Why are we seeing SPOT and Physical spreads widen?

66rounds said:
https://www.bullionstar.com/blogs/r...ightmare-as-lbma-comex-spread-blows-up-again/

Here I took "exiting the market" to mean a collapse but I see that was ignorance of the mechanics on my part. The name of the bank continues to elude me because I can't find my original source
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‘you could be right, there are bound to be many badly run bullion banks and dealers with no idea.

$25 to $50 per ounce difference in spot and contracts is not a big deal. When every contract dealer knows that it is simple mechanics of refiners shut down causing shortage. Most will accept delayed delivery if they want physical gold. End of the day there is no shortage of gold, just refined 100oz bars.

much like I can ring any food wholesaler and buy 25Kg sacks of rice or flour at a steep discount but have to pay inflated prices for 2kg or 5kg bags at supermarkets because of shortage of bagging capacity.

All CMC has to do is change their 100oz bar only to settle to either 100 and 400 ounce bars and the difference disappears.

It’s like Macdonald only accepting $10 notes and will only give $10 notes in change and it is the customer responsibility to buy as close to $10 lots..... or not get any change. That policy won’t last long.
 
Also only badly run miners, refiners, mints and bullion dealers that need money will be selling more than they have to by contract.

A well run miner, refiners, mints and bullion dealers would minimise sales to what they are contractually obligated too than sit and wait for $1800 plus and reevaluate.

Imagine a refiner with 1,000kg of 80% dore in the warehouse they own outright, not refining any and delaying production is better than refining it and selling at $1 per ounce premium for a 999.9 bar
 
Ipv6Ready said:
A well run miner, refiners, mints and bullion dealers would minimise sales to what they are contractually obligated too than sit and wait for $1800 plus and reevaluate.
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It may make make sense for a miner to stockpile, but no well run refiner, mint or bullion dealer actually takes a long (or short) position like that. The other factor is that to sit on stock like that requires funding, and that is costly and hard to get. If they have stock they are going to sell it immediately.
 
​
STKR said:
wrcmad said:
One point you keep coming back to is dealers removing inventory from sale? I stated previously this would not make business sense, so I don't believe it is happening.
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How can you not believe it's happening?
.......
Your price gouging theory makes no sense when dealers are pulling the majority of their stock.
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bron.suchecki said:
It may make make sense for a miner to stockpile, but no well run refiner, mint or bullion dealer actually takes a long (or short) position like that. The other factor is that to sit on stock like that requires funding, and that is costly and hard to get. If they have stock they are going to sell it immediately.
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Well, I'm glad that's finally settled. ;)​
 
{deep sigh....}
You might want to re-read thread starting here.
As initially stated, this was a fake news story to get permabulls all excited, and as expected gold cost of carry as returned to below 2%pa. ;):)
 
Please ring Mr Kirkpatrick on (212) 299-2200 and ask him where is all the gold that COMEX is contracted to hold???
 
66rounds said:
Please ring Mr Kirkpatrick on (212) 299-2200 and ask him where is all the gold that COMEX is contracted to hold???
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Don't need to ask..... the answer is simple:
COMEX is not contracted to hold any gold, because COMEX does not enter a contract
with anyone in a gold trade.​
COMEX is merely a clearing house acting as a 3rd party.
The contract is between the buyer and seller.
This topic has been done to death many times on here before.
 
wrcmad said:
Don't need to ask..... the answer is simple:
COMEX is not contracted to hold any gold, because COMEX does not enter a contract
with anyone in a gold trade.​
COMEX is merely a clearing house acting as a 3rd party.
The contract is between the buyer and seller.
This topic has been done to death many times on here before.
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Must be a magic clearing house if they never have to lay hands on physical to close the contract between buyer and seller. Why choose such a confusing name as Commodities Exchange that implies they exchange physical commodities instead of You Buy, We Lie or something else more catchy.
 
66rounds said:
Must be a magic clearing house if they never have to lay hands on physical to close the contract between buyer and seller. Why choose such a confusing name as Commodities Exchange that implies they exchange physical commodities instead of You Buy, We Lie or something else more catchy.
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No bite from me today.
Not confusing.... couldn't be simpler.
Do your own homework. :)
 
66rounds said:
Where's the fun in my own homework? Arguing on a pet rock forum is the only thing getting me through this damn quarantine!
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Lots of us spent around 7 years arguing amongst ourselves whilst waiting for our pet rock prices to increase. Now that's happening but all every man and his bottle of hand sanitiser wants to talk about is germs and parasites.
Coincidentally those are two of the words that many of us used to refer to each other as. From 2012-2015 if Spannermonkey didn't rolleyes at someone's post and/or tell them to fk off at least daily GoldPelican would get someone to go visit and check in on him to make sure he was ok. Ah, the memories!
 
I do agree with wrcmad that the COMEX won't disappear up its own arse and turn into a black hole if demand exceeds current holdings at any time. With our current lives, any rush to take possession will be tempered by distancing rules and only one person being allowed to rush the place at a time.
 
if you hold on long enuff, your positions would be elevated, just like this little girl

The girl was playing with friends near the cables as workers were installing them when she was inadvertently suspended in the air.PHOTOS: SCREENGRAB FROM TWITTER
rk_girlcollage_180420.jpg


Comex is not all markets, there are other markets that settle gold and not in USD
 
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