Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Gold Prices Surge as Squeeze on Physical Market Continues

CommoditiesApr 06, 2020 12:25PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Geoffrey Smith 

Investing.com -- Gold prices roared higher again on Monday, extending a three-session rally as confidence returned to global financial markets against a backdrop of slowly improving health data from Europe.

By 12:20 PM ET (1620 GMT), gold futures for delivery on the Comex exchange were up 2.6% at $1,688.70 a troy ounce, only slightly off an intraday high of $1,695.90 an ounce.

That’s the highest mark in nearly two weeks, in a rally driven by the prospect of a sharp recession and an extended period of low interest rates, along with big increases in government borrowing.

Spot gold was up 2% at $1,650.55 an ounce. The premium of the futures contract over the physical product thus widened to the most in over a week, under the weight of heavy inflows into ETFs and other gold-backed products.

Holdings rose by 1.5 million ounces last week and are now up 10% in terms of claims on physical gold since the start of the year, according to analysts at BMO.

Much of that increase has gone into U.S.-backed ETFs, which track the Comex price rather than the London price.

E.B. Tucker, director of Metalla Royalty & Streaming, told the news site Kitco that “there’s maybe around $100 of paper gold trading for every ounce of real gold that’s in New York vaults.”

The recent extreme arbitrage suggests that “the people that have been arguing about manipulation in the gold market and talking about that for years (are) not as crazy as we once thought,” Tucker added.

Uncertainty continued to cloud the actions of some major players in the market. The Central Bank of Russia delayed the publication of its weekly reserves data for the third day, in what appeared to be an effort to conceal the degree of pressure on its foreign reserves as it tries to stabilize the ruble amid the ongoing price war in oll.

Silver futures rose 3.7% to $15.03 an ounce, on the back of similar inflows into silver ETFs, where AUM rose by 4.35 million ounces last week.

Platinum futures rose 2.2% to $733.60 an ounce.

The risk-on attitude in global markets was also reflected in other haven assets, with the Japanese yen weakening against the dollar, and U.S. Treasury yields rising by between four and seven basis points along the yield curve.

Gold Prices Surge as Squeeze on Physical Market Continues
 

Related Articles

Oil edges up, as investors worry about global demand
Oil edges up, as investors worry about global demand By Reuters - Sep 21, 2021

By Stephanie Kelly NEW YORK (Reuters) - Oil prices rose modestly in a see-saw session on Tuesday, as concerns about the global consumption outlook counterbalanced the struggle by...

Oil Inventories Fell by 6.1M Barrels Last Week: API
Oil Inventories Fell by 6.1M Barrels Last Week: API By Investing.com - Sep 21, 2021 5

By Yasin Ebrahim Investing.com - U.S. crude stockpiles fell by more than expected last week, amid a slow recovery of U.S. production following disruptions from Hurricane Ida. ...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (3)
laettis laett
laettis laett Apr 06, 2020 5:29PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Bye bye COMEX and LBMA. The cat is out of the sack now and there is no going back. Eggs have been scrambled. It's all the way to Weimar and Zimbabwe now. They can do whatever the F they want with the paper price, the demand for physical will continue rising. Once people realize how much they are getting rekt by the central banks and unlimited QEs, and gold becomes hard and too expensive to get...where are people going to turn to then I wonder..could it be silver?
omar zaklouta
omar zaklouta Apr 06, 2020 2:27PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
probably for long terms Gold looks bearish
laettis laett
laettis laett Apr 06, 2020 2:27PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
You must be looking at your chart inverted.
Pwr Strk
Pwr Strk Apr 06, 2020 12:08PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
the underlying stock moves are all fake
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email