CoinMiner

Missed the Move in Gold? Crude Oil Could Be an Alternative Commodity Play

Hi, I like paired trades myself.

One thing not yet noted here, however, is that much of the GLD rise has been underpinned by physical Au purchases. China, India and other asian and mid-east countries have been strong buyers of physical gold for the past couple years.

This forces up the paper price, and GLD - which must maintain a certain level of physical gold in storage (at least according to their prospectus) - must then purchase even more physical gold.

You can verify this thesis by noting the premium that physical gold, especially small fractional gold pieces, has held over the spot price the past 12 months (although the premium has backed off recently).

*Extremely few organizations or banks or individuals hold physical oil.*

p.s. I like your web site.