An unusually wide spread between gold prices for Comex futures and the London bullion market this week highlighted both pricing and delivery issues tied to the shutdowns of gold operations aimed at preventing the spread of the COVID-19 pandemic.
Metals traders were surprised to see Comex gold futures and London cash spot market prices so far apart on Tuesday. Traders said London spot prices on Tuesday were as much as $100 an ounce less than the gold futures price on Comex.
“London is the heart of global precious metals trading,” said Adrian Ash, director of research at BullionVault. The latest data show that the U.K. capital’s professional vaults hold the world’s largest commercial stockpiles of precious metals, equal to 10 months of global gold-mine output and 15 months of world silver-mine output, according to Ash.
But right now, “those stockpiles can’t reach other global trading centers so easily,” said Ash. “Monday’s UK lockdown announcement sparked Tuesday’s $100 premium for New York settlement and it’s what’s spooking traders in Comex derivatives.”
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