On BNN, Embry warns of failure of December gold contract

[Rajiv]

Sprott Asset Management's chief investment strategist, John Embry, went on Business News Network in Canada this morning and, interviewed by Amanda Lang, discussed, among other things, the suppression of the gold price on the New York Commodities Exchange. Embry speculated that long contract holders may call for delivery of enough December contracts as to prompt a claim of force majeure when the exchange cannot delivery enough real metal. The interview with Embry begins at the 11-minute mark and continues for about 6 1/2 minutes at the BNN Internet site here:

http://watch.bnn.ca/tuesday/#clip104603

[Guest]

Re: On BNN, Embry warns of failure of December gold contract

I read of that too Rajiv. Sooner or later ...

Sprott Asset Management's chief investment strategist, John Embry, went on Business News Network in Canada this morning and, interviewed by Amanda Lang, discussed, among other things, the suppression of the gold price on the New York Commodities Exchange. Embry speculated that long contract holders may call for delivery of enough December contracts as to prompt a claim of force majeure when the exchange cannot delivery enough real metal. The interview with Embry begins at the 11-minute mark and continues for about 6 1/2 minutes at the BNN Internet site here:

http://watch.bnn.ca/tuesday/#clip104603

[Nicolasd]

Re: On BNN, Embry warns of failure of December gold contract

Sinclair is also reporting similar scenario

[idianov]

Re: On BNN, Embry warns of failure of December gold contract

The Gold Basis is shrinking down every day for the last 7 days. The paper price is going down, while the physical price does not.

Gold Forward Rates:
Date------1m------2m------3m------6m-----12m
14-Oct-08 2.17857 2.17143 2.11429 1.87857 1.79286
15-Oct-08 2.10000 2.10833 2.07500 1.91667 1.85000
16-Oct-08 2.10000 2.09286 2.03571 1.87857 1.77857
17-Oct-08 2.00833 2.00000 1.92500 1.86667 1.82500
20-Oct-08 1.70714 1.70000 1.67857 1.73571 1.72571
21-Oct-08 1.65000 1.65000 1.63333 1.62500 1.64000
22-Oct-08 0.81000 0.81000 0.79000 0.98000 1.02000

What happens when you are short gold contract and the paper price falls below spot price?

Igor