"Gold is little changed near a one-week high, and is marginally higher in
dollars as the dollar has retreated from a three-year high, and higher in most
currencies.
The gold market continues to digest the ramifications of gold borrowing costs
surging to the highest since the post-Lehman Brothers scramble for gold
bullion.
Gold Forward Offered Rates (GOFO) or the cost to borrow gold remains negative
and overnight the 1 month GOFO has gone from -0.106% to -0.11167%. Other
durations eased marginally.
The lack of liquidity in the the interbank London Good Delivery gold market
(400 ounce gold bars) has pushed gold forward rates, known as “gofo”, into
negative territory, meaning that gold for future delivery is trading at a
discount to physical market prices – a rare situation that has occurred only
after the Lehman Brothers collapse and near the bottom of the gold market in
1999.
The last time forwards were negative was in November 2008, when a scramble
for physical gold led a sharp price rally of 46% from $682/oz to over $1,000/oz
between October 2008 and February 2009..."
at http://www.zerohedge.com/news/2013-07-10/gold-borrowing-costs-hit-post-lehman-high-hong-kong-jewellers-and-banks-face-supply-
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