Sprott Physical Gold Trust (PHYS)

[Pro-Life]

LBMA colludes with the COMEX – To lockdown the global gold market?
25 Mar 2020 04:54 - Ronan Manly

https://www.bullionstar.com/blogs/ronan-manly/lbma-colludes-with-the-comex-to-lockdown-the-global-gold-market/

Conclusion

COMEX 100 oz gold futures contracts are deliverable in name only. In terms of COMEX gold futures trading, practically no contracts ever reach delivery. Just a few basis points of a percent. And delivery on the COMEX just means a warrant (receipt) from one of the approved COMEX warehouses changes hands. Getting any gold bar out of the COMEX vaults once you have a warrant is a totally different ballgame. The vast majority of COMEX 100 oz gold futures are never delivered, they are offset (closed out) and cash-settled, or else rolled over. his is essentially the same as unallocated gold in the London market, both are just cash-settled gold derivatives. In fact, 100 oz gold bars are really not common at all. Why then would the LBMA and its bullion banks be even concerned about 100 oz bars that rarely ever get delivered.

So what is exactly going on here? Who is bailing out who? The same bullion banks operate in both markets. Is the LBMA bailing out some of its bullion bank members that have blown up while at the same time propping up the COMEX edifice? If so, with the LBMA just being a trade association with the bullion banks at the helm, where are the 400 oz gold bars coming from? The HSBC or JP Morgan vaults in London? Or that famous gold lender of last resort, the Bank of England?

Or is it just a management of perceptions exercise with no gold bars involved, to try to coax back the spot and futures prices by telegraphing that the gold that is backing the spot price (which is actually unallocated non-existent gold) is now also backing COMEX gold futures. While neither of the two can be delivered, the same non-gold now backs both, so voila, there is no need for any price divergence!