Just so you know I'm not playing with the numbers, or just revealing certain markets, here is the TOCOM, which functions as a commodity clearing house between member firms. Physical gold trading has dried up there too, and in fact reinforces my point even more.
This doesn't tell you any more than the LBMA. Why not put yourself in the shoes of a CB manager and tell me what you would do with this pile of useless metal which has got all sorts of uncompensated and hidden costs?
Physical gold that is available for purchase and sale (i.e: liquidity) has disappeared there too.
You can't make any such claim. You have no idea where or to what degree gold is or is not available.
My guess is that most of the leased CB gold is now in the form of jewelry, etc.
That's another question that you and the 'Bugs don't answer. Who buys gold on lease? If I'm in the jewelry business, there's no way I want to get gold on lease. Why do that? You can't make a good argument for doing it. Someone gives you gold and you have to pay interest on it. You take the gold and make jewelry for sale. Assuming it sells you receive cash against the gold liability. I see it now, you buy futures or you burn the gold lenders! Some business model.
Well, not really a mystery, cause the answer is they can't. This market is set up for a squeeze.
This is always the case in any commodity, but you'd have to be pretty crazy to speculate on a squeeze especially in the current environment. Who knows? It may work, but probably not until September. |
