Chaos in Gold Markets Ripples to Other Precious Metals
- Silver, platinum exchange deliveries surge as banks reposition
- Falling open interest signals glut of metal on CME exchanges
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The chaos that engulfed the gold market in March as the global pandemic choked off physical trading routes is rippling through other precious metals, resulting in price dislocations and a surge in exchange inventories for silver and platinum.
The gold market was thrown into turmoil in March as lockdowns grounded planes and closed refineries, leading traders to worry they wouldn’t be able to get gold to New York in time to deliver against futures contracts. That caused futures, which typically trade close to the London spot price, to soar to a premium, inflicting losses on banks that struggled to close arbitrage bets and spurring them to shift some positions out of New York futures.