Four Major Developments Gold Investors Should Watch 60 comments
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Gold has finally breached the $1,000 level and looks like it might hold the line on this latest attempt. I anticipate that this psychologically-important level will turn from resistance into support as gold makes new highs towards the end of 2009. If I am correct, right now is the last chance investors will have to purchase gold for under $1,000/ounce.
A series of new and significant events have unfolded over the past few weeks that have influenced the precious metals markets and will likely continue to support gold’s price advance. If you are a gold investor, it is important that you understand these events and the impact they are likely to have on your investments.
Development #1 – China Encouraging Citizens to Buy Gold and Repatriating Gold Holdings from London
China is making a series of calculated decisions in order to mitigate the risk of a dollar collapse. They have already come out strongly and repeatedly in favor of a new reserve currency to compete with the dollar and have quietly been making large purchases to increase their gold reserves. But the Chinese government has taken it a step further this year. Financial Sense reports:
As recently as 2002, the private ownership of gold was prohibited in China. You could be jailed if caught with any in your possession. Beginning in 2009, in a stunning about-face, the central government removed all restrictions. In fact, as Mineweb and other sources report now it’s actively pushing folks to buy some personal metal, with China’s Central Television, the main state-owned television company, running news programs cum infomercials, letting the public know just how easy it is to purchase gold and silver as an investment.
It truly is as simple as can be, because every bank sells gold and silver bullion bars in four different sizes to individuals. (Try to find the same the next time you make the trek down to Wells Fargo.) Mining companies are reportedly encouraging employees to convert some of their wages to gold on payday. Gold is traded in some form 24 hours a day. And paper proxies for the metal are also soaring in popularity. There are persistent rumors that the export of silver has already been banned. Gold could be next.
Thus China, which only yesterday was the lowest per-capita consumer of gold in the world, is bidding to become the biggest. Some analysts believe it will pass India – the top dog since forever – as early as 2010. Clearly, the government believes the country is strengthened if everyone who can holds some hard currency.
All this suggests a mania in the making, and only in the formative stage. Imagine if hundreds of millions of new consumers climb on that particular bandwagon…
Indeed, if China’s newly formed middle class begins using even a small portion of their disposable incomes to purchase precious metals, a whole new source of demand will exert its influence on the gold markets.
In another brazen move, Hong Kong is pulling all its physical gold holdings from depositories in London, transferring them to a high-security depository newly built at the city’s airport. I believe that China demanding physical delivery of their gold will force the unwinding of derivatives and leases on the gold, tactics that many believe have been employed by Western governments in order to suppress the gold price. Some will go as far as to suggest that the physical gold may no longer be on hand in London. From my viewpoint, this transfer and demand for physical delivery can only be bullish for the gold price and beneficial to precious metals investors. As Jim Sinclair’s MineSet newsletter continually reminds investors:
Nothing will unnerve the paper gold shorts more quickly and do more to undercut their confidence than to strip them of the real metal and force them to come up with more hard gold bullion to make good on deliveries. “Stand and Deliver or Go Home” should be the rallying cry of the gold longs to the paper gold shorts. –Trader Dan Norcini
Development # 2 -The World’s Largest Gold Producer, Barrick Gold Corp (ABX), Announced a Decision to Close Its Massive Hedge Book
The world’s largest gold producer, Barrick Gold, announced last Tuesday, Sept. 8, that it intends to pay off its entire book of fixed-price gold hedges and a portion of its floating hedges to gain greater exposure to the market price of gold. Barrick’s decision to close its 9.5 million ounce hedge book just as gold has taken out the $1,000 level speaks volumes. Instead of waiting for a correction and lower pricing, they are eager to gain full exposure to the gold price. What might the largest gold producer know about what is in store for the gold price and why the rush to de-hedge as gold is breaking $1,000? Forbes posed the same question:
It’s also another very strong signal from sophisticated operators who know the gold market best–gold mining company executives with the most on the line when they move from the certainty of having future production sold at locked-in rates to an environment in which their fortunes are fully leveraged to the price of gold.
In terms of scale and effect, Barrick’s move to de-hedge, the fixed price contracts alone (3 million ounces) are equivalent to reducing total annual global gold production for all gold producers by about 4 percent. The additional floating price hedges (6.5 million ounces) represent an additional 7% of annual global gold production for a grand total of 11% of annual global production. This is very bullish for gold going forward and a key reason the price closed last week above $1,000 an ounce, the highest end-of-week close ever.
Development # 3 – COMEX Commercial Traders Have Taken the Largest Net Short Position Against Gold & Silver Ever on Record
It is not unusual to see commercial traders go heavily short when gold makes a big run, but they have effectively gone “all in” this time with their total net short position setting a new record. These are presumably the most well-informed traders or “smart money.” While this news is usually very bearish and a prelude to a massive sell off, it is interesting to note that the commercial net short position increase was actually less than the increase in total open interest. In other words, despite taking record short positions against gold, they were unable to absorb all of the buying pressure. This is further evidenced by the fact that gold has held onto recent gains and continues hovering around the $1,000 mark.
I would not go so far as to say that gold investors are out of the woods quite yet. It will be interesting to see how the positions of commercial traders have changed over the past week. You can track the COT at this website.
My takeaway from this report, despite the record short position, is that the news is bullish for gold and could be the prelude to a huge move to the upside. If commercial shorts went so far as to establish a record net short position and still did not meet the increase in open interest, this suggests there is some very intense buying pressure on the other end. It may also suggest that many of the current gold buyers are demanding delivery of the physical metal and are no longer willing to accept a paper promise for future delivery. Which leads us into our fourth and final major development for precious metals...
Development # 4 – Gold and Silver Slipped into Backwardation Last Week
Both gold and silver slipped into backwardation last week. It was a light backwardation, but it is a relatively rare occurrence for precious metals and warrants our attention.
The term backwardation pops up every so often in the precious metals investment community and there is often confusion and misinformation around the topic. Backwardation exists when the price of a commodity for immediate delivery is higher than its price for delivery in the future. It can be interpreted to mean that people controlling the supply of monetary gold cannot be persuaded to part with it, regardless of the bait and suggests that there is more demand for immediate physical delivery than there is metal to service it.
Backwardation is usually viewed as a bullish sign for the underlying commodity. But to be fair, commodities go into backwardation for a variety of reasons and backwardation can last for quite some time and never lead to a breakdown of the delivery mechanism.
Still, with the news from China and signals that Russia and other countries are scrambling to increase their gold reserves, the current backwardation could be a very real sign of increased demand for physical delivery. This could blow the lid off what seems to be a long-standing attempt by issuers of fiat currency to suppress the price of gold and maintain their power structure. If more and more buyers begin demanding physical delivery, we could see the paper manipulation schemes unravel and a potential default of the COMEX. This could be the impetus for an explosion in prices for both gold and silver. I am not prophesying if and when this even will unfold, but simply calling attention to the possibility. For now, we will keep a closer watch on the degree of backwardation and continue to report as events unfold.
Any way that you look at it, we are entering intense times in the financial markets and a reality check for the monetary system that has brought great advantage to the United States since establishing the dollar as the world’s reserve currency. With the U.S. government creating an unfathomable amount of debt in a very condensed time period and China growing increasingly impatient, I believe it is only a matter of time before we experience a severe inflationary period. Those in power might be able to manufacture one last rally for the dollar and correction for gold, but each attempt seems to be dwindling in both its potency and stamina. The “banksters” are literally running out of arrows in their quiver. Reducing your exposure to the dollar and protecting your assets with a sensible allocation of gold and silver seems like an obvious move at this juncture.
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This article has 60 comments:
Once reality sinks in, when the populace and government accept there is no going back to yesterdays glorious days of debt, at that point gold will have reached its new and sustainable level. That level, presumably, will be high enough to balance currency created during the excesses of the last decades.
On Sep 15 08:21 AM chap08 wrote:
> You could delete your 4 items and replace them with one: the dollar.
> If you don't believe me, take a look at the gold price in a range
> of other currencies.
Silver went into backwardation when the price collapsed and demand for retail rounds and bars got very high, as recently as March of this year. That was simply a supply bottle-neck.
Not yet.
It will go below 850 one more time before the next advance
On Sep 15 08:34 AM Disa Anja wrote:
> I agree! All that matters is the price of the US$. Hey, what a minute....what
> happens if the equity markets trade down again and lower than the
> Match lows...the US$ will appreciate again like it did during the
> last down leg?
By my inexact reckoning, China can take 50% or $1 Trillion or so to purchase over 30,000 tons of Gold at $1,000 or more.
As the number 1 Gold producer in the world, I do not think they would want their Gold Holdings devaluated in terms of a Currency they wish to abandon.
I can turn on the radio and hear several different commercials trying to sell the public gold, and I see guys out on the street corner to holding up "buy gold" signs. Any gold post on this site attracts tons of bullish comments. It's a certain mania and they make dangerous investments.
Interesting-- the China story. They cant buy enough of our treasuries at rotten rates of return. Why cant China get enough low rent dollars despite bad mouthing the buck in public to run it down further? Hummm. Obviously they're expecting a RISE in the dollar and they want in cheaper, otherwise they're screwed.
If they thought they might get screwed on the dollar, wouldnt the government be hoarding gold instead of passing it out to the citizens?
It doesnt add up.
Unless some country decides to go back on the gold standard, gold really has no practical value except for jewelry or a trading vehicle.
Be careful with gold!
government be hoarding gold instead of passing it out to the citizens?"
China is hoarding Gold, they have admitted it by declaring their 1,000+ ton plus stash. They won't be handing any of it out. China is a growing importer of Gold (more than India so far this year [granted : Indian imports are down]) and it is this imported Gold that will be going to the retail trade, which is only going to grow.
By encouraging demand I believe that China will force a floor under the price and I'm betting the floor will be at $1000 with plenty of upside potential. IMHO
On Sep 15 09:15 AM axelrod608 wrote:
> I've often heard that the time to buy anything was when there were
> no buyers left and the time to sell anything was when everyone was
> buying. These days every cabbie, every shoeshine boy and every waitress
> is giving unsolicited advice to "buy gold". That may not constitute
> fundamental research, but it has been on my mind. I don't have an
> answer other than to hedge every dollar I have in gold.
For every Buy Gold TV commercial, I can point to a Sell your Gold Commercial (just Mail it to us, we will send you Cash).
Barrick's decision is notable in light of its past collusion with central banks' efforts to suppress gold's price (if you subscribe to GATA's theory). Either Barrick has grown a backbone or they are no longer useful to central bankers who are ready to throw in the towel on gold price manipulation.
> One more thing. Backwardation in the gold market is a very
> different kind of event than backwardation in other markets,
> because there is never a real shortage or bottleneck in gold.
> (Most of the gold that ever was mined is available at all times.)
Of course it's available - at a price.
> Backwardation in gold, as occurred briefly in Nov '08 indicates an > extreme distrust of the futures markets' ability to make good on
> the contracts they underwrite.
Let's see, hypothetically people want delivery but the commodity is not available. Sounds like a shortage to me!
But paper money supply will increase much faster then the supply of gold in the long term and this itself is bullish for the precious metal.
How does Chinese state TV running a promo for gold equate to a resounding endorsement of the gold market??
Show me anything in either prospectus that allows what you say they can do.
On Sep 15 09:43 AM mbkelly75 wrote:
> Some excellent points were made in this article on both Gold and
> Silver that correspond with my own thoughts and help make them clearer.
> About 6 months ago, I raised the Gold and Silver holdings in my portfolios
> from 6% to 16% using CEF as they maintain a balance between the two
> metals (I can hold both with one stock and do not have to trade to
> maintain a balance between them) and even pay an itty-bitty dividend
> instead of charging to store them. They also clearly gaurantee to
> hold at least 90% bullion and are VERY transparent unlike the more
> popular GLD and SLV (which I would not recommend to anyone - including
> my ex-wife). Gold and Silver paper unwinding and having to actually
> deliver the physical amounts could not only raise the price of both
> metals but could show how much GLD and SLV depend on paper metal
> for their supply instead of actually holding the metals. They used
> to clearly say on their websites (in a downloadable PDF propectus)
> that they could hold the paper instead of the metal at their discretion,
> but later made even the prospectus harder to get and read. If the
> price of either one drop again - it will simply make a good time
> to increase holdings. Ted Butler has pointed out for YEARS how much
> the prices were distorted due to using paper to replace actual metal
> in the trading of Silver and Gold and that a time of reckoning is
> long overdue. China may be bringing that time to the markets and
> making it VERY interesting for the people holding the paper and unable
> to deliver as for the most part - all they have ever had was the
> paper.
Gold is tangible and has worldwide value. That is compared to real estate which is still in the process of correcting from nosebleed valuations, bonds issued by punch drunk governments trying to avoid economic pain, and let's not forget companies that are being bid to the stratosphere just because they are awesome cost cutters. How will these companies increase their revenue streams unless someone takes the mantle from retrenching American consumers?
No - gold is not overvalued as compared to other asset classes.
On Sep 15 12:50 PM Faisal Humayun wrote:
> Gold has outperformed, relative to other asset classes since the
> financial crisis began. So, at current levels, it is overvalued as
> compared to other asset classes and hence some correction might be
> impending in the near term.
>
> But paper money supply will increase much faster then the supply
> of gold in the long term and this itself is bullish for the precious
> metal.
On Sep 15 11:01 AM DVW wrote:
> It is a mania! That much I agree with.
>
> I can turn on the radio and hear several different commercials trying
> to sell the public gold, and I see guys out on the street corner
> to holding up "buy gold" signs. Any gold post on this site attracts
> tons of bullish comments. It's a certain mania and they make dangerous
> investments.
>
> Interesting-- the China story. They cant buy enough of our treasuries
> at rotten rates of return. Why cant China get enough low rent dollars
> despite bad mouthing the buck in public to run it down further? Hummm.
> Obviously they're expecting a RISE in the dollar and they want in
> cheaper, otherwise they're screwed.
>
> If they thought they might get screwed on the dollar, wouldnt the
> government be hoarding gold instead of passing it out to the citizens?
>
>
> It doesnt add up.
>
> Unless some country decides to go back on the gold standard, gold
> really has no practical value except for jewelry or a trading vehicle.
>
>
> Be careful with gold!
When Bangkok was built over 200 years ago, gold was as popular as ever. As Bangkok grew in population and prosperity, small time merchants, mostly of Chinese descent, would purchase chains or bracelets with any spare money, as a hedge against bad times. If conditions got difficult, they would trade the precious chains for cash to continue the business. People who had emigrated from chaos elsewhere to relatively peaceful Bangkok knew firsthand that the bar, not paper, is a true store of value.
Early Bangkok precious metal traders were concentrated in the Yaowarat district of Bangkok, as well as the Silom section by the Chaophraya River. When you visit these two areas, you will still see some old two-story buildings where the ground floor shops, painted bright red, are lined up with glass case cabinets filled will yellow metal chains of all sizes. They also carry rings, bracelets, amulet casings, and pins.
The more established shops also carry bullion of various sizes, from half ounce to kilogram pieces. Established shops are trustworthy. Tang To Kung and Hua Seng Heng are the two top yellow metal merchants in Bangkok. These two giants have branches all over Bangkok and in other provinces.
Today these merchants are really metal traders and brokers. They sell gold in jewelry format and bullion formats. They will also buy back them from their customers in both formats. When they buy back from you, there is a small transaction fee, at current prices approximately one hundred baht per half ounce. A half ounce of the yellow metal in Bangkok is about twelve thousand five hundred baht today. So a hundred baht transaction fee is pretty small when you trade bullion for cash.
For foreigners in Thailand, one confusing aspect of Thai bar is the system of measurement. The weight unit for Thai gold is called baht. One baht is about half an ounce or 15.16 grams. Adding to the confusion, the Thai paper currency is also called baht. Thus one bar baht is about twelve thousand five hundred baht. It sounds confusing, but it is nonetheless accurate.
Gold in Bangkok is of high grade, though somewhat less than standard international investment grade. Bullion is 96.5% pure. By contrast, Swiss bullion is 99.99% pure. A jewelry such as a wrist watch bands might be a bit less pure to enhance the sturdiness.
The price of the bar is set daily by the Thai Gold Traders Association. Practically all bar transactions are done in cash. You walk into a metal shop, tell them how many baht of the yellow piece you want, and pay them in cash. By the way most metal shops do accept credit cards as well.
With all the uncertainty in international markets, it might not be a bad idea to have some bullions stashed away for a rainy day. It has stood the test of time as a store of value. It will continue to be popular in Bangkok for a long time to come.
----------------------...
Money without intelligence is like a car without a road.
www.intelligentinvesti...
I use stop limits to protect capital and I diversify my portfolio. This mitigates my risk.
On Sep 15 08:32 AM Jordan Lindsey wrote:
> As a trader my primary concern is risk. You seem to only be concerned
> with the possible reward side. What happens if your magical $1,000
> price level does not hold? What is your exit strategy? You do have
> an exit strategy right Jason?
"The (GLD) trust holds gold bars and is expected from time to time to issue Baskets in exchange for deposits of gold and to distribute gold in connection with redemptions of Baskets"
They go on to say that HSBC Bank USA is the custodian of the gold and oversees the safekeeping. I would have picked a different company myself... let's just hope they don't tap it to cover their fraud and loan default losses.
On Sep 15 01:50 PM kohalakid wrote:
> There is NOTHING in the prospectuses of SLV or GLD that allow them
> to hold "paper" gold or silver. They are allowed to hold only physical
> metal.
> Show me anything in either prospectus that allows what you say they
> can do.
If/when there is a rush into gold, it will overwhelm the relatively tiny market and push prices much higher.
On Sep 15 09:15 AM axelrod608 wrote:
> I've often heard that the time to buy anything was when there were
> no buyers left and the time to sell anything was when everyone was
> buying. These days every cabbie, every shoeshine boy and every waitress
> is giving unsolicited advice to "buy gold". That may not constitute
> fundamental research, but it has been on my mind. I don't have an
> answer other than to hedge every dollar I have in gold.
This article focuses on relatively new developments in the gold market. The dollar is the obvious key driver of the advancing gold price, so I didn't feel the need to re-hash that point.
Cheers
On Sep 15 08:21 AM chap08 wrote:
> You could delete your 4 items and replace them with one: the dollar.
> If you don't believe me, take a look at the gold price in a range
> of other currencies.
Hmmmmmm.
Almost nobody thought tech stocks could go down.
Almost nobody thought Oil would fall like a stone.
Almost nobody thought houses could depreciate wildly.
and
Who would have thought that tulip bulbs were worthless?
I'm just saying... good luck if you own it and be careful.
I'll be waiting to short it... eventually.
Who are you trying to convince?
www.moneyandmarkets.co...
This story will bring your concern to an entirely different level about the USD. The only true hard asset left is gold and silver.
On Sep 15 08:34 AM Disa Anja wrote:
> I agree! All that matters is the price of the US$. Hey, what a minute....what
> happens if the equity markets trade down again and lower than the
> Match lows...the US$ will appreciate again like it did during the
> last down leg?
The average American has not been taught to calculate interest rates and most of what we talk about here is beyond their comprehension. A lot of Obama voters thought that the government would buy them cars, houses and whatnot. Printing the money to make good on those promises will do what to the dollar?
I disagree with the idea that all the gold ever mined is available. Most of the gold is kept in vaults and you can not buy it. The actual float in gold is much smaller than the total supply. Furthermore, the fact that a lot of people want to buy gold with "cash" tells me that the perceived value of the paper dollar is going down. (I can also see it on BigCharts).
The Chinese are smart. They not only allow their citizens to buy gold but urge them to do so. The increased price of gold will deliver a lot of wealth and capital to the country. It will spur the buying of appliances that they hope to produce for domestic use. I can not but wonder that Communists understand that, while our Liberals do not.
Finally, the question of China buying Treasuries and dollars. They are divesting themselves of their holdings. I wonder if they short the dollar while actually selling it.
The governement has admitted on several occasions that it regularly manipulates gold prices--down. They are running out of ammunition to do so on a sustainable basis.
Gold is not in a mania. Very few of the folks I talk to have 5 or ten percent of their net worth in gold. Middle class Americans I work with and talk to, and e-mail have their worth in pensions, social security, their homes, bonds, and equities. Some people have gold and silver coins, a few grand worth perhaps.
The gold bull market will be a mania when an unsustainable proportion of the populace have 20-30 percent of their net worth tied up in gold, that they have gone into debt to buy, and are awaiting getting rich on. This is simply not the case now.
-Except for those of us who refused to invest in tech unless these stocks paid dividends, sold real products and had cash reserves.
-Almost nobody thought houses could depreciate wildly-
-Except for those on the various housing bubble blogs who said 'this is nuts' and refused to drink the real estate kool aid.
-Almost nobody thought Oil would fall like a stone-
-The oil price declining was a bit of a surprise, but perhaps it was due to hedge funds getting out of the oil market when Congress starting asking questions. (Oil has gone up from its lows.)
Yes, gold could go down, but what would cause gold to go down? The US Dollar going up in value? A sudden dumping of gold by all the central banks? A new mega-goldmine delivering huge amounts of the yellow metal to the market? These scenarios seem unlikely at best right now.
The only thing that would cause a decline in gold's price would be if gold reached bubble proportions. The gold bubble won't happen until all of the financial news outlets sing gold's praises and advise everyone to buy gold, when everyone isn’t just talking about buying gold but are actually going out and buying and taking physical possession, when the ‘we buy gold’ advertisements are replaced with ‘we sell gold’ advertisements, and when gold bubble blogs start springing up, then it will be time to head for the exits, but not a moment before.
On Sep 15 03:53 PM DVW wrote:
> Almost NOBODY thinks it's possible that gold can go down in value.
>
>
> Hmmmmmm.
>
> Almost nobody thought tech stocks could go down.
> Almost nobody thought Oil would fall like a stone.
> Almost nobody thought houses could depreciate wildly.
> and
> Who would have thought that tulip bulbs were worthless?
>
> I'm just saying... good luck if you own it and be careful.
> I'll be waiting to short it... eventually.
I have a very large extended family in various parts of the country, and I'm the only one who owns gold. Some might own it incidentally: a gold watch or gold wedding ring (and maybe a miner or two in a diversified mutual fund)...but that's it. In the US, gold hasn't even come close to the real estate mania of the past 10 years (about 90% of my extended family owns or owned at least one house), or the dot.com mania of the 1990s (where friends of mine making minimum wage as baristas, bike messengers, and waiters were buying $100 tech stocks).
On Sep 15 03:31 PM Jason Hamlin wrote:
> This is simply not true axelrod. The vast majority of investors have
> little or no gold in their portfolios. Walk around the streets and
> ask Joe public if they know how to invest in gold, what the gold
> price is or why owning gold is important. You will get blank stares.
>
>
> If/when there is a rush into gold, it will overwhelm the relatively
> tiny market and push prices much higher.
Good article pointing to important developments!
On Sep 15 03:53 PM DVW wrote:
> Almost NOBODY thinks it's possible that gold can go down in value.
>
>
> Hmmmmmm.
>
> Almost nobody thought tech stocks could go down.
> Almost nobody thought Oil would fall like a stone.
> Almost nobody thought houses could depreciate wildly.
> and
> Who would have thought that tulip bulbs were worthless?
>
> I'm just saying... good luck if you own it and be careful.
> I'll be waiting to short it... eventually.
It truly is as simple as can be, because every bank sells gold and silver bullion bars in four different sizes to individuals. (Try to find the same the next time you make the trek down to Wells Fargo.) Mining companies are reportedly encouraging employees to convert some of their wages to gold on payday. Gold is traded in some form 24 hours a day. And paper proxies for the metal are also soaring in popularity. There are persistent rumors that the export of silver has already been banned. Gold could be next."
Think you for this tidbit. I'll research that and see if I can find a way to track gold purchased in China. However, I disagree with your analysis over the long haul. That type of behavior (government pushing purchases of gold and silver and companies paying wages in gold and silver) have all the makings of a bubble and an opportunity to make money when it bursts.
> I've often heard that the time to buy anything was when there were
> no buyers left and the time to sell anything was when everyone was
> buying. These days every cabbie, every shoeshine boy and every waitress
> is giving unsolicited advice to "buy gold". That may not constitute
> fundamental research, but it has been on my mind.
There are still too many signs at jewelry shops that say "CASH FOR GOLD" and a plethora of newspaper ads shouting the same thing. This means the insiders are still buying. When I start to see "GOLD FOR CASH" and read stories of teenagers trading gold online, then I'll get worried.
> As a trader my primary concern is risk. You seem to only be concerned
> with the possible reward side. What happens if your magical $1,000
> price level does not hold? What is your exit strategy?
Those of us who hold gold as "insurance" against calamity don't need an exit strategy. Gold is the ultimate "exit" strategy in itself.
For trading purposes, I go by the old standard Dow/gold ratio. I strongly believe that it'll get down to 3 or 2.5. There's just too much money printing going on and not enough real (i.e. non-sugar-high) economic growth going on.
Have you actually READ the GLD prospectus?? Page 11 and 12 talk about how they are NOT responsible for anything that results in not having the physical gold in possession. I also refer you to these links about the trustworthiness of GLD:
www.bestwaytoinvest.co...
www.safehaven.com/arti...
www.marketskeptics.com...
goldprice.org/james-tu...
seekingalpha.com/artic...
I will tell you once again - GLD and SLV are NOT the way to have an easily tradable form of Gold or Silver
Are you physically holding gold? If so why?
To you a calamity is the market down 50%, another depression or structural breakdown of law and order in the US?
I also do not understand "Gold is the ultimate "exit" strategy in itself". What does that mean to you?
And ,yeah, I've read the whole prospectus front to back a few times. I guess since I know how the physical market works, a lot of the terminology isn't that unfamiliar to me where maybe it's scary to others.
You're right in that GLD is not for those who want to hold physical gold in their possesion. But as a trading vehicle or a hedge it works just fine.
I actually just bot 40 1 oz gold Eagles and hedged 'em by selling 400 GLD at 99.85!!
On Sep 16 03:02 PM mbkelly75 wrote:
> It is true - you can download the GLD Prospectus if you google it.
> It is equally true that the GLD website makes it difficult to do
> - which is what I said.
> Have you actually READ the GLD prospectus?? Page 11 and 12 talk about
> how they are NOT responsible for anything that results in not having
> the physical gold in possession. I also refer you to these links
> about the trustworthiness of GLD:
> www.bestwaytoinvest.co...
>
> www.safehaven.com/arti...
> www.marketskeptics.com...;br/>goldprice.org/james-tu...
>
> seekingalpha.com/artic...
>
> I will tell you once again - GLD and SLV are NOT the way to have
> an easily tradable form of Gold or Silver
I went to the last article in the list of links you posted. It's a SA post written by some moron named Financial Foghorn. I stopped reading after his 5th reason because he is factually wrong in each of his first 5 reasons to not own GLD. I was laughing so hard at his lack of knowledge about the gold market and how GLD works that I just about fell off my chair. If you are basing your opinion of GLD on writings like this it's no wonder you won't touch GLD.
But a simple reading of the GLD prospectus shows this guy's a wing-nut.
On Sep 16 03:02 PM mbkelly75 wrote:
> It is true - you can download the GLD Prospectus if you google it.
> It is equally true that the GLD website makes it difficult to do
> - which is what I said.
> Have you actually READ the GLD prospectus?? Page 11 and 12 talk about
> how they are NOT responsible for anything that results in not having
> the physical gold in possession. I also refer you to these links
> about the trustworthiness of GLD:
> www.bestwaytoinvest.co...
>
> www.safehaven.com/arti...
> www.marketskeptics.com...;br/>goldprice.org/james-tu...
>
> seekingalpha.com/artic...
>
> I will tell you once again - GLD and SLV are NOT the way to have
> an easily tradable form of Gold or Silver
If Brinks has insurance while it's transporting gold to my vault, why should I pay extra for additional, unneeded insurance??
On Sep 16 03:02 PM mbkelly75 wrote:
> It is true - you can download the GLD Prospectus if you google it.
> It is equally true that the GLD website makes it difficult to do
> - which is what I said.
> Have you actually READ the GLD prospectus?? Page 11 and 12 talk about
> how they are NOT responsible for anything that results in not having
> the physical gold in possession. I also refer you to these links
> about the trustworthiness of GLD:
> www.bestwaytoinvest.co...
>
> www.safehaven.com/arti...
> www.marketskeptics.com...;br/>goldprice.org/james-tu...
>
> seekingalpha.com/artic...
>
> I will tell you once again - GLD and SLV are NOT the way to have
> an easily tradable form of Gold or Silver
Sailingsnowbird
On Sep 15 09:15 AM axelrod608 wrote:
> I've often heard that the time to buy anything was when there were
> no buyers left and the time to sell anything was when everyone was
> buying. These days every cabbie, every shoeshine boy and every waitress
> is giving unsolicited advice to "buy gold". That may not constitute
> fundamental research, but it has been on my mind. I don't have an
> answer other than to hedge every dollar I have in gold.
SSB
On Sep 16 06:09 AM Carlos Lam wrote:
> On Sep 15 09:15 AM axelrod608 wrote:
If you had read the first 4 links - you would have found that the gentleman in the 5th link IS factually correct. Here is another link for you to actually read if you wish:
seekingalpha.com/artic...
You are mistaken - but welcome to make your own mistakes. I hope you do not get too badly hurt when you find that out.
COMEX Commercial Traders Have Taken the Largest Net Short Position Against Gold & Silver Ever on Record...
...it is interesting to note that the commercial net short position increase was actually less than the increase in total open interest. In other words, despite taking record short positions against gold, they were unable to absorb all of the buying pressure. This is further evidenced by the fact that gold has held onto recent gains and continues hovering around the $1,000 mark.
On Sep 15 04:36 PM User 377624 wrote:
> "COMEX Commercial Traders Have Taken the Largest Net Short Position
> Against Gold & Silver Ever on Record ... While this news is usually
> very bearish ... My takeaway ... is that the news is bullish..."
>
>
> Who are you trying to convince?