Where Is Gold Going In This Market

farang000999 · May 20, 2012

In The Lead - Statistics! Lies! Heresy! More Statistics! Truth.

Friday May 18, 2012 09:32

Gold prices rallied by more than 2% on Thursday and by nearly 1% early this morning as the US dollar appeared to slow its upward progress on the trade weighted index. Nevertheless, the dollar –trimmed gains and all-was still up for a 15th day in a row (!) in pre-market action. The jump in gold was characterized as mainly a “short-covering surge” and that kind of “profile” probably should not have come as a big surprise to certain players, given the low RSI and extremely low Daily Sentiment Index levels that we had mentioned in Wednesday’s commentary. The bottom line is still that May has thus far greeted gold and silver players with ten down days versus two (perhaps three after today) to the upside. Sell in May? Ummm…yes, and then some…

There was also a mild “QE3 hope” overlay present in the marketplace to help gold recover from the deep loss it incurred on Wednesday. That kind of optimism came from players reading certain things that smacked of potential QE into the FOMC’s just-released meeting minutes, and from just plain reading the numbers related to the Philly Fed manufacturing index and the US’ leading economic indicators (both only so-so). Follow-through action remains essential in order to be able to begin talking about the bear tide having turned. On the physical side, Chinese demand softened notably after the price recovery dampened buying appetite according to Standard Bank’s daily report.

But –as Reuters reports – “with the euro and U.S. stocks in decline and Greece still on the brink of leaving the euro zone, many traders saw the gains as little more than a "dead-cat bounce", slang for a small but temporary rally that follows significant declines. Milko Markov, an investment management analyst at SK Hart Management LLC, said about yesterday’s action that: "When the move to the upside is so elastic, it suggests a lot of people caught at the wrong side, but also confirms the medium negative trend."

Similar sentiment was manifest in the comments made by UBS analyst Edel Tully this morning when she noted in a report that “To see a return of gold reacting positively to macro stresses is indeed refreshing, but it is still far too early to make any firm conclusions from here that gold has indeed turned the corner. Follow-through buying will have to kick in to encourage investors to jump in.” The good news? Nothing (in the markets) goes straight up or down. Ever. Not for long, anyway.

Spot New York dealings this morning showed gold trading at $1,588 per ounce on the bid-side, silver quoted at $28.38 an ounce and platinum and palladium modestly higher as well. The former gained $6 to open near $1,455 and the latter climbed $2 to $603 an ounce. The PGM market is once again manifesting fears about supplies, following the break-out of hostilities between two rival mining unions at Implats’ Rustenburg mine (the world’s largest platinum mine). One worker seriously injured and tensions remain high. Standard Bank reports that “As of this morning, the company reported that “everything is calm” and that the incident had not affected production.”

On the negative side for PGMs there are reports that the slowing Chinese economy is swelling the number of unsold automobiles on the country’s dealership lots. Automakers Honda, Chery, and Geely are now carrying an estimated 45 days’ worth of inventory and the development comes as a warning sign that not all is well with the economy (read more about all that, below). In a country that normally sells a new car every 2.3 seconds, the total vehicular sales tally fell by 1.3% in the first four months of 2012 and that could turn out to be the worst such showing since 1998. Caution: bumpy road ahead.

More PGM niche-related news for you today: India’s Geological Survey announced that nearly 20 million tonnes of “platinum-group elements” have been found in exploratory surveys across that country. Major PGM findings were reported from the Eastern State of Odisha and Southern States of Karnataka and Tamil Nadu.

Background market indications showed the US dollar steady near 81.40 on the index and the euro mired close to the $1.272 level against it, while crude oil gained 22 cents to rise to $92.75 per barrel. Dow futures pointed higher albeit the past week has not been kind to that market and we won’t even mention what European shares (or Asian ones for that matter) have been subjected to of late.

The latest blows to the EU’s financial system came from Moody’s which downgraded 16 Spanish banks and from Fitch’s which downgraded Greece’s sovereign debt rating to CCC (read: “poor quality with possibility of default”). Germany’s Finance Minister said that-as he sees it-the upheaval in the region’s financial markets might drag on for another two years. The G-8 meets today in the US and will try to once again “do more” to put out the fires in the system.

The heavy fall in gold prices has, of course, once again, given rise to a plethora of allegations about the market being manipulated by unnamed (okay, sometimes even named) evil sources working for the ‘Gubmint’ or for Mr. Bernanke, or for Dr. Evil, or for Auric Goldfinger. Well, here is something this author thought he’d never report on; a major ‘defection’ in the pro-gold camp over to the manipulation-skeptic side.

None other than noted financial newsletter writer and gold advocate Doug Casey wrote a brilliant piece that appeared on LewRockwell.com in which he dissects the possible manipulation-related questions and concludes that they are little but rhetorical. Mr. Casey advises his readers to buy gold “even at current prices” but he instructs them to do it for “the right reasons.” Fighting “manipulation” is not one of them.

As Mr. Casey sees it, the “arguments about gold manipulation are more redolent of religious belief than economic reasoning.” Wow. That kind of straight talk, will hopefully not earn Mr. Casey the kind of e-mailed death threat that this author “enjoyed” last week, but it is sure to swell the “inbox” that he gets to read every day. Evidently, he did not realize that talking in “The Church of Gold” is strictly verboten. For his courage, applause is due.

Meanwhile, Business Intelligence Middle East notes that gold has not only experienced what it calls “heavy falls” since February, but that “Since mid-Q3, when equity markets turned on better US economic data, the price of gold has essentially followed risk appetite.” You have, no doubt, seen numerous headlines on the Kitco news site over the past half a year that have linked gold’s daily trials and tribulations to “risk-off” type of sentiment manifest in the markets.

Thus, we come to learn from Barclays Capital, the amount of total assets under management in commodities overall declined by $6 billion in April. The large shrinkage was principally caused by the flight of investors’ money from precious metals ($4 billion got up from, and left that space) and from energy (about $2 took flight there). Notably, agriculture-related assets under management remained largely intact, underscoring confidence in the basic fact that eat we must. Eating gold or drinking oil, on the other hand, is a tricky proposition. We should look forward with keen interest to Bar-Cap’s summary for the May metrics in this niche given what has taken place in precious metals prices this month.

Well, the latest quarterly gold demand statistics from the World Gold Council are out and the data set presents a muddled picture in several key areas. First, it must be noted that global gold demand dropped by 5% in Q1 of 2012. The only way to see that statistical development as a positive one is to frame it in terms of dollar value. In terms of tonnage taken from the marketplace, the decline is…a decline and one cannot spin the fact.

Fear not, The Telegraph, over in the UK, found a way to publish a headline that will be the only one in heavy rotation on numerous gold-oriented and bullion dealers’ websites in coming days: “Global Demand For Gold Grows 16%” –That’s one way to present the fact that gold demand actually…fell. You know, kind of like that famous utterance by a former US President: “It all depends on what your definition of the word “is,” is.” Stretch Armstrong has nothing over The Telegraph when it comes to the truth.

Ditto the demand for gold bars and coins: it fell 17% on the quarter. Ditto the demand by India: the country’s total gold demand fell by 29% in Q1, its jewellery demand fell by 19% on the quarter, and its investment demand fell by 46% on the period. Ditto the demand in Saudi Arabia (down 40-50%) where more than 500 (!) gold shops closed their doors in the past three months. Actually, global gold jewellery demand fell by 6% on a year-on-year basis and the only bright spot in the baubles’ space was the offtake from China (it gobbled up 156.6 tonnes of gold for ornamental purposes).

Speaking of China and of India, and the perennial stories of “ChIndia” growing in competition with Jack’s storybook beanstalk (i.e. to the sky), the developing realities ‘on the ground’ in both countries appear to be anything but confidence-inspiring for commodity bulls who seek salvation from these two nations’ demand levels for ‘stuff.’

Case in point number one: China. Standard Bank’s team of commodity analysts reminds us that “Chinese construction remains an important source for much of China’s commodity demand such as iron ore and copper. This has also been a key growth area over the past few years for the Chinese economy as a whole. Property investment accounted for around 14% of China’s GDP last year and weakness in this sector remains a concern.”

The SB market observers added that “given that monetary policy remains tight, private sector construction remains vulnerable to a lack of financing. But it is new construction that is important for commodity demand. On the back of slower sales we continue to expect construction growth to slow. In fact, the massive growth rate in new construction that we have witnessed between 2008 and 2011 is unlikely to repeat itself any time soon.

March and April this year have seen the weakest seasonal month-on-month growth rates since at least 2008,” and they concluded that “As a result, we do not expect commodity demand from the construction sector to accelerate anytime soon, and may be looking for stronger demand only towards the middle of next year. With this morning’s news from China that property prices in all but 24 out of 70 cities being tracked by the country’s National Bureau of Statistics fell for a second month in a row, even that view may be a tad too optimistic. Newly built home prices in China have fallen by an average of 0.94% last month.

Case in point number two: India. Commodity Online (an India-based website) offers a total of one dozen reasons for being less than sanguine about the country’s prospects for the type of growth that investors have previously been assured would be seen for decades to come. Just a few of the reasons being cited:

•An S&P downgrade to ‘negative’ of India’s sovereign debt. The agency is now factoring in what it calls the likelihood of diminished growth prospects, slow fiscal reforms, and a worsening external position.

•A crash in the Indian Rupee to a historic low against the dollar (one of the main reasons Indians steered clear of unaffordable gold this spring – counterintuitive as that might seem.

•Declining export growth related to troubles in the EU and elsewhere.

•A soaring trade deficit boosted in large part by gold and silver (and oil) imports.

The Washington Post analyzed the situation in India noting: “India is struggling to balance its books partly because citizens keep buying gold. The country’s current account, the difference between the value of its imports and exports of goods, services and financial transfer payments, is running at a deficit of about 4 percent largely because of high import bills for oil and gold.”

We now turn to the silver market and to the release of the latest and much-anticipated Silver Yearbook by the CPM Group New York analytical team. The firm’s latest survey of the silver market contains some eye-opening revelations insofar as the fundamentals of the white metal are concerned. For example, much to the chagrin of those who would still like to claim that silver is a monetary metal and that it could be regarded as some kind of stand-in for gold among less wealthy individuals, the reality is that of the 50 billion ounces of silver which have been produced over the past five centuries, only some 5% ended up being held by investors in the form of bullion or coins. The industrial and jewellery niches have consumed the remainder of the ounces. Case closed.

We are now in a paradigm in which only about four central banks hold any silver at all (roughly 1,200 tonnes) and wherein silver, as money, no longer plays a role. This occurred despite the more than 133 million ounces of the metal that global investors demanded from the marketplace last year and that it was the fifth highest such level of offtake that CPM is aware of. CPM now looks for investors to add less silver to their portfolios in coming quarters, largely owing to the fact that the relatively high price of the metal means that fewer ounces will be required to fulfill specific dollar allocations in such baskets of wealth.

As such, CPM notes that albeit 2011 was a pivotal year for silver (having traded at the half-century per ounce mark), that same year might also come to constitute a turning point in the white metal’s fortunes. While the market witnessed a record level of trading activity in 2011, CPM does not expect such fervor to continue this year, or for silver to break above last year’s highs, and it expects the precious metal to decline further throughout the remainder of 2012.

On the supply side of the silver market, it was noted that 2011 witnessed a tally of 995.1 million ounces in terms of newly refined market economy contributions. Of the total, some 700 million ounces of silver were added to the market by the world’s mines; a 4% increase over 2010. China and Mexico were strong sources of supply and the two countries stand as the top players in the field. This year will mark the first time in history that the one billion ounce mark in silver supply will be attained.

Scrap silver supplies experienced a 1.7% decline last year as Indian secondary sales dried up. On the fabrication side, demand climbed by 2.2% driven for the most part by robust offtake by the photovoltaics (solar panels) sector. Electronics-related demand did not fare badly either, gaining 4.3% last year. On the other hand, silver’s usage in photography continued to decline; its demand was 7.5% lower than that seen in 2010. If this trend continues, CPM expects fewer than 100 million ounces of silver o be absorbed by the photographic applications sector this year.

We thank CPM Group for their continued insightful work and hope that you take the time (and a little money) to secure your own copy of the seminal Yearbook right here at their store. Talk about “value investing…”

Have a nice weekend.

By Jon Nadler

Senior Metals Analyst – Kitco Metals

Naam · May 20, 2012

The yellow metal has lost $255 per ounce since February the 28th and $385 since last September’s peak

so what? Gold has only lost when looking at the price in worthless fiat. its intrinsic value never changes! for more details contact or read Professor Jayman who will explain to you the difference of "price and value" or other right honourable eggsburts who teach the mantra

Physical gold, the only asset without counterparty risk, increases in value at such a time... regardless of what the price tells you...

and next time your wife complains that New Zealand lamb shoulder and Argentine beef have become more expensive, you console her that the price increase is only in worthless fiat money. the intrinsic value and delicious taste of lamb and beef will always be the same, regardless of what the price tells you, once it is properly prepared and placed on the dining table.

churchill · May 20, 2012

2* Nadler = 1 Fartman ...

Naam · May 20, 2012

-we come to learn from Barclays Capital, the amount of total assets under management in commodities overall declined by $6 billion in April. The large shrinkage was principally caused by the flight of investors’ money from precious metals

-the “arguments about gold manipulation are more redolent of religious belief than economic reasoning.”

-the fact that gold demand actually…fell

-the latest quarterly gold demand statistics from the World Gold Council are out and the data set presents a muddled picture in several key areas

-In terms of tonnage taken from the marketplace, the decline is…a decline and one cannot spin the fact

-the demand by India: the country’s total gold demand fell by 29% in Q1, its jewellery demand fell by 19% on the quarter, and its investment demand fell by 46% on the period

-demand in Saudi Arabia (down 40-50%) where more than 500 (!) gold shops closed their doors in the past three months

-Speaking of China and of India, and the perennial stories of “ChIndia” growing in competition with Jack’s storybook beanstalk (i.e. to the sky), the developing realities ‘on the ground’ in both countries appear to be anything but confidence-inspiring for commodity bulls who seek salvation from these two nations’ demand levels for ‘stuff.’

Jon Nadler

Senior Metals Analyst – Kitco Metals

treason! hang him high! but torture him first!

Naam · May 20, 2012

2* Nadler = 1 Fartman ...

gold + intrinsic = 1 lukewarm fart

Jayman · May 20, 2012

2* Nadler = 1 Fartman ...

gold + intrinsic = 1 lukewarm fart

Naam + 17,000 posts on thai visa = A bored old man with too much time on his hands and a superiority complex to boot.

johnnybgood · May 20, 2012

I just love this thread. Thank Buddha for the internet.

All you guys posting and pontificating from your uber boats in Nantucket, or perhaps moored in Poole harbour next to ones' pile in Sandbanks or perhaps the warmer climes of Mote Carlo? The tax feeezing slopes offff Swittzerland-- who knows? Please keep going.......

12DrinkMore · May 20, 2012

In The Lead - The Bear Facts

Friday May 18, 2012 09:30

The uber-critical $1,527 line of gold’s price defense came into play overnight as we had recently pondered here, and this time around, despite all the denials of the fact and protestations to the contrary, the gold market entered the cave of the bear. Granted that with RSI levels near 20 and with bullish Daily Sentiment indicators perhaps only in the single digits an overdue counter-trend rally might yet delude the bulls, but this is where the market highway junction that really matters is to be found.

A quick round-up of the midweek opening quotes showed gold prices being bid near $1,540 the ounce. The yellow metal has lost $255 per ounce since February the 28th and $385 since last September’s peak. Spot silver was quoted at $27.55 per ounce and platinum posting a small loss of $1 at $1,426 per ounce. Palladium lost $5 to reach $586 while rhodium was unchanged at $1,325 after having shed $25 recently. In the background, the US dollar hovered near 81.33 on the index but crude oil slipped $1.40 to $92.60 a barrel (a six-month low), copper was off 1.4%, while the euro continued to struggle near $1.27 against the greenback.

While the majority of recent gold market commentaries kept reaching in vain for any possible explanation for gold’s continuing melt-away, the simplest of all reasons evidently eluded most of their authors. We have now been treated to excuses that range from the silly to the preposterous, as to why gold is not acting in the manner that we had all been promised it would, when and if serious financial conditions such as we are witnessing these days would materialize.

Thus, we are being treated to gems such as: “Gold is down because the putative ‘bankster elite’ wants it to be down” and “gold is down because some ‘paper market’ is deluding people to the ‘reality’ that, in fact, gold is up and that the demand for coins and bars has never, ever been better” and “ advanced algorithms that control commodities and stocks make real price discovery impossible“ or “gold is down because we just had a “Super Full Moon” event.” We could go on…but it is not worth your time.

If anyone cared to dig just a tad deeper, they would have found the principal agent of change in gold prices staring them in the face; the US dollar. Yep, that debt-ridden, good-only-for-fireplace fodder, no-good, sickening green piece of paper, just recorded its 12th session of gains in value. That kind of streak has not been seen since –in the words of Marketwatch- “at least 1985.” Talk of the target level of 90 on the index has suddenly materialized, and such talk could be validated by a breach above the 82 mark on that scale.

If you think that is merely heavy lipstick on a terminally ill pig, the consider the virtual flood of dollar obituaries which have been coming our way for the past six years, and how they might appear to today’s readers in light of what has not happened. You get the point. In what may have sounded like trite remark at the time, this writer told Bloomberg’s Tom Keene (in an early January interview) that “gold will go where the dollar does not.”

That point is that, gold prices, aside from all the unpleasant happenings in Europe, closed at their lowest level of 2012 after having probed even lower (around $1,540) during the trading day on Tuesday. The point is that silver (also purported to be around $80 by now, for sure) tested price zones very close to $27.00 an ounce instead of vaulting three times higher. The point is that the dollar’s aforementioned streak has now been updated and that its 13-day long advance has now been classified as the longest winning one ever since the trade-weighted index has been created.

The point also is that, as was the case in 2008, this is the perfect environment for gold to show its mettle and to attract serious amounts of worried global money, and, yet, it is failing to do so. In fact, this May has been so cruel to bullion prices that analysts can now talk about the worst semi-monthly performance in the yellow metal in seven year, and not just since 2008.

If there is any “comfort” to be found by disillusioned gold and silver investors who had loaded up on the metals in anticipation of that which never came, it would be the fact the misery loves company. Commodities as a group fell for a tenth day on Tuesday, putting in their worst losing sequence since 1998. Oil, for example, traded near $92.50 per barrel early this morning.

Copper fell to the lowest level since January. Last week, according to Standard Chartered, investors pulled another quarter billion dollars or more out of this fast-sinking niche. A huge portion of recent gains in this space was attributed to the ear of “easy money” courtesy of the Fed. Now that questions have arisen about the continuation of that kind of largesse, well, you can see the (initial) results; pain and devastation.

Peter Major, an analyst at Cadiz Corporate Solutions, a unit of Cadiz Holdings Ltd., said by phone from Cape Town: “Commodity prices were unrealistically high as a direct result of a combination of easy and cheap money from quantitative easing and the threat of inflation. The market is efficient and it looks ahead. Mining houses have been weak for four or five months now; investors definitely saw weaker prices going forward.” Does that sound somewhat familiar? It should, to the regular readers of these columns.

As well, we cannot yet take comfort in the fact that the latest reports indicate that investors such as fund maven John Paulson have not yet lightened up on their GLD holdings. The first quarter may have initially been kind to such portfolios but the tide has swiftly turned against them and new questions are not swirling around as to the fate of at least a portion of such allocations. Shareholders do not take kindly to more than one “explanatory” message from fund managers. They want results, here and now.

Some market watchers expect Mr. Paulson to join the selling herd and cut some of his holdings in gold before the second quarter draws to a close. "There's absolutely no question in my mind that large institutions have been net sellers in gold over the past two weeks," said Adam Sarhan at New York's Sarhan Capital. "The fact that Paulson has been coming under a lot of pressure on his other holdings may force him to liquidate as well." The additional price pressure coming from such liquidations is as yet not fathomable, but is certainly did show its effects on the way up in the gold market. To be continued…

Something that we are continuing: our coverage of developments in China and how they relate to the commodities’ space. The recent shifts in that country’s economy have clearly been contributors to the decline in the price of “stuff” and that includes gold and silver. At the present time, the overriding perception is that China’s economic deceleration could increase and that its growth might reach a weak point not seen in circa 13 years. PMICO certainly feels that way, and it projects economic expansion in China to only come in at around the 7% mark this year.

Something else that underscores the deepening slowdown in the planet’s second-largest economy is the fact that foreign investment in China fell by 0.7% in April. So-called inbound investment amounted to only $84 billion after the country missed import/export estimates and recorded the slowest level of industrial output since 2009.

China’s currency reserves did however grow in the first quarter and that pattern reversed the first quarterly decline since 1998 that was witnessed earlier. However, once again starkly contradicting those who continue to see the mirage of “stealth” Chinese official sector gold buying, China bought…US Treasuries. In fact, China bought 1.6% more US government securities in Q1 while Japan bought 2.4% more of the same as well.

And now, to close things out, we go back to the US of A for more perspectives. A string of economic statistics has been making its way into the markets since the start of the week, and most of the data appears to reinforce the take that the Fed will not budge and that QE3 remains only a dream in the sleep of the commodity bulls who have become hooked on such generosity. In fact, the week’s most relevant metric- that of inflation falling (largely owing to gas prices caving in) - has not managed to bring about any higher levels of expectations for a new round of QE.

Other than that, we have seen retail sales in April bounce one-tenth of a percent higher in April, US homebuilder sentiment coming in at its best level since the Great Recession, The Empire State manufacturing Index rebounding to 17.1 this month, US industrial production climbing 1.1% and thus beyond expectations in April, housing starts rising by 2.6% in the same month, and capacity utilization – an important metric- increasing to 79.2 percent, i.e., the highest level since April of 2008. That little amalgam of positive economic numbers should be sufficient to silence those who see the “unfolding demise of America” and who only preach fear. Odds are stacked against such a silencing however, as it has become quite fashionable to scare folks into buying that which…one offers to sell; be it God, gold, or guns.

Until Friday,

By Jon Nadler

Senior Metals Analyst – Kitco Metals

Could you give me a one liner on all that?

12DrinkMore · May 20, 2012

2* Nadler = 1 Fartman ...

gold + intrinsic = 1 lukewarm fart

Naam + 17,000 posts on thai visa = A bored old man with too much time on his hands and a superiority complex to boot.

I'm sure Naam is well able to reply to that.

I'm happy to have Naam around here. He is a little intolerant of BS, but that's OK. Maybe it helps the posters to think a little. I don't know.

Anyway to Naam.

I would guess he's spending his time the way he wants to , what is wrong with that?

And he is exercising his brain , which doesn't apply to a lot of sad old farts in Thailand.

letitbe · May 20, 2012

In The Lead - Statistics! Lies! Heresy! More Statistics! Truth.

Friday May 18, 2012 09:32

Gold prices rallied by more than 2% on Thursday and by nearly 1% early this morning as the US dollar appeared to slow its upward progress on the trade weighted index. Nevertheless, the dollar –trimmed gains and all-was still up for a 15th day in a row (!) in pre-market action. The jump in gold was characterized as mainly a “short-covering surge” and that kind of “profile” probably should not have come as a big surprise to certain players, given the low RSI and extremely low Daily Sentiment Index levels that we had mentioned in Wednesday’s commentary. The bottom line is still that May has thus far greeted gold and silver players with ten down days versus two (perhaps three after today) to the upside. Sell in May? Ummm…yes, and then some…

There was also a mild “QE3 hope” overlay present in the marketplace to help gold recover from the deep loss it incurred on Wednesday. That kind of optimism came from players reading certain things that smacked of potential QE into the FOMC’s just-released meeting minutes, and from just plain reading the numbers related to the Philly Fed manufacturing index and the US’ leading economic indicators (both only so-so). Follow-through action remains essential in order to be able to begin talking about the bear tide having turned. On the physical side, Chinese demand softened notably after the price recovery dampened buying appetite according to Standard Bank’s daily report.

But –as Reuters reports – “with the euro and U.S. stocks in decline and Greece still on the brink of leaving the euro zone, many traders saw the gains as little more than a "dead-cat bounce", slang for a small but temporary rally that follows significant declines. Milko Markov, an investment management analyst at SK Hart Management LLC, said about yesterday’s action that: "When the move to the upside is so elastic, it suggests a lot of people caught at the wrong side, but also confirms the medium negative trend."

Similar sentiment was manifest in the comments made by UBS analyst Edel Tully this morning when she noted in a report that “To see a return of gold reacting positively to macro stresses is indeed refreshing, but it is still far too early to make any firm conclusions from here that gold has indeed turned the corner. Follow-through buying will have to kick in to encourage investors to jump in.” The good news? Nothing (in the markets) goes straight up or down. Ever. Not for long, anyway.

Spot New York dealings this morning showed gold trading at $1,588 per ounce on the bid-side, silver quoted at $28.38 an ounce and platinum and palladium modestly higher as well. The former gained $6 to open near $1,455 and the latter climbed $2 to $603 an ounce. The PGM market is once again manifesting fears about supplies, following the break-out of hostilities between two rival mining unions at Implats’ Rustenburg mine (the world’s largest platinum mine). One worker seriously injured and tensions remain high. Standard Bank reports that “As of this morning, the company reported that “everything is calm” and that the incident had not affected production.”

On the negative side for PGMs there are reports that the slowing Chinese economy is swelling the number of unsold automobiles on the country’s dealership lots. Automakers Honda, Chery, and Geely are now carrying an estimated 45 days’ worth of inventory and the development comes as a warning sign that not all is well with the economy (read more about all that, below). In a country that normally sells a new car every 2.3 seconds, the total vehicular sales tally fell by 1.3% in the first four months of 2012 and that could turn out to be the worst such showing since 1998. Caution: bumpy road ahead.

More PGM niche-related news for you today: India’s Geological Survey announced that nearly 20 million tonnes of “platinum-group elements” have been found in exploratory surveys across that country. Major PGM findings were reported from the Eastern State of Odisha and Southern States of Karnataka and Tamil Nadu.

Background market indications showed the US dollar steady near 81.40 on the index and the euro mired close to the $1.272 level against it, while crude oil gained 22 cents to rise to $92.75 per barrel. Dow futures pointed higher albeit the past week has not been kind to that market and we won’t even mention what European shares (or Asian ones for that matter) have been subjected to of late.

The latest blows to the EU’s financial system came from Moody’s which downgraded 16 Spanish banks and from Fitch’s which downgraded Greece’s sovereign debt rating to CCC (read: “poor quality with possibility of default”). Germany’s Finance Minister said that-as he sees it-the upheaval in the region’s financial markets might drag on for another two years. The G-8 meets today in the US and will try to once again “do more” to put out the fires in the system.

The heavy fall in gold prices has, of course, once again, given rise to a plethora of allegations about the market being manipulated by unnamed (okay, sometimes even named) evil sources working for the ‘Gubmint’ or for Mr. Bernanke, or for Dr. Evil, or for Auric Goldfinger. Well, here is something this author thought he’d never report on; a major ‘defection’ in the pro-gold camp over to the manipulation-skeptic side.

None other than noted financial newsletter writer and gold advocate Doug Casey wrote a brilliant piece that appeared on LewRockwell.com in which he dissects the possible manipulation-related questions and concludes that they are little but rhetorical. Mr. Casey advises his readers to buy gold “even at current prices” but he instructs them to do it for “the right reasons.” Fighting “manipulation” is not one of them.

As Mr. Casey sees it, the “arguments about gold manipulation are more redolent of religious belief than economic reasoning.” Wow. That kind of straight talk, will hopefully not earn Mr. Casey the kind of e-mailed death threat that this author “enjoyed” last week, but it is sure to swell the “inbox” that he gets to read every day. Evidently, he did not realize that talking in “The Church of Gold” is strictly verboten. For his courage, applause is due.

Meanwhile, Business Intelligence Middle East notes that gold has not only experienced what it calls “heavy falls” since February, but that “Since mid-Q3, when equity markets turned on better US economic data, the price of gold has essentially followed risk appetite.” You have, no doubt, seen numerous headlines on the Kitco news site over the past half a year that have linked gold’s daily trials and tribulations to “risk-off” type of sentiment manifest in the markets.

Thus, we come to learn from Barclays Capital, the amount of total assets under management in commodities overall declined by $6 billion in April. The large shrinkage was principally caused by the flight of investors’ money from precious metals ($4 billion got up from, and left that space) and from energy (about $2 took flight there). Notably, agriculture-related assets under management remained largely intact, underscoring confidence in the basic fact that eat we must. Eating gold or drinking oil, on the other hand, is a tricky proposition. We should look forward with keen interest to Bar-Cap’s summary for the May metrics in this niche given what has taken place in precious metals prices this month.

Well, the latest quarterly gold demand statistics from the World Gold Council are out and the data set presents a muddled picture in several key areas. First, it must be noted that global gold demand dropped by 5% in Q1 of 2012. The only way to see that statistical development as a positive one is to frame it in terms of dollar value. In terms of tonnage taken from the marketplace, the decline is…a decline and one cannot spin the fact.

Fear not, The Telegraph, over in the UK, found a way to publish a headline that will be the only one in heavy rotation on numerous gold-oriented and bullion dealers’ websites in coming days: “Global Demand For Gold Grows 16%” –That’s one way to present the fact that gold demand actually…fell. You know, kind of like that famous utterance by a former US President: “It all depends on what your definition of the word “is,” is.” Stretch Armstrong has nothing over The Telegraph when it comes to the truth.

Ditto the demand for gold bars and coins: it fell 17% on the quarter. Ditto the demand by India: the country’s total gold demand fell by 29% in Q1, its jewellery demand fell by 19% on the quarter, and its investment demand fell by 46% on the period. Ditto the demand in Saudi Arabia (down 40-50%) where more than 500 (!) gold shops closed their doors in the past three months. Actually, global gold jewellery demand fell by 6% on a year-on-year basis and the only bright spot in the baubles’ space was the offtake from China (it gobbled up 156.6 tonnes of gold for ornamental purposes).

Speaking of China and of India, and the perennial stories of “ChIndia” growing in competition with Jack’s storybook beanstalk (i.e. to the sky), the developing realities ‘on the ground’ in both countries appear to be anything but confidence-inspiring for commodity bulls who seek salvation from these two nations’ demand levels for ‘stuff.’

Case in point number one: China. Standard Bank’s team of commodity analysts reminds us that “Chinese construction remains an important source for much of China’s commodity demand such as iron ore and copper. This has also been a key growth area over the past few years for the Chinese economy as a whole. Property investment accounted for around 14% of China’s GDP last year and weakness in this sector remains a concern.”

The SB market observers added that “given that monetary policy remains tight, private sector construction remains vulnerable to a lack of financing. But it is new construction that is important for commodity demand. On the back of slower sales we continue to expect construction growth to slow. In fact, the massive growth rate in new construction that we have witnessed between 2008 and 2011 is unlikely to repeat itself any time soon.

March and April this year have seen the weakest seasonal month-on-month growth rates since at least 2008,” and they concluded that “As a result, we do not expect commodity demand from the construction sector to accelerate anytime soon, and may be looking for stronger demand only towards the middle of next year. With this morning’s news from China that property prices in all but 24 out of 70 cities being tracked by the country’s National Bureau of Statistics fell for a second month in a row, even that view may be a tad too optimistic. Newly built home prices in China have fallen by an average of 0.94% last month.

Case in point number two: India. Commodity Online (an India-based website) offers a total of one dozen reasons for being less than sanguine about the country’s prospects for the type of growth that investors have previously been assured would be seen for decades to come. Just a few of the reasons being cited:

•An S&P downgrade to ‘negative’ of India’s sovereign debt. The agency is now factoring in what it calls the likelihood of diminished growth prospects, slow fiscal reforms, and a worsening external position.

•A crash in the Indian Rupee to a historic low against the dollar (one of the main reasons Indians steered clear of unaffordable gold this spring – counterintuitive as that might seem.

•Declining export growth related to troubles in the EU and elsewhere.

•A soaring trade deficit boosted in large part by gold and silver (and oil) imports.

The Washington Post analyzed the situation in India noting: “India is struggling to balance its books partly because citizens keep buying gold. The country’s current account, the difference between the value of its imports and exports of goods, services and financial transfer payments, is running at a deficit of about 4 percent largely because of high import bills for oil and gold.”

We now turn to the silver market and to the release of the latest and much-anticipated Silver Yearbook by the CPM Group New York analytical team. The firm’s latest survey of the silver market contains some eye-opening revelations insofar as the fundamentals of the white metal are concerned. For example, much to the chagrin of those who would still like to claim that silver is a monetary metal and that it could be regarded as some kind of stand-in for gold among less wealthy individuals, the reality is that of the 50 billion ounces of silver which have been produced over the past five centuries, only some 5% ended up being held by investors in the form of bullion or coins. The industrial and jewellery niches have consumed the remainder of the ounces. Case closed.

We are now in a paradigm in which only about four central banks hold any silver at all (roughly 1,200 tonnes) and wherein silver, as money, no longer plays a role. This occurred despite the more than 133 million ounces of the metal that global investors demanded from the marketplace last year and that it was the fifth highest such level of offtake that CPM is aware of. CPM now looks for investors to add less silver to their portfolios in coming quarters, largely owing to the fact that the relatively high price of the metal means that fewer ounces will be required to fulfill specific dollar allocations in such baskets of wealth.

As such, CPM notes that albeit 2011 was a pivotal year for silver (having traded at the half-century per ounce mark), that same year might also come to constitute a turning point in the white metal’s fortunes. While the market witnessed a record level of trading activity in 2011, CPM does not expect such fervor to continue this year, or for silver to break above last year’s highs, and it expects the precious metal to decline further throughout the remainder of 2012.

On the supply side of the silver market, it was noted that 2011 witnessed a tally of 995.1 million ounces in terms of newly refined market economy contributions. Of the total, some 700 million ounces of silver were added to the market by the world’s mines; a 4% increase over 2010. China and Mexico were strong sources of supply and the two countries stand as the top players in the field. This year will mark the first time in history that the one billion ounce mark in silver supply will be attained.

Scrap silver supplies experienced a 1.7% decline last year as Indian secondary sales dried up. On the fabrication side, demand climbed by 2.2% driven for the most part by robust offtake by the photovoltaics (solar panels) sector. Electronics-related demand did not fare badly either, gaining 4.3% last year. On the other hand, silver’s usage in photography continued to decline; its demand was 7.5% lower than that seen in 2010. If this trend continues, CPM expects fewer than 100 million ounces of silver o be absorbed by the photographic applications sector this year.

We thank CPM Group for their continued insightful work and hope that you take the time (and a little money) to secure your own copy of the seminal Yearbook right here at their store. Talk about “value investing…”

Have a nice weekend.

By Jon Nadler

Senior Metals Analyst – Kitco Metals

well if its kitco forget it totally clueless as they have proved many times In fact they have nearly been as wrong as Benankie but thats a difficult record to beat

letitbe · May 20, 2012

hey whats wrong with us sad old farts better to be a sad old fart here with a beautiful wife than a sad old fart in UK USA or any western country

waza · May 20, 2012

2* Nadler = 1 Fartman ...

gold + intrinsic = 1 lukewarm fart

Naam + 17,000 posts on thai visa = A bored old man with too much time on his hands and a superiority complex to boot.

I'm sure Naam is well able to reply to that.

I'm happy to have Naam around here. He is a little intolerant of BS, but that's OK. Maybe it helps the posters to think a little. I don't know.

Anyway to Naam.

I would guess he's spending his time the way he wants to , what is wrong with that?

And he is exercising his brain , which doesn't apply to a lot of sad old farts in Thailand.

Ah Naam, hes a bit deep for some and analogous for others. Some say, like the star ship Enterprise he floats around Uranus looking for Clingons. However, he is correct when he says that if you want to enjoy the intrinsic value of New Zealand lamb then you need worthless fiat money because the Kiwis dont accept gold or Mia Nois. Hmm on second thought they will swap a Mia Noi for a sheep.

Jayman · May 20, 2012

Ah Naam, hes a bit deep for some and analogous for others. Some say, like the star ship Enterprise he floats around Uranus looking for Clingons. However, he is correct when he says that if you want to enjoy the intrinsic value of New Zealand lamb then you need worthless fiat money because the Kiwis dont accept gold or Mia Nois. Hmm on second thought they will swap a Mia Noi for a sheep.

Yes but the point has always been that as your fiat is worth less every day, that when you want that lamb you can sell your metal for more fiat than you would have had before and buy your lamb with it. The argument that you can;t eat gold or you can't buy things with gold is a tired one. You can't eat paper either. Your gold is just as easily converted into the local currency as a foreign paper currency is convertible into local paper. I mean, do you actually think you can walk into big-c and try to buy food with Euros? Same rules apply for gold. In fact, in Thailand it's almost easier to convert gold to local currency than it is for foreign paper.

This is also why I don't buy into the adjusted for inflation claim of 1980 gold being worth more than today. If, back in 1980, I have 7 one hundred dollar bills and you took your $700 and bought an oz of gold. And we both are holding them till we needed to buy that lamb now. I still have $700 and you have $1500. Seems to me that your oz of gold will buy more lamb than my $700.

Again, no one is sitting around hoping the world will self destruct so we can "get rich quick" from our gold purchases. I for one started buying gold as a preservation of my wealth. When I started buying gold it was $300 an oz. That wasn't all that long ago in my lifetime. The silver I purchased was $3-4 an oz. You are going to have a hard time convincing me that I would be able to buy more with that money had I just held it in paper form rather than storing it in metal.

Edited May 20, 2012 by Jayman

waza · May 20, 2012

Ah Naam, hes a bit deep for some and analogous for others. Some say, like the star ship Enterprise he floats around Uranus looking for Clingons. However, he is correct when he says that if you want to enjoy the intrinsic value of New Zealand lamb then you need worthless fiat money because the Kiwis dont accept gold or Mia Nois. Hmm on second thought they will swap a Mia Noi for a sheep.

Yes but the point has always been that as your fiat is worth less every day, that when you want that lamb you can sell your metal for more fiat than you would have had before and buy your lamb with it. The argument that you can;t eat gold or you can't buy things with gold is a tired one. You can't eat paper either. Your gold is just as easily converted into the local currency as a foreign paper currency is convertible into local paper. I mean, do you actually think you can walk into big-c and try to buy food with Euros? Same rules apply for gold. In fact, in Thailand it's almost easier to convert gold to local currency than it is for foreign paper.

This is also why I don't buy into the adjusted for inflation claim of 1980 gold being worth more than today. If, back in 1980, I have 7 one hundred dollar bills and you took your $700 and bought an oz of gold. And we both are holding them till we needed to buy that lamb now. I still have $700 and you have $1500. Seems to me that your oz of gold will buy more lamb than my $700.

Again, no one is sitting around hoping the world will self destruct so we can "get rich quick" from our gold purchases. I for one started buying gold as a preservation of my wealth. When I started buying gold it was $300 an oz. That wasn't all that long ago in my lifetime. The silver I purchased was $3-4 an oz. You are going to have a hard time convincing me that I would be able to buy more with that money had I just held it in paper form rather than storing it in metal.

Why so serious? I understand the value of gold as a store of wealth, it doesnt rust, dissolve or shrink, its hypoallegenic so you can hide it in your body if you want. You can shit on it and bash it with a hammer and its still worth the same. Thats why I have a some gold rather than a pile of lamb. However, you cant eat it for food or burn it for energy, its pays no divedends or interest it doesnt grow organically, the best you can hope for is capital gains.

Edited May 20, 2012 by waza

Naam · May 20, 2012

When I started buying gold it was $300 an oz. That wasn't all that long ago in my lifetime.

none of the resident gold lovers bought any gold "long ago" for which a rational explanation

exists. those who invested long ago the lion share or all of their liquid capital in gold either

starved to death or are thoroughly pissed off and ashamed to post in Thaivisa's gold thread.

Jayman · May 20, 2012

When I started buying gold it was $300 an oz. That wasn't all that long ago in my lifetime.

none of the resident gold lovers bought any gold "long ago" for which a rational explanation

exists. those who invested long ago the lion share or all of their liquid capital in gold either

starved to death or are thoroughly pissed off and ashamed to post in Thaivisa's gold thread.

Is that what you are so upset about Lt? You bought gold back in the 70's and feel burned when it urged and then fell? I have talked with many older folks that have bad memories of gold that I was too young to remember. They all seem to have a similar opinion that gold is not a good store of wealth.

I'm still very confused with why anyone that bought gold lower than today's prices would be upset to still own it. I guess I don't understand how your paper money is multiplying on it's own to keep up with the increase in gold prices throughout history. No one here has yet to explain that. They keep quoting inflation relative stats that afaik don't make your $100 bill turn into a $200 does it?

Maybe all the old-timers have it right. Maybe I am the blind sheep walking around living with a false sense of security in that I own gold. I can tell you that personally I feel very relieved that I own some physical gold/silver and that is much more so than holding paper money.

To each his own.....

Failing to prepare is preparing to fail.

John Robert Wooden

Edited May 20, 2012 by Jayman

Naam · May 20, 2012

If, back in 1980, I have 7 one hundred dollar bills and you took your $700 and bought an oz of gold. And we both are holding them till we needed to buy that lamb now. I still have $700 and you have $1500.

i have strong doubts that many brain-amputated people exist who owned in 1980 any amount of "worthless" fiat money and did not invest that money to collect fat "worthless" fiat interest from AAA rated debtors (UK Gilts 13%, US Treasuries 15%, German Bunds 11%).

but talk is cheap, let's look at the facts:

1. clever goldbug who bought in 1980 ten ounces of gold, paid $7,000 and holds now gold valued at $ 16,000

2. stupid believer in worthless fiat bought in 1980 a 30year UST longbond, paid $ 7,000, reinvested the interest at an average conservative yield of only 6% in UST and owned in 2010 (let's forget the 2 years in favour of the clever goldbug) TARAAAAAAHHH... $ 40,500 for which he could buy 34 ounces of gold in 2010 or 25 ounces today.

ElStupido cashed in $ 31,500 interest which, reinvested, provided additional interest of approximately $ 2,000 and repayment of principal $ 7,000 = $ 40,500

Jayman · May 20, 2012

If, back in 1980, I have 7 one hundred dollar bills and you took your $700 and bought an oz of gold. And we both are holding them till we needed to buy that lamb now. I still have $700 and you have $1500.

i have strong doubts that many brain-amputated people exist who owned in 1980 any amount of "worthless" fiat money and did not invest that money to collect fat "worthless" fiat interest from AAA rated debtors (UK Gilts 13%, US Treasuries 15%, German Bunds 11%).

but talk is cheap, let's look at the facts:

1. clever goldbug who bought in 1980 ten ounces of gold, paid $7,000 and holds now gold valued at $ 16,000

2. stupid believer in worthless fiat bought in 1980 a 30year UST longbond, paid $ 7,000, reinvested the interest at an average conservative yield of only 6% in UST and owned in 2010 (let's forget the 2 years in favour of the clever goldbug) TARAAAAAAHHH... $ 40,500 for which he could buy 34 ounces of gold in 2010 or 25 ounces today.

ElStupido cashed in $ 31,500 interest which, reinvested, provided additional interest of approximately $ 2,000 and repayment of principal $ 7,000 = $ 40,500

Yes but you are comparing investing to holding. Not sure how this is a fair comparison. The point you keep missing its that you can do both. How much are bonds paying now I wonder? Since I was a little school boy in 1980 I didn't have the money to buy into high interest paying investments.

I understand its hard to teach an old dog new tricks but the fact is that many younger folks who are not retired are much better off owning some gold than putting there money into UST or the likes.

Naam · May 20, 2012

Is that what you are so upset about Lt? You bought gold back in the 70's and feel burned when it urged and then fell? I have talked with many older folks that have bad memories of gold that I was too young to remember. They all seem to have a similar opinion that gold is not a good store of wealth.

assumptions, allegations and prophecies, in that the goldbugs excel. the only gold i bought from 1979 onwards was jewelry for wife which i did not consider an investment. i bought however British Gilts yielding 13.5%, Mexico bonds denominated in Pound Sterling yielding in excess of 25% and later exclusively emerging market bonds (you name them, i held them). till 1996 at any investment that yielded less than 15% i made fitting derogatory remarks.

after lean 7 years with yields of (YUCK!) less than 10% the party started again and sovereign debtors (mostly Latin America) had to shell out again 15-20% interest to attract investors. unfortunately that lasted only till 2004 and with a few exceptions (e.g. Venezuela or subordinated financials) yields dropped into the abyss.

it goes of course without saying that anybody who comes up with ridiculous stories that somebody might hold cash for 30 years without investing it has no idea what i am talking about. you are therefore excused

Naam · May 20, 2012

How much are bonds paying now I wonder?

to name a few:

Venezuela (sovereign debt) ~13%

PdVSA (crude oil reserves more than Saudi Arabia) ~14%

Provincia de Buenos Aires ~15%

subordinated bonds of financial institutions (hundreds of them) 8-12%

disclaimer: nowadays high yield investments are not buy and hold. they require constant daily monitoring and are neither suitable for inexperienced investors nor for the faint-hearted. that's the reason why you find people like me daily in serious financial forums to exchange views and intermittendly in a forum like this one for entertainment and relaxation which they require as a diversion from the hard work looking for 6-8 hours at three screens, trying to make a few extra bucks for dog food

flying · May 21, 2012

the US-Dollar is an excellent example for my claim. every Bill, Buck, Hank and Joe talked and talks about the Dollar's demise but change their minds during a perceived or an actual crisis (like the present one) when the Dollar morphs into a "safe haven".

You are correct of course & this is a simple fact that many cannot wrap their heads around.

I am long gold even though I sold 75% @ $1775 due to a change of country & will of course accumulate again once settled.

BUT...............I have no illusions & know it does not matter what logic dictates.....In the end the market nor the people who are swept into it are logical.

We like to think it is 2+2=4 but it is not. The market is the market. The big boys decide where it goes & they drive it there.

It also does not matter one iota that we know the US is sinking in a cesspool of debt vs revenues....The dollar for what ever reason will remain the perceived safe haven to many. Not because it is the strongest but because the country that prints it gives the best illusion of strength of any other.

To make it simple for TV readers.....all the world is bargirls & the US is the weekend millionaire in Pattaya

They spend in such an extreme fashion the majority of bargirls are still impressed.

Same with the concept you tried to explain pages back about gold priced in USD & folks need to do the math to see if perceived movement is

up....down or a wash. It can be very deceiving to someone who may think it is flying when in reality it is slight of hand or a wash best.

Again everyone knows from the first page I am bullish...but I do not cheer lead & I am not blind to facts

Good Luck

Edited May 21, 2012 by flying

David48 · May 21, 2012

My quite conservative Thai gf bought some gold last week end (with her money).

she took advantage of the recent drop in the price of gold.

Edited May 21, 2012 by David48

BEENTHEREDONETHAT · May 21, 2012

When I started buying gold it was $300 an oz. That wasn't all that long ago in my lifetime.

none of the resident gold lovers bought any gold "long ago" for which a rational explanation

exists. those who invested long ago the lion share or all of their liquid capital in gold either

starved to death or are thoroughly pissed off and ashamed to post in Thaivisa's gold thread.

Is that what you are so upset about Lt? You bought gold back in the 70's and feel burned when it urged and then fell? I have talked with many older folks that have bad memories of gold that I was too young to remember. They all seem to have a similar opinion that gold is not a good store of wealth.

I'm still very confused with why anyone that bought gold lower than today's prices would be upset to still own it. I guess I don't understand how your paper money is multiplying on it's own to keep up with the increase in gold prices throughout history. No one here has yet to explain that. They keep quoting inflation relative stats that afaik don't make your $100 bill turn into a $200 does it?

Maybe all the old-timers have it right. Maybe I am the blind sheep walking around living with a false sense of security in that I own gold. I can tell you that personally I feel very relieved that I own some physical gold/silver and that is much more so than holding paper money.

To each his own.....

Failing to prepare is preparing to fail.

John Robert Wooden

I bought krugerands and Pandas in 1980 for around $800 sold most of them a few years later at $400 and put the money into Aussie bonds for ten years at 15%. So last time I calculated gold would have to be at $2600 now for me to break even. The $ I put into aussie bonds did very well. We do have a few Krugerans and Pandas we held onto but for a 30 year investment they haven't fared to well.

Naam · May 21, 2012

put the money into Aussie bonds for ten years at 15%

those were the days when tripleA debtors paid 15% whereas today you have to go for BB or single B to get double digit yields

if somebody had told me 10 years ago that Brazil, Mexico, Peru or Colombia will be able refinance five year maturity USD debt between 2.10% and 2.30% i would have called him a moronic attorante.

churchill · May 21, 2012

Gold bushwhacks bears

Commentary: Is a central bank buying?

http://www.marketwatch.com/story/gold-bushwhacks-bears-2012-05-21?link=MW_home_latest_news

12DrinkMore · May 21, 2012

Ah Naam, hes a bit deep for some and analogous for others. Some say, like the star ship Enterprise he floats around Uranus looking for Clingons. However, he is correct when he says that if you want to enjoy the intrinsic value of New Zealand lamb then you need worthless fiat money because the Kiwis dont accept gold or Mia Nois. Hmm on second thought they will swap a Mia Noi for a sheep.

Which way around?

Can't be too sure with the Kiwis

gregb · May 21, 2012

disclaimer: nowadays high yield investments are not buy and hold. they require constant daily monitoring and are neither suitable for inexperienced investors nor for the faint-hearted. that's the reason why you find people like me daily in serious financial forums to exchange views and intermittendly in a forum like this one for entertainment and relaxation which they require as a diversion from the hard work looking for 6-8 hours at three screens, trying to make a few extra bucks for dog food

And this is exactly why you buy gold if you are still in the work force. I can think of no more unpalatable job than sitting around like some scrooge on a keyboard trying to time the market and move in and out of hundreds of different investments, every day for days on end.

The days when you could stick your fiat into a bank CD and concentrate on the interesting challenges of life are long gone. You can either be like Naam, get yourself all wound up playing financial games for 6 hours a day, and then come here and denigrate others to blow off steam, or you can simply buy gold and hold.

30 years from now, when we are all as old as Naam is today, that gold may not have completely outperformed all of his investments, but we will not have needed to spend a miserable 6 hours a day that we didn't have trying to find better means of investing it. I only get about 3 hours a day with my kids as it is. There is something seriously wrong with society when it is necessary to spend multiple hours a day trying to find investments that can stay ahead of inflation. Gold is the antidote to this plague of modern finances, and this infuriates financial advisors no end, who make money convincing you to play this silly game.

My time is worth enough to me that I am not willing to spend 6 hours a day looking for investments. My children are infinitely more valuable than that.

Naam · May 21, 2012

I can think of no more unpalatable job than sitting around like some scrooge on a keyboard trying to time the market and move in and out of hundreds of different investments, every day for days on end.

what for some people is palatable is an interesting hobby for others. only poor ignorant have-nots are talking about hundreds of different investments because a single investor cannot follow with indepth more than a dozen, half a dozen is more likely and the moves are limited to one or perhaps two in a month.

utterly unpalatable is when a Farang in Thailand is that poor that he can't afford a local maid, especially if he has children (i refer to one of your recent postings) but keeps on having a big mouth, rendering arbitrary judgments about how others conduct their life and spreading his prophecies what will happen in 30 years from now.

much more palatable is that some people (e.g. my [not so] humble self) can afford, based on their unpalatable job as a "keyboard scrooge" , to walk into a car showroom, shoot from the hip and buy a 43 year old car for a fistful million worthless fiat Baht and one ("slightly" newer car) for the Mrs for a slightly higher worthles fiat amount as it happened 10 or 12 days ago.

palatable is also when one can afford to hold nearly 60% of ones liquid capital in "worthless" fiat cash and physical gold earning not a single penny interest.

churchill · May 21, 2012

Long but informative article .. if you have the time ..

Manipulating the Bullion Markets - Macleod

http://financeandeconomics.org/Articles%20archive/The%20gold%20bullion%20market.pdf

Jayman · May 21, 2012

Long but informative article .. if you have the time ..

Manipulating the Bullion Markets - Macleod

http://financeandeco...lion market.pdf

That was from a lecture at Hard Assets Investment Conference in New York this past week. Here is more of the lecture he gave...

http://financeandeconomics.org/Articles%20archive/2012.05%20Economic%20speech.pdf

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