Spot price vs. street price

I stopped by a local reputable coin dealer yesterday, to pick up some gold and silver coins, and happened to see a sign on one of their displays: "We pay higher than spot prices for gold bullion." Remember: coin dealers have to mark up whatever they pay for their gold purchases, so why would they pay higher for gold bullion from a retail seller--when they could just buy a contract at the COMEX for a lower price? Could it be there is a physical shortage at the COMEX also?

In the local Vietnamese gold market, the premium on the street price for gold above the worldwide spot price reached as high as $59.37. Clearly, there is a worldwide shortage of physical inventory, as premiums firm up above spot prices.

Think about it: why would the spot price, established by the COMEX in New York, or the London Metals Exchange, be so much lower than the true market price? Could it be further evidence that bullion banks are using naked shorting of paper contracts to artificially suppress exchange prices? Furtheremore, could these lower COMEX prices not be reflective of the true price of gold?

Despite setting new all-time highs in nominal prices, gold seems to be setting new support levels--and not new resistance levels, as two central banks (from India and Sri Lanka) stockpile gold, instead of selling their inventory. Other central banks are looking to bid for the remaining IMF inventory for sale, after India swooped in and purchased half of the original 403 tons. China, Russia, and Brazil are looking to shore up their gold reserves. They are coming to the realization that holding USDollars in their reserves is a riskier proposition than holding gold.