Now that I have a firm reputation as a goldbug (WTH...?!, a stack totaling... zero oz—#882690)... Matt Levine decides to write about gold. So I gotta cover it!
So, we have this framework:
hashtag bitcoin connection (e.g., here, but a story for another day).
Sometimes the physical world tears through the layer of abstraction. The coffee or cocoa beans are stale, or someone discovers that the nickel in the warehouse is actually a bag of rocks.
From the WSJ piece he cites:
Traders at major banks are racing to yank gold from vaults deep below London’s medieval streets and from Swiss gold refineries and ferry them across the ocean.
As far as I can tell, it's a story of spot-vs-future discrepancy (involving expectations of new tariffs somehow), and that banks decide to deliver physical gold spot rather than take the futures paper losses. Funny:
Gold no longer exists purely in abstract commodity space; there is New York gold and London gold, and New York gold is worth more. You can’t move between them on your computer, but you can on an airplane.
...or, as Jack Mallers so ironically said in the Madeira conference: or in your butt!
Only bitcoin moves in your brain
Only bitcoin moves on a computer
Traders are apparently flying gold bars around the world for size/melting purposes too:
Comex contracts require a different size of bar, so traders need to send gold to Swiss refiners to recast it before flying on to the U.S. Sometimes, they cut out the first European leg by handing the refiner gold in London in exchange for the right size of bar, or flying bullion in from Australia instead.
Even in abstract commodity space, the size of the bar matters.
What a wild (pre-bitcoin!) monetary world!
non-paywalled here: https://newsletterhunt.com/emails/157635