This is probably the most down to earth explanation I have heard for what has been going on over the last few weeks. No hysteria, just facts as he sees it.
Was this situation an opposite of what happened during Covid where they had plenty of bars, but just not in the correct deliverable weight for comex?
Right. He’s a long-standing professional on the industry is closely affiliated with the European business.He knows the industry better than most. At one point his firm sharps Pixley in UK was the biggest gold broker in the world. Gold people unfairly demonize him as “working for the man“.
Notwithstanding that on Tuesday 23 March, the London market had seen gold bid-ask spot spreads blowing out to US$ 100 and LBMA market makers breaching their responsibility to actively provide two-way price quotations, the LBMA forged ahead with pinning the blame on COMEX, and bizarrely offered to support COMEX to ‘facilitate physical delivery in New York’.
What this meant, said LBMA-embedded news wire Reuters, was that:
“the LBMA and executives at major gold-trading banks asked CME to allow 400-ounce bars to be used to settle Comex contracts”
Next day, Wednesday March 25, the CME played out its part of the script, announcing the launch of a “new gold futures contract with expanded delivery options that include 100-troy ounce, 400-troy ounce and 1-kilo gold bars” but a contract which still has a unit size of 100 ounces, identical to the COMEX flagship GC 100 contract.
Enhanced Delivery – When Black is White
Who launches a new exchange traded product in the middle of the biggest financial crisis for generations? Only a set of panicking bankers it would seem. And who has a fully developed new gold futures contract waiting in the wings to roll out the day after the gold market blows up? The same panicking bankers.
Unbelievably, the CME has christened this new contract as the ‘Gold (Enhanced Delivery) futures contract” (code 4GC) which will, according to the CME script “enable delivery in New York City of Kilo, 100 oz and 400 oz bar sizes for maximum flexibility.”
With COMEX gold futures de facto physically deliverable in name only and loco London gold never delivered on to the COMEX despite the disinformation campaign from the LBMA, the last thing on the minds of the CME-LBMA axis is ‘delivery in New York City’.
What is on the minds of the LBMA bullion banks though is that, unable to control the COMEX gold price contango, they are now rushing to put in place a tighter leash for the existing GC 100 ounce contract, which they will now have with inter-commodity spreads between 4GC and GC, all under the control of unallocated gold in London.
"And the reality is that over the last 2 months gold miners will have generated about 600 tonnes of fresh new metal …"
Does it matter where that material is located? I think that's the point of the current drama.
U.S. gold: highest value. Foreign gold: lower value. China gold: unavailable.
i have issues with some of the logic
This is probably the most down to earth explanation I have heard for what has been going on over the last few weeks. No hysteria, just facts as he sees it.
Was this situation an opposite of what happened during Covid where they had plenty of bars, but just not in the correct deliverable weight for comex?
Right. He’s a long-standing professional on the industry is closely affiliated with the European business.He knows the industry better than most. At one point his firm sharps Pixley in UK was the biggest gold broker in the world. Gold people unfairly demonize him as “working for the man“.
COMEX uses 1Kg bars!?!
There are serious problems with the logic. .I will address them frankly in private
Flashback to 2020, from a Bullionstar article:
Notwithstanding that on Tuesday 23 March, the London market had seen gold bid-ask spot spreads blowing out to US$ 100 and LBMA market makers breaching their responsibility to actively provide two-way price quotations, the LBMA forged ahead with pinning the blame on COMEX, and bizarrely offered to support COMEX to ‘facilitate physical delivery in New York’.
What this meant, said LBMA-embedded news wire Reuters, was that:
“the LBMA and executives at major gold-trading banks asked CME to allow 400-ounce bars to be used to settle Comex contracts”
Next day, Wednesday March 25, the CME played out its part of the script, announcing the launch of a “new gold futures contract with expanded delivery options that include 100-troy ounce, 400-troy ounce and 1-kilo gold bars” but a contract which still has a unit size of 100 ounces, identical to the COMEX flagship GC 100 contract.
Enhanced Delivery – When Black is White
Who launches a new exchange traded product in the middle of the biggest financial crisis for generations? Only a set of panicking bankers it would seem. And who has a fully developed new gold futures contract waiting in the wings to roll out the day after the gold market blows up? The same panicking bankers.
Unbelievably, the CME has christened this new contract as the ‘Gold (Enhanced Delivery) futures contract” (code 4GC) which will, according to the CME script “enable delivery in New York City of Kilo, 100 oz and 400 oz bar sizes for maximum flexibility.”
With COMEX gold futures de facto physically deliverable in name only and loco London gold never delivered on to the COMEX despite the disinformation campaign from the LBMA, the last thing on the minds of the CME-LBMA axis is ‘delivery in New York City’.
What is on the minds of the LBMA bullion banks though is that, unable to control the COMEX gold price contango, they are now rushing to put in place a tighter leash for the existing GC 100 ounce contract, which they will now have with inter-commodity spreads between 4GC and GC, all under the control of unallocated gold in London.
https://www.bullionstar.com/blogs/ronan-manly/comex-cant-find-a-400-oz-bar-for-its-new-400-oz-gold-futures-contract/