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Gold/Mining/Energy : Precious and Base Metal Investing -- Ignore unavailable to you. Want to Upgrade?

To: The Vet who wrote (31762)	10/25/2004 4:52:47 AM
From: LLCF	Respond to of 39344

<So you think it is OK for a seller to sell you a product that he does not own and cannot deliver, that you have put up the full price for, in cash!> Excuse me.. but you said the COMEX had the rules... not some investment bank. The COMEX has the gold right there in the vault as far as I know [OK, under a destroyed building for a while, but still there]. It's the investment banks that borrow tons of gold and sell it into the market and then are 'short it'. <<My point was that the shorts knowingly sell more than they can possibly deliver, and the longs have to commit first on all open interest. > Well, the points you are making are: 1.) that the comex has an imbalance, when you talk OI you're talking exchanage, I"m just correcting that mis-perception. As far as I know there is NOT more short open interest on the comex than can be delivered and therefore "paying up front" IS IN FACT like any other transaction. 2.) That shorts on the comex KNOW there will be huge sellers coming in to liquidate at or near expiration. That is a HUGE PIECE OF NEWS!! You are claiming that everyone knows that open interest will be SOLD??? As far as "longs committing first".... who else is going to commit? The shorts DONT HAVE THE RIGHT TO COMMIT. The shorts have an obligation to sell, the buyer has an obligation to buy... when I order from any warehouse [Amazon.com say] I pay before my goods are delivered... I see nothing wrong with letting the warehouse know they need to load up the trucks. :)) I think you are confusing the Comex market [where there is open interest tallied nightly] to the entire gold borrowing and lending market, which is a huge unknown. So someone correct me if I'm wrong, but the Comex publishes what's in their warehouse [and I think we'd of all heard about it after the 9/11 cleanup if there really wasn't any under there] AND their open interest... NO? DAK