Gold Price Conspiracy? 29 comments
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Have you ever compared websites to see which supplier currently has the best prices for precious metals? I just got done with such an experiment and I noticed something very interesting. On Kitco.com, there is a bold message (printed in red) saying:
IMPORTANT NEW NOTICE: Demand for bullion products has increased significantly in recent days. As a result, we may experience delays in supply and possibly delays in processing and shipping by our vaults. We apologize for this inconvenience and will do everything in our power to service your orders as quickly as possible. While cancellation fees still apply, prices are guaranteed regardless of the length of the delay. We remain committed to providing you the best service no matter what market conditions prevail.
At the same time, on the APMEX.com website (American Precious Metals Exchange) there was this notice:
So, my questions are: why is gold trading at $810 and change if the demand is so strong? If gold is so expensive, then why is the US mint not selling all they can at the current price?
My suspicion is that there is a tremendous unwinding of leverage in the gold market causing a short term price drop that is neither fundamental nor warranted. When was the last time a confrontation between Russia and the US caused the price of gold to drop? When was the last time rising inflation numbers caused gold to drop?
The current environment for gold and oil investments are similar. This is a wonderful opportunity to buy gold (and energy) investment vehicles.
Disclosure: Long gold and precious metals.
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This article has 29 comments:
Maybe you are right (I didn't read your article) but I have no idea were gold is heading,still it didn't stoped me from pocketing 7000$ today morning from trading on NYMEX,CME products that offer such a liquidity.One who tries to find top/bottom in anything will be broke one day,trade ranges guys and you will survive.
Who is smarter,investors with gold/silver/palladium stock that helds biggest reserves on earth and Mars of metals or one who finished trading for today pocketing profits and going easy.
My advise to petty Americans ( I love to make money on your markets),wear Paul&Shark shirts,check time on your gold watch,drive Mercedes and relax.
So if we buy gold now at $800 (and silver, which I am doing) what happens if Kitco has to fill my order when the price is $900, $1000, or $2000. Kitco has a choice, take a hosing, or start raiding their pools.
Now there is a chance that gold will go down, but that is very unlikely. When India, China, and the middle east get a whiff of this supply crunch, they'll shoot gold to the moon, and the resulting short covering rally will send it to Pluto.
I was always suspecting big things from China to happen after the olympics. Now I understand what it will be. Buy physical metal while you can because pretty soon everyone is going to see just how much paper is worth really worth compared to gold
Remember Bird in the Hand is worth much more than 2 in the bush.
FoxV: especially better than the 2nd bush
Here is a much better and deeper SA article along these same lines by someone who obviously knows more about the gold market than I ever will:
seekingalpha.com/artic...
Where are you storing your gold? At home? I have money in the GLD and DGP etfs and feel comfortable about them, yet I keep hearing that physical is the route to go. My thought is that when the public becomes aware of gold (like tech in late 90's and real estate a few years ago) they will go for the etfs versus buying actual gold and having to store it. GLD holds enough gold (10% of commitments) to cover any trader or investor that wishes to sell. Thoughts as I'm just trying to get this right...
The problem with physical etfs and certificates is that at the end of the day all you have is a piece of paper who's only worth is your belief that it can be exchanged for something of value. If that's fine for you, then might as well hold currency. Its the same thing.
If you believe in gold then you probably have an inherent disbelief in the Paper debt train (wreck?) we live with. In which case, the only way to know that what you have is really worth what it is, is to have it in your hands. And this current shortage of physical metal during a price crash demonstrates that something is definitely up with the system
As for storage, I have it at home. Perhaps not the wisest thing to do, but I don't have much and its certainly not worth the risk to life and limb it would cost should somebody "activate" my 300psi, 42 tooth security system ;)
at the end of the day, just don't tell anybody you have it. When people break into a home they're looking for electronics and jewelry, not bullion
P.S.: so nobody tell anyone I keep my bars at home
John Nadler said on March 31st 2008:
www.kitco.com/ind/Nadl...
"Depositories are practically choking on 1,000 ounce silver bars crowding their floor space."
Something really stinks about this market and the negative lease rates for gold and silver. It does smell of heavy manipulation by the heavy hand og governemt(s) and thei nearly all-powerful cronies. All in the name of profits of course and not the public interest, whatever that is nowadays.
I think we are close to some kind of serious financial crisis/meltdown. I have read that M1/M2/M3 rates of growth have plummeted recently but that in itself maybe a manipulation to create a deflation scare before central banks inflate like never before. On the other hand, it may predict real upcoming deflation due to massive imminent defaults and bank failures.
I don't know whether it is lierally safe to hold gold at these times or a good idea. I would want to hold it in several countries and certainly not in the US or UK. I don't trust those regimes. However, the USA is beginning to get a little of its old role back as Russia pursues a new cold war and the ultra-tarnished US reputation may shine again a little in comparison. Perhaps.
To me, the gold rationing recently by the US mint and bullion dealers looks like the start of a precious metal confiscation process initiated by the bankrupt US and UK, in preparation for preventing the public from protecting themselves from the consequences of the fiat currency meltdown.
As for China, once the Olympics are over, they can afford to stop being so nice to people. no-one boycotted their Olympics and no-one can after next week when they finish, so then China can do anything it wants with impunity. Especially since they hold 1 trillion $ of US paper assets. The paper doesn't matter - what matters is China has the means of production. Now it has that, it can choose when to pursue its real aims, sooner or later, when the opportunities arise.
Now, wealthy investors (b-ball players, Tiger Woods, Michael Phelps when he starts receiving his, et al) have gold, oil, Abu Dhabi real estate and some other places to have their millions placed. Gold will still be the last resort for inflation/risk hedging once oil, real estate, et al lose their attraction due to lousy economic conditions.
As said by others, it's fun making money buying gold low and selling it high repeatedly during this period.
I kept waiting to see some posts about what 'something big' might be, but I never did.
however as part of the over all theme of "YOU MUST NOT OWN GOLD" we pay provincial sales tax if we buy physical bullion in Ontario and you don't if you buy it in Quebec. That and Kitco is not far from me so if I ever find the shipping too much (are want to scream at them about delaying my order) I can always drive down and visit them. Montreal is a great city and they're right downtown.
btw, if you buy a Gold certificate from the bank, you do not have to pay the tax. Go figure
Jon Nadler has his own view of things; he's not a gold bug. I simply think that's his personality.
it seems people don't understand the magnitude of deflation
no one will have any cash NO ONE.
producers will go bankrupt with products to sell because there will be no cash.
I don't have enough gold to cover my living expenses completly fo extended periods and I work for one of the former bug three auto companies I'm toast
it seems people don't understand the magnitude of deflation"
The magnitude of the deflationary pressure is what engenders the magnitude of the inflationary response.
JBP: try American Precious Metals Exchange APMEX.com. also, i believe gold is treated taxwise as a collectable.
gollwoods22: gold to tumble? hard for me to buy inflation with energy & food raging. that said, when it comes to housing, you have a good point. that's what we are in: energy driven inflation, and weak economic deflation. stagflation. we go back and forth. that said, with the oil crisis we're facing, a weak currency, a huge fiscal deficit, and bernanke running the printing presses full-time in order to pay-off all the wall streeters...i'll keep some of my hard earned dollars in gold. "some". certainly not all. sorry about your job situation. i have no idea why the american big 3 auto companies went SUV when it was clear there was an oil crisis coming. short term profits over long term strategy. of course, the management still walks away mutli-millionaires. what a country.
www.irs.gov/publicatio...
The precious metals ETF's are subject to the same tax treatment as physical metals. I have no idea how strictly this is enforced.
I have been told that LEAPS contracts are eligible for the 15% max (regardless of the underlying asset), if held more than 1 year. So you could buy a LEAPS on GLD.
The tax treatment of precious metals tells me that the government wants to discourage people from owning them (which makes me want them more).
JBP: Go to your local coin dealers. Them, or eBay. Those LARGE brokers just get into your pocket and you have to WAIT to get your bullion...IF you ever get it!
Something to think about: If you want PROFITS, buy SILVER. It will OUTDISTANCE gold by multiples. Its bulkier to store, but you will smile later down the road....
They sell the ASEs for $22 ea, or 20 for $420, not bad, just have to wait in line,because when the word got out,lines formed, these country Folks in TN knows what real money is, so week ends are flea Markets fun!
www.rapidtrends.com/bl.../
look at CEF[closed end fund] for tradeoff of concerns. US and Toronto listed.
"Hi ---x,
Just thought you would be interested to know that my business (I do crown and bridge work for different dentists) uses precious metals every day. After reading all the hysterics on the 'Net' yesterday about shortages I decided to call my supplier to see if they were having any problems. Nick at **** said he had not even heard a whisper about a problem. They also sell various types of gold coins and bullion. There is no shortage in these either.
Seems to me that someone is stirring up rumors. Gold should bottom around the $690-$750 area as near as I can tell. No need for panic."
for US-based investors CEF is a "passive foreign investment company" (PFIC) and is legally taxed fairly heavily at the federal level. ASA which is also a PFCI published this informative pdf file on the whole issue of PFIC taxation:
www.asaltd.com/Tools/L...