Commodity Trade Mantra

Posts Tagged ‘Negative GOFO’

Gold Shortage, Worst In 21st Century... And India Just Made It Worse

One event that may stretch the already ridiculous disconnect between physical & swap-based gold, is that India scrapped a rule mandating traders to export 20% of all gold imported into the country, in a surprise move that could cut smuggling and raise legal shipments into the world’s second-biggest consumer of the metal after China.

Gold Forward Offered Rate (GOFO) Turned Negative AGAIN: The Consequences

Historically, GOFO rates (Gold Forward Offered Rate) have only been negative twice since 1999, but have frequently moved into negative territory over the past year. We believe this is a result of on going large shift of gold from the west to the east. GOFO is back negative again, 7th time since July 8, 2013.

Chinese Physical Gold Demand YTD 369t Up 51 % Y/Y

Compared to last year, the Chinese gold demand is up 51 % over the same period – China is on schedule to establish a new record, if the world can supply any more gold. The longer this insatiable demand continues the more I start to ask myself where this gold is coming from.

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