XAU/USD & XAG/USD - Gold & Silver Traders Thread

Global Prime sent to clients this:
Dear Client,
Please be advised that XAUUSD has been very illiquid and spreads have been widening to unprecedented levels. We are receiving news from various interbank dealing desks that the volatility and subsequent spread widening are due to a breakdown in Exchange for Physical (EFP) gold. Accordingly, refineries are shutting down and market makers who had short EFP positions are being adversely affected.
In order to allow continuous market pricing, we will be actively assessing and adjusting our spread filters to be wider in order to allow prices through. Please reassess your XAUUSD positions with considerations towards the current price volatility and trade with caution.

Thanks PF.

Anyone got possible explanations for why gold is moving the way it is right now (1m)?

Also for why the spread has increased by an unbelievable amount?

Thanks

your broker should have mailed you

My spread was 60¢ all day and this is very unusual.

yeap have not put on a trade since late yesterday as xag/usd spread has been 2.5-3 cents all night and day so far, it has been close to zero in the past.

just the other day i was unable to sell physical USD to retail exchanges as they also said their suppliers are not supplying..

people online are claiming that the demand for metal coins is also outstripping supply at the moment - ie, wholesalers are not selling stocks..

hate to be dramatic but wha da!

Is it fixed now? Any further communication from broker in this regard?

#GOLD / H1 / Bearish Idea

I still suffer from wide spreads overhere. You could look into future based CFDs or (micro) gold futures as an alternative.

below future spread (GC 04-20 contract)

Gold is reversing exactly where we expected it from

Spread is too high and gold has been in consolidation mode so far today.

It doesn't look any better on an hourly chart.

A little more than a day ago it became obvious that LBMA (London Bullion Market Association comprised of BNP Paribas, Citibank, Goldman Sachs, HSBC, ICBC Standard, JP Morgan Chase, Merrill Lynch, Morgan Stanley, Standard Chartered, Bank of Nova Scotia, Toronto-Dominion and UBS) who are primarily responsible for setting the spot price and CME which provides the overwhelming majority of gold futures are having problems meeting their physical delivery requirements. Spot gold is theoretically based on LBMA physical delivery (although some brokerages include the most active COMEX futures strike month -- usually but not always the "current" month -- to calculate the spot price). The question of deliverability led to the $80 differential between spot and COMEX prices which created the massive spreads for both spot and COMEX gold.

A potential breach of contract for physical deliverability goes towards suggesting a motive for CME to contribute to LBMA price suppression when they reduced leverage on COMEX gold product by a record 2/3rds in a two-week time span beyond JP Morgan Chase's market-as-a-whole explanation of the vicious circle created by volatility triggering margin increases triggering voluntary and margin call sales increasing volatility, etc. last week. While virtually all gold futures positions are closed prior to the strike date, they do have an obligation to deliver. JPMC used this requirement (albeit in ETFs) to accumulate a portion of their silver holdings a few years ago when they were putting the squeeze on Sprott or Blackrock or Citygroup in the process (Sprott, iShares, and Velocity Shares ETFs respectively).

Time to reduce exposure to gold or get out completely for a couple of days until the dust settles. There's no way to know what will happen if the LBMA and/or COMEX are forced to admit that they do not actually have the supply of physical gold they claim. Ultimately higher gold prices, yes, but what happens to the price of spot gold that doesn't exist and/or the price of leveraged paper gold without the physical gold to back it up in the interim? A third of those LBMA banks nearly bankrupted themselves when one of their most blatant price rigging schemes started to fall apart a few years ago (there was a theory that it was a double-cross by JPMC) which could easily happen again. How will the inevitable law suits and (hopefully) additional criminal investigations affect prices, margin, or availability in general if they can't get the delivery issue resolved before the impending strike date?

There is a real possibility that prices could smash through stops in both directions and create forced margin calls which will exacerbate the situation even more. Consider taking advantage of the excellent swap ratio and trade your gold positions for (what should be) far less volatile silver. Silver gaining on gold the past few sessions was very promising to my way of thinking and I've started doing exactly that; now weighted about 15% more silver than gold.

Palladium saw a 20% gain today which has me wondering about the upside potential (though I don't expect to add to my position). Non-metal-wise, nearly all REITs gained 20% or more today (one just missed my entry price by $1 before gaining 90%) plus most have an excellent dividend -- many in the double digits. The moral of the story being there are many opportunities for traders to make money if they want to take a step back from gold until the price and spread weirdness goes away.

I was a bit stumped about what to do when COMEX prices were a solid $45 more than spot. I had a COMEX contract approaching expiration that I needed to unload but there was no way to know whether spot would move up to COMEX or COMEX fall to spot or if they both end up somewhere in between. Ultimately I found the solution in the chaos of the COMEX prices.

Ordinarily, each subsequent strike contract is $3 to $5 more than the previous month but there was a point this afternoon when the April and June prices aligned and the August, which conveniently I was using as my hedge contract, was $10 less than the others -- roughly $20 less than it should be with respect to April and likewise $15 better than would be normal compared to June. Then December fell $2 under April which is usually a $20 premium. I closed out my April, June, and August contracts with actual profit and moved my long position to December which was priced $22 better than comparatively speaking and $2 in actual price action. Now that COMEX has come down $30 my overall position is down, yes, but $22 less so than would otherwise have been the case so I am quite pleased.

Now I'm taking advantage of the gold/silver ratio to convert some of my long term gold holdings to silver. If silver can outperform gold for a few sessions after this price chaos is over I plan on converting all my gold to silver and swap it back again once the ratio bottoms.

Easy

The liars messed up the physical gold delivery.

Smashin jump up could happen.

There's no real gold.... Only lies.

And that's why spread was 5 dollars for me.....

And you lie, as always.

Every broker I've seen is few dollars spread

You try to lie again ... Why???

Hi liar

Is that 8 dollars spread liar???

Didn't you say 60 cents dumpfunkel?

Nice.

Arbitrage genius

My analysis based post has been trending on LinkedIn: https://www.linkedin.com/posts/vikin...590109184-cnc1

Gold update

The gold market is trending upwards this week. The green line [1] illustrates the support for the current bullish impulse. Let's analyze the context.
2] Breakout moment. High volume represents the effort of buyers to overcome the black resistance line [3]. A chart tells us, 1520-1540 is an undervalued price per contract.
4] On the background, we have the same but opposite - the effort of sellers to break down the support line [5].
6] I plot the resistance line from the moment of breakdown. The market has "memory". On 11/Mar 1645 was overvalued price, that is why we got exhausting of the current bullish impulse as price approached 1645.
7] Bullish attempt had no success. Just a small penetration of the previous minor high (24/Mar) - this is not a strong behavior.
One of the most likely scenarios for me is breaking down the support line [1] and testing the line [8].

Gold was flat all day today so it was a waste of time trading it.