There’s still time to read this month’s Gold Letter, which contains a fascinating commentary by Bud Conrad at Casey Research in which he explains the difference between the paper and physical gold markets and their influence on the recent turmoil in the price of the yellow metal.
“Previously, there was little difference between the physical and paper markets for gold. Yes, there were premiums and delivery charges, but everybody regarded the futures market as the base quote. I believe this is changing; people don’t trust the paper market as they used to.
Instead of capitulating to fear of greater losses, the demand for physical gold has hit new records. The US Mint sold a record 63,500 ounces – a whopping 2 tonnes – of gold on April 17 alone, bringing the total sales for the month to 147,000 ounces; that’s more than the previous two months combined. Indian markets, which are more oriented to physical metal, now have a premium of US$150 over the futures price in Chicago. Demand at coin dealers has increased as the price has dropped. And premiums are much bigger than they were as recently as a week ago.”
Continue Reading the Full Commentary
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The Disconnect Between Paper and Physical Gold
There’s still time to read this month’s Gold Letter, which contains a fascinating commentary by Bud Conrad at Casey Research in which he explains the difference between the paper and physical gold markets and their influence on the recent turmoil in the price of the yellow metal.
Continue Reading the Full Commentary
Follow us on Twitter to stay up-to-date on Peter Schiff’s latest thoughts: @SchiffBlog