Gold at a four-year low should find solace after rates at which bullion is lent for dollars turned negative, signaling tighter supply, Natixis SA said.
The Chart of the Day shows the three-month gold forward offered rate has turned negative on a weekly basis. Prices rose in three of the past four times this occurred since last year. There's now a "limited window" to bet on a gold rebound, Natixis economist Evariste Lefeuvre said in a Nov. 10 report.
A form of backwardation, when earlier prices are more expensive than for later dates, the negative GOFO rate signals that dealers are paid to lend metal against cash, rather than paying for the privilege. As bullion slid to the lowest since April 2010 this month on a stronger dollar and outlook for higher interest rates, demand for U.S. Mint coins increased. ...
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