Big Crowds In Gold Shops Today....buying Or Selling?

[NanLaew]

Amazing the shadenfreude comments made by people on this thread to the OP for posting a perfectly reasonable question!Especially given the fact that these people seem to have no grasp of the facts behind the big retracement in gold's spot price!

Gold has indeed plummeted to it's biggest 1 day drop since the 1980s,the reason behind this was the news that the Cypriot Central Bank was about to dump 10 tons of physical gold onto the market,about 400 million Euros worth.They still haven't done that yet but may be forced to by the IMF to unlock 10 million euros worth of loans.

Central Bank Chief Panicos Demetriades said last week that the Cypriot government didn’t have the right to sell gold without his consent.He also signalled the administration hadn’t involved him in the plan.The Cypriot central bank manages the country’s gold stock,which amounts to 13.9 metric tons,according to the World Gold Council.

So obviously if this sale goes ahead gold will fall much,much further,think around the USD $1100/troy oz mark.Therefore anyone buying gold now would be very,very foolish with the prospect of the huge Cyprus sell off hanging over the gold market like the Sword of Damacles!

A logical if rather simplistic view.

The Cypriot governent may be considering selling their gold but, as you said, it's only worth €400m. These suckers need to raise another €6-7 billion. The rest, I'd imagine would have to come from additional levies on deposit holders within the two beleaguered banks and, as it stands, they have to raise a total of €13bn to qaulify for a troika loan of €10bn.

Can you see the Cypriot people going for that?

As someone said, the gold ain't been sold yet and even if it is, it's a piffling amount in the grand scheme of things. I can't see the troika be able to bully the Italians and Spanish into doing the same. The people will tell them where to go.

Whilst the ratio of the value of there gold to there debt may well influence there decision to sell, hpothetically what affect is it likley to have on the market if they did dump it?

In global gold market terms is 400m euros a small or large amount?

To quote my great grandfather, 'A fart in a thunderstorm.'

[FunFon]

Whilst the ratio of the value of there gold to there debt may well influence there decision to sell, hpothetically what affect is it likley to have on the market if they did dump it?

In global gold market terms is 400m euros a small or large amount?

-

Absolute drop in the bucket.

http://blogs.wsj.com/economics/2012/06/11/central-banks-back-to-buying-gold/

http://www.bloomberg.com/news/2012-12-05/bank-of-korea-raises-gold-holdings-as-central-banks-buy-1-.html

http://qz.com/74459/why-central-banks-have-been-hoarding-gold-since-2009/

And although we know China's buying big, they're doing through their sovereign funds so no one knows just how much.

[Waterloo]

Amazing the shadenfreude comments made by people on this thread to the OP for posting a perfectly reasonable question!Especially given the fact that these people seem to have no grasp of the facts behind the big retracement in gold's spot price!

Gold has indeed plummeted to it's biggest 1 day drop since the 1980s,the reason behind this was the news that the Cypriot Central Bank was about to dump 10 tons of physical gold onto the market,about 400 million Euros worth.They still haven't done that yet but may be forced to by the IMF to unlock 10 million euros worth of loans.

Central Bank Chief Panicos Demetriades said last week that the Cypriot government didn’t have the right to sell gold without his consent.He also signalled the administration hadn’t involved him in the plan.The Cypriot central bank manages the country’s gold stock,which amounts to 13.9 metric tons,according to the World Gold Council.

So obviously if this sale goes ahead gold will fall much,much further,think around the USD $1100/troy oz mark.Therefore anyone buying gold now would be very,very foolish with the prospect of the huge Cyprus sell off hanging over the gold market like the Sword of Damacles!

A logical if rather simplistic view.

The Cypriot governent may be considering selling their gold but, as you said, it's only worth €400m. These suckers need to raise another €6-7 billion. The rest, I'd imagine would have to come from additional levies on deposit holders within the two beleaguered banks and, as it stands, they have to raise a total of €13bn to qaulify for a troika loan of €10bn.

Can you see the Cypriot people going for that?

As someone said, the gold ain't been sold yet and even if it is, it's a piffling amount in the grand scheme of things. I can't see the troika be able to bully the Italians and Spanish into doing the same. The people will tell them where to go.

Whilst the ratio of the value of there gold to there debt may well influence there decision to sell, hpothetically what affect is it likley to have on the market if they did dump it?

In global gold market terms is 400m euros a small or large amount?

To quote my great grandfather, 'A fart in a thunderstorm.'

So not likley to have much of an affect on price then!

[FunFon]

So not likley to have much of an affect on price then!

-

Just like the favours of a beautiful Thai woman, there's not necessarily any discernible logic behind any given twist of the wind, even if overall patterns can be discerned in the long term. . .

[NewlyMintedThai]

There's no selling without someone buying, and no buying without someone selling.

[Blumpkin]

Thank you Blumpkin for your analysis. Fools rush in.... I almost wanted to buy as well. I think I will wait.

Thanks for the speculative analysis you mean. Some talking head made a statement and an 'analyst' infers that the Cypriot bailout is contingent on selling a chunk of their gold.

That about sums it up. Make of it what you will.

Actually no,you're wrong!

The Cypriot Govt has already signed contracts to the effect that they WILL sell off 10 metric tons of gold to raise approximately 400 million Euros,in order to qualify for a bailout from the IMF to the tune of 10 million Euros.These are not figures plucked out of the air,they are cold,hard facts!

As for whether they will sell off is 100% down to the IMF enforcing the contract to execute the sell order on the majority of their gold bullion reserves.

Will they do it?Personally I would have to say no,they probably won't as saving the Euro itself will remain far more importnat than a token gesture from one of the smallest nations in the Eurozone.

To sum up,the bailout from the IMF is 100% contingent on this sale of Cypriot gold.

Once again Thai Visa proves the old adage :

"It is better to remain silent and be thought a fool,than to open your mouth and remove all doubt!"

- George Eliot.

[Blumpkin]

Amazing the shadenfreude comments made by people on this thread to the OP for posting a perfectly reasonable question!Especially given the fact that these people seem to have no grasp of the facts behind the big retracement in gold's spot price!

Gold has indeed plummeted to it's biggest 1 day drop since the 1980s,the reason behind this was the news that the Cypriot Central Bank was about to dump 10 tons of physical gold onto the market,about 400 million Euros worth.They still haven't done that yet but may be forced to by the IMF to unlock 10 million euros worth of loans.

Central Bank Chief Panicos Demetriades said last week that the Cypriot government didn’t have the right to sell gold without his consent.He also signalled the administration hadn’t involved him in the plan.The Cypriot central bank manages the country’s gold stock,which amounts to 13.9 metric tons,according to the World Gold Council.

So obviously if this sale goes ahead gold will fall much,much further,think around the USD $1100/troy oz mark.Therefore anyone buying gold now would be very,very foolish with the prospect of the huge Cyprus sell off hanging over the gold market like the Sword of Damacles!

A logical if rather simplistic view.

The Cypriot governent may be considering selling their gold but, as you said, it's only worth €400m. These suckers need to raise another €6-7 billion. The rest, I'd imagine would have to come from additional levies on deposit holders within the two beleaguered banks and, as it stands, they have to raise a total of €13bn to qaulify for a troika loan of €10bn.

Can you see the Cypriot people going for that?

As someone said, the gold ain't been sold yet and even if it is, it's a piffling amount in the grand scheme of things. I can't see the troika be able to bully the Italians and Spanish into doing the same. The people will tell them where to go.

Whilst the ratio of the value of there gold to there debt may well influence there decision to sell, hpothetically what affect is it likley to have on the market if they did dump it?

In global gold market terms is 400m euros a small or large amount?

To quote my great grandfather, 'A fart in a thunderstorm.'

You obviously know very little about what you are talking about as the total volume gold that has ever been mined would actually fill only 3 Olympic size swimming pools,how much of that would you say is 10 metric tons?

You are starting to embarrass yourself with your lack of knowledge now I'm afraid my friend!

[HardenedSoul]

Gold fell as sharply as it did because of a confluence of "sure things".

1. Cyprus will sell its 10 tons

2. All the other skint peripheral euro zone countries will be forced to follow suit when the time comes for them to be bailed out

3. The Federal Reserve will remove the quantitative easing punchbowl from the 5 year old easy-credit party

Now, do any of those sound like sure things to you or is it more likely that;

1. The Cypriots will flip the bird at the troika and bin the euro rather than subject their people to even more cash grabs

2. The likes of Spain and Italy will do the same rather than be dictated to by the Germans, the Finns and the Dutch while having their ordinary bank depositors shafted like the Cypriots and

3. The Fed will carry on printing rather than crash the bond market where it is the de facto buyer of last resort?

[Waterloo]

Quick search on wikipedia has an estimate of 165,000 tons total mined up to 2009, 10 tons doesn't sound to much compared to that?

[David48]

The amazingly young, stunningly beautiful and incredibly clever Mrs NanLaew sold about 10 baht of gold just before the Songkran weekend.

I haven't seen her today but I reckon I know where she is!

Ah NanLaew, NanLaew, NanLaew (said in descending tone) ... you know your point is mute without a photo ...

[DiNiro]

There are spikes in buying when gold goes up and spikes in selling when gold drops.

Buy high, sell low is a major problem for novice investors. Greed-fear cycle.

I bet more are selling now.

[FunFon]

1. The Cypriots will flip the bird at the troika and bin the euro rather than subject their people to even more cash grabs

2. The likes of Spain and Italy will do the same rather than be dictated to by the Germans, the Finns and the Dutch while having their ordinary bank depositors shafted like the Cypriots and

3. The Fed will carry on printing rather than crash the bond market where it is the de facto buyer of last resort?

-

Personally I think only #3 is certain, while #1 & 2 are very very unlikely.

Even all the PIGS selling significant portions of their gold reserves (IMO very very unlikely) will not have a large impact on the price of gold past 1-2 year timeframe.

Buying and selling gold as speculation is of course very risky, especially as paper/bits in computer system, but not IMO much more so than houses.

Long term physical gold as a hedge against general collapse of the west's fiscal systems (IMO moderately likely) I think as safe as land, and a lot more liquid.

[Naam]

Quick search on wikipedia has an estimate of 165,000 tons total mined up to 2009, 10 tons doesn't sound to much compared to that?

anybody who thinks that the potential sale of 10 tons Cyprus gold is one of the reasons for gold to drop must be a globally renowned guru who is vying for the Nobel Prize in economics.

[Mosha]

If the shops are apparently taking the gold and handing over cash, the customers may simply be pawning the gold.

[FunFon]

If the shops are apparently taking the gold and handing over cash, the customers may simply be pawning the gold.

-

The reputable gold shops don't do pawn, separate category of business.

[Mosha]

If the shops are apparently taking the gold and handing over cash, the customers may simply be pawning the gold.

-

The reputable gold shops don't do pawn, separate category of business.

In Ranong, I don't know of any that don't. No other Pawn shops AFAIK

[FunFon]

In Ranong, I don't know of any that don't. No other Pawn shops AFAIK

-

Not the case in Bangkok, and personally there's only a handful of gold shop's I'd buy from anyway and they're all on Yaowarat.

"Reputable" is another how long is a piece of string discussion. . .

[FunFon]

I took his post to mean more along the lines of:

The speculation about Cyprus' intention to sell gold being the cause of the drop in the world price is a crock.

And I agree. No one can explain the mob psychology of a market based 99.9% on the global population's fears about the future.

And if someone could, they'd deserve the Nobel prize for publishing an explanation.

[Jimmy Jump]

Why are people trying to argue about what's already happened?The answer to the question of 'How much of an effect will it have on the market?',is the biggest single one day drop in gold bullion in three decades!
That's how much of an effect it had,only on Thai Visa could people argue it's a drop in the ocean and nothing will happen when it just has!
What's the follow-up thread,'Is Black really White?'

[FunFon]

The drop has occured, the cause is not actually known.

Most of the responsible financial press has clearly stated that the Cyprus factor is just one element that analysts have seized upon as a convenient hook, but that the true underlying causes of the drop remain a mystery.

Gold is not a rational market based on supply and demand, more an indicator of global mob psychology.

If the US were actually paying interest for its never-never go back to rationality borrowings, start actually working on restoring trade imbalances and fund government spending with real tax money, then it would be more understandable.

As it stands I have to believe there are unseen players manipulating the market and perhaps they overplayed a hand or two. . .

The tiny Cyprus factor just isn't enough to explain such a huge drop is it?

[Donnie Brasco]

Once again; most of the comments here come from guys who haven't a clue.

The raid on gold and silver was a raid on paper positions, ETF 's and derivatives.

Everyone is buying as much bullion as they can pay for.

There was a drop in paper positions

***The recent "drop in bullion price" comes as a result of there being no official segregation of paper position from physical holding.***

Just try and buy silver without forking ov a silver round to spot price premium that amounts to more than the actual drop in the spot price.

Check it out.

If there were a big bullion sell-off in play, you'd be seeing a tsunami of g&s for sale at Kitco, Tulvings and Gainsborough.

There is NOT such a sell-off in progress.

In fact these huge dealers have either doubled their spot-plus premium of taken physical product, especially silver right off the market.

For a crystal clear take on this read Reagan's former Ass't Treasury Secretary, Paul Craig Roberts.

A true fiscal conservative, PCR blogs the truth about what the banisters and money junkies have been doing to what was left of the US economy for the last decade.

It's a looting.

The banks run that country anyway.

He'll, they run all the countries with central banking systems.

Read Paul Craig Roberts

Few people with any serious position in bullion divested.

Thais included.

[FunFon]

Stockman's recent book is also revealing, no matter how much he is to blame for the crackpot "trick down voodoonomics" of that era, he sure is scathing about the past couple decades mismanagement by the west's central bankers.

All of which seem IMO to point to gold's continuing sound status as a hedge against possible future meltdowns.

[FunFon]

Yes, that all makes very interesting reading, all in line with my thinking.

I thought the idea that the Fed actually doesn't have the gold it's supposed to be storing for Germany was a crackpot idea, but here's a pretty mainstream guy hinting that it's completely possible. Means same goes for the UK, maybe even more likely given their idiotic firesale over the past decade.

Quis custodiet ipsos custodes?

Really should be auditors with power over the central banks to hold them accountable to the tax payers.

Oh right, the Fed is actually a private bank, doesn't answer to the government either. . .

[metisdead]

A profanity post has been removed as well as a reply. A troll baiting post has been removed as well.

[Donnie Brasco]

The term "crackpot idea" is right up there with "conspiracy theorist".

Lazy cowardly thinking keeps poor people poor.

Question authority.

[seasia]

Once again; most of the comments here come from guys who haven't a clue. The raid on gold and silver was a raid on paper positions, ETF 's and derivatives. Everyone is buying as much bullion as they can pay for. There was a drop in paper positions ***The recent "drop in bullion price" comes as a result of there being no official segregation of paper position from physical holding.*** Just try and buy silver without forking ov a silver round to spot price premium that amounts to more than the actual drop in the spot price. Check it out. If there were a big bullion sell-off in play, you'd be seeing a tsunami of g&s for sale at Kitco, Tulvings and Gainsborough. There is NOT such a sell-off in progress. In fact these huge dealers have either doubled their spot-plus premium of taken physical product, especially silver right off the market. For a crystal clear take on this read Reagan's former Ass't Treasury Secretary, Paul Craig Roberts. A true fiscal conservative, PCR blogs the truth about what the banisters and money junkies have been doing to what was left of the US economy for the last decade. It's a looting. The banks run that country anyway. He'll, they run all the countries with central banking systems. Read Paul Craig Roberts Few people with any serious position in bullion divested. Thais included.

I happen to agree with the gist of what you are saying.

The sell off did seem to be mostly in paper positions rather than real gold.

The rapid rise in the Gold spot price after the recent fall does somewhat confirm that.

[Donnie Brasco]

If the shops are apparently taking the gold and handing over cash, the customers may simply be pawning the gold.

Kind of like a tax on stupidity ;-)

[Donnie Brasco]

Why are people trying to argue about what's already happened?The answer to the question of 'How much of an effect will it have on the market?',is the biggest single one day drop in gold bullion in three decades!

That's how much of an effect it had,only on Thai Visa could people argue it's a drop in the ocean and nothing will happen when it just has!

What's the follow-up thread,'Is Black really White?'

Your "biggest single day drop in gold bullion" is false.

Bullion didn't drop.

It's the paper position (ETF, Derivative, Futures) margin buying paper hangers that took this hit.

The bullion market is another kettle of fish.

Please don't come back with another opinion here.

Facts.

[AnotherOneAmerican]

The whole point of buying gold is to have it in your hand as an emergency hedge against war/disaster/financial collapse/ethnic cleansing/zombie plague.

Anyone accepting paper in the place of gold, has to be completely insane more insane than the gold bugs.

Edited April 20, 2013 by AnotherOneAmerican

[Eesat]

Why are people trying to argue about what's already happened?The answer to the question of 'How much of an effect will it have on the market?',is the biggest single one day drop in gold bullion in three decades!

That's how much of an effect it had,only on Thai Visa could people argue it's a drop in the ocean and nothing will happen when it just has!

What's the follow-up thread,'Is Black really White?'

Your "biggest single day drop in gold bullion" is false.

Bullion didn't drop.

It's the paper position (ETF, Derivative, Futures) margin buying paper hangers that took this hit.

The bullion market is another kettle of fish.

Please don't come back with another opinion here.

Facts.

Possibly the most ridiculous statement I've ever seen,spot gold is the price at which gold bullion is bought and sold.If you don't understand that you really have no business posting here!