Where Is Gold Going In This Market

[flying]

there is no doubt that the ousting of Manuel Zelaya will have gold trading in Hong Kong above 2,800 dollars within the next couple of hours!

You think so? I dont but you could be right.

My point was more along the lines that everyday we wake to noise.

We wake to noise in the news & noise the markets.

I just was showing some of today's noise.

But that is all it is noise............

It masks a much larger problem.

Again just a 50/50 but it is mine

Edited June 29, 2009 by flying

[Naam]

there is no doubt that the ousting of Manuel Zelaya will have gold trading in Hong Kong above 2,800 dollars within the next couple of hours!

You think so? I dont but you could be right.

i am right! gold is trading in Hong Kong presently @ 2,808 dollars.

[flying]

i am right! gold is trading in Hong Kong presently @ 2,808 dollars.

I think your wrong..........I believe it is 7265 per oz or 233.61 per gram HKD of course

Edited June 29, 2009 by flying

[Naam]

i am right! gold is trading in Hong Kong presently @ 2,808 dollars.

I think your wrong.....

it's would have been advisable to read the last line of my posting too which says "OOPS! edited to add that i meant of course >$2,800 for THREE ounces"

[flying]

it's would have been advisable to read the last line of my posting too which says "OOPS! edited to add that i meant of course >$2,800 for THREE ounces"

I saw it you wacko

Behave yourself

[Abrak]

Either way, with 140 times the paper Gold as the physical, one day we'll see the same blow up in the Gold market as we are witnessing in credit markets, albeit it not as large, and effecting the few rather than the many.

I dont understand what you mean by this comment. I realize for instance that holding GLD ETF is paper gold but it is theoretically backed by physical gold.

You might mean that fiat currencies are 140 times the value of the gold market (which would surprise me but might be the case) but to me that wouldnt imply that the relative value of gold is likely to go down - quite the opposite in fact.

It maybe that you mean there is 140 times the total supply of gold than the annual real demand and supply which will leave it vulnerable when investment demand falls. This is true. If the world gets back on its feet, growth returns and policy makers stop trying to debase their currencies, gold will certainly fall substantially to at least US$600 I suspect.

[lannarebirth]

Either way, with 140 times the paper Gold as the physical, one day we'll see the same blow up in the Gold market as we are witnessing in credit markets, albeit it not as large, and effecting the few rather than the many.

I dont understand what you mean by this comment. I realize for instance that holding GLD ETF is paper gold but it is theoretically backed by physical gold.

You might mean that fiat currencies are 140 times the value of the gold market (which would surprise me but might be the case) but to me that wouldnt imply that the relative value of gold is likely to go down - quite the opposite in fact.

It maybe that you mean there is 140 times the total supply of gold than the annual real demand and supply which will leave it vulnerable when investment demand falls. This is true. If the world gets back on its feet, growth returns and policy makers stop trying to debase their currencies, gold will certainly fall substantially to at least US$600 I suspect.

I believe he means that there is 140 times the "ownership" of Gold than there is physical supply. Ownership being through any number of ETF's, trackers, or other dodgy proxy paper financial instruments. Sort of the opposite of naked short selling of "phantom" shares. Or maybe I'm reading it wrong.

Edited June 29, 2009 by lannarebirth

[Abrak]

I believe he means that there is 140 times the "ownership" of Gold than there is physical supply. Ownership being through any number of ETF's, trackers, or other dodgy proxy paper financial instruments. Sort of the opposite of naked short selling of "phantom" shares. Or maybe I'm reading it wrong.

Well that cant be right. There have been 158,000 tonnes of gold ever mined worth some US$4.5trn. If there is 140 times in paper gold then paper gold is worth US$790trn or 15x the GDP of the entire world. Most gold is physically held in the form of jewellry although I guess CBs own 30,000 tonnes or so. ETFs account for maybe 10,000 tonnes and they are supposed to be backed by physical. I dont suspect the futures market is very big and I bet it is largely hedged.

[lannarebirth]

I believe he means that there is 140 times the "ownership" of Gold than there is physical supply. Ownership being through any number of ETF's, trackers, or other dodgy proxy paper financial instruments. Sort of the opposite of naked short selling of "phantom" shares. Or maybe I'm reading it wrong.

Well that cant be right. There have been 158,000 tonnes of gold ever mined worth some US$4.5trn. If there is 140 times in paper gold then paper gold is worth US$790trn or 15x the GDP of the entire world. Most gold is physically held in the form of jewellry although I guess CBs own 30,000 tonnes or so. ETFs account for maybe 10,000 tonnes and they are supposed to be backed by physical. I dont suspect the futures market is very big and I bet it is largely hedged.

Of course it can't be "right", I'm just trying to figure out what his point was. Whether right or wrong, I believe it is true that there are more financial instruments representing physical supply than the supply can support. That's what the goldbugs claim anyway, and I've no reason to doubt them.

I think they believe when "investors" try to redeem that paper for the underlying, that could put serious upward pressure on the price of the physical metal. I think that's how the theory goes, but I haven't been watching it closely. If there is validity to the paper/physical mismatch, I could see a rush for the exits sending price down even quicker, in the short term. Anyhow, I just don't have any facts to judge either argument, so I choose to ignore it.

Edited June 29, 2009 by lannarebirth

[Naam]

ETFs account for maybe 10,000 tonnes and they are supposed to be backed by physical.

that is correct. i remember my grandmother confirming that fact after she climbed the Nanga Parbat in 1936 without oxygen mask.

[lannarebirth]

ETFs account for maybe 10,000 tonnes and they are supposed to be backed by physical.

that is correct. i remember my grandmother confirming that fact after she climbed the Nanga Parbat in 1936 without oxygen mask.

GLD one of many ETF's is a Trust and is supposed to have the physical on hand. It usually does, but it sometimes does not. Whether it can deliver it, I have no idea. It trades between 25% and 30% of it's inventory per day. Nope, no mania there, and that's one of the better ones.

[badge]

There are approximately 140 ounces of paper Gold for every ounce of Physical Gold. Once Gold fund redemptions are frozen and defaults are made on all types of contracts related to Gold, the bubble will deflate.

Its arguable that the remaining physical Gold may soar in value, but I think the USD would benefit more.

By paper Gold Im refering to notional values of all cash and derivative products. For example notional values on all derivatives lie around approximately $1Quadrillion at the moment.

[lannarebirth]

There are approximately 140 ounces of paper Gold for every ounce of Physical Gold. Once Gold fund redemptions are frozen and defaults are made on all types of contracts related to Gold, the bubble will deflate.

Its arguable that the remaining physical Gold may soar in value, but I think the USD would benefit more.

By paper Gold Im refering to notional values of all cash and derivative products. For example notional values on all derivatives lie around approximately $1Quadrillion at the moment.

I'm old enough to remember when that used to be a lot of money.

[lannarebirth]

ETFs account for maybe 10,000 tonnes and they are supposed to be backed by physical.

that is correct. i remember my grandmother confirming that fact after she climbed the Nanga Parbat in 1936 without oxygen mask.

GLD one of many ETF's is a Trust and is supposed to have the physical on hand. It usually does, but it sometimes does not. Whether it can deliver it, I have no idea. It trades between 25% and 30% of it's inventory per day. Nope, no mania there, and that's one of the better ones.

As I said, this is one of the "better" ones:

http://seekingalpha.com/article/121121-ten...id-the-gold-etf

[flying]

Everything being said in the last 9 posts....

Isn't it nice to know that they can claim all kinds of things about paper gold

just like paper currency but the reality of physical gold is when push comes to shove

it's count cannot be twisted.

:D

[Abrak]

As I said, this is one of the "better" ones:

http://seekingalpha.com/article/121121-ten...id-the-gold-etf

But from the same source...

http://seekingalpha.com/article/59216-wsj-...g-gold-holdings

It is fairly apparent that GLD's holdings are backed by substantial physical gold. If you look at the structure of the fund they make something ridiculous like 1% simply for matching buys and sells of ETF purchases with physical, so they are hardly likely to be 140x paper.

Anyway Badge's point was that various types of fiat 'currency' - in the broadest possible definition - are 140x global gold money supply. This I can believe. What I dont understand is if this all implodes why the value of physical gold should implode? I thought the opposite was suppose to happen.

BTW did someone say they had no reason to doubt gold bugs?

[lannarebirth]

As I said, this is one of the "better" ones:

http://seekingalpha.com/article/121121-ten...id-the-gold-etf

But from the same source...

http://seekingalpha.com/article/59216-wsj-...g-gold-holdings

It is fairly apparent that GLD's holdings are backed by substantial physical gold. If you look at the structure of the fund they make something ridiculous like 1% simply for matching buys and sells of ETF purchases with physical, so they are hardly likely to be 140x paper.

Anyway Badge's point was that various types of fiat 'currency' - in the broadest possible definition - are 140x global gold money supply. This I can believe. What I dont understand is if this all implodes why the value of physical gold should implode? I thought the opposite was suppose to happen.

BTW did someone say they had no reason to doubt gold bugs?

As I said, GLD is one of the better ones. There are lots more claiming to be representative of the same supply. This is just a small, partial list:

http://etf.stock-encyclopedia.com/category/gold-etfs.html

then you've got your leveraged "trackers", futures, options, options on futures. The point is all that exists, not because everyone wants to own Gold, it exists because everyone wants in on the action. As we saw in the commodities bubble it was the demand for the derivatives that drove the price, not the demand for the undelying. My personal opinion is, Gold not much differnt, but with far less fundamentals to own it. Can't eat it, no utility to speak of.

Anyhow it could go to 200 or 2,000 as the derivatives tail wags the dog and not affect much, as it's just not that important (IMO) . Not like oil, or wheat or copper for instance.

As for not doubting the goldbugs they're right most of the time, with their argument, if not their expectations, but so what? I'm not an idealogue.

[flying]

It happens

Missing gold not accounting error: audit

Deloitte and Touche recommends review of security systems and potential activity by 'internal and/or external parties'

http://www.thestar.com/news/canada/article/658290

You know in the old west gold dust fell between the cracks in the floor.

Maybe that happened here?

I mean 15 mill is only 1040 or so pounds of gold

Edited June 29, 2009 by flying

[badge]

notional values on all derivatives lie around approximately $1Quadrillion at the moment.

I'm old enough to remember when that used to be a lot of money.

Right. A quadrillion here, a quadrillion there, pretty soon your talking real money

[badge]

GLD has never been audited? Thats not good!

abrak - if(when) paper gold implodes it could be +ve for physical, but I think the USD would make greater gains.

As a long term bear I imagine all these remaining asset bubbles will burst. Not all at once. In time, Golds day of reckoning will come.

Perhaps Golds high is in for our generation, perhaps its got another spike left in it to $2000. Until it clears $1100 I wouldnt like to commit either way right now.

[churchill]

Trading in commodities - Any lessons to be learned ?

Monkey 'stock market' prone to fluctuations too

http://www.newscientist.com/article/dn1739...ations-too.html

[Datsun240Z]

As an answer to the OP's topic title: In the Thais family pockets. You marry daughter? -> GOLD.

[badge]

As an answer to the OP's topic title: In the Thais family pockets. You marry daughter? -> GOLD.

Thats a bad trade

[Datsun240Z]

As an answer to the OP's topic title: In the Thais family pockets. You marry daughter? -> GOLD.

Thats a bad trade

[flying]

Chinese Government Wants To Purchase Another $80 Billion Of Gold!

http://www.numismaster.com/ta/numis/Articl...;ArticleId=6926

[tigerbalm]

http://www.numismaster.com/ta/numis/Articl...;ArticleId=6926

Interesting article i was going to ask why the Chinese were doing this but read the article again and found the answer.......

In this non-public discussion, Kirk was told that the Chinese were extremely concerned about the likely near term decline in the U.S. dollar because of the explosion of government debt. As part of the reaction to this concern, the Chinese government had established another reserve to stockpile petroleum and was planning to purchase another $80 billion of gold (about 85 million ounces at today's price level).

It seams the Chinese are just being cautious

Any comments/views about the concern in the US dollar or the effect on the gold price would be of interest.

Thanks

[Abrak]

http://www.numismaster.com/ta/numis/Articl...;ArticleId=6926

Interesting article i was going to ask why the Chinese were doing this but read the article again and found the answer.......

In this non-public discussion, Kirk was told that the Chinese were extremely concerned about the likely near term decline in the U.S. dollar because of the explosion of government debt. As part of the reaction to this concern, the Chinese government had established another reserve to stockpile petroleum and was planning to purchase another $80 billion of gold (about 85 million ounces at today's price level).

It seams the Chinese are just being cautious

Any comments/views about the concern in the US dollar or the effect on the gold price would be of interest.

Thanks

I received this from my Private Banker the other day....

China approved use of yuan to settle cross-border trade with Hong Kong, part of a drive to broaden the use of the currency. The SAR hopes the first transactions will start next month. The program would reduce foreign-exchange risks and transaction costs. China is promoting greater use of the yuan in international trade and finance. Symbolically, it’s an important step to make the yuan an international currency and the SAR will be a “testing ground” for use of the yuan outside mainland China. Ii is believed that about 50 percent of Hong Kong’s trade with China may be settled in yuan after the program starts.

I guess it shows that China is moving further away from the dollar in so far as it is moving towards the Yuan. I noticed it received little fanfare. Perhaps it is more a move to integrate Hong Kong into China than a sign that China is freeing up the yuan.

[badge]

[...]

I guess it shows that China is moving further away from the dollar in so far as it is moving towards the Yuan. I noticed it received little fanfare. Perhaps it is more a move to integrate Hong Kong into China than a sign that China is freeing up the yuan.

CNY is in no way even ready to be freely floated.

Its therefore more likely that you'll bed Scarlet Johanssen than the CNY becomes a dominant global currency in our lifetimes

It would be nice if it was freely floated, I look forward to a brisk market trading in Spot USDCNY, but I doubt I'll get to see it.

Good luck!

[Naam]

Chinese Government Wants To Purchase Another $80 Billion Of Gold!

http://www.numismaster.com/ta/numis/Articl...;ArticleId=6926

"Kirk was engaged in a private conversation with lesser Chinese officials. In this non-public discussion, Kirk was told that the Chinese were extremely concerned about the likely near term decline in the U.S. dollar because of the explosion of government debt. As part of the reaction to this concern, the Chinese government had established another reserve to stockpile petroleum and was planning to purchase another $80 billion of gold (about 85 million ounces at today's price level)."

it is a well known fact that all Chinese, especially those who run the Chinese Government are extremely stupid and have no idea how to conduct business in a shrewd manner. that's why they inform the public via "lesser officials" about any purchase plans of any commodity to drive up prices.

:D

[flying]

it is a well known fact that all Chinese, especially those who run the Chinese Government are extremely stupid and have no idea how to conduct business in a shrewd manner. that's why they inform the public via "lesser officials" about any purchase plans of any commodity to drive up prices.

Have notice this & wondered too.

Then I saw pointed out on a site yesterday that this is their style.

Not as you say but actually saying they are going to do something after they have pretty well completed their task.

Of course that cannot be possible in regards to this quantity but it is obvious they have been buying.