Gold Futures Offer Many Ways to Make Money: Hoffman

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Nov. 13 (Bloomberg) -- Bloomberg's Scarlet Fu and Bloomberg Industries’ Kenneth Hoffman put futures in focus with a look at gold ETFs and future physical demand in "On The Markets." They speak on Bloomberg Television's "In The Loop."

Are for a futures trader.

Futures traders, there are a lot of ways they can make money.

One of the ways they can make money is through something called -- what is the difference between the price today and in the future?

If the price is higher in the future, that is called -- and if it is lower, that is called -- and what we have seen is despite the price of gold over the last six months dropping, how much you want to pay going out five years has risen by 50%, and there is a reason we believe that number is occurring, which is a lot of people are worried if the gold is going to be available in the future to buy.

In the future to buy, and what does this have to do with demand out of china?

We did see some small sign of physical demand in china, which caught a lot of people by surprise.

Exactly fair and what we have seen this year is a really interesting trend.

In the past where you would see gold sold, it would sit in the same fault in london.

This year it has been quite different.

What we have seen is about 24 million ounces of gold leaf london, go to switzerland where it is melted down into smaller sizes, shipped to hong kong, and then it goes into china.

We have seen 24 million ounces go out of london and toys 6 million ounces go into china.

-- and 26 million ounces go into china.

What's a dozen to china, it is not coming back out.

Traders are worried if there is a real big increase in demand for gold, that that gold is not sitting there in london, it is in china and cannot come back out.

Got you.

We talk about the fed is tapering and how that schedule could start in december, as early as next month.

What would be the bullish catalyst for gold to break out of this range?

Gold has been stuck in this $1200 to $4000 range.

It falls to $1200 when people are worried about tapering, it rises to $1400 when people are thinking about demand in china and india.

Who knows where we will be from here?

A december taper would be bearish for gold.

All right, thank you so much.

We are on the markets once again in 30 minutes.

This text has been automatically generated. It may not be 100% accurate.


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