Why are we seeing SPOT and Physical spreads widen?

Discussion in 'Markets & Economies' started by 66rounds, Mar 29, 2020.

  1. wrcmad

    wrcmad Well-Known Member Silver Stacker

    Joined:
    Jan 2, 2012
    Messages:
    6,408
    Likes Received:
    723
    Trophy Points:
    113
    Location:
    Northern NSW
    Well, that didn't take long at all - can't even shift the stuff now at a reasonable price: https://www.silverstackers.com/foru...-2oz-gold-lunar-tigers-x2.95770/#post-1140990
    Maybe it's just fractional in short supply, because the small players in stackerland believe they are representative of LBMA and COMEX trading?
     
    Silverling likes this.
  2. 66rounds

    66rounds Well-Known Member Silver Stacker

    Joined:
    Jun 22, 2019
    Messages:
    1,785
    Likes Received:
    1,773
    Trophy Points:
    113
    Location:
    Melbourne
    I don't think there has been much shortage of gold on the forums but silver is another story. Premiums still higher than were used to.
     
    Silverling and wrcmad like this.
  3. Silverling

    Silverling Well-Known Member Silver Stacker

    Joined:
    Aug 13, 2017
    Messages:
    994
    Likes Received:
    723
    Trophy Points:
    93
    Location:
    NSW
    I'd buy that in a flash if it was a f2f but the seller specifically said no f2f. So that leaves risking 11k and 4 oz's going in the post which is not guaranteed overnight anymore and they do not require the receiver to sign for the items either. There's a bit to much risk involved with all that but granted that is a fantastic price for a couple of very nice looking coins.
     
    wrcmad, 66rounds and madaw1 like this.
  4. jultorsk

    jultorsk Well-Known Member Silver Stacker

    Joined:
    Oct 17, 2016
    Messages:
    638
    Likes Received:
    821
    Trophy Points:
    93
    “We’re producing as many kilobars as we can, we’re probably churning out seven and a half tons of them a week at the moment and we are forward sold well into May,” Richard Hayes, chief executive officer of the Perth Mint, said in an interview. “A very large portion of those kilobars are ending up as Comex deliveries.”
    --
    The mint, which reopened a kilobar production line in response to the supply crunch, expects elevated demand to prove to be only a short-term issue.

    “Arbitrage issues around the Comex will be short lived and I don’t see them lasting for months and months,” Hayes said. “This is this is an unusual situation where you’ve got plenty of physical metal, it’s just in the wrong form and in the wrong place.”

    https://www.bloomberg.com/news/arti...siness&utm_medium=social&utm_content=business

    Screen Shot 2020-04-24 at 11.25.38 am.png
     
    Karoi, sgbuyer and wrcmad like this.
  5. President Trump

    President Trump Active Member Silver Stacker

    Joined:
    Jun 26, 2019
    Messages:
    162
    Likes Received:
    147
    Trophy Points:
    43
    But the take away for the stacker community was:
    “For every coin we make, be it gold or silver, we could probably sell five or six of them,” he said. “That strong demand will be a little longer-lasting, I expect, as people have been quite badly frightened by this whole Covid disaster.”

    Of course for the spot price to rise, rather than just have retail delivery delays and high premiums, this retail demand would need to translate into demand in the overall (much larger) market.
     
    66rounds likes this.
  6. Pirocco

    Pirocco Well-Known Member

    Joined:
    May 24, 2011
    Messages:
    4,899
    Likes Received:
    120
    Trophy Points:
    63
    Location:
    EUSSR
    Which % of the gold futures contracts ends up delivered in gold instead of dollars?
    And btw the difference between futures/forward price and spot is that the latter contains the former. You can see it on https://finviz.com/futures_charts.ashx?t=GC&p=m1
    The green line, alternatively red+blue. The bigger the figure, the bigger the futures/forward component in the spot price.
    That's by the way the existence reason for futures markets: to drive the price up without having to actually buy the underlying. It could be seen as an order that gets cancelled. They don't even want to buy the underlying, simply because futures hedge real stocks, being the amount they DID want.
     
    Last edited: Apr 27, 2020
    wrcmad likes this.
  7. 66rounds

    66rounds Well-Known Member Silver Stacker

    Joined:
    Jun 22, 2019
    Messages:
    1,785
    Likes Received:
    1,773
    Trophy Points:
    113
    Location:
    Melbourne
    Good question, I presume that it is an increasingly larger percentage.
     
  8. wrcmad

    wrcmad Well-Known Member Silver Stacker

    Joined:
    Jan 2, 2012
    Messages:
    6,408
    Likes Received:
    723
    Trophy Points:
    113
    Location:
    Northern NSW
    I liked your post before the edit.....
    This last bit is a little misinformation - not sure the reason for the existence of futures markets is to drive price up?...... o_O
    Some would even argue it is to manipulate price down?....:rolleyes:

     
  9. 66rounds

    66rounds Well-Known Member Silver Stacker

    Joined:
    Jun 22, 2019
    Messages:
    1,785
    Likes Received:
    1,773
    Trophy Points:
    113
    Location:
    Melbourne
    IMG_20200428_091812.jpg
     
  10. 66rounds

    66rounds Well-Known Member Silver Stacker

    Joined:
    Jun 22, 2019
    Messages:
    1,785
    Likes Received:
    1,773
    Trophy Points:
    113
    Location:
    Melbourne
  11. Pirocco

    Pirocco Well-Known Member

    Joined:
    May 24, 2011
    Messages:
    4,899
    Likes Received:
    120
    Trophy Points:
    63
    Location:
    EUSSR
    Strategy of the big lie. As ordinary as a thief dressed as a cop.
    It's the contrary: one orders stock Y, pays X, wants to sell it at X + 1, and makes an instant followup order of a second stock Y - but as futures, to make the price X + 1.
    Then when stock Y sold at X +1, cancel/undo (opposite position) that futures (fake) "order", and price back down to X.
    Rinse and repeat.
    It's the basic principle of hedging along futures. That's were the dollars that compensate for a windfall profit or loss, origin: from the suckers that paid X + 1.

    That's what they do o o , THUNDER! :D
     
    heartastack likes this.
  12. Pirocco

    Pirocco Well-Known Member

    Joined:
    May 24, 2011
    Messages:
    4,899
    Likes Received:
    120
    Trophy Points:
    63
    Location:
    EUSSR
    See, that's a fake story as old as the futures markets fake orders.
    Those Comex stocks are often claimed as what is available to deliver for the future.
    So when Comex stock low, little available, shortage coming soon, price is gonna rise.
    And when Comex stock high, alot available, price is gonna drop.
    But it's the opposite. The Comex (and any) stocks reflect wat happened in the past, not what will happen in the future.
    Just like in autumn, when trees let their fruits fall, at harvest time, when stocks are big, price is LOW.
    And in winter, when trees give nothing, and stocks are depleted / low, price is HIGH.
    So when the precious metals selling clubs yell COMEX STOCK DEPLETING SHORTAGE HURRY LAST CHANCE TO BUY AT THIS PRICE: DON'T. Instead: SELL. The stocks got depleted due to big amount buy orders in the past, in the process driving the price up to a peak.
     
  13. wrcmad

    wrcmad Well-Known Member Silver Stacker

    Joined:
    Jan 2, 2012
    Messages:
    6,408
    Likes Received:
    723
    Trophy Points:
    113
    Location:
    Northern NSW
    Well. That played out exactly as expected. :p

    PMsales.jpg
     
  14. sgbuyer

    sgbuyer Well-Known Member Silver Stacker

    Joined:
    May 25, 2018
    Messages:
    2,309
    Likes Received:
    1,344
    Trophy Points:
    113
    Location:
    Singapore
    Confirms my observation a week ago, but past couple of days, I see a slight pickup in gold sales on BS. The premium on silver is unwarranted.
     
    jultorsk and wrcmad like this.
  15. Holdfast

    Holdfast Well-Known Member Silver Stacker

    Joined:
    Oct 15, 2009
    Messages:
    9,612
    Likes Received:
    840
    Trophy Points:
    113
    Location:
    Australia
    Why are we seeing SPOT and Physical spreads widen?

    Try getting your hands on silver?

    Have a look at Perth's Bullion website.
    Nearly all categories are out of stock.
    There's limits in place for coins in stock.
     
  16. Holdfast

    Holdfast Well-Known Member Silver Stacker

    Joined:
    Oct 15, 2009
    Messages:
    9,612
    Likes Received:
    840
    Trophy Points:
    113
    Location:
    Australia
    Orders are taking a very long time to be delivered.
     
  17. Aurora et luna

    Aurora et luna Well-Known Member Silver Stacker

    Joined:
    Jul 1, 2009
    Messages:
    6,677
    Likes Received:
    2,583
    Trophy Points:
    113
    Location:
    Sydney
    If the Perth Mint was actually prepared to accept orders for their gold and silver products, I am sure they would have had record sales in May.
    For nearly 3 months they have been putting their distributors on very small allocations and refusing to take their orders.
    That's the reason why their sales has halved; not because of a shortage of demand from their distributors and customers!
    It's only a guess but I wouldn't be surprised if their supplies of feedstock and planchets are compromised.
     
    Holdfast, Silverling and 66rounds like this.
  18. Holdfast

    Holdfast Well-Known Member Silver Stacker

    Joined:
    Oct 15, 2009
    Messages:
    9,612
    Likes Received:
    840
    Trophy Points:
    113
    Location:
    Australia
    100%
     
    Aurora et luna likes this.
  19. Holdfast

    Holdfast Well-Known Member Silver Stacker

    Joined:
    Oct 15, 2009
    Messages:
    9,612
    Likes Received:
    840
    Trophy Points:
    113
    Location:
    Australia
    Probably mentioned before that they've got so many bullion coins now that they are congested.
    The 2021 Ox would be in full swing by now, so they're committed to their big customers in China
    and dribbling to the rest of us.
    Remembering their coin issues, they'll only hold about 10% of stock for Aussies.
    I don't think we will see light of day of the kilo or 5oz mouse.
     
  20. jultorsk

    jultorsk Well-Known Member Silver Stacker

    Joined:
    Oct 17, 2016
    Messages:
    638
    Likes Received:
    821
    Trophy Points:
    93
    Not taking a stance - but for your viewing pleasure I noticed Chards/UK posted the below pic taken apparently on 6th June of their recently received silver haul (25'000oz).
    Seems to be a sizeable amount of Perth Mint mice on the left hand side. And wondering where do all these old lunars and kooks come from then, as this is "new stock"? Better resolution pic available here.
    edit. Should've added it's not all of course Perth Mint, there's heaps of other mints' products on the table as well.

    49977782836_20523c14dd_k.jpg
     
    66rounds likes this.

Share This Page