freefall51

Will Obama Deliver on His Rhetoric?

You are too respectful.

Peter Schiff: Outlook for the Gold Market

If Mr Schiff had shorted gold from it s high other than owning it he would have 25 % more and not 25 % less.

Gold ETF Reaches One Dollar Per Tonne

I would suspect GLD is sitting on a lot of gold inventory and even gold receivables that deflate rapidly. They may speculate that the price will come back anytime soon and hold, while selling now may potentially lead to losses.

It is probably harder to actually move the gold than the price, since the gold trust cooperates with certain selected but unnamed partners to reddeem shares in baskets of 100 000 shares. How that process of redeeming works and what triggers it is not clear. At least it was at least not disclosed in GLD's last 10Q report.

GLD seem to have a large liability of redeemable shares on their balance sheet, which also seems to be under balanced by the gold assets valued at their historical prices. On that basis the equity of this trust is negative with a strong tendency to deteriorate. There may be still some unrealized gains left, which are not on the books. To capture those GLD would have to hurry and sell. I wonder what will happen if gold prices further drop and the shareholders of GLD - remember that is a trust and not all gold - are heading for the exits. And there is limited access to the trust to redeem shares. But thats just me.

Why Are Investors Returning to the Dollar?

That would explain why Jim Rogers is shorting 30 year US Gov. bonds.
He may see the influx of $$$ into treasuries unwind and bet those $$$ are going into stocks starting Nov. 1? The old fox is always a step ahead.

Good insight, thanks.

Charts of the Day: Gold, and Baltic Dry Index

Platinum, Silver and Palladium prices have been cut in half since spring. What is the rational to afford gold a different treatment?

Target $ 500/ oz.

Gold Has Significantly Outperformed: Can This Continue Indefinitely?

I guess alajac expressed it elsewhere. It is not the trillions that are printed around the world. Sure that sounds scary. The core purpose of this stunt is to take (bad) subprime morgage debt off the balance sheet of banks and make the institutions solvent again or to buy equity in banks in order to spread confidence. This influx of liquidity should not to be conceived as a a gift or a freebie to anybody. The assets can be sold back over time, some may even turn into a profit. With some conservatism this may end up as a +/- zero sum game. Who would know that exactly now? It is a moot case to make a guess at this time. Better focus what is next on the way and that is economical contraction, ie deflation, ie falling gold prices.

Gold's Relationship with Real Estate

@ Socialism,

While I sympathize with your name, I cannot resist to note that GLD is 5 % down today. So much for store of value. Reminds me eerily to my former oil stocks. That makes excellent BEARS!

Gold's Relationship with Real Estate

A Katz raises a very important point that I can relate to. Its is called denial.

Every bubble is based on a good story, scarcity of gound fuels the housing bubble, peak oil fuels the oil bubble, printing $ fuels the gold bubble. People believe it must be that way until it isn't.

I believe now that gold must come down if for no other reason than that it is still up like the last man standing. I am not a chartist but I know that a good upward price curve comes out of a consolidated base. For gold that was 6 years ago. Now we are in the 4th inning and the price curve is falling apart. There must be a fundamental reason for that. We will know in hindsight.

I want to side with CHL. I believe he was a recent oil bear. I was in denial and got my butt kicked. This time I am listening. Short GLD.
This is a mild Ponzi scheme anyway.

Countdown of Manipulated Gold Price Running Out

This discussion reminds me to the peak oil discussion we had in spring. Everybody was jumping on the train with the longterm perspective that oil as a irreversibly consumable commodity goes up like crazy. Did not happen so fast. There were other issues in the foreground that caused oil to drop like a stone.

I suspect something similar happens at this time with gold. Gold held about its value, but the GLD price curve looks exceedingly ugly and I would not bet it breaks to the upside. That does not take anything away from the longterm perspective of gold.

So what is it? A surge of uncovered future contracts hitting the market and depressing prices?

Yes a lot more money is being printed supporting a weaker $ , but the spending party is mostly over for the time being. Creditcards and mortgages are maxed out, house prices have not bottomed yet, consumer confidence in abysmal, lending standards and cost go up drastically. This is not about liquidity but solvency which goes to the hearth of credit worthiness of the consumer. That is deteriorating and limits spending especially for discretionaryand costly items like gold..

I dont see why a economical contraction does not affect all asset classes. Last time we came out of a recession in 2002 gold had bottomed. I would not declare the goldprice at a bottom here.

Bullion Shortage and Spot Prices Tell Two Different Gold Stories

A point to the specific risk on paper gold and why people may think it is manipulated.

Reference was made to GLD, SPDR Gold Trust that sells paper gold. The price of the share is supposed to track the price of a 1/10 oz bullion, ~ $84 a piece today. What do you get for your money if you buy GLD?

I am reading from GLD’s 10 Q report ending June 30, 08:

Gold investment and receivables is all there is on the asset side of the GLD balance sheet.

Gold Assets/ Number of shares = $ 13.8 B/ 0.21 B Shares = $ 65.7/ Share. But you pay today ~ $82.50 /Share. Are you not shortchanged by 25 % + buying the paper instead of physical gold.

Plus this trust has negative equity due to excessive redemption share liabilities, strongly deteriorating yoy and the buyer takes on all the credit and counter party risk of this trust.

This all looks like a terrible deal to me. Looking at the price volume action of GLD today I sense there is a high volume shorting of GLD going on since Friday.

The GLD price curve looks awful since it broke in Mar 08.

I think alajac is right, when the hoi polloi believes it is common sense to buy gold, the smart money has already left the place.

Is Gold A Sucker's Bet?

Reference was made to GLD, SPDR Gold Trust that sells paper gold. The price of the share is supposed to track the price of a 1/10 oz bullion, ~ $84 a piece today. What do you get for your money if you buy GLD?

I am taking from the 10 Q report ending June 30, 08:

Gold investment and receivables is all there is on the asset side of the GLD balance sheet.

Gold Assets/ Number of shares = $ 13.8 B/ 0.21 B Shares = $ 65.7/ Share. But you pay today ~ $82.50 /Share. Are you not shortchanged by 25 % + buying the paper instead of physical gold.

Plus this trust has negative equity, strongly deteriorating yoy and the buyer takes on all the credit and counter party risk of this trust. Who would want that now?

Is there not a strong case to short GLD? Looking at the price volume action of GLD today I sense there is a high volume shorting of GLD going on since last Friday.

The GLD price curve looks horrible since it broke in Mar 08.

What am I missing here?

Crude Oil, Gold Prices Plummet: Time to Get Cautious About Dollar Bears

The comment is better than the article.

What's Behind the Slide in Oil and Commodities?

Compelling. Good one.

In Light of Peak Oil, Financial Diversification Is a Bad Idea

mike fitz,

I am just curious about your picture. What peak are you on?