For general commodities, it is not uncommon for spot premium to be upside down, which is often affected by the continuous decline of inventory. It is extremely rare that there is a "spot premium" in the gold market. Unlike other commodities, gold is not consumed, but stored by people. Considering the storage cost and opportunity cost, there is always a premium between futures price and spot price, and between far-month contract and near-month contract.
Meanwhile, the supply of gold has been relatively stable. It can be said that there is hardly a real shortage of gold, so once there is a "spot premium" in gold, it is easy for investors to carry out spot arbitrage. The existence of spot arbitrage makes the "spot premium" of gold difficult to maintain.
Extended data:
The part where the forward futures price exceeds the near forward price is called "premium"; If the forward futures price is lower than the recent futures price, the spot price is higher than the futures price, and the basis is positive.
The concept of basis refers to the difference between the spot price of a specific commodity at a specific time and place and the futures price of the commodity in the futures market, that is, basis = spot price-futures price.
Basis consists of two components, namely "time" and "space" between spot and futures markets. The former reflects the time factor between the two markets, that is, the holding cost of two different delivery months, including storage fee, interest, insurance premium and loss fee, in which the change of interest rate has a great influence on the holding cost;
The latter reflects the spatial factors between the spot market and the futures market. Basis includes transportation cost and holding cost between two markets. This is also the basic reason why two different locations have different basis differences at the same time.
At present, there is no futures market and spot market in the United States, which we often say in academic circles. The actual situation is that the price formed by the futures exchange is the benchmark price of spot circulation, which is just a logistics system. Due to the differences in origin and quality, both parties need to talk about a premium of futures price when trading spot, namely:
Transaction price = futures price+? Incremental discount
In other words, futures market and spot market are just a distinguishing concept in academic research. In practice, they are a whole market. Only when futures pricing and spot logistics play an organic role can the market mechanism operate normally.
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