The cost of borrowed gold, known as the gold-lease rate, has zoomed to twenty times its normal rate, reports the Financial Times.
That’s because central banks just aren’t letting anyone have any more bullion, at least over the last few days, as stock markets crash around the globe. The Fed this morning announced a coordinated global interest rate cut aimed at shoring up the financial system.
One month lease gold rates jumped to more than 2.6 percent, the highest it has been since May 2001. Long-term lease rates also climbed.
The five-year average for gold leases of a month has been 0.12 percent, reported the U.K. newspaper.
Mean while, the U.S. Mint has again frozen its gold bullion coin sales, citing extraordinary demand.
"Due to the extreme fluctuating market conditions for 2008, as well as current market conditions, gold and silver demand is unprecedented and the demand for platinum is unusually high," the U.S. Mint said in a statement.
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