It only leads to an arbitrage if the differential is sufficient to buy on Comex and sell on the SGE. I suspect it is more a case of outright buying for delivery from mostly non-Chinese sources. The run up on Comex is being driven by a combination of the marginal supply of bullion being scarce, and speculators (i.e. hedge funds) having sold out their positions trying to get back in. I don't see the powers that be being able to control the price any more.
Hi Alasdair. Thank you for your substack, it’s a great resource. Am I right in thinking that the SGE premium over Comex is leading to a viable physical arbitrage? If so, then those who wish to control the price of gold on Comex can only do so at the risk of losing control over the physical bullion which heads east never to return. Is this realization behind the recent run-up in Gold on Comex? That is, the powers that be will allow paper Gold to rise in order to keep physical Gold in the West because an export ban is their only other alternative?
Hi Alasdair, I would like to learn the basics of future markets, is any book or on line content You can recommend? I enjoy a lot Your substack and has been a great help to really understand the foundation of economics and finance.
It only leads to an arbitrage if the differential is sufficient to buy on Comex and sell on the SGE. I suspect it is more a case of outright buying for delivery from mostly non-Chinese sources. The run up on Comex is being driven by a combination of the marginal supply of bullion being scarce, and speculators (i.e. hedge funds) having sold out their positions trying to get back in. I don't see the powers that be being able to control the price any more.
I'm sure there are suitable books, but I suggest you look for explanations on the net. Sources like Wikipedia might be a good place to start.
And thanks for your kind comments.
Hi Alasdair. Thank you for your substack, it’s a great resource. Am I right in thinking that the SGE premium over Comex is leading to a viable physical arbitrage? If so, then those who wish to control the price of gold on Comex can only do so at the risk of losing control over the physical bullion which heads east never to return. Is this realization behind the recent run-up in Gold on Comex? That is, the powers that be will allow paper Gold to rise in order to keep physical Gold in the West because an export ban is their only other alternative?
Hi Alasdair, I would like to learn the basics of future markets, is any book or on line content You can recommend? I enjoy a lot Your substack and has been a great help to really understand the foundation of economics and finance.