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Craig Hemke at Sprott Money: Comex (ab)use of gold EFPs has collapsed
8:40p ET Tuesday, September 1, 2020
Dear Friend of GATA and Gold:
Use of the strange "exchange for physicals" mechanism to settle gold futures contracts on the New York Commodities Exchange has diminished dramatically this year, the TF Metals Report's Craig Hemke writes today at Sprott Money.
Hemke writes: "Bank EFP use is down by as much as 75 percent versus years past. This is significant, as it betrays both a lack of physical metal and a lack of counterparty confidence.
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"This also explains why the spread between spot gold and the front-month futures contract persists. When you lack confidence in your counterparty, what was once perceived as a risk-free arbitrage becomes something quite risky indeed."
Hemke's analysis is headlined "Comex EFP (Ab)use Has Collapsed" and it's posted at Sprott Money here:
https://www.sprottmoney.com/blog/COMEX-EFP-AbUse-Has-Collapsed-Craig-Hem...
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
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