LIVE Gold Prices $  | E-Mail Subscriptions | Update GoldSeek | GoldSeek Radio 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

GoldSeek.com to Launch New Website
By: GoldSeek.com

Is Gold Price Action Warning Of Imminent Monetary Collapse Part 2?
By: Hubert Moolman

Gold and Silver Are Just Getting Started
By: Frank Holmes, US Funds

Silver Makes High Wave Candle at Target – Here’s What to Expect…
By: Clive Maund

Gold Blows Through Upside Resistance - The Chase Is On
By: Avi Gilburt

U.S. Mint To Reduce Gold & Silver Eagle Production Over The Next 12-18 Months
By: Steve St. Angelo, SRSrocco Report

Gold's sharp rise throws Financial Times into an erroneous sulk
By: Chris Powell, GATA

Precious Metals Update Video: Gold's unusual strength
By: Ira Epstein

Asian Metals Market Update: July-29-2020
By: Chintan Karnani, Insignia Consultants

Gold's rise is a 'mystery' because journalism always fails to pursue it
By: Chris Powell, GATA

 
Search

GoldSeek Web

 
Gold traders are paid not to redeem Comex EFPs, London sources say

By: Chris Powell

 -- Published: Friday, 27 March 2020 | Print  | Disqus 

Dear Friend of GATA and Gold:

What the heck are those mysterious "exchange for physicals," the mechanisms by which contracts to buy gold on the New York Commodities Exchange are neither fulfilled by delivery on the Comex nor settled for cash there but transported for supposed delivery elsewhere?

The mechanism long has been incorporated by the Comex trading system but was described as an "emergency" procedure undertaken upon agreement by buyer and seller -- except that the use of this "emergency" procedure has exploded in the last year, involving tens of thousands of contracts and, nominally, hundreds of tonnes of gold.

In one respect this is not so surprising, since there never has been much tonnage in Comex gold vaults, with nearly all Comex contracts settled for cash. But apparently physical demand over the last year has risen enough to cause sellers to need to source gold elsewhere.

The presumption is that the EFPs shift a seller's delivery obligations off the Comex to bullion banks in London. But this raises another issue, since so many EFPs have been issued in the last year that if delivery really was being claimed for them, unallocated metal in London -- metal available for sale, rather than metal being vaulted for exchange-traded funds and other institutions -- would be wiped out. In January Bullion Star researcher Ronan Manly calculated that fewer than 1,200 tonnes of gold in London were really available for trade:

https://www.bullionstar.com/blogs/ronan-manly/lbma-claims-record-amount-...

Indeed, sources in the London gold market say that few EFPs ever claim delivery. Rather, these sources say, EFPs are usually cash-settled in London with their claimants paid cash bonuses that are never reflected in the gold price, which would be much higher if the bonuses were reflected.

But as the tightness of gold supply in London increasingly has been recognized in recent months, EFP claimants are said to have been demanding larger bonuses against the risk that the gold will run out, making their EFPs worthless.

Despite the "physicals" in their name, the vast increase in their use suggests that most EFPs have not been resolved by any delivery of metal. So those using and sustaining the mechanism must have other purposes -- like sustaining the increasingly creaky fractional-reserve gold banking system.

Whatever is happening with the EFPs, their enormous use in the last year is new and indicates some big change in the gold market, and it must be an especially sensitive change because Comex operator CME Group, the U.S. Commodity Futures Trading Commission, and the U.S. Office of the Comptroller of the Currency -- nominal regulators of the gold market and its bullion banks -- refuse to explain what it means.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

* * *

Toast to a free gold market
with great GATA-label wine

Wine carrying the label of the Gold Anti-Trust Action Committee, cases of which were awarded to three lucky donors in GATA's recent fundraising campaign, are now available for purchase by the case from Fay J Winery LLC in Texarkana, Texas. Each case has 12 bottles and the cost is $240, which includes shipping via Federal Express.

Here's what the bottles look like:

http://www.gata.org/files/GATA-4-wine-bottles.jpg

Buyers can compose their case by choosing as many as four varietals from the list here:

http://www.gata.org/files/FayJWineryVarietals.jpg

GATA will receive a commission on each case of GATA-label wine sold. So if you like wine and buy it anyway, why not buy it in a way that supports our work to achieve free and transparent markets in the monetary metals?

To order a case of GATA-label wine, please e-mail Fay J Winery at bagman1236@aol.com.

* * *

Support GATA by purchasing
Stuart Englert's "Rigged"

"Rigged" is a concise explanation of government's currency market rigging policy and extensively credits GATA's work exposing it. Ten percent of sales proceeds are contributed to GATA. Buy a copy for $14.99 through Amazon --

https://www.amazon.com/Rigged-Exposing-Largest-Financial-History/dp/1651...

-- or for an additional $3 and a penny buy an autographed copy from Englert himself by contacting him at srenglert@comcast.net.

* * *

Help keep GATA going:

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16

 

 


| Digg This Article
 -- Published: Friday, 27 March 2020 | E-Mail  | Print  | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2019



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer


Map

The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, Gold Seek LLC, is strictly prohibited. In no event shall GoldSeek.com, Gold Seek LLC or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.