Discussion in 'Commodity Futures' started by jsv416, Feb 13, 2009.
Don't know about the oil for gold swap bit but there is no question that there is a very direct correlation between the SPR filling with oil rising and the SPR not filling or releasing with oil price falling.
I'm not particularly knowledgeable about either of these two commodities but if I read your article correctly it is saying that gold and oil are being swapped in their respective markets. It is not saying that gold is being swapped for oil or vice versa.
It is an interesting piece and again, being ignorant, what surprises me is that the actions of the government can have such a profound effect on the price of oil. Perhaps it was a 'catalyst' for the fall, as in "... the USG is no longer stockpiling oil, therefore ...". I don't know. Do you have any comments on this point?
My thoughts are that if the Gov. is(or was) pulling light sweet out of the SPR and putting into the open market to try to put a cap on prices then they are incredibly stupid, replacing it with heavy sour nonetheless.
My original point in posting the article was to point out that it is possible that Gov. has its hands in "free" markets and some markets are in fact manipulated. According to the article it is Gold and Oil. Ultimately, I believe, that any commodity thats price is manipulated can only be done so for so long until a drastic repricing, or rebalancing if you will, occurs. It could go on for years, technically, but at some point the facade falls and true price rationing will occur.
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