Dr. Zijlstra’s Final Settlement: Gold as the Monetary Cosmos’ Sun

Whenever I am in Amsterdam, I go to a bookstore and browse the second-hand shelves in the economics section. Recently I found two books by Dr. Jelle Zijlstra: “Dr. Jelle Zijlstra, Conversations and Writings” (1979, second edition) and “Per Slot Van Rekening” (1992, fifth edition). The latter title is a Dutch figure of speech that may be translated as “The Final Settlement.”

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What’s going on with the gold price?

Last week we saw a remarkable movement in the gold market. On Tuesday the price of gold on the New York stock exchange was $70 per troy ounce higher than in London, the biggest price difference in 40 years. These prices often diverge, but under normal circumstances traders are entering the market to eliminate this difference. This did not happen last week, resulting in two different gold prices and tightness in the New York gold market. How did this happen?

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