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Gold Market Summary - Q4 2009, From The World Gold Council
The topic that generates by far the greatest disagreement in the investment community, just after whether we will have inflation or deflation, is whether gold is cheap or expensive. And as much as gold is a speculative commodity, it does have roots in fundamental supply and demand. A good source in demystifying the fundamentals in the gold industry, The World Gold Council, has released its summary analysis of investment trends, and market and economic influences in the gold market in Q4 of 2009.
Key observations from the report:
Investors bought another 30 tonnes of gold via Exchange Traded Funds (ETFs) in the fourth quarter, bringing total inflows for the year to 573 tonnes. GFMS believes the global over-the-counter market was an important source of new net demand in Q4 2009. They note a strong pick up in OTC activity from September onwards driven by “non-traditional” investors taking out long-term positions. The more speculative end of investment demand also remained strong, with total non-commercial and non-reportable net long positions on COMEX increasing by 27.0%, on average, to 22.0 million ounces.
Investment flows, dollar-hedging, inflation protection, and central bank buying all played a role in propelling the gold price to new records. Looking into 2010, a growing number of investors are worried about price stability, as the global economy shows increasing signs of recovery. The large sums of money supply that reached the market in 2008 are creating concerns that inflation may be looming. There is a strong, lagged, relationship between changes in global money supply and changes in the gold price.
Preliminary reports on fourth quarter jewellery trends in India suggest a continuation of the cautious recovery from the low demand levels in Q1 2009, helped by seasonal factors. Moreover, levels of jewellery recycling have subsided from the highs experienced at the end of 2008 and beginning of 2009. In China, the outlook remains resilient as the economy recovers, whilst the US market is still being impacted by higher US$ gold prices. Anecdotal evidence suggests global levels of recycling remained subdued despite the rise in the gold price. Separately, the pattern of behaviour among central banks and official sector institutions continued its recently established trend, as sales under the third Central Bank Gold Agreement (CBGA3) slowed to a negligible rate, whilst banks outside of the agreement clocked up another quarter of net purchases, according to our estimates.
The gold price rose for the ninth consecutive year in 2009 to US$1087.50/oz on the London PM fix by December end, from US$869.50/oz at the end of the previous year. This represented a 25.0% increase in the price of the yellow metal during 2009. Similarly, the average price of gold rose 11.5% to US$972.35/oz, from an average of US$871.96/oz during 2008.
Whilst market volatility has eased relative to 2008, gold price volatility increased in the fourth quarter to an annualised average of 19.7% from 15.0% in the previous quarter. Gold price volatility reached a peak of 26.0% on 21 December, measured on a 22-day rolling basis, as the price of gold fell from its historic peak of US$1212.50/ oz on 2 December to US$1084/oz on 22 December, at the London PM fix
Investment Trends:
- Exchange Traded Funds
Investors bought another 30 tonnes of gold via Exchange Traded Funds in Q4, bringing total inflows for the year to 573 tonnes. This took the total amount of gold in the ETFs that we monitor to a record 1,762 tonnes, worth US$62 billion at the year-end gold price. SPDR® Gold Shares, or GLD as it is known, listed on the NYSE Arca and cross-listed in Mexico, Singapore, Tokyo and Hong Kong recorded the strongest inflows during the fourth quarter, adding 38.3 tonnes, bringing the total to 1,133.6 tonnes (worth US$40.2 billion) in assets. It was followed by ETFS Physical Swiss Gold Shares—which was launched in September 2009 and is listed in the NYSE—adding 6.4 tonnes during Q4 to a total 9.5 tonnes in assets. iShares Comex Gold Trust, or IAU listed on the NYSE Arca, posted the third strongest gain, adding 4.7 tonnes during the quarter and bringing its total assets to 79.3 tonnes. ETFS Physical Gold (listed on the London Stock Exchange) experienced net outflows of 11.2 tonnes during Q4, although it added 44.2 tonnes overall during 2009. GBS Bullion Securities (listed on the London Stock Exchange) shed 7.8 tonnes during the quarter, although it had a net gain of the same amount during the course of 2009.
- GLD options
Trading in GLD options more than doubled in the fourth quarter of 2009 to a total of 13.7 million contracts from 5.7 million in the third quarter, and it more than tripled from the same period last year as both call and put option transactions increased. Volumes sharply increased from an average 132,277 contracts per day in early October to a daily average of 353,521 contracts in the fi rst half of December, subsequently easing to 212,624 contracts, on average, by the end of the year, much in line with movements in the gold price. Call and put volumes peaked on 4 December at 252,897 and 474,108 contracts respectively. Whilst options volume generally rose as the price of gold increased, the peak coincided with the largest daily drop in the gold price during Q4, when the yellow metal fell by 3.8% to US$1161.4/oz from US$1207.6/oz the previous day. At-the-money implied volatilities traded in a range of 20.0% to 27.0% on the 3-month call and put options; implied volatility reached the low for the quarter on 30 October trading at 20.4%, increasing to 27.3% by 9 December, and fi nally retracing back to 23.0% by the end of the quarter.
- Gold futures
Comex total non-commercial and non-reportable net long positions, a proxy for the more speculative end of investment demand, remained strong. The net long position reached 28 million ounces by the end of Q4 compared to 27.5 million ounces at the end of Q3. On average, net long positions in Q4 increased by 27.0% from 22.9 million ounces on average in Q3. The net long peak of 30.8 million ounces in early December coincided with the historical high in the gold price of US$1212.50/oz on the London PM fix, on 2 December. By the end of the quarter, net long positions fell slightly to 27.9 million ounces, much in line with movements in the price of gold. Overall, netlong positions rose on the back of an increment of 29.0% in long-only positions from Q3, which was partially offset by a 42.0% surge in short-only contracts during the same period. Whilst net long positions increased on average during Q4, the rise was relatively tame compared to the increment in the gold price, as demand fl ows for gold were probably not primarily driven by speculative trading.
- Bars and coins
The latest available data on coin and bar sales corresponds to Q3 2009 (comprehensive Q4 data will be released in mid-February). Net retail demand for gold, which includes demand for coins, small bars, medals and imitation coins, and other retail investment, remained strong during the third quarter. It rose by 17.9 tonnes to 185.9 tonnes in Q3 2009 from 167.9 tonnes in the previous quarter, an increase of 10.7%. This largely reflects a recovery in investment demand in non-western gold markets, partly offset by a reduction in net inflows in western markets. The single biggest infl ow during the quarter occurred in China, followed closely by India, at 26.8 tonnes and 26.0 tonnes respectively. Whilst the third quarter was not as strong for the US, Q4 data on American Eagle bullion coin sales from the US Mint shows a more rosy picture. Demand for 1-ounce coins increased by more than 27% in the fourth quarter, on a quarter-on-quarter basis, and total demand for coins (including smaller denominations) rose by 66.0% relative to Q3 2009 and by 14.0% relative to Q4 2008, to a record 471,000 ounces (14.6 tonnes) during Q4 2009. Anecdotal evidence suggests a similar pattern in global coin demand.
- Lease rates
The implied gold lease rate is the difference between the dollar interest rate and the equivalent duration gold forward rate—the rate at which gold holders are willing to lend gold in exchange for dollars, also known as the swap rate. On the one hand, the 3-month US Libor rate remained very low at 0.25% during the quarter. On the other hand, the 3-month gold swap rate fell to a low of 0.27% by the end of October to later rise to 0.42% by mid-December as the gold price fell from its record highs in early December, and then back to 0.32% by the end of the quarter, as the gold price rose slightly again. Consequently, the implied gold lease rate remained modestly negative.
Market Influences and Outlook
The recovery in the global economy, especially in the countries like India and China, is likely to play a positive role in jewellery demand. However, jewellery was not a primary source of support for the price of gold in 2009. Investment flows, dollar-hedging, infl ation protection, and central bank buying all played a role in propelling the yellow metal to successive new highs.
Looking forward to 2010, a growing number of investors are worried about price stability. The large sums of money supply that reached the market in 2008 are creating concerns that inflationary pressures loom. Investors who do not believe higher inflation will materialize may still worry about the dollar outlook.
During our meetings and in surveys we conducted at conferences throughout the second half of 2009, we found that investors who hold gold, on average, have allocations of 5-7% in their portfolio. Yet, overall assets under management in gold remain low. As of Q3 2009, we estimate that only about 1.1% of global assets are invested in gold, compared to other alternative investments which correspond to about 4.4% of assets. There is, therefore, ample scope for growth.
For example, of those investors surveyed, almost half (45%) were planning to increase their gold exposure, and only 1 respondent was planning to reduce it. More than two-thirds of investors cited gold being an infl ation and dollar hedge as their primary reasons for holding the yellow metal, and about half used it for portfolio diversification. Less than a quarter of those investors were using gold as a vehicle to express a tactical view, in line with other signs that many of the investment fl ows into gold have tended to be more strategic in nature.
Supply
The fourth quarter of 2009 was an interesting one for the official sector. Separately, the pattern of behaviour among central banks continued its recently established trend, as sales under the third Central Bank Gold Agreement (CBGA3) slowed to a negligible rate, whilst banks and official sector institutions outside of the agreement clocked up another quarter of net purchases, according to our estimates
The most significant development of the quarter was the announcement by the Reserve Bank of India (RBI) that it had bought 200 tonnes of the IMF’s 403 tonnes of planned gold sales. The move boosted the RBI’s gold reserves to 558 tonnes and lifted the proportion of gold in total reserves to 6.4% from 4.0% prior to the sale. The RBI announcement was followed swiftly by the news that Sri Lanka’s central bank purchased 10 tonnes of gold from the IMF in a transaction that tripled its holdings of gold, which now stand at 15.3 tonnes and account for over 22% of total reserves. Finally, the Bank of Mauritius announced that it had purchased a further 2 tonnes, doubling the bank’s holdings to 3.9 tonnes.
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Another excellent article by Tyler Durden! Bravo!!!
FYI: Soros doubled gold ETF investment
www.reuters.com/article/idUSTRE61G00220100217?feedType=RSS&feedName=businessNews&rpc=76
And this from the guy who said gold was in a bubble? Maybe he was trying to buy more gold at a lower price by jabber jawing. Also funny is that he bought paper GLD(!)... and we ALL know about them.
ASK YOURSELF: do you really trust that these ETFs have the gold they claim and GLD's counterparties that store said gold are not leasing it out or creating/forming/leveraging some other paper gold on top of their paper gold. As an example, GLD can hold NOT GOOD bars for proper delivery to the market and they do not insure their gold holding. Add to that, there are many other serious situations one should consider before choosing GLD or other ETFs.
Read GLD's 10-k filing at www.spdrgoldshares.com/media/GLD/file/10k_Sept08.pdf and pay special attention to pages 54 to 62.
Bottom line, if you want to invest in gold i would do as GLD's largest shareholder did months ago.... they sold their GLD holdings and purchased physical metal and took delivery. In this day and age counterparty risk is to be avoided imho.
PS: "Moreover, levels of jewellery recycling have subsided from the highs experienced at the end of 2008 and beginning of 2009."
The sheeple are getting fleeced from their gold as they need to pay the rent, buy food, etc. Physical gold is now moving away from 'weak hands' to 'strong' ones.
FYI, the report and facts that you are applauding is from the group that sponsors the GLD chief! WGC owns the trust http://www.spdrgoldshares.com/media/GLD/file/SPDRGoldTrustProspectus.pdf "The Trust’s Sponsor is World Gold Trust Services, LLC, or WGTS, which is wholly-owned by the World Gold Council, or WGC, a not-for-profit association registered under Swiss law. "
How can you believe the report if you cant trust them to store gold and not lie to you? Not trying to break balls but maybe they are lying about the fact that gold has any demand at all beyond ETF's? Seems to me you would want a guy like Soros to test your allegations as he sure as hell isn't afraid to do it as his fund is mostly his own cash now. Why not write to him constantly and beg him to convert his paper to physical as is allowed. I would think that would drive up the price as they scramble to deliver. Maybe they are just sitting on shit loads of cash and aren't buying any gold now because they know it will crash and they can cover at a lower price, just a thought.
I have also wondered myself, if the world's financial elites really are in fact planning to crash the world's fiat currency system, or even fear that such an event has a significant chance of occurring, then why have they not already bought up ALL the world's available gold by now? Clearly they have not done so yet.
because they still believe in keynesianism and the idea they can spend their way to prosperity.
Exactly, they need to keep th sheeple thinking that colored pieces of paper actually hold some value. As everyone on ZH knows, FIAT currency is basically a pure faith system. The 'elites' need to keep PHYSICAL gold flowing while allowing for a 'shadow (fake) inventory' via PAPER GOLD ETF like GLD. The moment physical delivery of gold becomes unobtanium then their faith based colored paper may very quickly drops to nil and no one will want it.
It is a game, and physical gold holding is the best investment. Paper GLD holding may as well be like another FIAT currency like the Euro or USD. Soros touting more GLD is perhaps a way to get more sheeple into PAPER GOLD in hopes to stem the tide of those smart investors who demand physical gold delivery/holding.
The moment physical delivery of gold becomes unobtanium then their faith based colored paper may very quickly drops to nil and no one will want it.
Did you see Avatar? When I heard the cost of that material they have in the movie I did some math. Basically its like $650,000/oz in 2154.
Now take gold. If you do some inflation compounding at 3.5% per year that gets you to about a $64,000/oz price of gold in 2154. And if the price rises in the near term, say a decade, to a $10,000/ounce level as some individuals have posited it needs to be to return the system to balance then that $10,000/oz level rises to right around $650,000 in 2154. I just wonder if Cameron is a secret gold bug and no one knew...
"ASK YOURSELF: do you really trust that these ETFs have the gold they claim"
Not only No, but hell no..........these mkts are for traders,speculators, not investors, or insurance buyers.
Most are clueless.
There's no way these ETF's hold their Gold, there's not enough above ground for them to do so.
This is why I wish they were illegal.
You can't GUARANTEE physical delivery, you have no business selling a commodity, or for sure REAL money.
And what happens when the abnormal demand from ETF speculation is taken out of the equation?
The price of gold falls.
That's weird that you advocate these actions, being a goldtard and all...
And what happens when the abnormal demand from ETF speculation is taken out of the equation?
And what would cause that, exactly? A return to "normal" times? How do we get there from here? Care to elaborate?
The very provisions the OP brought up.
Or, people get some common sense... but that's asking a bit much.
What happens when the uneconomic abnormal consolidated commercial short position which dwarfs any gold buying by magnitudes is taken out of the equation?
The price of gold rises.
"Dollartard"
It's your conclusion that is retarded. Removing the ETFs would remove a large part of the supply of available gold investment vehicles. It would not dent demand very much. This in turn would lead to an increase in the price of gold due to the whole supply/demand relationship. This will help you understand this amazingly complex theory: "Economics Basics: Demand and Supply"http://www.investopedia.com/university/economics/economics3.asp
You should also be embarrassed that an economics novice like me needs to point this out to you.
OMG, is that what he meant by that comment? That blew right past me; do you mean he was implying the ETF demand was somehow independent?
I read his comment to mean that if ETFs were eliminated then speculation would be eliminated, which would drive the price down. I would see things going the other way in that people would be unable to buy into a "piece" of a 400oz bar that might or might not exist and would be forced to buy coins or small bars which do not exist in large enough quantities to balance the ETF holdings. Which to me would cause the price of real gold (smaller weights) to go through the roof and the 400 oz bars to be unwanted (by the holders of etfs) as there would be huge backlogs at the refiners/mints.
But what do i know, I's all gold-tarded for a few years.
The slave waits, while the master bates. :)
BTW (Not directed at you SWR) What the heck is with that you can't eat gold mantra? I challenge any of the fiatsters: I will eat (ingest) one ounce of gold (to prove it can be done), and you eat $1100 in FDRs. After my one ounce magically reappears I will attempt to buy some real food, and you can do the same with your shit.
So, they dig this stuff out of the ground, refine it at great cost, then sell it to someone who stores it under the ground again. Or, they sell it to someone who owns vending machines first, who then sells it to someone who hides it in his safety deposit box, under the ground.
SPDR Gold Trust assets have gone up almost 10x from 9/05 to 9/09, from $2.9b to $28.5b. Who buys this gold when the music stops?
Makes more sense than making a bunch of bills from linen and cotton and calling it a million dollars.
So, they create this stuff on spreadsheets using MBS and GSE debt as collateral, print it at great cost, then give it to someone who has a connection to government via the grant system or the right social connection to the NY Fed. Then it goes in some bank vault and just sits there, unless it's being used to bail out a corrupt and insolvent friend of the Fed, in which case it buys bank equity and just sits there.
The Fed balance sheet has gone from $700B to $1.6T in a little over a year. Who buys the debt when the music stops?
You just described something that is rare and not easily reproducible.
Sell it for what? Bernanke's Monopoly money?
Look, holmes, if want to hold something of value, just logically, wouldn't you want to hold it in something that is not easily duplicated? Would you rather have the original Mona Lisa, or the print? Hello?! Value of all things, including gold, will fluctuate, but it will fluctuate based on market (like other goods and resources), and not based on Bernanke's whimsical printing press. Gold is a hedge, and historically the best hedge against fiat currency. Ignoring short term noise, the evidence (ancient as well as present) demonstrates that fiat currency depreciates against Gold.
And, of course, what friendly government agency will be taxing these gold sales and at what rate when it's time to move the store of value back into something productive?
My mom made a million dollars trading gold back in the Carter years. she was not a rich woman. it can be done!
Who buys this gold when the music stops?
Why, that would be the "sky is falling, GOLD BITCHEZ" crowd.
The same people who were short on the market all last year.
The music never stops,but the tune changes.
New, devalued currencies are re-issued and PM's are
sold for the new re-issues.
Go read your history Master Bates, its all in the history books.
Or just wait a few months and you will probably get to see
first hand how the process works.....
But that's what you told me a few months ago!
In a few months, it'll be "just wait another few months until quattrain 43 comes true, with a white dove farting on a butterfly, and arrows piercing the heavens shoot forward from the city of sand."
You know, after having lurked in this forum for some time now, I am still waiting for you to make your first meaningful or non-frivolous post. And I suspect that my wait is going to be a long one. But at least you did chose a forum name that is representative of your contributions here.
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/mado...
Talk about a no confidence vote for the financial system. I love charts that make the central planners grind their teeth.
Thanks for this site guys, it is helping a reasonably educated guy like myself learn some economics.
Quick question - what is the most cost-effective way to purchase physical noble metal assets (gold or silver). Coins? Stamped bars? Etc.?
Buy coins that are easily traded. eg 1 oz American Eagle gold and silver coins
Buy the coins in tubes of 20 for a bulk price. Negotiate a price that is a spread over the bullion price. You might get $30 over but this spread has been getting bigger. Only buy from reputable dealers.
even easier is 'junk silver' pre 1965 US coinage. less cost over spot and more silver for your money.
once again, that is not a cow, it's a steer.
Personally I buy from APMEX.com. They are a great service, no taxes on your purchase, roughly 20 bucks for shipping. The only down side is you have to wait for your check to arrive their and for it to clear. Usually takes about 2 weeks from point of sale and sending your check to get delivery but the prices are great and so is service so it is very much worth while.
If you want to be able to sell some of the gold or silver you buy more easily in the future buy coins that are government issued like American eagles, Canadian maples, Krugerrands, Philharmonics, etc. The premium price is higher on these (price over spot) but people will pay you closer to its real value (spot plus some premium) when you go to sell them. My first silver purchase was in apmex bullion 100 one ounce coins and I realized it would be harder to sell them than any of the government issued simply because of the designs and reputation. However if you want to have some coins around that you wouldn't mind spending then get bullion because it will be harder for you to let go of coins that have aesthetic and numismatic qualities.
OMG, APMEX.com is a rip-off. They charge way too much over spot! Close to 20 percent over spot for junk silver!!! Get your coins from eBay. eBay has buyer protection. I've purchased 90 percent junk silver at an average of 5 percent over spot. I have never had an issue with an eBay seller. See for yourself, prices are much more competitive.
Best cost effective, look at the SPREAD of buy price to sell price. try www.Tulving.com and the JM Kilo bars are lowest spread. Next would be Pamp/Credit Suisse 1 ounce bars. Another good dealer is Gainesville Coin followed by Apmex.
------------------
-----------------
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coins are for chumps.
buy 99.99% gold
jewelers bars from
united precious metals
refiners in albany NY.
google them!
spot+$5/oz +$35+shipping
for 10 oz bars.
my local rip-off
gold merchant even
classifies them
as recognizable gold
bars.
UPRF also buys them back
reasonable.
i have no connection to
them.
Who buys this gold when the music stops?
When the music stops, which has been expected for decaeds, the only measure of value will be held in Gold, as it has been for 6,000 years. It's not like someone else will buy to retain it's value, but rather the worlds currencies will be re-valued against gold.
i agree but everyone seems to forget all the 'other stuff' that comes when society goes into chaos.. people will be trading women, slaves and everything like that also, for the last 6,000 years
its not like gold becomes the new standard and we all come back to ZH and pat each other on the back
What other choice is there? We can only deal with the cards we are given. The civilized will find civil ways to fix the problems, likewise the ignorant will be ignorant. Hopefully we are Not ignorant.
"the only measure of value will be held in Gold,"
Today, I can trade an ounce of gold for a MIG welder capable of repairing steel, stainless steel, and aluminum...if the music ever stops I'd place more value on in welder, and the skill set to use it, than an ounce of gold.
Without a medium of exchange everyone is a victim of the "double coincidence of wants".
What if the person with the thing you need doesn't want anything welded?
There will always be a need for a medium of exchange that is durable, portable, and easily divisible.
yes yes yes, barter is useful, but gold is liquid barter.
yes yes yes, barter is useful, but gold is liquid barter.
Its amazing to me how hard this concept is for many people to grasp.
"ya cain't eat gold, ya idjit. hyuk hyuk."
What if you want a 5 dollar jug of water, but all you have is 1200 dollar gold coins?
And who is going to want your 1200 dollar gold coins when there's anarchy in the street?
Oh wait, yeah, gold bitches. Gold to 6000 by April, yada yada...
It would make much more sense to use silver in that case. Of course you could use the silver to make some bad water potable, and save your $5. $5 bills are not thrown down wishing wells because they do not purify water. Interestingly a $5 bill miraculously found in an old wishing well intact would be worth less thana $1 coin made of silver. Checkout Bill Still's The Money Masters sometime.
And now, a meandering missive from the mixed-up mind of St. Lawrence of Kudlow:
"Money and politics is about my favorite topic (apart from spiritual faith, of course). And we had plenty of both in the last day or two. But here’s the rub. The price of gold is booming again, up huge today, despite the fact that the dollar has been rising. This is a message of tea-party skepticism. It’s a message that worldwide big-government spending is still the dominant political thinking. Because I share the tea-party optimistic view that We the People, Thomas Jefferson-style, can overturn central-planning elites and the left-wing college professors, I am hoping that the gold rally falls short." http://kudlow.nationalreview.com/post/?q=NjM2OTcwZGYwYjI2NGRiMmYzMWFmOGZ...
Dump da gold ya see? Jefferson-style that is. Hey chicky-baby ain't ya listenin? Nuff with dem smarty-pants teaches. Ya hear me?
Why are stupid teabaggers always with the "We the People" nonsense?
It's annoying.
The founding fathers set up this country so the rich elites could screw everybody. That's why there's a whole slew of different laws than when the founding fathers existed. (Like letting black people and women vote, as an example.)
The founding fathers wanted the lower class to succeed about as much as North Korea wants to make peace and live with the rest of the world.
Who buys gold when the music stops?
More ZH speculators, that's who. And when the music does stop, what will you bitches redeem your gold with? Certainly not for gas or groceries.
Ahhhhh.... I know, the very paper you idiots denounce. Nice. Pure speculation.
What asset has more universal appeal than gold? Yup, you guessed it, HOUSING. And look where that got the "flip this house" crowd.
Reading comment after comment on how irresponsible the financial system is on this site, combined with "hey let's all buy gold and stuff it our basement" makes me laugh. Trade one speculative behavior for another.
I wish you all well.
No... the Currencies will be Gold backed ...no less paper just paper that isn't toilet paper as money.
I'm hoarding microchips and pacemakers!!
lol!! I'll corner all the throwback Mountain Dew made with real SUGAR!
If the sh*t really hits the fan, housing will be a drug on the market, as it was during the 1930s. Worse, because thanks to unlimited mortgage availability from the Fs, there is a huge overhang right now. Gold, on the other hand, retained its value.
in fact, they devalued against gold during the depression and its value went up in terms of purchasing power.
even more so because of deflation. and gold miners? up more. price of unit of good sold up, nearly uniquely in a poor economy, and cost of goods sold down, as most other businesses, in a deflationary economy. the kicker is that you get to stay invested in an "equity" in a bear market so you don't have to correctly time the bottom of the bear dive so as to get the rocket ship bull advance off the bottom. you are always invested. look at the charts of gold miners and of common stocks generally for 1929 to 1936.
I guess starving people digging for gold in Zimbabwe are ZH speculators.....
Ahhhhh.... I know, the very paper you idiots denounce. Nice. Pure speculation.
Personally, I would like nothing better than to put my capital to work in a system which I trusted not to outright steal it from me. Such a system requires, among other things, the rule of law. And other than on a comparitive basis, which is no basis at all anymore really, does rule of law wrt paper financial assets exist today in the U.S.? No, of course not. GM senior secured debtholders, anyone? How about:
SEC rule 22e–3(a) would permit a money market fund to suspend redemptions if: (i) The fund’s current price per share, calculated pursuant to rule 2a–7(c), is less than the fund’s stable net asset value per share; (ii) its board of directors, including a majority of directors who are not interested persons, approves the liquidation of the fund; and (iii) the fund, prior to suspending redemptions, notifies the Commission of its decision to liquidate and suspend redemptions, by electronic mail directed to the attention of our Director of the Division of Investment Management or the Director’s designee. These proposed conditions are intended to ensure that any suspension of redemptions will be consistent with the underlying policies of section 22(e). We understand that suspending redemptions may impose hardships on investors who rely on their ability to redeem shares. Accordingly, our proposal is limited to permitting suspension of this statutory protection only in extraordinary circumstances. Thus, the proposed conditions, which are similar to those of the temporary rule, are designed to limit the availability of the rule to circumstances that present a significant risk of a run on the fund.
So, we understand that you think it's your money, and that our seizing it might cause you some "hardships", like when you want to use it to pay bills and stuff, and maybe buy some food for your kids, but that's really tough shit, because we know better than you and all, so thanks for being incredibly gullible and keeping your money in those incredibly safe and sound paper assets where we can fucking steal it from you whenever we want.
Or, you might want to consider buying an asset class that has been recognized as a store of value for thousands of years, and which you can hold yourself, where the government at least can't fucking steal it from you because they know better than you.
Gold is unlike every other commodity, which is physically consumed, in some form or another, soon after it is produced. The gold that is mined or consumed in jewelry or electronics is a small fraction of the world's total. Most of the gold in the world sits in the vaults of central banks, who can unload huge inventories whenever they feel like it. So at the end of the day, it's always a guess about market psychology. Every other variable pales in comparison.
Actually, it is incorrect to state that "Most of the gold in the world sits in the vaults of central banks". Only a fraction (roughly 30%) of the total aboveground stock of gold is owned by governments and/or central banks --- and even that is assuming that their stated reserves figures are correct, and that none of those reserves were leased out or used to suppress the price of gold in the open market, as groups such as GATA have long claimed. Most of the world's gold, in fact, is held in private hands, as it should be.
Central banks can threaten all they want to plunge the price of gold via official sales, but as we saw last November with the IMF sale to India, such threats (which were held over the head of the gold market for YEARS by pro-establishment shills such as Jon Nadler) may be little more than sound and fury, signifying nothing.
and one wonders if these central bankers are any better than the traditionally whipsawed buy high sell low odd lot investor (like me). gordon brown sold a lot of england's gold in the low hundreds (as did other european central banks) some years back but now, not so much. maybe they'll be buyers at $3000.
No, they won't, since the price isn't getting to 3000, or even 2000.
At least not in the next thirty years...
Spoken like a true, dyed in the wool, clueless Keynesian blowhard, ignorant of both economics and history. Thank you for reaffirming my commitment to owning gold --- when pro-establishment sheep such as you attack it, I know I MUST be doing something right!
WGC is the last place I'd go to for any information about Gold.
They're like a "De Beers" of gold. Member list:
Agnico-Eagle Mines Limited
www.agnico-eagle.com/
CANADA
Alamos Gold Inc
www.alamosgold.com
CANADA
AngloGoldAshanti Limited
www.AngloGoldAshanti.com
SOUTH AFRICA
Barrick Gold Corporation
www.barrick.com
CANADA
Barrick Goldstrike Mines Inc. Minera
www.barrick.com
U.S.A
Barrick Gold of Australia Limited
www.barrick.com
AUSTRALIA
Cedimin SAC
PERU
China Gold Group
www.chinagoldgroup.com
CHINA
Coeur d’Alene Mines Corporation
www.coeur.com
U.S.A.
Compañía de Minas Buenaventura S.A.A.
www.buenaventura.com
PERU
Eldorado Gold Corp
www.eldoradogold.com
CANADA
Franco-Nevada
www.franco-nevada.com
CANADA
Goldcorp Inc
www.goldcorp.com
CANADA
Gold Fields Limited
www.goldfields.co.za
SOUTH AFRICA
The Hutti Gold Mines Company Limited
INDIA
IAMGold Corporation
www.iamgold.com
CANADA
Inversiones Mineras del Sur SAA
PERU
Kahama Mining
TANZANIA
Kinross Gold Corporation
www.kinross.com
USA
Metallica Resources Inc
www.metal-res.com
CANADA
Minera Barrick Misquichilca S.A.
www.barrick.com
PERU
Minera Yanacocha S.R.L.
www.yanacocha.com.pe
PERU
Mitsubishi Materials Corporation
www.mmc.co.jp
JAPAN
New Gold Inc
www.newgold.com
U.S.A.
Newmont Mining Corporation
www.newmont.com
U.S.A.
Royal Gold, Inc.
www.royalgold.com
U.S.A.
Yamana Gold Inc
www.yamana.com
CANADA
www. gold.org
"is whether gold is cheap or expensive"
Gold is gold. Its currencies that can be cheap or expensive.
At least thats the lens I view this discussion thru.
Yessir.
And they're insanely expensive in gold terms these days - so why hold them?
;)
I maintain, gold and silver are for optimists, brass and lead are for realists. Got long term food stored?
Well that will be fine, but with enough Gold you can hire a police force. Employ enough workers to grow food to sustain a whole village. With Gold you can buy protection that last. You're view is potentially fatal.
Hire a police force? He who has the guns makes the rules. The hired guns can easily turn on you when the mood strikes. Gold and silver coins (1oz or less), guns (.12 ga shotgun, .357 mag revolver and .308 bolt action with top shelf optics) and about 500 - 1000 rounds of ammo for each. Stored food and water for at least 3 months,
Every family should have this in good times and in bad.
I'm sorry this assumes a rule of order
i almost wonder if the torch and pitchfork (brass and lead) crowd aren't the closet optimists here. where oh where is the popular revolt against the epic corruption, the wars, the increasing poverty, the disgusting "national security" clampdown, the charade of party politics, the incredible waste of resources on all the foregoing? tea parties? really? forget the guillotine, we can't even audit the fed (for more than half a century).
If you hold some of your wealth in gold it is not to buy a loaf of bread or a pair of socks when your paper money becomes toilet paper. It is to reestablish your family in a business or land when you would otherwise have nothing to carry your wealth forward into a now economic system and be in the position of having your labor alone to offer.
Bingo!
+10000000000000
it is not to buy a loaf of bread or a pair of socks when your paper money becomes toilet paper.
Maybe not, but it does cover this possibility/scenario as well
Exactly. Gold is the means for moving wealth forward form one currency regime to the next. Use currency to buy gold ---- currency goes 'poof' ---- use gold to buy real wealth-producing assets. It's a simple plan, really.
All of you currency goes 'poof' deniers: what do you call a 70% devaluation that takes place in a day? Franklin Delano Roosevelt, the second greatest destroyer of the republic, after he-who-must-not-be-named. Ah, yes, the joys of fiat central banking. What a great system!
Now we're starting to get it. When the deutschmark was in a spin in the 1930's, the german people were forced to trade their gold for "the new deutschmark". Those that did could not leave the country when it went to war. Those that still had gold could use it to trade for their freedom.
more +1000
Other reason to own gold is to pay taxes on current land owned, in the event of a currency crisis.This wss my original purpose for owning gold .Things got out of hand from there,once I realized the appreciation rate I was realizing on PM's...
WGC is only an authority on the very temporary (1971 to date)non monetary functions and uses of gold. Since "gold is money and nothing else" the WGC opinion its speculative commodity (as described by TD) value is of such little import as to be meaningless.
Indeed, both the WGC and GFMS seem to function as little more than pro-fiat propaganda arms of the world's central banks, by focusing ONLY on gold's industrial applications, consistently denying any of the monetary attributes of gold, and conveniently overlooking its historical role as money and hedge against currency collapse and economic upheaval.
its just another commodity... what a big deal?
Did anybody else notice that the LBMA has not published clearing figures for December and January?
http://www.lbma.org.uk/stats/clearing
The "most recent figures" are even older:
http://www.lbma.org.uk/stats/clearrct
I do not believe that the staff there is sleeping but that not all trades cleared.
During quiet times the numbers are published two weeks after the end of the month; now the last published number is november 2009.
Now there's an interesting story that the financial media doesn't seem to have picked up.....
Gunther,
Are you in LA
Check out Rainy River Resources. 4+ million ounces. Experienced Team. 5 drills turning. New resource estimate on the way.
Yes, this is a stock tip and I am not a shoe shine boy
Jesus Christ, I just checked out some their exploratory surveys, unbelievable!!!
they plan 70,000 metres of drilling for 2010.
2009 was the same 70k metres.
I hear they are awash with cash. No cash straped junior this.
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