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Gold: Implicit Carrying Cost and Implied Storage Cost

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Calculate the implicit cost of carrying an ounce of gold and the implied storage cost per ounce of gold if the current spot price of gold per ounce is $425.00, the forward price of an ounce of gold for delivery is 273 days is $460.00, the yield over 91 days on a zero-coupon treasury bill is 2%, and the term structure of interest rates is flat.

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The expert calculates respective costs.

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Assuming a simple compounding method for the risk free interest rate, over 273 days, the Risk free rate is 2%*3=6%. Now, F = S ...

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