Kitco gold spreads

[Southernguy]

A lot has been happening in the gold market lately. Today I checked Kitco buy-sell spread for 1 kilo bars: 9.8%. Big spread also in 1 ounce coins, etc: Usually was, not a long time ago, around 3%.
Seems to be a big shortage or physical.
There is also an abnormal spread between spot and futures. That said by some supposed specialist at Zerohedge.
Any comments?

[Woodsman]

Re: Kitco gold spreads

Did not read the article, but the wide spread is definitely something I've seen with the local dealers I've long worked with. And that assumes there's even an inventory to buy. My guys are all but empty-handed.

[globaleconomicollaps]

Re: Kitco gold spreads

Did not read the article, but the wide spread is definitely something I've seen with the local dealers I've long worked with. And that assumes there's even an inventory to buy. My guys are all but empty-handed.

I listened to Jeff Christian yesterday. He makes a good case that we are looking at a temporary problem that will resolve itself after the planes are flying again. On the other hand there is this:

https://www.youtube.com/watch?v=la8odjzAIcw


I listen to things like this and I am bewildered. What exactly is the GOFO and why should I care? It seems like a bunch of inside baseball. Maybe I need a dummies guide.

[Woodsman]

Re: Kitco gold spreads

...What exactly is the GOFO and why should I care? It seems like a bunch of inside baseball. Maybe I need a dummies guide.

You're no dummy:

The Gold Forward Offered Rate (GOFO) is the swap rate for a gold-to-U.S. dollar exchange. In other words, it is a rate at which someone is ready to lend gold on a swap basis against greenbacks (the benchmark used to be quoted by a few banks involved in the rate-setting process which were prepared to lend gold to each other). For example, if someone owns gold and wants to borrow U.S. dollars, he can use gold as collateral to secure the loan. The GOFO is the interest rate on that loan.

https://www.kitco.com/commentaries/2...ld-Prices.html

[shiny!]

Re: Kitco gold spreads

Did not read the article, but the wide spread is definitely something I've seen with the local dealers I've long worked with. And that assumes there's even an inventory to buy. My guys are all but empty-handed.

Same here.