RE:RE:Physical buying comex and the perfect stormI think the one month is in backwardation, premium to get it now.
the other 2 months should go into backwardation now as gold is bullish after the news.
The bullion banks can default on delivery and settle in cash but I think they usually go bankrupt after that. The problem with that is the only way to stock the vaults after a default is to buy physical on the open market which would require huge amounts of capital and faith in the paper system.
the bullion banks could default to bullion sellers but then there would be massive shortages of gold and prices would rocket until it was sold out. the comex wouldnt have enough money to buy 300tons of gold at 5k - 20k driving the price up.
They really only have one choice is to let the paper price rise to slow physical buying before its too late and get physical sellers to buy from.