The Gold enigma.

swissie · March 31

A question: Why are central banks buying Gold as if there were no tomorrow (especially third world countries) while private investors are selling their Gold and ETF Gold certificates?

WHY THIS?

MrPancake · March 31

As far as I know buying gold is a way for central banks to diversify and protect their reserves.

It's usually a sign that the USD ain't gonna do too well.

That's the reason emerging economies are buying a lot of gold.

It's a way of hedging the risk as they are heavily dependent on the USD.

Well, I guess.

Edited March 31 by MrPancake

swissie · March 31

51 minutes ago, MrPancake said:

As far as I know buying gold is a way for central banks to diversify and protect their reserves.

It's usually a sign that the USD ain't gonna do too well.

That's the reason emerging economies are buying a lot of gold.

It's a way of hedging the risk I guess.

I remain: The central banks are gobbeling up Gold massively. At the same time Private Investors get rid of their Gold holdings.

There is a good reason I called this thread as "the Gold Enigma".

MrPancake · March 31

17 minutes ago, swissie said:

I remain: The central banks are gobbeling up Gold massively. At the same time Private Investors get rid of their Gold holdings.

There is a good reason I called this thread as "the Gold Enigma".

If central banks buy massively, the price must be going up.

That's probably an opportunity to sell and make a profit for many private investors.

Seems logical to me...

Larry Fink said investors should now allocate 90% of their money to stocks.

Probably more opportunities to rack up profits that way.

Edited March 31 by MrPancake

soi3eddie · March 31

27 minutes ago, swissie said:

I remain: The central banks are gobbeling up Gold massively. At the same time Private Investors get rid of their Gold holdings.

Yes, we know about central banks. Where is the evidence that private investors are selling? Why would they, other than hardship need, or to take some profits? If there's high demand then now is not the time to sell.

swissie · March 31

33 minutes ago, soi3eddie said:

Yes, we know about central banks. Where is the evidence that private investors are selling? Why would they, other than hardship need, or to take some profits? If there's high demand then now is not the time to sell.

There are so many official and private statistics available that prove that the "Central-Banks" are the main buyers of Gold.

I would like to know why in such a situation "private investors" rather sell their Gold, instead of following "the central banks policy" of accumulating gold, instead of selling it.

Again: I called this thread "The Enigma of Gold". With good reason.

soi3eddie · March 31

3 minutes ago, swissie said:

I would like to know why in such a situation "private investors" rather sell their Gold, instead of following "the central banks policy" of accumulating gold, instead of selling it.

Maybe greed. I know a number of Thais who sold as the price increased. Now they regret it. I bought gold for safety last year (31,950 Baht/Baht). I reckon gold still has way to go. When WW3 starts and SHTF then those holding gold will have more options than those who don't.

Mike Lister · April 1

13 hours ago, swissie said:

There are so many official and private statistics available that prove that the "Central-Banks" are the main buyers of Gold.

I would like to know why in such a situation "private investors" rather sell their Gold, instead of following "the central banks policy" of accumulating gold, instead of selling it.

Again: I called this thread "The Enigma of Gold". With good reason.

Maybe because Central Banks will only buy gold for delivery whereas most private investors only buy ETF's, certificates and funds and doubt that the issuers of that paper would even exist, if there was a meltdown. I think it would be pointless to buy gold except to have it and hold it. I considered buying Eden Tree gold at one point but decided the risk was still there and was too great. But if I'm the government of Bongabonga, knowing that my gold bars are nicely tucked away in the BIS vaults, I probably sleep very soundly.

Dolf · April 1

14 hours ago, MrPancake said:

If central banks buy massively, the price must be going up.

That's probably an opportunity to sell and make a profit for many private investors.

Seems logical to me...

Larry Fink said investors should now allocate 90% of their money to stocks.

Probably more opportunities to rack up profits that way.

Stocks are high. That advice is 12 months late.

MrPancake · April 1

26 minutes ago, Dolf said:

Stocks are high. That advice is 12 months late.

Depends. If you look at Berkshire for example, it's still a pretty good deal.

Edited April 1 by MrPancake

Dolf · April 1

36 minutes ago, MrPancake said:

Depends. If you look at Berkshire for example, it's still a pretty good deal.

Warren will die soon.

MrPancake · April 1

5 minutes ago, Dolf said:

Warren will die soon.

Yep. That's very likely.

retarius · April 1

1 hour ago, Mike Lister said:

Maybe because Central Banks will only buy gold for delivery whereas most private investors only buy ETF's, certificates and funds and doubt that the issuers of that paper would even exist, if there was a meltdown. I think it would be pointless to buy gold except to have it and hold it. I considered buying Eden Tree gold at one point but decided the risk was still there and was too great. But if I'm the government of Bongabonga, knowing that my gold bars are nicely tucked away in the BIS vaults, I probably sleep very soundly.

I agree. I'm sure a lot of ETF and certificate holders are going to be crying if the poop flies. Buy physical gold, then you only have to worry about whether it is real or not.

Mike Lister · April 1

Thinking more about this question......who is being referred to in the by private investors, Thai people, Western investors or?

Thai people will likely take any profit as soon as it becomes visible, they will form queues outside gold shops as news of price increases emerge, simply because they are short of cash and always in debt. Take the money and run.

Western investors are more likely to invest for the longer term which means if they are selling now, it's because they also are short of cash or they think there will be a crash and their paper may become worthless.

Ultimately this is a debt related issue, I think. Global borrowings are too high, especially US borrowings, which sparks concerns about USD and what will happen to the assets of those companies that will fail, when it all implodes. If they are holding bullion, they are probably free and clear. But if they are holding paper, ouch!

To summarise, profit taking and fear are the key drivers, I think, is it not the same with everything!

cowellandrew · April 3

We had this clown in uk govt

That sold this gold!

Srikcir · April 3

"Here's Why Gold Is At A Record High - Forbes"

"Gold has added 394% in value over the past 20 years, according to FactSet data, below the S&P 500's 522% return over the two-decade period, but still a remarkable feat considering gold is an inorganic material without the potential to return profits to shareholders as a stock would." Mar 9, 2567 BE https://www.forbes.com

Shmo · April 4

1 hour ago, Srikcir said:

"Here's Why Gold Is At A Record High - Forbes"

“….considering gold is an inorganic material without the potential to return profits to shareholders as a stock would."

so misleading and outright wrong.

my 2 cents, you get what you pay for!

Buffet and all the other player’s including banks are using Arbitrage to make huge earnings and profit. How could gold have so much increase and earnings (394%!) if it wasn’t money?

Everything else is paper and can vanish at a whim of an Incompetent leader.

( EG Canada!) All the banks,countries, and super rich are pushing CBDC on the common people and hoarding up the hard currency ( gold) for themselves.

Interest rates are designed to strip the wealth from the public to the benefit of the investors.

Gold doesn’t rust or burn, is widely recognizable portable and tradable.
It is the basis of all money. Full Stop!

ALL the western countries and financial institutions buy gold to cover their

“ natural shortfall” in (ta-da!)

* Fractional Reserve Banking*

Gold is traditionally a storage of wealth unless you have enough to do Arbitrage and not feel pinched for cash flow.

I suspect that the bulk of the Gold in the world is generally not reported on the books and is stored and hidden.

By current thinking and definition, gold is not generally considered income or money but a. “Commodity for trade.”

( *evil deception there*)

That’s a cue for Forbes magazine can pipe up and repeat the “ gold is not income bearing” lie.

They think we are too stupid to know about Arbitrage

Banks, super rich, and some smart investors do it all the time to set prices and reap windfall profits.

Don’t be fooled!

Gold ( and silver) are the origin and source of true wealth as the absolute common denominator for exchange. The BIS and all the Central banks use it as a baseline for currency exchanges so how is it not money?

Gold is The foundation of all money,

simply put, a medium of exchange of energies they measure in Troy ounces against your labor and brain power.

https://www.investopedia.com/articles/active-trading/021715/precious-metals-arbitrage.asp

May you all be profitable in your life!
Cheers!

blazes · April 4

I'm surprised that no one on this thread has mentioned the most obvious reason (among many) why gold has climbed so much in the last two years.

It relates to the American imposition of sanctions on Russia at the beginning of the Ukraine business.

When countries around the world with strong economies saw that the US was likely to suddenly freeze the assets of any country the US disapproved of, they began to organize against the same thing happening to them as happened to Russia. So, the BRICS countries (Brazil, Russia, India, China, & S. Africa) began the process of setting up a payments' system in opposition to the dollar system that has prevailed since the end of WW2.
(The Brics countries have been joined, last year, officially by Egypt, Ethiopia, Iran and the UAE.)

Russia of course got around American sanctions by trading oil for Indian rupees or for Chinese yuan etc. That was the beginning. It is already leading to a slight weakening of the dollar.

Much more dangerous for world peace & stability is an idea originating in Washington that (in order for Congress to finance the carnage in Ukraine) the US should SEIZE (that is, steal) $300 billion in US Treasuries that belong to Russia. If that idea comes to fruition and the theft is committed, it will herald ...well, who knows what ...but the consequences could be extremely serious.

Nothing written here is secret or conspiratorial. It's all easily available in numerous sources in financial and political journalism.

bradiston · April 4

If your gold's in a Swiss vault, come WWIII, chances are Putin's going to blow it up and empty it. It's the only way he can keep the Russian kleptonomy alive. Get out of gold!

Mike Lister · April 4

1 hour ago, blazes said:

I'm surprised that no one on this thread has mentioned the most obvious reason (among many) why gold has climbed so much in the last two years.

It relates to the American imposition of sanctions on Russia at the beginning of the Ukraine business.

When countries around the world with strong economies saw that the US was likely to suddenly freeze the assets of any country the US disapproved of, they began to organize against the same thing happening to them as happened to Russia. So, the BRICS countries (Brazil, Russia, India, China, & S. Africa) began the process of setting up a payments' system in opposition to the dollar system that has prevailed since the end of WW2.
(The Brics countries have been joined, last year, officially by Egypt, Ethiopia, Iran and the UAE.)

Russia of course got around American sanctions by trading oil for Indian rupees or for Chinese yuan etc. That was the beginning. It is already leading to a slight weakening of the dollar.

Much more dangerous for world peace & stability is an idea originating in Washington that (in order for Congress to finance the carnage in Ukraine) the US should SEIZE (that is, steal) $300 billion in US Treasuries that belong to Russia. If that idea comes to fruition and the theft is committed, it will herald ...well, who knows what ...but the consequences could be extremely serious.

Nothing written here is secret or conspiratorial. It's all easily available in numerous sources in financial and political journalism.

I don't see that USD has weakened at all, in fact, the opposite seems true.

https://www.marketwatch.com/investing/index/dxy

farangkinok · April 4

1 hour ago, blazes said:

When countries around the world with strong economies saw that the US was likely to suddenly freeze the assets of any country the US disapproved of, they began to organize against the same thing happening to them as happened to Russia.

Bingo!

Edited April 4 by farangkinok

blazes · April 4

37 minutes ago, Mike Lister said:

I don't see that USD has weakened at all, in fact, the opposite seems true.

https://www.marketwa

38 minutes ago, Mike Lister said:

I don't see that USD has weakened at all, in fact, the opposite seems true.

https://www.marketwatch.com/investing/index/dxy

tch.com/investing/index/dxy

That is a good graph to show (and I go there myself every day). However, if you look closely at the numbers (and the surrounding stories) you will see that there has been some weakening of the dollar. Not so many weeks ago the dollar index (versus gold) stood at about 102 (now it is 104, and so a strengthening of the dollar. But it is strengthening because of global expectation that US Treasuries will go up (see the story below the graph).

If Treasuries go up, it is because the "market" expects further inflation and further rate increases. The rate increases will come because of the huge deficits being run by successive administrations. (That is why whoever wins the next general election is going to have to somehow solve this problem of deficits as far as the eye can see. But who has the balls to do what needs to be done??!!)

Mike Lister · April 4

6 minutes ago, blazes said:

That is a good graph to show (and I go there myself every day). However, if you look closely at the numbers (and the surrounding stories) you will see that there has been some weakening of the dollar. Not so many weeks ago the dollar index (versus gold) stood at about 102 (now it is 104, and so a strengthening of the dollar. But it is strengthening because of global expectation that US Treasuries will go up (see the story below the graph).

If Treasuries go up, it is because the "market" expects further inflation and further rate increases. The rate increases will come because of the huge deficits being run by successive administrations. (That is why whoever wins the next general election is going to have to somehow solve this problem of deficits as far as the eye can see. But who has the balls to do what needs to be done??!!)

Bond yields and value work in opposite directions. If Treasuries are going up then yields will fall, it's because the markets expect interest rates to fall, which they certainly will.

Skeptic7 · April 4

I didn't have much, but sold my gold coins for THB yesterday. Didn't need the money, but figured I'd dump it at a high price. Gonna offload my silver coins too soon, if can find a pawn shop or individual to buy it.

roquefort · April 4

On 4/1/2024 at 12:49 AM, swissie said:

I remain: The central banks are gobbeling up Gold massively. At the same time Private Investors get rid of their Gold holdings.

There is a good reason I called this thread as "the Gold Enigma".

There's a good reason private investors are know as "dumb money".

Irish star · April 4

1 hour ago, Skeptic7 said:

I didn't have much, but sold my gold coins for THB yesterday. Didn't need the money, but figured I'd dump it at a high price. Gonna offload my silver coins too soon, if can find a pawn shop or individual to buy it.

I would wait on silver

CanadaSam · April 4

On 4/1/2024 at 1:18 AM, soi3eddie said:

Where is the evidence that private investors are selling?

Where else are the central banks going to get large quantities of gold?

SportRider · April 4

There's really no point to dwell on it.. and I don't think it really rates as an 'enigma' 😂😂... How did the population of Easter Island die out? Why are the bases of ancient pyramids perfectly flat? Why are people selling gold...? Err.. nope.

It is what it is. Main reason for individuals selling 'safe' assets is *because they need the money*, hardly a revelation.

Ps this is the reason why directors selling shares is much less important than directors buying shares. The former could be for school fees. The latter indicates faith in the business.

SR

Skeptic7 · April 4

2 hours ago, Irish star said:

I would wait on silver

I hear ya...but been waiting since 1980. 🤣

Did sell some then. But bought a lot more for years after that, dirt cheap. Should have sold in 2011. Don't need the cash, just want to off-load it. Clearing out the clutter.

Mike Lister · April 4

10 hours ago, blazes said:

I'm surprised that no one on this thread has mentioned the most obvious reason (among many) why gold has climbed so much in the last two years.

It relates to the American imposition of sanctions on Russia at the beginning of the Ukraine business.

When countries around the world with strong economies saw that the US was likely to suddenly freeze the assets of any country the US disapproved of, they began to organize against the same thing happening to them as happened to Russia. So, the BRICS countries (Brazil, Russia, India, China, & S. Africa) began the process of setting up a payments' system in opposition to the dollar system that has prevailed since the end of WW2.
(The Brics countries have been joined, last year, officially by Egypt, Ethiopia, Iran and the UAE.)

Russia of course got around American sanctions by trading oil for Indian rupees or for Chinese yuan etc. That was the beginning. It is already leading to a slight weakening of the dollar.

Much more dangerous for world peace & stability is an idea originating in Washington that (in order for Congress to finance the carnage in Ukraine) the US should SEIZE (that is, steal) $300 billion in US Treasuries that belong to Russia. If that idea comes to fruition and the theft is committed, it will herald ...well, who knows what ...but the consequences could be extremely serious.

Nothing written here is secret or conspiratorial. It's all easily available in numerous sources in financial and political journalism.

https://www.bnnbloomberg.ca/currency-angst-is-going-global-as-strong-dollar-vexes-markets-1.2054961

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