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With Local Gold Inventories Depleted, Panicking German Dealers Stage Run On Krugerrands
Last week we noted that several prominent Austrian and German gold dealers had run out of inventory and were no longer transacting with a European population that has suddenly discovered gold religion. As a result, dealers are now focusing procurement efforst outside of Europe, with South Africa receiving the brunt of Europe's panic for physical precious metals. As the FT reports, "At the Rand refinery in South Africa, the phone has not stopped ringing this week." Just imagine what will happen when the gold bug goes airborne and jumps across the Atlantic...
More from the Financial Times:
Panicking German dealers and banks have been desperate to get their hands on krugerrands, the world's most popular gold coin.
"We have some extraordinary sales to German customers," says Deborah Thomson, the Rand treasurer. The refinery, which usually sells 2,000 coins to each customer at a time, says that last week it received an order from one German bank for 30,000 coins. Another bank requested 15,000 coins.
Frank Ziegler, head of precious metals at BayernLB, one of Germany's largest wholesale suppliers of gold, says: "People are buying krugerrands like crazy." The frenzy pushed gold prices to a nominal high of $1,248.95 a troy ounce yesterday while the euro price surged through €1,000 an ounce for the first time. Adjusted for inflation, however, gold prices are still a long way from their all-time high above $2,300 an ounce in 1980.
Although coins account for a small part of the market, they are one of the best indicators of investor sentiment towards the precious metal. And right now gold is in massive demand from investors who see it as the ultimate safe haven at a time of market turmoil and as one of the best hedges against a possible resurgence of inflation.
Other important factors are supporting prices: institutional investors are pouring billions into bullion-backed exchange traded funds; central banks have reversed 20 years of selling gold (and some, including the Chinese central bank, are buying it); and mine gold supply growth has stagnated.
In focus are also the big physical and otherwise gold ETFs which have recently received much notoriety over the likeilhood they are hollow ponzi scams which will shut down operations the second there is even a whiff of a gold run on their holdings.
There is no indication that Germans are ready to stop buying. Panicked by the possible inflationary implications of this week's €750bn eurozone bail-out, they have been snapping up gold coins and small bars at a faster rate than in the aftermath of the Lehman Brothers bankruptcy.
The European Central Bank says its government bond purchases will be "sterilised" by operations to remove inflation risks. But Martin Siegel, manager of Westgold, a dealer of gold in Frankfurt, says people "are not as dumb as economists. They believe there is going to be inflation and are buying gold to protect themselves"."
German investors are notoriously wary about inflation. While few are old enough to remember the hyperinflation that wrecked Germany during the Weimar Republic in the 1920s, the episode remains etched into the national psyche: newsreel from the period has been running on the news in recent days.
The appetite for coins has been so intense that shortages are developing. "In the European market there is a shortage of krugerrands," says Mr Ziegler. As a result, the premium paid for krugerrands in the secondary market has risen from about 2 per cent to 6-8 per cent.
The interest has not been confined to coins and bars. ETFs, which hold physical gold and issue shares to investors, have also seen large inflows.
The world's largest, the SPDR Gold Trust, has increased its holdings by
50.5 tonnes in the past two weeks, more than in the first four months
of the year. Other funds have also been building their positions. Gijsbert Groenewegen, at Silver Arrow Capital, a New York-based precious metals hedge fund, says investors have been flooding into his fund "in swarms" in the past week.Analysts and traders believe gold could rise even higher in the short term.
Philip Klapwijk, executive chairman of GFMS, the precious metals consultancy, believes that the current upward trend "could run a bit". Edel Tully, precious metals analyst at UBS, forecasts the gold price will hit $1,300 an ounce in the next month.
One bullish factor is the lack of physical gold, or scrap, being sold, despite the high prices. In Asia, where the gold market is especially sensitive to price, a surge in prices usually leads people to sell their old gold for scrap, boosting supply.
But that is not really happening yet. Afshin Nabavi, head of trading and physical sales at MKS Finance, a gold refining and trading company in Geneva, says: "Sales of scrap have picked up but not that much."
Even if gold is indeed entering a bubble mania phase, the mania in PMs is far less exuberant than in stocks, with the stock market multiples larger than that of gold and silver, and with far greater retail and speculative participation. Should there be an unwind, we expect stock prices to drop more and faster than those of PM products.
h/t Slim Beleggen
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On the German ebay krugerrands are sold 20 percent over the spot
for instance: http://cgi.ebay.de/ws/eBayISAPI.dll?ViewItem&item=120566738629&_trkparms...
At Pro Aurum (a big German buillon dealer) the amount of customers multiplied in the last week. They also have
closed their online store.
On the other hand some banks have still gold coins in their stock. Maybe the buillon dealer try to push the price by exaggerating the shortage.
I will answer your question with a question:
What will happen to the price of gold when the economy improves?
Also, one more question for you:
Do you really think that JPM and GS, who were right 61/61 trading days last quarter, know less than you about the future price of gold....
now i will answer these two moronic questions
if you think the economy is going to improve ....then i have some tungsten filled gold bars to sell to your dumb ass..as far as the second question you pose...Bof A and Citi also posted 61 out of 61...what do they all have in common..they sit on the federal reserve...boy I hope you are not the head of some family...with a wife and kids dependant on you..they will surely suffer greatly when the next crash hits and you are waiving a Goldman Sachs flag while wearing a JP MORGAN HAT...GET A CLUE ....
Ya know what else they all have in common?
They all went bankrupt and became wards of the United States Government under the bank holding charter.
They are sooooo smart. I could lend my retarded nephew $5 and he could lend it out with interest and make money all day long too. This is the only way JPM and the rest can make money anymore.
And people lost confidence in the FED, thats why gold is doing so well
dumb ass
the zit faced trolls on gold
answered an ad for trolls..
and are given a cheat sheet each morning ,
gold has gone up now for ten straight years
is acknowledged my some of the finest gold savy, economic people in the industry
and some how these stand alone voices . probably in a dark room , proclaim the where for's and whatnots of gold
yet probably between them all they have maybe one thin dime ...
even JB stated if gold rose above the last high of 1220 he would eat a hat , but his mouth still full of horse MANURE ,, denys what has jUSt happened to gold .
DEAR DUMPSTER...WHEN GOLD HITS 2,000 THESE MORONITISIS WILL STILL BE SCREAMING AT THE TOPS OF THEIR VOICES...GOLD IS A BUBBLE..WHEN BREAD HITS 10 DOLLARS A LOAF..THESE IMBECILITES WILL STILL BE SAYING GREEN SHOOTS...WHEN UNEMPLOYMENT HITS 20 %..THESE SHRILLS WILL STILL BE SAYING ..WE ARE IN A V SHAPED RECOVERY....YOU CANT TEACH THE BLIND TO SEE..NOR CAN TOU TEACH THE DEAF TO HEAR....THEY WILL JUST HAVE TO ROAST IN THE FIRE TO LEARN..AND THAT BBQ IS COMING THIS SUMMER......
Air in, Air out... think about something blue
Air in, Air out...
One of my favorites:
In the land of the blind, the one-eyed man is king.
Exactly ZEITGEIST.Also, we are not hoping for the system to collapse in order for our PM's to increase in value. We have bought our PM's because we know there is a high probability of system collapse. System collapse will be the worst thing that anyone will ever experience in their lifetimes, excluding a long painful death..which is what collapse could very well be. The equation is against us...
a 10-4 ish the trolls are empty . when gold hits 2000 they will still need food stamps .
the troll sets under a bridge in brackish water.. grabbing at any straw that will float ,
a troll makes believe he is a majestic king who orders the waves of the sea to go out and next thing he knows both his facade and sloppy mouth are buried in water
a troll feeds at the dredge of empty platitudes sipping muddy water through a straw of deaths hemlock.
will say anything to further the effect of his doppy mind ,, willing to sell his integrety with a hunk of meat , thrown on the floor by his handlers
+ Um, yet again today, a Huge Number. $55,000 maybe?
1 oz of silver durring the Weinmar Republics collapse would purchase enough food for a month + the mortgage.
1oz of Gold would buy a City Block.
I've hedged my silver holdings incase i'm wrong, and I'll buy more with the protection money on a significant drop. And Hedge again.
i really have no set number ,, probably in the 5000 area to balance a partial backing with gold .
but it could get out of hand ,, and spike to something higher .
but gold will become an instrument in international finance and in trade ,,,
'
count on it
To me, the number ($55,000 or $5,000) is meaningless. Whatever it will be, it probably won't represent much more or less purchasing power than it does today.
My personal guess that gold could climb to $3,000 in today's USD. Whether or not they'll print as much money to make that $3,000 inflate to a figure as high as $55,000, that depends on the government (or governments) and how long before we reach the top.
And I tend to think that the 100:1 "paper gold" dillution is pretty much already calculated in the current price of physical gold.
there's a common theme with all these gold troll numpties.
they allegedly were all long gold at some previous point but were "smart enough to get out at the top" except that it wasn't quite the top, was it numpties?
and the higher it goes, the sillier you feel, the wronger you are, and the more vitriolic your anti goldbug rants become.
but seriously, its really fucking dull, you've all said the same crap over and over, and youre all still just as clueless now as you were back at $1000.
I think you need to deal with your issues and then go and be positive about your stocks or whatever somewhere where people give a shit.
impossible to have been in gold at 400 for these trolls that was 7 years ago lol
most were still in high school . taking driving class,
wondering if they should wear a blue of black suit to the prom..
Here is a fairly bad (google) translation from the proaurum (large German/Austrian/Swiss physical dealer) newsletter I get once a week:
Run on Precious Metals
Throughout all experienced pro aurum branches today after the holiday, an unprecedented onslaught. Many customers were startled by a rumor that at the last weekend or the coming allegedly secretly prepared a currency reform should be carried out. We do not give this rumor any faith. Fear and panic are not a good guide for investment decisions. The online shop was indeed from yesterday until this morning closed and there are currently only a few items available online, but every day we get new supplies, with which we try this online offer will extend again. So make yourself at home just relaxing and order in the soon again plentiful supply, online from home. Whoever wants to use the high prices to take profits, may just as quickly and easily sell online with us. The customers who thronged today in the gold house and, despite schedule extra shifts and extra staff had to wait very long, could all be satisfied. At the counter in Munich still a limited set of coins and bars is available. Many of the now sold out, most popular investment coins and bullion have been ordered and will be in the coming days and weeks to be available again. As the demand on the company's online and over the counter at our offices is huge and the capacity utilization of the manufacturers and suppliers are expected to improve the supply situation only gradually. Therefore, in the coming days and weeks continue with longer waiting times and a limited variety of products to be expected.
I am not a Bing enthusiast, but sometimes I will user their translator to cross-check against Google's results.
I am not saying that this is the real deal,a run on gold, but folks, this is a good look at the future...
Thanks -273 (absolute zero?) good to see you around
He said the ideal mechanism would provide money at less than commercial terms and with favourable repayment plans, and would be coupled with a legal system that could handle disputes when countries failed to pay back loans.
“What normally gets wound up, cleaned up [...] in ordinary markets through bankruptcy courts and the like, we don’t have that at the international level,” Mr. Clark said. “Countries find that these things never get resolved.”
He added that one of the biggest changes in thinking over the last three months had centred on the idea that the IMF could participate in the creation of a new world currency. This would be done through its system of Special Drawing Rights (SDRs), which are credits allocated by the lending body to its members. However, it was uncertain whether sovereign nations were willing to allow the IMF such power.
He said discussions were also being held on how SDRs should be distributed ?? whether on the basis of population, economic weight, or level of financial contributions to the institution. Today, most SDRs are allotted to the wealthiest nations. The IMF must develop mechanisms for spending SDRs, explaining that African debtor nations could, in theory, use SDRs to pay off debts.
http://www.un.org/News/briefings/docs/2009/090507_Financial_Crisis.doc.htm
This whole thread got hijacked. I'm sad about it frankly. If they (JB, Yip) had new issues they brought up, (Leo brought up the issue of gold not contributing to building society on another thread, that made for some novel conversation) I would value their contributions. But what happens is the same old territory get reviewed, insults are exchanged, and the conversation does not go anywhere deeper as a result.
I have taken troll bait myself, I am as guilty as anyone.
I'm telling you these two are genuinely destructive. Disagree, that's cool, but please bring something new to the conversation.
I am trying to show Master Bates (JB if you did not know) that his arguement is tired. I wish this was face to face in a full room so that afterwards he wouldn't be able to go to his fridge for a beer, but would have to smile at you and with a returned scorn you would melt his heart.
MsCreant you are right, and time will tell....
Bob marley "time will tell":http://www.youtube.com/watch?v=_7kSjZ9LoIs
lennon
face to feces with these guys in a room lol
you would stand there ,, and they would be looking straight at your chest
they are moral and mental midgets
The trolls are indeed well fed.
The derision of the arguments of the bugs of paper and those of gold resonate through and across all such blogs. It is akin to as well as kin to the deflation/inflation clamor.
It's intellectual facism. They won't be made wrong. Defeat them logically and with reason and they will simply parrot lies. They are going to get hurt if they are not being hypocrits. Which is doubtful. I would wager that JB, YIP and cia gang have lots of gold and are simply lying out their ass. Master Bates is a wannabe. He's kissing ass trying to get into the "in crowd". JW in florida slipped. He exchanged energy. There's not just fear it's terror. Blind mad terror.
But it's simple they got nothing. They have to make crap up and distort everything to even begin to make a sandy foundation arguement. It's a waste of time and energy.
I can explain it but have to use astrology terms and explain it in compressed gas theory. Jupiter is expansive ideology. Facism is a result of meeting anything that will make you "wrong" and instead of expanding to encompass it you simply try to compress it into an interior/exterior component. This sets up self/other identification along mars/venus axis. The other side becomes deeply in the other trench and you do indeed set up a situation of being "wrong" with severe consequences. It's not a problem if your being hypocritical like I said because even when you are made wrong you get to be right. But it's simply a matter of still not getting your prefered "righteousness".
SW summarized the arguement bullet points. Everyone knows the dilluted and refined form of it. Control freaks gotta learn their limitations which is why they are regularly getting not ganged up on but simply independantly solo'd by everyone on here. Each with thier own understandings and own style. It does benefit us because the control freaks give us a gauge of just how desperate and serious the situation is by how they fight. So it's not a total waste.
Volume 14 Number 2, Fall 1994
http://www.cato.org/pubs/journal/cjv14n2-7.html
Debaser - Pixies
http://www.youtube.com/watch?v=7q5WjYjzrEQ
Thank God for folks like Yipcarl and Johnny Bravo.
More for the rest of us!
Yes. So right. Say, since we can't eat gold, how do the think the yipster would taste with a good BBQ sauce.
Actually you can eat gold, and it is big business...
http://www.delafee.com/
Not much nutritional value, but on the other hand ... no transfats.
I'll stick with steak.
In fact, I'll go buy some steak now at the grocery with some T-Bills and AAPL stock.
This just in...Yipcarl and Johnny Bravo live in Alabama....and are first cousins...and yes...you guessed correctly..they are betrothed to one another....YEEEEEEEHAWWWWWWWWWWWW..FOR ALL THE FIAT CURRENCY LOVERS OUT THERE...WITH AN IQ LOWER THAN THE CONVERSION OF THE EURO....ABOUT 100% OF YOU...BETROTHED MEANS PROMISED TO ONE ANOTHER....NOW GO AND THROW ANOTHER ROAD KILL ONTO THE FIRE...
That is a vicious and unfounded lie!
Johnny B is MINE!
After meeting in last year's Gay Pride Parade in the Castro District in SF, I knew that I had found "the one". The fact that he has three chins, halitosis like a 14 year-old dog, shoulder hair and a bad case of backne is just a quibble. His many delightful personal qualities shine through like, well, ...... you know what.
akak
grab um while they ride the bycicle nude , like the fremont parade in seattle ..
these trolls led the pack lol
Fremont has a big troll:
http://www.barbaraluecke.com/images/projects/troll_monks_lg.jpg
http://www.fremont.com/fremonttroll.html
And true to form, it lives under a bridge!
I wonder whch bridge Johnny B lives under?
May his cardboard box always remain dry.
yep and who would deliver the pizza on a sunday night
Typical example of a disrespectful and insulting comment that doesn't look any different from the other side's "arguments".
So, tell us: are people who happen to deliver pizza to make a living to be disrespected?
I propose that JB and yipcarl be banned from any thread related to gold. They do nothing in these threads but troll. They have stated that that is their purpose, and the have each purposefully ignored facts to such an extent that it can not be simply attributed to stupidity.
I would further challenge each of those "gentlemen" to a wager. The terms are this: one year from today (ie May 16th 2011), we will exchange 1 American Gold Eagle for the current price plus shipping from APMEX (US$1319.70). If gold plummets, as you beleive, then you will be able to purchase the gold at a much lesser price later. If it skyrockets as I beleive, you will be forced to pay a much higher price.
If you wish to accept this bet, and prove that you are not cowardly children with no money, you may accept the terms here. We can exchange personal information at a later time, should you chose to put your money where your mouths are.
I should note that I won the last bet of this sort by a mere two hundred dollars. I think it will be quite a bit more this time.
Absence of any response is pretty telling :-)
I wouldn't ban anyone from gold-related threads. It's important that we be able to read disenting opinions and constructive opposition should be welcome.
If you say their comments aren't exactly constructive, I agree. ZH should have the Ignore User feature where everyone could choose whose comments not to see. That way everyone could choose to ignore whoever they want. My personal ZH Ignore User list would also contain names of all insulting individuals (which includes some rabid gold bugs) and bigots.
(I hoped the latest upgrade would have something new in that respect, but unfortunately it seems I was too optimistic. FWIW: Drupal Ignore User feature: http://drupal.org/node/398382)
Tyler and Staff. Please take a moment to review. You already know about my Geopolitic edge. Trolls can just watch while munching on their own end trails.
Global Governance
http://www.youtube.com/watch?v=bmH-i8JDKPw
"A level playing field....same rules...for global finance."
Between the lines that means one world currentsea.
"One ring to rule them all. One ring to find them. One ring to bring them all and in the darkness bind them in the land of Mordor where the shadows lie."
re "the gold bubble" its got a long way to go before its anywhere near as bubbly as all the fiatsco driven nonsense
http://www.businessinsider.com/chart-of-the-day-putting-the-gold-rally-i...
Technically its in a bubble when the identifiably moronic poster class decide it isn't. When that situation inverts, I might decide to lighten up. Unless of course I'm feeling double negative contrarian that day.
Holy Guacamole
Can anyone tell me how many old gold mines have opened up? There is still gold in those old mines, just expensive to get too. If there are ten's of millions being invested opening up old mines this run is serious. If not, why?
The current up pressure is understandable. The Euro has had a nice run. Every one forgets it was once .8 to the dollar, the euro can still fall a ways. If I had spare euro's I would be buying multiple assets that are not priced in euro's. Once the euro stops falling gold will drop. Whether from 2k to 1k or 1.4k to $800 probably depends on the worlds panic level. Does gold rise or fall if China suddenly devalues?
the trolls are like a derivative... they are backed 100% by a taco stand in baglidish ... so any bets with them would cheapen the taco stand
ditto ditto ditto
6000 years of monetary history for gold & silver doesn't lie!! Fiat currencies are paper pulp fiction offering nothing more than thin air promises of fraudsters! 100% possesesion of physical gold/silver is the law among the lawless!!
Don't bother with facts and history buzlightening, gold rabies is incurable and attacks the mind, this preventing the assimilation of new data...or old data in this case
At the current interest rates it is impossible for the gold price to be in a bubble.
The bad debts are still very much on the books, and with the risk free interest rate at its current lows, even the smallest return is connected with significant risk. Combined with our "market to myth" regime the outcome is obvious, massive mal-investment.
The only way for the economy to recover is for the risk free interest rate to become high enough to cleanse the bad debts from the books. As it is the current developments in the "leading indicators" are meaningless, they merely reflect the expected returns based on faulty assumptions.
I have bought gold myself and I’m not selling until interest rates are at least 10-12%. At the current levels, every dip represents a buying opportunity.
Correct me if I am wrong...
But the faster people buy gold, the faster they kill the velocity of money stone dead.
Yes?
And if that's the case, I don't see how that can turn out well.
your wrong
What do you think the people that sold the gold are doing? Putting it in a savings account?
With regard to go gold 'many go out looking for wool only to come home shorn'
Can we get back to whether it's better to push a Ford than drive a Chevy, please.
Did someone say Denninger was an asshat? Yes, he's often wrong, but seldom in doubt. That fella has a lot of, um, issues, and he definitely does not understand PM's and their place in the monetary firmament. Perhaps his biggest blind spot is that he believes reform of our desperately corrupt "government" is possible from within the government itself.
Interesting video - 80% uncontestable fact and 20% vicious Libertarian sewage propaganda, ground, mixed, and packaged in a slick, NaturalLamb skin, fully lubricated. BTW, I am a huge fan of Gerarld Celente.
"Vicious" + "libertarian" = contradiction in terms
Now if you want to insert the word "statist", on the other hand .....
Having a farmer as one of your best friends - Priceless!!!
Holy shit - the US Mint is out of all gold and siver proof and uncirculated coins.
Latest Jim Rogers on Bloomberg. He is long the euro but is very nervous about the position. He makes fun of Roubini's position on Au.
http://www.youtube.com/watch?v=D3x2FdKunT8
Just found the entire, hour long interview at http://www.dollarcollapse.com
Its a must watch
You know, I'll never get tired of Rogers. The world only seems to pump out a few guys like him every hundred years or so.
Regardless of whether or not he's a kook in his personal life, he's still tremendous. His willingness to speak to the public is also remarkable.
Compare someone like him to craven, semi-communist bastards like Buffet and Munger. No contest.
+ $1240
268 (now 269) comments and counting. Nope, nothing to see here folks. Because War is Peace, Freedom Is Slavery, Ignorance Is Strength and Paper Is Money.
APMEX.com is out of small American Eagle coins now. They have Maples and Phil's, but that is it... what does that tell people about the "mania" jumping to America? People may be speculating, but I do not think so as most speculators will use the GLD, it is easier and cheaper. This is honest to God distrust of the economy/government. The ship is sinking as it does not exist without confidence. Another trillion dollar bailout will erode whatever confidence is left. The real deal, IMHO, is silver, silver will be much higher a few years from now as it has real utility value and it will sell off because people see the utility value first and not its PM value, a big mistake. Silver is the trade of the century below $20.
Ageed. But right now gold and the dollar have almost straight up trajs
Au up over 6 bucks and the dollar up .68 to 87! wow
At this rate, one ounce will be a thousand pounds in under two weeks.
"Even if gold is indeed entering a bubble mania phase"
I'll know when gold is in a bubble when...
1. The two jack asses on ktar radio star pimping gold.
2. When I see infomercials like 'flip and grow rich with gold'. By some rent seeking johnny come lately trying to squeez the last penny of profit from the apex.
3. My boss, whom consideres me "loony" for getting into pm's, comes in and starts talking oz's and maples.
And I'll consider selling when .gov REALLY considers cutting spending
in a big way.... and we all know how well that will go over.
someone mentioned the euro, I'm seeing 1.227 at this moment.
and ditto on the above post, if I see the US govt. start slashing spending and elminating (useless) departments then I'll think differently about my pm's, until that time don't bother me.
The one thing I am sure about after reading this thread...
You can't eat douchebags!
hat tip to KD
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