7/7/2015 – Gold And Silver Spot Prices Increasingly Detached Frome Reality by Clint Siegner, Money Metals Exchange
Gold and Silver Spot Prices An insolvent Greece has defaulted. On June 30th, officials missed repayment of billions in lMF loans and declared a banking holiday. Predictably, many Greek citizens responded to the crisis and bought gold coins. So did a lot of people here in the U.S. and around the world. You just wouldn’t know it by looking at spot prices.
The regular disconnect between the futures markets, where spot prices are set, and the physical markets reveals a growing problem. The link between the spot price and physical demand is thin at best. That is why the base price for gold coins in an Athens coin shop can get cheaper, but the all-in cost of buying the coins goes up as the line of buyers grows.
The availability of metals in a retail form is one cause. But the disconnect also has to do with the mechanism for setting the spot price – the futures markets… read more