Passa ai contenuti principali

CME resolving physical gold squeeze with delivery of 100-ounce, 400-ounce and 1-kg bars

Tuesday evening, the futures exchange announced the launch of a new gold futures contract with expanded delivery options that include 100-troy ounce, 400-troy ounce and 1-kilo gold bars.

The new contract is expected to launch with the first expiration of April 2020, pending regulatory approval, the exchange said.

"This time of unprecedented market conditions has led to growing demand for a broader range of delivery needs for our clients worldwide," said Derek Sammann, Senior Managing Director and Global Head of Commodity and Options Products, CME Group in a press release.

"By offering a choice of delivery sizes as well as inter-commodity spreads with our benchmark gold futures, this new contract will provide customers with maximum flexibility in managing physical delivery," Sammann added.

The news comes after an intense trading day in the gold space as the market has seen strong physical demand and dwindling supply.

According to reports, bullion banks across the board reported massive liquidity issues Tuesday in the physical market. The problem, according to many banks, was the Exchange For Physical (EFP) market, which allows traders to switch gold futures positions to and from physical. Spreads in EFP are typically around $2, but on Tuesday, because of a lack of supply, the spread increased as high as $40.

Part of the issue is the lack of specific gold bars. CME contracts are for 100-ounce bars. However, Good Delivery listed bar from the London Bullion Market Association are 400 ounces.

The move from the CME will help relieve some of the liquidity issues as future contracts could be filled with 400-ounce bars from the London Bullion Market Association.

According to reports, The LBMA and executives at major gold-trading banks asked CME to allow 400-ounce bars to be used to settle Comex contracts.

Earlier in the day, the LBMA said that it was working with the CME to resolve the liquidity issues.

"LBMA has offered its support to CME Group to facilitate physical delivery in New York and is working closely with Comex and other key stakeholders to ensure the efficient running of the global gold market," the association said in an email to Kitco News.

In an interview with Kitco News, Ole Hansen, head of commodity strategy, said that the price dislocation in the gold market Tuesday was a logistics problem and a breakdown in the supply chain because of the coronavirus.

"We don't have enough hands to handle all the demand," he said. "There is plenty of gold in the market, but it's not in the right places. Nobody can deliver the gold because we are forced to stay home."

Commenti

Posta un commento

Post popolari in questo blog

Fwd: The Looming Bank Collapse The U.S. financial system could be on the cusp of calamity. This time, we might not be able to save it.

After months  of living with the coronavirus pandemic, American citizens are well aware of the toll it has taken on the economy: broken supply chains, record unemployment, failing small businesses. All of these factors are serious and could mire the United States in a deep, prolonged recession. But there's another threat to the economy, too. It lurks on the balance sheets of the big banks, and it could be cataclysmic. Imagine if, in addition to all the uncertainty surrounding the pandemic, you woke up one morning to find that the financial sector had collapsed. You may think that such a crisis is unlikely, with memories of the 2008 crash still so fresh. But banks learned few lessons from that calamity, and new laws intended to keep them from taking on too much risk have failed to do so. As a result, we could be on the precipice of another crash, one different from 2008 less in kind than in degree. This one could be worse. John Lawrence: Inside the 2008 financial crash The financial...
Posta un commento
Continua a leggere

3 Reasons Why Gold Will Outperform Equities And Bonds

3 Reasons Why Gold Will Outperform Equities And Bonds https://www.forbes.com/ 3 Reasons Why Gold Will Outperform Equities And Bonds For centuries, gold has played a major role in human history and has become interwoven into the financial fabric of society. Beyond its investment following, gold has become synonymous with wealth. Historically, gold's early use cases revolved around money – a form of "medium of exchange". After the second world war however, several countries and their respective currencies, started to shift away from the gold standard and migrated towards a fiat currency system. Today, gold remains largely a "Store of Value", and due to its unique properties and large number of use cases, it has managed to distance itself from other asset classes in terms of correlation, demand / supply drivers, and investment purpose. Gold's idiosyncrasies function as a double-edged sword, as it is challenging to predict ...
Posta un commento
Continua a leggere

China Market extends fall on talks of less stimulus

Headline indices of the Mainland  China  equity market closed down for second straight day on Tuesday, 23 April 2019, as profit booking selloff continued after a flurry of comments from policymakers signaled they're less comfortable about adding stimulus. At closing bell, the benchmark Shanghai Composite Index declined 0.51%, or 16.45 points, to 3,198.59 The Shenzhen Composite Index, which tracks stocks on China's second exchange, fell 1.32%, or 23.05 points, to 1,728.86. The blue-chip CSI300 index shed 0.16%, or 6.60 points, to 4,019.01.  Top-ranking policymaking bodies including the Politburo, the State Council, the central  bank  and the  Central Financial and Economic Affairs Commission  have all held meetings in the last two weeks.  China  should fine-tune monetary policy in a pre-emptive way based on economic growth and price changes, according to a top-level meeting reports chaired by  President  Xi Jinping.  Monetary po...
Posta un commento
Continua a leggere