The Run on Gold

According to a recent article in Numismaster, there was a run on gold at the London Bullion Market Association Gold Exchange. Supposedly on expiration day on Sept. 30, some wealthy buyers bought a huge amount of September 2009 gold contracts, and then asked for immediate delivery. According to the article, JPMorgan Chase and Deutsche Bank did not have enough of the physical gold to deliver, creating a naked short. Reportedly, the buyers were offered 25% above spot in lieu of delivery, but the buyers turned it down; at least two central banks offered to provide 'leased gold' to the banks in order to cover the delivery.