The day's price movements

rblong2us

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curious that the Kitco charts are both now showing pog as $1660 ish a sudden jump from around $1600 and there was a lag between the two Kitco charts, which I have seen in the past when things are moving fast but my Bullionvault chart remains fairly steady at around $1600 ......... the BV chart refreshes every 30 seconds.

This has been steady for around an hour now.

thats a worringly large discrepancy
Any simple explanations ?
 

pmbug

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It looks like the QE infinity news finally gave the metal futures wings. Maybe people are finally waking up to the reality that the Fed is going to double or triple their balance sheet in the near future (and other central banks are going to follow suit).

I wouldn't sell any gold right now in spite of the GSR. Gold is my insurance against TSHTF and it really seems like we are getting close to that. It might be a different story if you could actually buy physical silver near spot prices.
 

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We display several kitco widgets on the home page. I've got zero control over how they work. There are no options for adjusting the refresh rate or anything like that.

The kitco charts do have a time stamp on them. I think the table listing all the metals seems to refresh on a tighter interval than the graphs do.

I don't know how bullionvault manages their chart, but it seems like a fair question to ask them (especially if you are a customer).
 

rblong2us

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hmmm

an interesting development then

The Bullionvault chart is based on deals taking place on the live order board, so a close indication of what I might pay or receive if I choose to trade .....

Its still hovvering around $1600 for me

I guess the question becomes, where do Kitco get their info ? E-bay (-;
 

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... and on Tuesday morning the divergence that was barely noticeable late Monday has blown out to unprecedented level, with gold futures decoupling and trading far above spot prices.



The near record spread is the widest seen in four years.

As Kitko notes, just before noon EDT, one price vendor was showing spot metal was trading at $1,612.10 an ounce while at the same time showing the Comex April futures were at $1,654.10 an ounce – a spread of $42 an ounce. It was much wider earlier in the day, when as Kitco adds, "nearby futures were more expensive than deferred, a sign of strong demand in any commodity market."

"I’ve never seen that before," said one gold trader who has been in the market for 30-plus years. Some contacts reached by Kitco suggested the discrepancy is an evolving story that is still unfolding, with traders trying to figure out what’s happening.

Earlier in the day, the London Bullion Market Association, the world's most important authority for physical gold and its transfers, issued this stunning statement to Kitco:
"The London gold market continues to be open for business. There has, however, been some impact on liquidity arising from price volatility in Comex 100-oz [ounce] futures contracts. LBMA has offered its support to CME Group to facilitate physical delivery in New York and is working closely with Comex and other key stakeholders to ensure the efficient running of the global gold market."
In short, the unprecedented scramble for physical metal coupled with continued liquidations among levered players, while refiners remains offline, appears to be fracturing the gold market from within.
...
https://www.zerohedge.com/commoditi...spreads-explode-lbma-warns-liquidity-problems
 

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Increasing pressure from market players and significant liquidity issues in the gold market are prompting CME Group to make some changes in how it delivers its physical gold.

Tuesday evening, the futures exchange announced the launch of a new gold futures contract with expanded delivery options that include 100-troy ounce, 400-troy ounce and 1-kilo gold bars.

The new contract is expected to launch with the first expiration of April 2020, pending regulatory approval, the exchange said.
...
According to reports, bullion banks across the board reported massive liquidity issues Tuesday in the physical market. The problem, according to many banks, was the Exchange For Physical (EFP) market, which allows traders to switch gold futures positions to and from physical. Spreads in EFP are typically around $2, but on Tuesday, because of a lack of supply, the spread increased as high as $40.

Part of the issue is the lack of specific gold bars. CME contracts are for 100-ounce bars. However, Good Delivery listed bar from the London Bullion Market Association are 400 ounces.

The move from the CME will help relieve some of the liquidity issues as future contracts could be filled with 400-ounce bars from the London Bullion Market Association.

According to reports, The LBMA and executives at major gold-trading banks asked CME to allow 400-ounce bars to be used to settle Comex contracts.
...
https://www.kitco.com/news/2020-03-...very-of-100-ounce-400-ounce-and-1kg-bars.html
 

rblong2us

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yeah, apparently there's loads of gold available for settlement in London ........

Lets see how much settlement is actually allowed
 

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I posted back on 3/2/20 about the CME raising margin requirements on gold futures contracts. J.S. Kim says they've been going crazy raising margin requirements since to try and arrest gold prices...

... Normally, when bullion banks manufacture waterfall declines in paper gold and silver prices, as they did earlier this month, with the complicity of the CME’s largely unreported rampage in raising initial and maintenance margins on futures contracts many times within a 2-month period in the midst of a stock market crash ...

... I have not seen a single news site in the entire world, except for my own, mention the relentless increase in initial and maintenance margins in gold and silver futures contracts (the 100-oz gold futures contract and the 5000-oz silver futures contract) for the past two months, in a desperate attempt to knock long positions out of the game and thereby prevent an increasing amount of physical delivery requests. Just recently, the CME raised margins yet again for 100-oz gold futures contracts to $9,185/$8,350 for initial/maintenance margins, representing a massive 86% increase in margins, and for 5000-oz silver futures contracts to $9.900/$9,000 for initial/maintenance margins, representing a gigantic 73% increase in margins, in just a couple months’ time. ...
https://maalamalama.com/wordpress/comex-physical-gold-supply-problems-/28/03/skwealthacademy

The report on 3/2/20 noted the maintenance margins for 100oz gold were raised from $5,000 to $5,500. Kim says they are now at $8,350 four weeks later. Sounds like they have been quite busy with this game.
 

rblong2us

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Yes but holding the paper contracts and insisting on settlement, knowing there is no gold is the new game in town.
The margin adjustments only have effect once. After that they simply factor into the risk / reward assessment. At some point the numbers could work at full pog value for contracts.
 

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I found this on the CME Group's website:
...
Futures margin generally represents a smaller percentage of the notional value of the contract, typically 3-12% per futures contract as opposed to up to 50% of the face value of securities purchased on margin.
...
https://www.cmegroup.com/education/courses/introduction-to-futures/margin-know-what-is-needed.html

If I understand that right, at a base gold price of US$1,600 (for example), the notional value of a contract for the gold would be US$160,000. The "typical" range for margins could range from US$4,800 to US$19,200. They still have room to raise margins to keep paper gold in check (at today's price point).
 

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Sure feels like "ignition".

I'm sure the CME will be raising margin requirements soon.
 

rblong2us

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yes the airfreight costs are massive (-;

The futures-spot price differential points to a perceived higher cost of transporting gold from London to deliver against COMEX futures contracts in the U.S. due to all the COVID-19 disruptions, the strategists explained.

At the time of writing, spot gold was trading at $1,725.50 an ounce, up 0.74% on the day, while June Comex gold futures were at $1,759.70, down 0.10% on the day, after nearing $1,800 earlier in the session.
from -
https://www.kitco.com/news/2020-04-...tors-as-futures-prices-eye-higher-levels.html
 

pmbug

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...
The report on 3/2/20 noted the maintenance margins for 100oz gold were raised from $5,000 to $5,500. Kim says they are now at $8,350 four weeks later. Sounds like they have been quite busy with this game.
...
I'm sure the CME will be raising margin requirements soon.
Looks like the CME did raise maintenance margins at the very least some time in the last week. According to the CME website, maintenance margins on 100oz gold contract is now $9,150. I can't seem to figure out how to see the initial margin requirement on the CME website. I'm not sure if they raised that too.
 
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