Jul. 14 at 7:26 PM
$SPY $JNUG $NUGT $AEM $NAK
The Shanghai premium (the price difference between SGE gold and COMEX/LBMA gold) is likely to widen, indicating that physical metal in China is becoming scarcer and more valuable than the paper contracts representing it.
East vs. West: While Western markets (COMEX, LBMA) remain dominated by paper futures and ETF flows, the Chinese market is becoming increasingly physical-only. This could lead to a situation where the "global" spot price (largely set in London/New York) trades at a discount to the actual cost of buying metal in Asia.
Arbitrage Opportunities: If the paper price drops due to liquidations while the physical price in Shanghai remains high, arbitrageurs may step in to buy cheap paper gold in the West and take delivery in the East, eventually forcing the prices to converge at a higher level.
