Where Is Gold Going In This Market

[Naam]

"Found the Sri Lanka interview - after about 3 minutes if you don't want to watch it all"

insignificant small country with insignificant small forex reserves which makes gold holdings of 10-20% insignificant small.

p.s. the remark "would manage their reserves to maintain 10-20% in Gold", id est a difference of 100% depicts in my [not so] humble view a clown.

:jap:

dude, you have to look at the big picture and not respond to every small story separately- one could easily get confused

India, Bangladesh, Sri Lanka and Mauritius central banks are all buying gold- 2010 central banks will be net buyers for only secound time since 1998.

dude, because you say so?

the central bank of that huge and powerful country Mauritius (population slightly more than Chiang Mai or 15% of Bangkok's population) must have bought 17 ounces yesterday in a local goldshop. perhaps that's the reason why gold dropped?

Edited November 13, 2010 by Naam

[churchill]

"Found the Sri Lanka interview - after about 3 minutes if you don't want to watch it all"

insignificant small country with insignificant small forex reserves which makes gold holdings of 10-20% insignificant small.

p.s. the remark "would manage their reserves to maintain 10-20% in Gold", id est a difference of 100% depicts in my [not so] humble view a clown.

:jap:

dude, you have to look at the big picture and not respond to every small story separately- one could easily get confused

India, Bangladesh, Sri Lanka and Mauritius central banks are all buying gold- 2010 central banks will be net buyers for only secound time since 1998.

You forgot Nepal

'KATHMANDU, Nov 13: Nepal is buying gold worth Rs 3.2 billion ($ 45 million) from the International Monetary Fund (IMF) to bolster the country´s gold reserves to ensure macroeconomic stability and gold supply for its domestic market.'

http://www.myrepublica.com/portal/index.php?action=news_details&news_id=25157

[churchill]

Buffett doesn't like gold because it's got no intrinsic value.

What if it could be used to save energy and absorb CO2 !

see 'Gold nanoparticles turn trees into streetlights'

http://www.gizmag.com/glowing-trees-using-gold-nanoparticles/16917/

Danziger Goldwasser cures athlete's foot, erectile dysfunction and hair loss

http://en.wikipedia.org/wiki/Goldwasser

and Has it worked ?

Edited November 13, 2010 by churchill

[churchill]

'Carême created several dishes named for his patron including Salmon Rothschild, but none was more suited to the Baron's personality than the Soufflé Rothschild, a dessert soufflé flavored with candied cherries and Danziger Goldwasser. Goldwasser is a clear, 80 proof orange-anise-flavored liqueur liqueur containing small flakes of 22 or 23 karat gold leaf in suspension. Goldwasser was original created as a medicinal since gold was a medieval panacea, although it is now sold primarily as a novelty. There are several different brands of goldwasser, some of which have alternate flavorings such as of Schwabacher Goldwasser, a Swiss cinnamon schnapps.'

http://www.medadvocates.org/celebration/november/nov_15_a.htm

[ExpatJ]

"Found the Sri Lanka interview - after about 3 minutes if you don't want to watch it all"

insignificant small country with insignificant small forex reserves which makes gold holdings of 10-20% insignificant small.

p.s. the remark "would manage their reserves to maintain 10-20% in Gold", id est a difference of 100% depicts in my [not so] humble view a clown.

:jap:

dude, you have to look at the big picture and not respond to every small story separately- one could easily get confused

India, Bangladesh, Sri Lanka and Mauritius central banks are all buying gold- 2010 central banks will be net buyers for only secound time since 1998.

dude, because you say so?

the central bank of that huge and powerful country Mauritius (population slightly more than Chiang Mai or 15% of Bangkok's population) must have bought 17 ounces yesterday in a local goldshop. perhaps that's the reason why gold dropped?

You are doing it again- trying to draw conclusions from individual pieces of news rather than looking at the big picture. But anyway, lets agree to disagree on the way we analyze the situation, thats cool.

Edited November 13, 2010 by ExpatJ

[churchill]

Quantitative Easing: Be afraid ........

The world is heading towards high inflation and political instability. It's only a matter of time before there is another global crisis. The first sign would be a collapsing treasury market. The Fed is controlling the yield curve through its QE program. But, it is irrational for other investors to play this game. The only reason to stay in is that the Fed won't let the market fall. But, the underlying value is evaporating with rising money supply and the inflationary consequences. When all investors realize this, they will run for the exits and the Fed won't be able to stop the stampede. If it prints enough money to take over the whole market, the people with freshly minted dollars would surely want to convert their money into other assets..

The world seems on course for another crisis in 2012. The same people who caused the last crisis are still in charge. They'll get us into another. Iceland is sending its former prime minister to court for causing the banking crisis. A worse fate awaits the people who are causing the next crisis.

In summary, quantitative easing is a fraud, a last-ditch throw of the dice. Because its ultimate outcome is likely to be inflationary, ownership of real assets has validity. But simply hitching your cart to the stock market isn‟t the answer unless you can time your exit to perfection, because at some point the market will start to fret about when QE stops. Better by far to concentrate on the highest quality assets available in each category. In government debt, that amounts to those countries with the greatest potential to be able to pay you back not those countries that have issued the greatest amount of debt, nations which therefore comprise the largest components of government debt indices. In equity markets, sensibly priced businesses that are suppliers of inherently scarce products and services with unlimited demand (not least, energy and infrastructure) look particularly attractive. Notwithstanding the temporary multiple correlations of 2008, it still makes absolute sense to diversify. And gold, of course, is still a core hold.'

http://www.stockopedia.co.uk/content/quantitative-easing-be-afraid-50414/

Edited November 13, 2010 by churchill

[Naam]

"Found the Sri Lanka interview - after about 3 minutes if you don't want to watch it all"

insignificant small country with insignificant small forex reserves which makes gold holdings of 10-20% insignificant small.

p.s. the remark "would manage their reserves to maintain 10-20% in Gold", id est a difference of 100% depicts in my [not so] humble view a clown.

:jap:

dude, you have to look at the big picture and not respond to every small story separately- one could easily get confused

India, Bangladesh, Sri Lanka and Mauritius central banks are all buying gold- 2010 central banks will be net buyers for only secound time since 1998.

dude, because you say so?

the central bank of that huge and powerful country Mauritius (population slightly more than Chiang Mai or 15% of Bangkok's population) must have bought 17 ounces yesterday in a local goldshop. perhaps that's the reason why gold dropped?

You are doing it again- trying to draw conclusions from individual pieces of news rather than looking at the big picture. But anyway, lets agree to disagree on the way we analyze the situation, thats cool.

-i am not trying to draw conclusions, i conclude.

-i don't see pieces of news, i see personal opinions presented out of thin air without any underlying proof...

-...and when i read "central banks of Bangla Desh, Sri Lanka and Mauritius are all buying..."

-...i

for the benefit of those TV-members who are looking for information i consider it my duty to point out flaws, incorrect facts and/or assumptions as well as wishy-washy or outright ridiculous claims.

disclaimer: i (actually "we") hold a substantial amount of physical, paper and 'mining' gold and after the 2009 mother load of investment opportunities (which are gone now) i see fair value in holding a certain percentage of gold because we are facing an uncertain future. but the afore-mentioned does not prevent that i keep on acting as 'advocatus diaboli' in this thread as a counterweight of goldbugs who float on cloud nine.

[ExpatJ]

i think over optimistic gold bugs can give distorted views. I just started investing in gold a couple of weeks ago because;

a) uncertain economic times, i.e. a fair chance of another major crash a la 2008 lehman brothers.

b ) hedge against inflation (because of all the QE going on

c) hedge against weakening dollar (because of QE again)

d) i see more people moving into gold despite the already high price.

Im aiming to have about 10% of my portfolio in gold- real gold bars/coins- i see ETFs and gold mining shares/stock as being a poor substitute for real gold (ETFs are often under valued relative to gold price and there is no guarantee that mining shares increase as gold prices increase. )

Im now at 30% property, 30% equities, 30% cash, 10% - id be interested to hear yours (and others) portfolio spread.

Edited November 14, 2010 by ExpatJ

[ExpatJ]

Naam Quote"...and when i read "central banks of Bangla Desh, Sri Lanka and Mauritius are all buying..."

Not meaning to slight you or anything but , you again manage to overlook the key point of the analysis by focusing on the small piece of news (e.g. those 3 countries buying gold) and missing the big picture (central banks were net buyers of gold this year for only the second time in the last several years).

Tactical analysis is useful, but for financial analysis strategic analysis is key.

Edited November 14, 2010 by ExpatJ

[flying]

Im now at 30% property, 30% equities, 30% cash, 10% - id be interested to hear yours (and others) portfolio spread.

In 08 I went to 60/40 with cash & physical

it turned into 50/50 as PM's went up

Now I am at roughly 38/62 because the PM's have continued to appreciated

These are my liquid assets cash & PM's only & do not include property/real estate

Edited November 14, 2010 by flying

[Naam]

Im aiming to have about 10% of my portfolio in gold- real gold bars/coins- i see ETFs and gold mining shares/stock as being a poor substitute for real gold (ETFs are often under valued relative to gold price and there is no guarantee that mining shares increase as gold prices increase. )

of course there is no guarantee but one does not need a guarantee if the mines price increase is a multiple of the physical price increase. from a vice versa perspective there is no guarantee that the price of physical gold increases parallel to the price of mines. mines, ETFs and paper gold in general have a huge advantage. one can sell them with a few mouse-clicks without getting off a chair instead of leaving the house with a wheel barrow loaded with bars and coins or flying to a country where the physical gold is stored.

disclaimer: perhaps i was just lucky with the mines i am presently holding.

[flying]

ETFs and paper gold in general have a huge advantage. one can sell them with a few mouse-clicks without getting off a chair instead of leaving the house with a wheel barrow loaded with bars and coins or flying to a country where the physical gold is stored.

True paper gold is the way to trade in & but there is the flip side.

Probably an unlikely event but.....

Markets/exchange trading can & has been suspended...I believe it was 3 days in the big crash?

Things like the flash crash still go unanswered.

Perhaps it was a reaction test?...who knows

Same goes for banks...They do have a history in some countries of being "temporarily unavailable at this time"

Of course the amounts discussed has a very large bearing on choices available.

If as you say it is wheelbarrows loaded with gold bars then of course it is harder to deal with.

A problem I would like to have to ponder....but I dont

But everyone should at least have 6 months - 1 year funds readily available IMHO

I think the Chris Martenson crash course recommends 3 months but I am less trusting

Edited November 14, 2010 by flying

[Naam]

-trading was not suspended in 2008 but it was for 4 days in 2001 after sep11. nevertheless markets tumbled but recovered within a couple of months.

-based on my experience in oct 2008 i deem it prudent to hold one year's expenses in physical gold (immediately accessible).

-in case of any flash crash in precious metals, holding paper or physical doesn't make any difference.

[cloudhopper]

Great blog post from Mish -

http://globaleconomicanalysis.blogspot.com/2010/11/midas-crush-marketwatch-attempts-to.html

[churchill]

Great blog post from Mish -

http://globaleconomicanalysis.blogspot.com/2010/11/midas-crush-marketwatch-attempts-to.html

Yes

This from Harvey Organ over the week-end

'Here is the scary stuff: the volume on the comex today estimated by the comex folk is 345,624 with an estimated 300,428 contracts traded in the front December month. For comparison on Thursday, the confirmed volume was also high at 207,199 with 178,483 in the front month. The estimated volume was 171,000 contracts so they revised it up by 21%

You can bet the farm that when the final numbers get published on Monday, the banking cartel threw in over 400,000 contracts. To give you an idea of how many gold ounces that represents you must multiply each contract by 100 oz. Thus the estimated volume of 345,624 represents 34,562,400 oz. If the real volume turns out to be 400,000 contracts that represents 40 million oz of gold. The world produces around 73 million oz so the estimated volume represents

47% of world annual production; If the real volume is 40 million then it represents 54% of world annual production. Our regulators seem content in letting these banks play (short) with unbacked gold and silver paper.'

http://harveyorgan.blogspot.com/

/ I feel that everything has been thrown at gold and silver to bring prices down - and we are still over $1350 !- / I think the game ( if there is one with JPM and HSBC ) is nearly over / See Max Keiser latest also http://maxkeiser.com/

[crusader79]

Comments from Peter Schiff on gold counterparty risk from earlier this year (may have been posted before):

http://www.youtube.com/watch?v=hd57H_QxID4

[flying]

-in case of any flash crash in precious metals, holding paper or physical doesn't make any difference.

Not so sure about that one

[Naam]

-in case of any flash crash in precious metals, holding paper or physical doesn't make any difference.

Not so sure about that one

do you really think if non-phys gold drops 200 dollar an ounce your local goldshop will buy your physical gold at non-phys minus 50 dollars?

[cloudhopper]

do you really think if non-phys gold drops 200 dollar an ounce your local goldshop will buy your physical gold at non-phys minus 50 dollars?

Of course they will - physical gold will never trade for less than some paper derivative and quite possibly significantly higher if there are issues about the liquidity, tax liability or even legitimacy of the particular paper asset. It all depends on the perceived counter-party risk and physical gold has the least.

[flying]

-in case of any flash crash in precious metals, holding paper or physical doesn't make any difference.

Not so sure about that one

do you really think if non-phys gold drops 200 dollar an ounce your local goldshop will buy your physical gold at non-phys minus 50 dollars?

Well yes I do & have always said I thought there would eventually be a decoupling of paper priced gold from physical gold.

The premiums as they are now do fluctuate but............It is ever becoming more obvious that the two cannot be compared.

In the gambling world known as paper gold there is more paper than physical reality & that is as I said becoming more & more obvious.

That aside I was addressing more so the statement holding paper or physical doesn't make any difference

Because like you & I .....many folks hold physical as a form of insurance against a paper.....yes? I know I do so there is a difference in that regard.

I know you were speaking in regards to price drop in flash crashes but ultimately any gold in hand will be more valuable than paper IOU's at the end of any crash IMO

Edited November 15, 2010 by flying

[crusader79]

MarketClub on recent momentum:

http://broadcast.ino.com/education/gold1112/?blog

[Naam]

I know you were speaking in regards to price drop in flash crashes but ultimately any gold in hand will be more valuable than paper IOU's at the end of any crash IMO

"ultimately" is not a tangible basis for making rational decisions and neither is the big picture derived from assumed actions of the central bank of Mauritius, no gold in Fort Knox and Bernanke and Geithner summoned by a grand jury for money laundering and grand theft.

is there no way that we can discuss gold, Bernanke, dollar, the european "PIIGS" and what not rationally by looking at the prevailing environment and its facts instead of using mere assumptions? the resident (and non-resident) gurus who predicted the dollar demise after nov 2 were wrong, the goldbugs who predicted "up up up" were wrong. trees don't grow skyhigh and Armaggedon will not happen tomorrow and precious metals seem to be, respectively are falling in line with most commodities.

[Naam]

The premiums as they are now do fluctuate but............It is ever becoming more obvious that the two cannot be compared.

WHAT premiums? a seasoned investor does not buy coins (if he is not interested in buying bakeries) and the tiny difference between physical bars and paper gold is more than justified because it is a hassle to store, handle and especially to trade physical gold.

[Naam]

do you really think if non-phys gold drops 200 dollar an ounce your local goldshop will buy your physical gold at non-phys minus 50 dollars?

Of course they will - physical gold will never trade for less than some paper derivative and quite possibly significantly higher if there are issues about the liquidity, tax liability or even legitimacy of the particular paper asset. It all depends on the perceived counter-party risk and physical gold has the least.

nobody mentioned something about "less". the question was "will physical gold trade much higher than paper gold in case of a gold flash crash?"

Edited November 16, 2010 by Naam

[ExpatJ]

There is a place for gold ETF in a portfolio especially for small scale investors who have less to invest then its just easier to buy an ETF than mess around with a coin or two.

But, if there was a large scale monetary crises in the US, let alone worldwide, it’s very possible some of the banking institutions that are controlling these Gold Bullion ETFs could become bankrupt or insolvent. As a result they would likely end up liquidating the ETF and you would end up with no gold bullion and very little cash for your shares, if any.

Also , many gold mining stocks have performed relatively poorly even with the increase in gold price- this is because of the increasingly high costs of extracting gold. Mining stocks are also impacted by bull and bear market sentiment so you can see your mining stock decrease as gold prices increase.

Bottom line- yes, ETfs, mining stock are valid investments - but if you are really looking for a fail safe way to mitigate risk in these turbulent economic times only gold coins/bars will cut it.

[flying]

The premiums as they are now do fluctuate but............It is ever becoming more obvious that the two cannot be compared.

WHAT premiums? a seasoned investor does not buy coins (if he is not interested in buying bakeries) and the tiny difference between physical bars and paper gold is more than justified because it is a hassle to store, handle and especially to trade physical gold.

Even a basic no name 1 ounce bar is now $35 premium over spot. Remember a year or two ago it would have been as you say regarding bars.

Yes coins are more but even 1 oz Krugerrand are only $45 over spot so not a big difference from bars. But what I am saying is that premium has gone up & down depending

[Naam]

Even a basic no name 1 ounce bar is now $35 premium over spot.

of course small weights command a premium but an investor does not buy small units. "we" goldbugs hold only a limited quantity for the special purpose "Armageddon".

[flying]

Nov. 15, 2010, 5:26 p.m. EST

Soros increased gold positions in third quarter

Hey I thought George didn't like gold?

SAN FRANCISCO (MarketWatch) -- Soros Fund Management LLC, headed by George Soros, increased gold positions during the third quarter, according to a regulatory filing late Monday. Soros held 4,697,008 shares of the SPDR Gold Trust /quotes/comstock/13*!gld/quotes/nls/gld (GLD 132.93, +0.51, +0.39%) and 705,000 call options on the gold ETF at the end of September, the filing showed. Soros also owned 5,000,000 shares of the iShares Gold Trust /quotes/comstock/13*!iau/quotes/nls/iau (IAU 13.31, +0.06, +0.45%) at the end of the third quarter, according to the filing. Three months earlier, Soros held 5,244,697 shares of the SPDR Gold Trust, a portion of which was a shared position. The firm held no shares of the iShares Gold Trust at the end of June, according to the filing. Such regulatory filings don't include all positions held by investment firms. Many derivatives, direct commodity holdings and short positions aren't included.

[flying]

Even a basic no name 1 ounce bar is now $35 premium over spot.

of course small weights command a premium but an investor does not buy small units. "we" goldbugs hold only a limited quantity for the special purpose "Armageddon".

Tis true it does go down as the weight goes up

10 ounce bars are $25 per ounce over spot

Kilo bars are $10-$12 per oz over spot

400 oz bars they will not post the price...nor can I pay it

[Naam]

Mining stocks are also impacted by bull and bear market sentiment so you can see your mining stock decrease as gold prices increase.

that's a generalising and irrelevant claim without any basis. here are the facts of mining shares which i bought may 27, 2010 when the price for physical gold was $1,220/ounce. today gold is up 11%, mining shares are up 74%. two other mines which i own have an excellent performance too, not as good as the first one i mentioned but beating physical by many lengths.

next!