- The London Bullion Market Association and several major gold-trading banks have asked U.S. exchange operator CME to allow gold bars in London to be used to settle its contracts to ease disruption to trading, Reuters reports.
- The gap between gold futures on the CME's Comex exchange in New York widened above London spot prices by as much as $70/oz. - or 4% - today; the two usually remain within a few dollars of each other, and the gap skewed today's trading on the London market.
- Traders worry that air travel restrictions and precious metal refinery closures will slow shipments of bullion to the U.S. to meet contractual requirements.
- London is a key gold storage center, but it uses 400-oz. bars which must be melted down and recast as 100-oz. bars to be accepted by Comex, and the LBMA and the bank executives want CME to allow 400-oz. bars to be used to settle Comex contracts.
- The move would allow the gold to remain in vaults in London while ownership is transferred; if this happened, spot and futures prices supposedly would converge and help markets trade normally.
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