Bullion Bank Nightmare as LBMA-COMEX Spread Blows Up Again

by Ronan Manly
Bullion Star

The gaping price differential between spot gold and gold futures that has been plaguing the paper gold markets in London and New York for the last three weeks shows no signs of abating and is continuing to flare up.

In essence, the contango phenomenon we are seeing is one of gold futures prices trading far above spot gold prices, a sign of liquidity problems in the London gold market and a signal that something is completely broken between the world‘s two predominant “gold price discovery” trading venues – which both, by the way, trade paper gold.

As a reminder, London LBMA trades unallocated gold over the counter (OTC), a form of synthetic fractional gold derivative.

Continue Reading at BullionStar.com…