Significant Progress For Bitcoin: Gold Market Is In Historical Jam In New York!

The gold market is facing historical congestion as investors turn to gold as a safe haven in the period when the new type of coronavirus (COVID-19) virus outbreak has narrowed the physical demand. While the gold market in New York has narrowed the global pandemic physical transaction routes, at the same time, it faced a historical congestion with investors turning to gold as a safe haven.

As metal refineries are closed and flights are stopped in an effort to contain the virus, there is a problem in New York whether there is enough gold available against futures contracts traded in the Comex market. As of Tuesday, the number of positions held open in April futures gold contracts is 195,604 contracts, which corresponds to 19.6 million ounces of gold. Comex warehouses have 8.7 million ounces of gold that can be delivered.

“This is something we haven’t seen in a generation,” said Tai Wong, director of metal derivatives transactions at BMO Capital Markets. The refineries were not closed in either war or major financial crisis or natural disasters, ”he said.“ This has never happened before. And it happened very quickly. ”

The concerns about supply and the gold purchase rush have led to the highest gap in the 10-year gap between gold futures in New York and spot gold prices in London, which is how helpless investors are finding safe ports in the turmoil caused by the virus. is showing. The New York-London price gap has not been so wide since the 1980s, when the Hunt brothers cornered the silver market and raised the gold futures to $ 850 per ounce, a record level that could not exceed 25 years.

The June futures contract rose as much as 7.7 percent in New York on Tuesday, resulting in a price gap in London with spot gold up to $ 67.57. Considering the data dating back to the 1970s, the biggest difference between the most active contract and spot gold was seen at $ 67 in 1980. Futures gold contracts remained unchanged at 12.26 on Singapore time at Wednesday at $ 1.662.40 per ounce.

Representing gold market participants in London, the group said on Tuesday that they are working with Comex and others to ensure physical delivery and effective functioning of the global gold market in New York. The London Bullion Association said that volatility in Comex futures affected the transaction volume.

Another indication of the tightening in gold futures was that the April futures contract was traded 20 dollars more on Tuesday than the most actively traded contract. This gap dropped to $ 8 on Wednesday.

On the other hand, it is seen that investors are located in “digital gold” Bitcoin. The largest digital asset appreciated greatly in the days and is traded above $ 6,500 at the time of writing.