Gold Spot Price Higher Than Futures Prices For First Time Ever

For the first time ever yesterday. the spot price of gold traded higher than the futures price where investors or speculators accept the delivery of gold at a pre-determined later date at a pre-determined price.

Typically, the futures price equals the spot price plus the return you would receive if you took your funds and invested in a risk-free asset such as a Treasury Bill.

Most of the business media focused on this and indicated that investors were demanding ownership in physical gold rather than an exchange traded fund or some other derivative due to the uncertainty in todays economy.

This may be true to some extent. However, as Dennis Gartman reported in his daily report, the return on Treasury Bills are negligible. A 90 day treasury-bill is currently yielding in the vicinity of 1/100th of a percent so the spot price and futures price should be almost identical all things being equal.

Only time will tell if this situation will change going forward. What are your thoughts regarding gold investing? Will investors demand to have actual gold in their posession or will they be satisfied owning a derivative that participates in any upside in golds price? Your comments are greatly appreciated.