We can find the swap rate for most currencies by finding the difference in cash rates between central banks. But what determines the swap rate for holding precious metals overnight? And why is it charged in the first place?
The swap rate for precious metals in ment to be based on the storage charge of the metal, and the loss of interest from the currency you bought it with.
The thing with it is that no-one really knows who has real metal, and who has paper. Thats why the German’s have been the 1st to jump and grab theirs. Those who wait will be left holding the bag, as it is estimated that the paper gold is between 10 and 100 times the real gold level.