I noticed that the front month Comex Gold market depth is very thin. Silver had much better market depth even though gold volume is much higher than silver. I've also seen the spread between the bid and ask 5 ticks wide, and currently 12 ticks wide. Any ideas why?
Gold is being 'paper-traded' (futures). That means that the volume that is being traded at the future exchange, is never exact the real gold volume that actually exists. (Part-reserve; the idea behind this is, that at none point in time all holders of futures stuck to their right to get real gold delivered for it. Actually this works, but not in a crisis). Now, that the covid raised and many manufacturers turned down their production, much more futures are being traded than gold exists. This is why there is also a big gap between paper and real gold price. This is the reason for the bid ask gap: Buyers must pay a higher security bonus.