Gold Price Expected To Rise Significantly Soon

[Clay Diggins]

12 hours ago, GB_Amateur said:

I guess it depends on what "not connected" means, and what "physical gold price" means.  You can take delivery on a current month gold contract from the COMEX.  A single contract is 100 ozt of 99.5% minimum purity -- a single gold bar.  Thus if you have ~$167,000 you can get gold at the more/less spot price.  (There is a transaction cost that goes to the exchange and a commission that goes to the dealer, but those are small, relatively speaking.)

I know a little about COMEX. I was hedging metals there for several years after they opened their gold futures exchange in 1974. It has changed since then but it's only become more expensive and restrictive for small manufacturers and investors since that time.

No one can buy gold on COMEX. Gold is not for sale but futures contracts can be had. COMEX is a place to exchange futures contracts - not gold. The individual futures contract seller is responsible for delivery - not COMEX and not your Broker. The person taking delivery is responsible for transportation, warehousing, insurance and security.  A futures contract for gold can sometimes be taken to physical delivery but the conversion losses are so large that it's almost always less expensive to buy physical gold from one of the big metals dealers even with their higher prices.

Neither you nor I can buy or take delivery on a COMEX contract unless we are pre qualified as an Executing Trading Firm. (Usually that's your broker if they are one of the big boys.) The vast majority of gold futures contracts on COMEX are "rolled over" at the end of contract with an EFRP (Exchange for Related Position) - no gold exchanges hands. That is exactly what your selected Executing Trading Firm will strongly encourage you to do.

Many are tempted by the COMEX gold mini contracts of 50 oz. Unfortunately those are cash settlement only contracts - no gold is delivered or promised in the contract.

Physical delivery means gold in hand and is obviously distinct from someone else promising you they have your gold.

One important thing I learned hedging metal on the COMEX was if the metal isn't in your hands you don't own it. COMEX futures contracts are not gold in hand.  I don't see a logical or price connection between gold you might pay for in the future and might take delivery of even further in the future to local dealer prices for immediately available recognized gold coins in hand.

The market clearly doesn't see a connection between COMEX and physical gold anymore. It's been a few years since physical gold dealers have been paying more than COMEX spot for physical gold and selling at a 20 - 50% markup over COMEX spot. . For anyone who has traded in gold for nearly 50 years that is an obvious, historically unique, and big disconnect in COMEX futures vs physical pricing.

[GB_Amateur]

5 hours ago, Clay Diggins said:

No one can buy gold on COMEX. Gold is not for sale but futures contracts can be had. COMEX is a place to exchange futures contracts - not gold. The individual futures contract seller is responsible for delivery - not COMEX and not your Broker. The person taking delivery is responsible for transportation, warehousing, insurance and security.  A futures contract for gold can sometimes be taken to physical delivery but the conversion losses are so large that it's almost always less expensive to buy physical gold from one of the big metals dealers even with their higher prices.

Here is where I looked before I posted.  On rereading that, it does appear that "physical delivery" and "ensure that there is a convergence in pricing between the physical market and the futures market at expiry" is fancy wording with the devil in the details.  Thanks for going into the weeds with your explanation.  Another example of "a little knowledge is a dangerous thing?" 🤔

 

 

[klunker]

 

But wouldn't it be a little less risky to just go out with my detector and pick up a few bits here and there?

[dig4gold]

5 hours ago, klunker said:

 

But wouldn't it be a little less risky to just go out with my detector and pick up a few bits here and there?

Absolutely.

D4G

[mn90403]

When interest rates rise ....

 

The curious case of falling gold prices (msn.com)

[Aureous]

Russian Gold exchange proposal

 

Kitco have an interview here regarding more Russian 'interference' with the manipulation of the Gold price. Cant see it gaining traction but this video exposes a lot of back-door info.

[CoinShooter1]

This post is about 90 days old. So I pulled up a 90 day price chart of gold.

Its gone from roughly $1850 down to aprox. $1650 over the past 90 days.

Seems odd to me, as everything else keeps going up, up, and up some more.

 

[Aureous]

19 minutes ago, CoinShooter1 said:

This post is about 90 days old. So I pulled up a 90 day price chart of gold.

Its gone from roughly $1850 down to aprox. $1650 over the past 90 days.

Seems odd to me, as everything else keeps going up, up, and up some more.

 

Yes, as explained several times (and in that video), when the pressure on the gold price doesn't correspond with what 'they' want, they simply manipulate the price to suit their current agenda. The natural forces of supply and demand are not able to make the price move as expected. They keep buying at a reduced price until the time is right for them to allow the price to rise, then dump a significant quantity at the now higher price. 

[CoinShooter1]

6 minutes ago, Aureous said:

Yes, as explained several times (and in that video), when the pressure on the gold price doesn't correspond with what 'they' want, they simply manipulate the price to suit their current agenda. The natural forces of supply and demand are not able to make the price move as expected. They keep buying at a reduced price until the time is right for them to allow the price to rise, then dump a significant quantity at the now higher price. 

I believe we can expect 2 more interest rate hikes, before the year 2022 ends.

Who knows how that will effect the price of gold?

We may not see a bottom for a few more months???

 

[Lynk]

There are two more Fed meetings this year - 11/2 and 12/14.  The market currently prices in a 93% chance of another 75bp (basis points or 3/4 of a full percentage point) in November and a 96% chance of 50bp in December. 

Hikes are priced in through the May meeting, although to a much lesser degree.  Starting in June the markets see a higher probability of rates being cut.

It's important to note these are just expectations and they adjust with every significant economic update.

All else being equal, rates moving into real (government rates less inflation) territory make it hard for the price of gold to move higher.