Gold and Silver Juniors, Mid-tiers and Producers Message Board

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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers

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To: ferris wheel who wrote (61610)	10/13/2008 8:13:53 PM
From: E. Charters	Read Replies (1) of 78416

Comex prices are not matching physical gold as Comex reflects the sell off of assets by the trading institutions holding MBS paper and resulting derivatives that the MBS is the root of, that has declined in value - and of which they have calls. It also reflects their declining ability to trade with each other as their bank orders are not being backed. i.e. they have limited trading credit. If their borrowing cost goes up, as in Libor, the trades are less profitable so bids decline. Bids decline, prices decline. Most of these declining # of bids are because of is covering of margin calls on their firm. Interfirm margin for trading has increased by two times, so trading is now more expensive. This may go on for some time. Demand for physical gold has driven the real price up so their is now a disconnect between Comex gold paper trading price and physical gold real price.

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