Kitco News
(Kitco News) – Seventy-one percent of the Wall Street and Main Street respondents in the weekly Kitco gold-price survey look for the precious metal to build on its gains next week.
The post Gold prices seen building on biggest weekly gain since 2008 appeared first on WorldSilverNews.
Inflows of 57 metric tons were reported Thursday, with just shy of 560 tons going into these ETFs since the start of the week, Fritsch said. Further, inflows over the past seven trading days have totaled nearly 1,000 tons.
Allen Sykora
CNN Business/Hannah Zlady/3-26-2020
“Investors are snapping up gold bars and coins, seeking the security offered by the precious metal as the coronavirus pandemic trashes economies and forces central banks to print trillions of dollars in new money. But with major gold refineries across Europe shut because of government-ordered lockdowns, online shops out of stock and many of the passenger planes that move bullion grounded, physical gold is becoming harder to track down.”
Important USGOLD client note: Due to our long-standing relationships with key market-makers and our own inventory planning, we are still working from a strong inventory position and are able to deliver most of the standard gold and silver bullion items – American Eagles, Canadian Maple Leafs and Krugerrands. Even our sources though are strained under the circumstances and our inventory, of course, is finite. We do not know, as a result, how long the supply will hold up. All deliveries are running on schedule with occasional minor delays due to the order and shipping volume, and we think you will find our pricing as advantageous when compared to most sources. The one thing we have no control over is rising premiums which, unfortunately, we have no choice but to pass along. Please contact us to discuss prices and availability. 1-800-869-5115 x 100
Bloomberg/Katherine Doherty/3-25-2020
“’What we are seeing now is fast and violent,’ unlike the gradual sell-off in the 2007 and 2008 crisis, said Phil Brendel, a senior distressed credit analyst at Bloomberg Intelligence. If the virus isn’t suppressed, even more distress is possible, according to Brendel. ‘The worst is yet to come,’ he said.”
USAGOLD note: You get the sense that something is brewing under the surface that when it bubbles up it is going be another black swan (or even flock of black swans) on top of the black swan that’s already landed on the financial pond. Yesterday, Financial Times reported the Dutch bank ABN Amro taking a $200 million loss the equivalent of 10% of its annual profits from one trader going bust and leaving the bank holding the bag.
What the heck are those mysterious “exchange for physicals,” the mechanisms by which contracts to buy gold on the New York Commodities Exchange are neither fulfilled by delivery on the Comex nor settled for cash there but transported for supposed delivery elsewhere?
The mechanism long has been incorporated by the Comex trading system but was described as an “emergency” procedure undertaken upon agreement by buyer and seller – except that the use of this “emergency” procedure has exploded in the last year, involving tens of thousands of contracts and, nominally, hundreds of tonnes of gold.
In one respect this is not so surprising, since there never has been much tonnage in Comex gold vaults, with nearly all Comex contracts settled for cash. But apparently physical demand over the last year has risen enough to cause sellers to need to source gold elsewhere.
The presumption is that the EFPs shift a seller’s delivery obligations off the Comex to bullion banks in London. But this raises another issue, since so many EFPs have been issued in the last year that if delivery really was being claimed for them, unallocated metal in London – metal available for sale, rather than metal being vaulted for exchange-traded funds and other institutions – would be wiped out. In January, researcher Ronan Manly calculated that fewer than 1,200 tonnes of gold in London were really available for trade.
Indeed, sources in the London gold market say that few EFPs ever claim delivery. Rather, these sources say, EFPs are usually cash-settled in London with their claimants paid cash bonuses that are never reflected in the gold price, which would be much higher if the bonuses were reflected.
But as the tightness of gold supply in London increasingly has been recognized in recent months, EFP claimants are said to have been demanding larger bonuses against the risk that the gold will run out, making their EFPs worthless.
Despite the “physicals” in their name, the vast increase in their use suggests that most EFPs have not been resolved by any delivery of metal. So those using and sustaining the mechanism must have other purposes – like sustaining the increasingly creaky fractional-reserve gold banking system.
Whatever is happening with the EFPs, their enormous use in the last year is new and indicates some big change in the gold market, and it must be an especially sensitive change because Comex operator CME Group, the U.S. Commodity Futures Trading Commission, and the U.S. Office of the Comptroller of the Currency – nominal regulators of the gold market and its bullion banks – refuse to explain what it means.
