Via Bloomberg

Gold

You may have noticed something going strange with your gold spreads yesterday? A number of people contacted me to mention a widening of the spreads.

On Bloomberg's Markets Live Blog there was a piece about the massive spread opening up between the futures price and the spot price. Contracts for delivery were trading at a $60 premium for London. The last time a spread that high opened up was in the 1970's.

A similar event happened back in September when the spread difference between spot and future price averaged $10. Market participants were blaming refinery shut downs, but a number of people were contacting me during the day to mention that their gold spreads had become very wide. I am not sure why the spread opened up between the physical price and the spot price, but if any readers have the answer, please can you leave it in the comments below.

Today's post serves as a gentle reminder to look out for wide spreads before hitting buy or sell, especially in these volatile market conditions.