The disparity between the physical bullion and paper gold market could point to price manipulation in the markets, this according to E.B. Tucker, director of Metalla Royalty & Streaming.
“The difference between the price [of gold] in New York and the price in London was $70. What that says is that the people that have been arguing about manipulation in the gold market and talking about that for years is not as crazy as we once thought,” Tucker told Kitco News.
Contrary to what many investors may think, price manipulation may actually have presented a buying opportunity, Tucker noted.
“If somebody pulls down the price of Mercedes S-Class sedans, no one complains. With gold, all the gold bugs would complain, whereas I would just buy more physical ounces. Now, I could potential be towards the end of my ounce buying because now that’s changing, to the point where you’re looking at $100 to $200 premiums,” he said. “I think the manipulation was a great chance for people to get physical gold.”
Premiums on gold and silver coins have already become excessive, Tucker said.
“For me, personally, the line’s been crossed. I’ve looked at silver coins, $12 an ounce for silver, on the exchange, and $10 premiums. I know a lot of coin dealers, I called them all, they were telling me that there is no coinage…for me, paying that kind of premium is a place where I draw a line in the sand,” he said.
While gold did not rally substantially during the stock market tumble in March, the yellow metal did what it was supposed to do, which is preserve wealth, Tucker said.
“We closed up on the month under extreme pessimistic circumstances, I would say for most investors. I had people calling me saying ‘why is gold crashing?’ I said, maybe we’re looking at different charts, but it looks like it’s doing great to me, it’s doing exactly what we want it to do, which is to preserve wealth during a difficult time,” he said.
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