ETF Securities report - Physical Gold Shortage Drives Gold Price Higher
Summary
London Bullion Market Association
(LBMA) gold forward offered rates (GOFO) rates have now been negative for over 7
weeks. While GOFO rates have been negative during a few exceptional periods in
the past, this is the first time they have been negative for a prolonged period,
indicating tightness in the physical market for gold traded on the LBMA. Strong
demand from Asia and developing countries' central banks, coupled with reduced
supply from gold recycling and diminished mining supply, appear to have
substantially tightened the market.
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