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<p>[QUOTE=&quot;medoraman, post: 2476004, member: 26302&quot;]I agree with PeacePeople. The tiny amount of pm sold on the physical market is not a factor to the exchanges. On the exchanges you can only buy/sell certain qualified pm in specific warehouses, to take delivery you have to pay up front, etc etc. </p><p><br /></p><p>Having said that, the exchanges are the REAL markets for pm, where large quantities are bought and sold by firms who produce or consume large amounts of pm. The physical market is an afterthought that rides on the coattails of exchange price discovery. The exchanges do not care if we use their prices as a reference price, and would probably prefer it if we don&#039;t actually. They catch grief from physical investors for their actions, when the physical investors never pay a penny to the exchanges or ever participate in them.</p><p><br /></p><p>He and I have different opinions of which market is &quot;correct&quot;, but that does not matter. The physical market uses the exchange prices as reference points, but they are nearly separate markets. During price volatility they diverge, sometimes dramatically. Usually the physical market will be more stable, meaning cost to by physical will not be as low as markets will go, but not go as high. THis is true at least short term.[/QUOTE]</p><p><br /></p>

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