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Gold/Mining/Energy : Gold Price Monitor

GDXJ 108.90

+4.2%

Dec 9 4:00 PM EST

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To: long-gone who wrote (90786)	10/28/2002 7:34:02 AM
From: IngotWeTrust	Read Replies (1) of 116804

Yes, Richard, I have spoken to that point before. Simply put, the spread is customarily based upon: 1) cost of money (usually 30 day T-Bill rate here, or 30 day Libor rate) 2) length of time in days between spot and futures contract expiration. 3) storage charges extrapolated going forward Sometimes it is premium spot to futures; sometimes it is flat, aka no premium of spot to futures, sometimes it is premeium futures to spot. The "whether spot is a premium to futures" implies tight supply conditions as a rule. And, as a futures expiration date draws near, and the forward month becomes a "spot month", the spot price spread then begins to narrow in relation to the futures contract. Does this adequately cover your question? g_t The premium of futures to spot is more normal, and implies the cost of money and ca

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