by Chris Powell, GATA:
Dear Friend of GATA and Gold:
Bron Suchecki of the Perth Mint writes tonight that the key measure of stress in the paper gold market is the coverage ratio, the percentage of open interest that is backed by real metal on deposit; that the current coverage ratio on the New York Commodities Exchange, 19 percent, is within the normal range; and that “while most of the shorts don’t have the metal, most of the longs don’t have the cash.”
Suchecki adds: “We know this because of all the talk about margin calls causing people to have to sell. Think about that: If they couldn’t meet the margin calls, then it means they didn’t have the money to stand for delivery.”
Suchecki’s commentary is headlined “Comex Stock Drawdown: Single Most Important Metric to Watch” and it’s posted at 24hGold here:
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