Possible default in December gold??

[InvestVision]

Quote from nazzdack:

1) Gold is a "financial" commodity. Its carrying charges are dominated by short-term interest rates, which are very low, which translates into small "carry".
2) Crude oil is a "physical" commodity. It's carrying charges and premiums are related to supply expectations, which can be "all over the place".

Thanks nazzdack .
So I assume the gold 1 year future contract premiums are always similar to this $1000 ( more or less based on small change in interest rates ..)

 

[achilles28]

Max Keiser confirmed the rumor about a December COMEX default on gold.

Says a bunch of playas gonna take delivery next month because they know comex has been spec'ing the price downward.

No idea if its true.

Considering the insane amount of printing over the last decade, and forthcoming, yea, I think there's a slight chance investors will start taking big delivery.

 

[achilles28]

The rumor according to Max, the parties taking delivery are major gold producers and investors. An attempt to stop the downward manipulation by COMEX thats put many gold producers out of business!

 

[Mecro]

Quote from Corelio:

"I don't know what desk you work on, but I feel sorry for whoever's money you are trading."

I think your last comment applies here...

That's funny cause the question I ask has been speculated upon by many long time traders & investors. Noone can figure out who has been selling the contracts. Noone has pointed any evidence that COMEX even takes positions.

While you would not even know where to check on physical versus paper data, as easy as it is to find.

 

[Mecro]

Quote from achilles28:

Max Keiser confirmed the rumor about a December COMEX default on gold.

Says a bunch of playas gonna take delivery next month because they know comex has been spec'ing the price downward.

No idea if its true.

Considering the insane amount of printing over the last decade, and forthcoming, yea, I think there's a slight chance investors will start taking big delivery.

Where does it state that COMEX takes proprietary positions?

http://www.nymex.com/ss_main.aspx?pg=0

That's the official stance of the exchange. If it's a bunch of traders selling, then it's just a bunch of speculators going bankrupt OR running up spot in a covering frenzy. This has happened before, by the way.

 

[thriftybob]

Its just a rumor.

My guess is a lot will take delivery, but no default, and the next expiration, supplies will be a lot tighter.

 

[achilles28]

Quote from Mecro:

Where does it state that COMEX takes proprietary positions?

http://www.nymex.com/ss_main.aspx?pg=0

That's the official stance of the exchange. If it's a bunch of traders selling, then it's just a bunch of speculators going bankrupt OR running up spot in a covering frenzy. This has happened before, by the way.

Hey, I'm just recapping what he said, dawg.

 

[Mecro]

Quote from achilles28:

Hey, I'm just recapping what he said, dawg.

I know and some industry insiders have said the same but the exchange does not even have any incentive to take any proprietary positions ever. Unless someone is pulling the strings from behind the scene.

I think mostly likely scenario is a scramble to cover to avoid deliveries.

 

[jeb9999]

Quote from Mecro:

I know and some industry insiders have said the same but the exchange does not even have any incentive to take any proprietary positions ever. Unless someone is pulling the strings from behind the scene.

I think mostly likely scenario is a scramble to cover to avoid deliveries.

The shorts normally cover to avoid delivery, so why is December going to be different?

 

[Mecro]

Quote from jeb9999:

The shorts normally cover to avoid delivery, so why is December going to be different?

Cause you can settle the delivery with a cash transaction, which is a better option if you just want to lock in gain based on the net dollar amount.

The premonition is that investors & dealers are buying contracts not to speculate but to take delivery at the spot price. So they will demand the actual product and won't settle for the equivalent cash amount.