reasoning behind this? A globally orchestrated conspiracy to increase premiums? Sounds beyond illogical to me...
 
STKR said:
Can you explain your reasoning behind this? A globally orchestrated conspiracy to increase premiums? Sounds beyond illogical to me...
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It's not a global phenomenon.... it's an illusion of the laymen retail punter.
If you want physical at spot, and haven't got the funds to take delivery of a 400oz bar via the futures market, then there are other options. For example:

PMGOLD.ASX is fully backed in physical by the Perth Mint, available in 1/100 oz lots on market at near spot (AUD$2638/oz today), redeemable in physical by the oz, and only charges 0.15% cost of carry: https://www.perthmint.com/documents/PMGold-Fact-Sheet.pdf
PM Unallocated is similar, and redeemable in physical in 2 days: https://www.perthmint.com/storage/depository-program.html
 
wrcmad said:
It's not a global phenomenon.... it's an illusion of the laymen retail punter.
If you want physical at spot, and haven't got the funds to take delivery of a 400oz bar via the futures market, then there are other options. For example:

PMGOLD.ASX is fully backed in physical by the Perth Mint, available in 1/100 oz lots on market at near spot (AUD$2638/oz today), redeemable in physical by the oz, and only charges 0.15% cost of carry: https://www.perthmint.com/documents/PMGold-Fact-Sheet.pdf
PM Unallocated is similar, and redeemable in physical in 2 days: https://www.perthmint.com/storage/depository-program.html
Click to expand...
What's your method for buying PMGold? Not worth it using my Westpac trading account.
 
wrcmad said:
It's not a global phenomenon.... it's an illusion of the laymen retail punter.
If you want physical at spot, and haven't got the funds to take delivery of a 400oz bar via the futures market, then there are other options. For example:

PMGOLD.ASX is fully backed in physical by the Perth Mint, available in 1/100 oz lots on market at near spot (AUD$2638/oz today), redeemable in physical by the oz, and only charges 0.15% cost of carry: https://www.perthmint.com/documents/PMGold-Fact-Sheet.pdf
PM Unallocated is similar, and redeemable in physical in 2 days: https://www.perthmint.com/storage/depository-program.html
Click to expand...

Ok? So the entire world decided to collect a larger premium for gold cos they wanted to screw their customers for commercial gains?

You're ignoring the demand and the climate we're in. Gold is still just below its all time high in Australia. why would dealers turn back business by removing inventory? How does that make sense?

If only a handful of dealers were increasing their premiums and/or removing their inventory from their websites, sure, your story starts to make sense.
PM Unallocated is similar, and redeemable in physical in 2 days:
If you can document your sale of unallocated and take delivery within 2 days, I'll give you $100.

Explain the simultaneous behaviours and actions of every major Bullion dealer around the globe...
 
STKR said:
Ok? So the entire world decided to collect a larger premium for gold cos they wanted to screw their customers for commercial gains?

You're ignoring the demand and the climate we're in. Gold is still just below its all time high in Australia. why would dealers turn back business by removing inventory? How does that make sense?

If only a handful of dealers were increasing their premiums and/or removing their inventory from their websites, sure, your story starts to make sense.
PM Unallocated is similar, and redeemable in physical in 2 days:
If you can document your sale of unallocated and take delivery within 2 days, I'll give you $100.

Explain the simultaneous behaviours and actions of every major Bullion dealer around the globe...
Click to expand...
I'm not ignoring anything.
I know there will have been a surge of retail purchases lately, but dealer stocks ebb and flow during spikes like these. The cry of a physical squeeze has been seen here numerous times before, as has the cry of COMEX inventory shortages - all have amounted to nothing, and everyone has forgotten about it in no time, and gone back to their normal lives.
As for removing inventory.... not sure where you get this from?
I can buy physical right now if I want.
I have also shown you how to procure uninflated physical.
I have also pointed you to several explanations of what is really going on.

I don't believe "every major bullion dealer around the globe" is pulling inventory as per your story (as has been backed up by sgbuyer above) - turnover is there business.
And I definitely don't believe your story about the LBMA not delivering.
 
wrcmad said:
Thanks mate.
The conspiracy is getting less global by the minute. ;)
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I believe it can be explained by the smaller retail market for physical gold bullion in the West (includes Europe) in comparison to Asia. The sudden spike in demand for physical gold is more than dealers can handle so premiums have to spike.
 
sgbuyer said:
I believe it can be explained by the smaller retail market for physical gold bullion in the West (includes Europe) in comparison to Asia. The sudden spike in demand for physical gold is more than dealers can handle so premiums have to spike.
Click to expand...
Yup, exactly what I first stated - price gouging of the laymen retail punter.
 
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