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Nervous Bankers Leave the Gold Market Stuck in Disconnect

  • Refinery closures and grounded flights have widened the spread
  • Volatility, virus-led logistics have increased trading risk
Gold Production At The JSC Krastsvetmet Precious Metals Plant
Photographer: Andrey Rudakov/Bloomberg
Updated on

Gold has rarely been a hotter trade, but the world’s two most important markets remain out of sync. In New York, the price of gold topped $1,750 for the first time in seven years on April 9. In London, it still hasn’t caught up.

The dislocation first blew out in late March, when disruptions from the coronavirus sparked concerns among traders about getting gold to New York in time to settle futures contracts. In a chaotic couple of days, the premium for New York futures over the London spot price rose above $70 -- the highest in four decades.