eagle1003's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.com/user/432851/comments http://seekingalpha.com/article/1454401/comments?source=feed#comment-19131531 19131531 Wed, 22 May 2013 16:03:15 -0400 http://seekingalpha.com/article/1445141/comments?source=feed#comment-19044501 19044501 Today GLD dropped to 130.75 , just above the prior low, and then rallied to close at 135.12. AVI, is this a sucker's rally and should we wait for GLD to drop into the 123.75 to 127 region before we dive in? ]]> Mon, 20 May 2013 16:55:06 -0400 Today GLD dropped to 130.75 , just above the prior low, and then rallied to close at 135.12. AVI, is this a sucker's rally and should we wait for GLD to drop into the 123.75 to 127 region before we dive in? ]]> http://seekingalpha.com/article/1441431/comments?source=feed#comment-18998031 18998031 Sun, 19 May 2013 12:18:01 -0400 http://seekingalpha.com/article/1445161/comments?source=feed#comment-18996391 18996391
As far as a low VIX number being predictive of anything occurring in the next few months, that is just rubbish. The VIX was below 15 almost a year, dipping below 9 at one point, before the market topped in Oct of 2007. Buying calls as insurance and having them expire worthless is another good way to lose money. It doesn't take a genius to figure that out.]]> Sun, 19 May 2013 11:13:50 -0400
As far as a low VIX number being predictive of anything occurring in the next few months, that is just rubbish. The VIX was below 15 almost a year, dipping below 9 at one point, before the market topped in Oct of 2007. Buying calls as insurance and having them expire worthless is another good way to lose money. It doesn't take a genius to figure that out.]]> http://seekingalpha.com/article/1443111/comments?source=feed#comment-18974141 18974141
Jewelery: Increased by 60 tonnes to 551 tonnes

Technology: Increased by 4 tonnes to 105 tonnes

Central Banks: Increased 6 tonnes to 115 tonnes

Bar and Coin : Increased 35 tonnes to 378 tonnes

ETF investment: Decreased 230 tonnes to -177 tonnes

One thing is readily apparent: The demand in all categories has increased except for ETF demand which has fallen precipitously, dwarfing the increases of the other categories.

What is not so apparent is that demand for all categories with the EXCEPTION of ETF demand is 100% met by physical gold. ETF demand is met much differently. We know that a significant portion of ETF demand is met by the leasing out of bank gold, on a leveraged basis, to the ETF sponsors. This 'arrangement' puts no strain of the supplies of physical gold and the whole process lacks transparency and there is no requirement to report to a regulatory body.

Gold is going to continue to languish unless there is a change in the intent of the big players, many who have abandoned the gold ETFs. If they were to get back in the game as buyers of real gold instead of paper, then we have a whole new ball game. I doubt that the central banks would be able to prevent a dramatic rise in the price of gold although I am sure they would try even if it meant selling their stocks into the market. What would be at stake would be the integrity of the fiat currencies.

I am not saying that such a scenario is definitely going to happen but the possibility cannot be ruled out. Bigger players demanding real gold is the only realistic hope for the goldbugs. The Chinese housewives and Indian brides are not going to do the job.]]> Sat, 18 May 2013 02:23:08 -0400
Jewelery: Increased by 60 tonnes to 551 tonnes

Technology: Increased by 4 tonnes to 105 tonnes

Central Banks: Increased 6 tonnes to 115 tonnes

Bar and Coin : Increased 35 tonnes to 378 tonnes

ETF investment: Decreased 230 tonnes to -177 tonnes

One thing is readily apparent: The demand in all categories has increased except for ETF demand which has fallen precipitously, dwarfing the increases of the other categories.

What is not so apparent is that demand for all categories with the EXCEPTION of ETF demand is 100% met by physical gold. ETF demand is met much differently. We know that a significant portion of ETF demand is met by the leasing out of bank gold, on a leveraged basis, to the ETF sponsors. This 'arrangement' puts no strain of the supplies of physical gold and the whole process lacks transparency and there is no requirement to report to a regulatory body.

Gold is going to continue to languish unless there is a change in the intent of the big players, many who have abandoned the gold ETFs. If they were to get back in the game as buyers of real gold instead of paper, then we have a whole new ball game. I doubt that the central banks would be able to prevent a dramatic rise in the price of gold although I am sure they would try even if it meant selling their stocks into the market. What would be at stake would be the integrity of the fiat currencies.

I am not saying that such a scenario is definitely going to happen but the possibility cannot be ruled out. Bigger players demanding real gold is the only realistic hope for the goldbugs. The Chinese housewives and Indian brides are not going to do the job.]]> http://seekingalpha.com/article/1436971/comments?source=feed#comment-18884191 18884191
A lot of junior exploratory miners are in business only because it provides the CEOs and a few upper management leeches with fat salaries that are supported by way of continually selling shares until the stock is worth only pennies. Once investors catch on to these legal scams and are unwilling to buy anymore worthless shares, management closes up shop and moves on to a new venture with a new name so the scam can be repeated again and again.]]> Thu, 16 May 2013 01:36:19 -0400
A lot of junior exploratory miners are in business only because it provides the CEOs and a few upper management leeches with fat salaries that are supported by way of continually selling shares until the stock is worth only pennies. Once investors catch on to these legal scams and are unwilling to buy anymore worthless shares, management closes up shop and moves on to a new venture with a new name so the scam can be repeated again and again.]]> http://seekingalpha.com/article/1438271/comments?source=feed#comment-18883921 18883921 Thu, 16 May 2013 01:18:25 -0400 http://seekingalpha.com/article/1438271/comments?source=feed#comment-18883821 18883821 Thu, 16 May 2013 01:15:16 -0400 http://seekingalpha.com/article/1433151/comments?source=feed#comment-18850051 18850051
Perhaps Mr Bernake can be credited for having created a solution. The QE money did not sit idle in the banks as some have suggested. In fact, the bankers have been buying up equities in a very big way, enhancing share prices in the process. (http://ti.me/ZdHd1F) It is note worthy that the target sectors of the bankers are the defensive sectors, with commodity sectors completely shut out of the action.

No doubt, the pension funds will be reporting that they are now in much better shape with the market now at all time highs. Their ability to meet pension obligations will only get better as bond yields begin to improve. Corporations and nearly bankrupt cities also have a great deal to cheer about. Their pension related liabilities can only be improving.

The party may not end as abruptly as some think when the FED slows down or even ends the QE programs. Will the bankers suddenly rush to sell the accumulated stocks? I doubt that will happen. A sudden market decline would negate everything the FED has accomplished so a crash may not be in the cards. However, a problem will arise when excess liquidity is slowly removed. . In that situation, a gradual and lengthy sell down of equities would be the most likely outcome.]]> Wed, 15 May 2013 10:57:42 -0400
Perhaps Mr Bernake can be credited for having created a solution. The QE money did not sit idle in the banks as some have suggested. In fact, the bankers have been buying up equities in a very big way, enhancing share prices in the process. (http://ti.me/ZdHd1F) It is note worthy that the target sectors of the bankers are the defensive sectors, with commodity sectors completely shut out of the action.

No doubt, the pension funds will be reporting that they are now in much better shape with the market now at all time highs. Their ability to meet pension obligations will only get better as bond yields begin to improve. Corporations and nearly bankrupt cities also have a great deal to cheer about. Their pension related liabilities can only be improving.

The party may not end as abruptly as some think when the FED slows down or even ends the QE programs. Will the bankers suddenly rush to sell the accumulated stocks? I doubt that will happen. A sudden market decline would negate everything the FED has accomplished so a crash may not be in the cards. However, a problem will arise when excess liquidity is slowly removed. . In that situation, a gradual and lengthy sell down of equities would be the most likely outcome.]]> http://seekingalpha.com/article/1435941/comments?source=feed#comment-18848651 18848651 Wed, 15 May 2013 10:37:36 -0400 http://seekingalpha.com/instablog/4596961-joseph-stuber/1856021-the-bernanke-agenda-it-isn-t-what-you-think-it-is?source=feed#comment-18836221 18836221
On another note, I see the stock market sailed through your 1600 upper limit and seems to want to march higher yet. It must really suck to have been bearish all the time you could have been making hay. You have missed out on a great party. Are you going to pick another number as the high before it all slides into a crash?

The banks, buying stocks with QE money, are completely distorting the market with no inclination to take profits as we would normally expect to see. There also has been very little in the way of sector rotation with the same sectors pushing the market ever higher. It is interesting how the financial stocks and defensive sectors are doing so well but then it really isn't surprising considering the conservative nature of those who are driving the market with the Fed's 'printed' cash. The risky commodity sectors are completely ignored.

The declining volumes are evidence of a shrinking pool of buyers and some may interpret that to be a bearish sign. Well, it would be if we were in a normal bull market, but this bull market is anything but "normal". In fact, as the volume shrinks, the market responds by moving higher. Clearly, those in the driver's seat are intent on pushing the market up. The 'TOP' might prove to be much more elusive than one might expect.

One of the big beneficiaries of a rising stock market has been the pension funds and their corporate sponsors who have been facing billions in funding liabilities thanks to a combination of low bond yields and low stock prices that were crippling the ability of the plans to provide the pensions for retirees. Perhaps the QE gift from Bernake has gone exactly where he wanted it to go in order to avert a pension fund disaster. Rising yields should further lighten the funding liability. Maybe that was his real plan all along or would that be too simple to consider?]]> Wed, 15 May 2013 00:48:29 -0400
On another note, I see the stock market sailed through your 1600 upper limit and seems to want to march higher yet. It must really suck to have been bearish all the time you could have been making hay. You have missed out on a great party. Are you going to pick another number as the high before it all slides into a crash?

The banks, buying stocks with QE money, are completely distorting the market with no inclination to take profits as we would normally expect to see. There also has been very little in the way of sector rotation with the same sectors pushing the market ever higher. It is interesting how the financial stocks and defensive sectors are doing so well but then it really isn't surprising considering the conservative nature of those who are driving the market with the Fed's 'printed' cash. The risky commodity sectors are completely ignored.

The declining volumes are evidence of a shrinking pool of buyers and some may interpret that to be a bearish sign. Well, it would be if we were in a normal bull market, but this bull market is anything but "normal". In fact, as the volume shrinks, the market responds by moving higher. Clearly, those in the driver's seat are intent on pushing the market up. The 'TOP' might prove to be much more elusive than one might expect.

One of the big beneficiaries of a rising stock market has been the pension funds and their corporate sponsors who have been facing billions in funding liabilities thanks to a combination of low bond yields and low stock prices that were crippling the ability of the plans to provide the pensions for retirees. Perhaps the QE gift from Bernake has gone exactly where he wanted it to go in order to avert a pension fund disaster. Rising yields should further lighten the funding liability. Maybe that was his real plan all along or would that be too simple to consider?]]> http://seekingalpha.com/article/1415061/comments?source=feed#comment-18606911 18606911 Wed, 08 May 2013 22:03:59 -0400 http://seekingalpha.com/article/1415061/comments?source=feed#comment-18593481 18593481
I would not advise anyone to buy gold ETFs. Investments into gold ETFs sap the demand for the real thing and accordingly, do little to raise the price of gold. The reason for this seemingly contradictory statement is that most Gold ETFs are backed by gold that has been leased to them by the banks and on a leveraged basis. The ownership remains with the banks, NOT the ETF sponsors. This arrangement puts no strain on supplies and accordingly, allows the banks to keep a lid on prices

Those who are interested in gold should buy the real thing. For those who insist on buying via an ETF, there are some gold ETFs that are, in fact, backed 100% by real and unleveraged gold. The Sprott physical backed fund(PHYS) is one of them. Doing some homework before buying into anything would be wise.]]> Wed, 08 May 2013 15:53:07 -0400
I would not advise anyone to buy gold ETFs. Investments into gold ETFs sap the demand for the real thing and accordingly, do little to raise the price of gold. The reason for this seemingly contradictory statement is that most Gold ETFs are backed by gold that has been leased to them by the banks and on a leveraged basis. The ownership remains with the banks, NOT the ETF sponsors. This arrangement puts no strain on supplies and accordingly, allows the banks to keep a lid on prices

Those who are interested in gold should buy the real thing. For those who insist on buying via an ETF, there are some gold ETFs that are, in fact, backed 100% by real and unleveraged gold. The Sprott physical backed fund(PHYS) is one of them. Doing some homework before buying into anything would be wise.]]> http://seekingalpha.com/article/1407771/comments?source=feed#comment-18564171 18564171
While the demand for gold coins is elevated, don't get lulled into thinking that gold prices to set to skyrocket. Three hundred million in coin sales sounds like a lot but compared to the 25 billion dollars worth the central banks are expected to purchase this year, it's just small potatoes. Despite the fact that the central banks bought 534 tons of the real thing in 2012, gold is still not moving up. Think about that for a minute.]]> Tue, 07 May 2013 23:45:38 -0400
While the demand for gold coins is elevated, don't get lulled into thinking that gold prices to set to skyrocket. Three hundred million in coin sales sounds like a lot but compared to the 25 billion dollars worth the central banks are expected to purchase this year, it's just small potatoes. Despite the fact that the central banks bought 534 tons of the real thing in 2012, gold is still not moving up. Think about that for a minute.]]> http://seekingalpha.com/article/1411601/comments?source=feed#comment-18563521 18563521
It is the love affair that investors have for ETFs that have prevented real gold from going ballistic. Just think of where gold would be today if every GLD investor had bought real gold instead of the paper crap. The shortage would have been unlike anything we ever seen. The little guy buying gold coins is not going to turn this market around. As I see it, the only hope for gold now is if the big players who dumped their paper gold are intending to buy real gold in tons, not ounces. It just may happen.]]> Tue, 07 May 2013 23:14:28 -0400
It is the love affair that investors have for ETFs that have prevented real gold from going ballistic. Just think of where gold would be today if every GLD investor had bought real gold instead of the paper crap. The shortage would have been unlike anything we ever seen. The little guy buying gold coins is not going to turn this market around. As I see it, the only hope for gold now is if the big players who dumped their paper gold are intending to buy real gold in tons, not ounces. It just may happen.]]> http://seekingalpha.com/article/1406601/comments?source=feed#comment-18505151 18505151 Mon, 06 May 2013 15:52:06 -0400 http://seekingalpha.com/article/1405781/comments?source=feed#comment-18499621 18499621 Mon, 06 May 2013 13:39:12 -0400 http://seekingalpha.com/article/1403581/comments?source=feed#comment-18481191 18481191
To suggest that gold coin sales are somehow going to counter the massive dumping by various interests, is just nonsense. The booming gold coin market is irrelevant when compared to the magnitude of buying (or selling) by a central bank or hedge fund who may deal with hundreds of tons in just a single transaction.

Contrary to what the author has said, strong retail buying is exactly what one would expect to see at the end of a bull market. The interest of the retail buyer is never something to cheer about when you consider that it is the retail buyer who, without exception, ends up being the sucker at the very end of every burst bubble.

If we should someday learn that a number of central banks are buying several thousand tons of physical gold, that will be a game changer for gold's declining fortunes. In the meantime, let's stop yapping about meaningless retail sales. End of story.]]> Mon, 06 May 2013 01:19:08 -0400
To suggest that gold coin sales are somehow going to counter the massive dumping by various interests, is just nonsense. The booming gold coin market is irrelevant when compared to the magnitude of buying (or selling) by a central bank or hedge fund who may deal with hundreds of tons in just a single transaction.

Contrary to what the author has said, strong retail buying is exactly what one would expect to see at the end of a bull market. The interest of the retail buyer is never something to cheer about when you consider that it is the retail buyer who, without exception, ends up being the sucker at the very end of every burst bubble.

If we should someday learn that a number of central banks are buying several thousand tons of physical gold, that will be a game changer for gold's declining fortunes. In the meantime, let's stop yapping about meaningless retail sales. End of story.]]> http://seekingalpha.com/article/1401041/comments?source=feed#comment-18452911 18452911
For the month of April alone, gold ETF holdings fell by some 174 metric tons. Now, that is a lot of gold. On the other hand, we have retail investors buying gold coins in record amounts that so far, during the first four months of 2013, has totaled 502,000 ounces. That sounds impressive, until we convert that number to metric tons which works out to be a puny 15 tons! ( for four months)

Many authors and commentators have been making a big deal of the fact that at the retail level, there has been expanded sales of gold coins. The implication is that increased buying by the retail investor is going to overwhelm the dumping going on by the large holders of gold ETFs. Sorry, but the math just doesn't support that supposition. Thus far, the retail investor has accomplished little except to create temporary shortages at the dealer level and unless they further ramp up purchases by a factor of at least 20 times, the retail influence is going remain mostly irrelevant in the bigger picture.

What would send gold up is for sovereign nations to ramp up their purchases in big way. I am talking about a demand in the thousands of tons! The only circumstance that would cause that kind of demand is if gold were to become a widespread currency of choice for international trade, particularly for oil, thus threatening the reign of the US petrodollar. Improbable? Not at all. Iran has made deals with a number of countries to accept gold for oil. Perhaps they are about to find out just how much that pisses off the elite here and in Israel, who are exerting heavy pressure on Obama to start dropping bombs on yet another country.]]> Sat, 04 May 2013 23:51:36 -0400
For the month of April alone, gold ETF holdings fell by some 174 metric tons. Now, that is a lot of gold. On the other hand, we have retail investors buying gold coins in record amounts that so far, during the first four months of 2013, has totaled 502,000 ounces. That sounds impressive, until we convert that number to metric tons which works out to be a puny 15 tons! ( for four months)

Many authors and commentators have been making a big deal of the fact that at the retail level, there has been expanded sales of gold coins. The implication is that increased buying by the retail investor is going to overwhelm the dumping going on by the large holders of gold ETFs. Sorry, but the math just doesn't support that supposition. Thus far, the retail investor has accomplished little except to create temporary shortages at the dealer level and unless they further ramp up purchases by a factor of at least 20 times, the retail influence is going remain mostly irrelevant in the bigger picture.

What would send gold up is for sovereign nations to ramp up their purchases in big way. I am talking about a demand in the thousands of tons! The only circumstance that would cause that kind of demand is if gold were to become a widespread currency of choice for international trade, particularly for oil, thus threatening the reign of the US petrodollar. Improbable? Not at all. Iran has made deals with a number of countries to accept gold for oil. Perhaps they are about to find out just how much that pisses off the elite here and in Israel, who are exerting heavy pressure on Obama to start dropping bombs on yet another country.]]> http://seekingalpha.com/article/1386021/comments?source=feed#comment-18392171 18392171 Fri, 03 May 2013 03:01:49 -0400 http://seekingalpha.com/article/1397891/comments?source=feed#comment-18391781 18391781
The declining volumes accompanying the new S&P highs is worrisome. Buyers are obviously becoming scarcer with little interest coming from the retail investors, many of whom are still smarting after being thoroughly burnt in the 2007-08 crash. Personally, I already have one foot out of the exit door, just in case things go south in a big hurry.]]> Fri, 03 May 2013 02:42:11 -0400
The declining volumes accompanying the new S&P highs is worrisome. Buyers are obviously becoming scarcer with little interest coming from the retail investors, many of whom are still smarting after being thoroughly burnt in the 2007-08 crash. Personally, I already have one foot out of the exit door, just in case things go south in a big hurry.]]> http://seekingalpha.com/currents/post/995531?source=feed#comment-18390671 18390671 Fri, 03 May 2013 01:40:16 -0400 http://seekingalpha.com/article/1396321/comments?source=feed#comment-18388711 18388711 Thu, 02 May 2013 23:22:05 -0400 http://seekingalpha.com/article/1386021/comments?source=feed#comment-18297551 18297551
Hearing that investors are lining up to buy gold from coin dealers sounds wildly bullish until one realizes that these are retail customers we are talking about. Will retail buyers be the driving force behind a new and sustainable bull move for gold? That would mean that the retail investor is the new 'Smart Money'? Hmmmm...let's think that one out. It would be unusual, that's for sure.

I would be a lot more enthusiastic if the really big guns were involved in the buying spree rather then being reported as those who are reducing their holdings.]]> Tue, 30 Apr 2013 22:37:38 -0400
Hearing that investors are lining up to buy gold from coin dealers sounds wildly bullish until one realizes that these are retail customers we are talking about. Will retail buyers be the driving force behind a new and sustainable bull move for gold? That would mean that the retail investor is the new 'Smart Money'? Hmmmm...let's think that one out. It would be unusual, that's for sure.

I would be a lot more enthusiastic if the really big guns were involved in the buying spree rather then being reported as those who are reducing their holdings.]]> http://seekingalpha.com/currents/post/978601?source=feed#comment-18243461 18243461
Those who think that the ETF sponsors run out and buy real gold to fulfill the demand by the ETFs, are badly mistaken. That's not how it works. It's all done electronically with the holders of physical gold (banks) leasing out their gold on a leveraged basis. Some believe that the same gold is leased to multiple clients. We have no way of knowing if that is true because the banks are not required to report their actions. There appears to be zero over-sight by regulators. Note that 'leasing' is NOT a transfer of ownership!

It seems that the connection between paper gold and the real thing is, at best, tenuous. Some may feel that corrupt would be a better word. Just think about how easy it would be for interested parties to manipulate the price of real gold by buying or shorting the gold ETF's and doing so without ever having to worry about having the real gold to back them up!

The bottom line here is that despite the huge reported outflows of gold from the ETFs, the amount of gold that has actually changed ownership may be substantially less than what the 'outflow' would indicate.

Here a couple of links for those who want to follow up on gold leasing:
http://bit.ly/ZZApDM

http://bit.ly/14JMTHX]]> Mon, 29 Apr 2013 17:33:36 -0400
Those who think that the ETF sponsors run out and buy real gold to fulfill the demand by the ETFs, are badly mistaken. That's not how it works. It's all done electronically with the holders of physical gold (banks) leasing out their gold on a leveraged basis. Some believe that the same gold is leased to multiple clients. We have no way of knowing if that is true because the banks are not required to report their actions. There appears to be zero over-sight by regulators. Note that 'leasing' is NOT a transfer of ownership!

It seems that the connection between paper gold and the real thing is, at best, tenuous. Some may feel that corrupt would be a better word. Just think about how easy it would be for interested parties to manipulate the price of real gold by buying or shorting the gold ETF's and doing so without ever having to worry about having the real gold to back them up!

The bottom line here is that despite the huge reported outflows of gold from the ETFs, the amount of gold that has actually changed ownership may be substantially less than what the 'outflow' would indicate.

Here a couple of links for those who want to follow up on gold leasing:
http://bit.ly/ZZApDM

http://bit.ly/14JMTHX]]> http://seekingalpha.com/article/1380081/comments?source=feed#comment-18206631 18206631 Sun, 28 Apr 2013 21:16:04 -0400 http://seekingalpha.com/article/1379301/comments?source=feed#comment-18206451 18206451 Are you having trouble understanding what AVI is telling us? Maybe I can help. In a nutshell: GLD might rally back to the 142/143 level and maybe even as high has 143.45. However, if it should get past the 149 level, then we might assume that we are in a new bull market. Got that part?

Now, if GLD drops to 138, it might go to 127 and then maybe as low as 123.75. AVI didn't say what to watch for if the 123.75 level is taken out so I guess he will tell us whats next when the time comes. Stay tuned.

That Fibonacci thing that AVI uses isn't so hard once you get the hang of it, but I must confess that I am having difficulty figuring out how to make money with a system that seems to have all possibilities covered. Closest idea I can come up with is to short and go long GLD at the same time! Perhaps that I will know better how to make money using the Fibonacci thing when I understand it better.]]> Sun, 28 Apr 2013 21:11:32 -0400 Are you having trouble understanding what AVI is telling us? Maybe I can help. In a nutshell: GLD might rally back to the 142/143 level and maybe even as high has 143.45. However, if it should get past the 149 level, then we might assume that we are in a new bull market. Got that part?

Now, if GLD drops to 138, it might go to 127 and then maybe as low as 123.75. AVI didn't say what to watch for if the 123.75 level is taken out so I guess he will tell us whats next when the time comes. Stay tuned.

That Fibonacci thing that AVI uses isn't so hard once you get the hang of it, but I must confess that I am having difficulty figuring out how to make money with a system that seems to have all possibilities covered. Closest idea I can come up with is to short and go long GLD at the same time! Perhaps that I will know better how to make money using the Fibonacci thing when I understand it better.]]> http://seekingalpha.com/article/1379301/comments?source=feed#comment-18188811 18188811 Sun, 28 Apr 2013 10:25:34 -0400 http://seekingalpha.com/article/1358791/comments?source=feed#comment-18178861 18178861
Investor demand by way of gold ETF's are another significant (although negative) factor that should be considered. Demand from Asia is being met by actual physical gold whereas Western demand ( mostly for investment purposes) has been accommodated by paper gold ETFs that are supposedly backed by physical gold. I say supposedly because the reality is that the banks have been leasing out their gold to the ETF sponsors, on a leveraged basis. They can meet any amount of ETF demand by leasing the same gold out to multiple clients. How can the price go up when demand is being met with useless paper? It can't!

Ironically, it is the popularity of the gold ETFs that has enabled the banks to keep the price of gold where they feel it is not a threat to the integrity of paper currencies. If Western investors want to see the price of gold skyrocket, they must demand physical gold in the same way the Asians do. Investing in paper gold is exactly the wrong thing to do if one wants to see gold rise to it's true worth.]]> Sat, 27 Apr 2013 19:32:03 -0400
Investor demand by way of gold ETF's are another significant (although negative) factor that should be considered. Demand from Asia is being met by actual physical gold whereas Western demand ( mostly for investment purposes) has been accommodated by paper gold ETFs that are supposedly backed by physical gold. I say supposedly because the reality is that the banks have been leasing out their gold to the ETF sponsors, on a leveraged basis. They can meet any amount of ETF demand by leasing the same gold out to multiple clients. How can the price go up when demand is being met with useless paper? It can't!

Ironically, it is the popularity of the gold ETFs that has enabled the banks to keep the price of gold where they feel it is not a threat to the integrity of paper currencies. If Western investors want to see the price of gold skyrocket, they must demand physical gold in the same way the Asians do. Investing in paper gold is exactly the wrong thing to do if one wants to see gold rise to it's true worth.]]> http://seekingalpha.com/article/1375821/comments?source=feed#comment-18154981 18154981 Fri, 26 Apr 2013 18:32:39 -0400