Loading ...Gold Spot/Continuous Contract Disparity
Ok. Been thinking about this.
Which to use? Has gold broken out?
Stockcharts.com shows the “FUTURES” price. This is NOT today’s price but the bet people have on the FUTURE price. Fullgoldcrown said it’s the June contract now.
Why the heck are we charting the future price anyways!? Why is that all that stockcharts allows?
Spot: Today’s price. The price RIGHT NOW: $1681.80. This is not even the spot price recent high. We were higher on March 5th and March 8th.
The price right now…. this is why GLD is tied to the SPOT PRICE.
So basically people are betting on the future price. They’re betting in the future the system is done. The virus will be bad even in the future. Inflation is coming in the future, etc.
So if the inflation doesn’t come, if hydroxychloroquine and other cures start being used widely, if we have a quick recovery, and the system hobbles along for a couple more years….. hmmm…
How many unemployed ?
How many businesses never to come back
The economy was already average at best
The cake is baking
I’ll also add supply lines are a disaster of basic raw materials
Glycerine short. Alcohol short. Goes on and on
So let’s say we get a quick economic rebound. Prices will explode
Amazingly enough in my business I need these raw materials that are
Short. I’ll pay whatever there asking or I’m out of business. I’m passing the prices
On. And for the first time in many years not one customer is pushing back on price increases
Deflation in what you don’t need. It will take a year to rebuild supply lines at best
Badd news Mserr
Thanks for a reality check from the real economy
I think the June Futures Contract is going for a premium because you can’t get Gold Right Now…today… for $1681
You maybe can’t get it in size at any price.
Refiners are shut down…Some mines are shut down.
If you buy a June Futures contract you can take delivery in June of 100 ounces.( maybe) ..if things start to percolate by then.
If you buy Gold NOW you cant get any for spot…you pay a premium now…check prices at coin dealers….you will likely wait until June or later to take delivery anyhow.
So which is the real price ?
Somewhere in between.
Take comfort chuck that spot will eventually breakout. Look at other fiats vs spot. Also Plunger’s four horsemen. There is the truth.
I think futures already at 1754 will stall at 1775-1800.. waiting for spot to catch up.