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Gold Futures Dirty Secret (Part 2)
We ended the first part of this two part series with an unanswered question: Why has physical supply dried up now?
The answer to that question lies in the two vehicles that have made the gold carry trade possible. This is another issue that I’ve alluded to in prior issues of B&B, but I would again like to briefly explain this notion.
Gold Carry Trade
The gold carry trade takes two forms. The first is enacted by the central banks of the world. Essentially the banks use the futures market to pre-sell gold. This is a beautiful deal for the central banks when…
4Sep2008 | Oxbury Research | Comments Off | Continued
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