Learn How The COMEX Situation Helps Gold Eagles Directly At Gold-Eagle.org

February 24, 2010 – As options contracts for February were pressured downward by a negative Consumer Confidence Index report, supply concerns on the COMEX are suggesting that now may be the time to buy Gold Eagles and other gold assets. Gold prices on yesterday’s expiry date ended the day ten cents higher than the March contract price. This condition indicates a coming supply shortage, a state which could lead to much higher gold prices.

This condition where current spot prices are higher than futures is called backwardation as opposed to the typical condition of contango. Backwardation is so rare that there has only been a few hours of it recorded since futures trading began on the Winnipeg Commodity Exchange in 1972. This condition is seen by many experts as the sign of an imminent physical supply squeeze, which is generally followed by a significant price increase.

If this condition continue for any length of time, investors should strongly consider purchasing American Gold Eagle bullion and other forms of gold. The rarity of this event suggests an investment environment that could change rapidly, leaving investors that are slow to react without the ability to take positions before it is too late.

Gold bullion is an excellent investment vehicle for such short-term opportunities. Relying almost exclusively on the spot price of gold, bullion allows investors to take positions quickly and profit from a highly liquid investment. While this backwardation is taking place, investors should evaluate their portfolios and consider buying Gold Eagles and other forms of investment gold. 

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Joshua Harris

Senior Staff Writer - Gold-Eagle.org