Loading ...Gold’s supply side issues.
There are definitely supply/delivery issues (Covid-19?) which looks like started March 17th.
I’m expecting up spikes in futures contract with the slightest spot price up moves. A reason why the GC1 chart looks a lot better than spot chart.
Normal behavior is a few bucks above spot on contract start… that evenly, slowly catches up to spot price on expiry date.
So futures might touch all-time highs before spot does. Also, if and when these supply issues are settled, I expect gold prices on futures to go rapidly down to spot.
I don’t get it…you cant have it both ways
backwardation means the end of the world and Gold will soar to 10,000 and be unavailable
But a Contango is also good to cause a gold Price Explosion
can’t lose right ?
I think it depends what is creating the contango. Now, its supply issues. All fine and dandy.. but if you are holding the futures contract bought at a high preminum.. and they fix these supply issues.. you are caught holding the stick.. the preminum disappears and you revert to a few bucks above spot. You lose. As for backwardation.. I haven’t seen any proof or correlation that it signifies “bottoms”. The win-win is if the permanent backwardation theory actually happens. But that means END OF WORLD.. where gold is worth infinite. Charts are not showing this as even a close probability. I’m fst realizing, I can’t read to much into this collateral technical analysis. Easy to bend the “info” in the direction which please your bias.
Regular contango is the 4-6 bucks over spot.. (holding fess.. storage… whatever..) and the premium grinds lower to match spot. So in normal times. contango is not a win but a cost (loss).
If you don’t wanna lose.. buy amazon! 🙂
Can you plot gold lease rates also??
Let me check if I can get that data feed
Found this https://www.kitco.com/lease.chart.html
This is SUPER interesting.. https://www.bullionbypost.co.uk/index/market-commentary/gofo/
This might not be a simple delivery issue.. but some more financial stress detected by gold.
https://seekingalpha.com/article/4334938-gold-market-be-to-snap-watch-gofo