This page has been archived and commenting is disabled.
Peak Gold Is Upon Us
If you had any doubt about what the driver has been for gold’s meteoric rise to $1,300, take a look at the chart below showing the spike right at the Fed’s announcement that QEII was in the cards. With the speed of a mainframe running the latest algorithm, this bid spread to the other precious metals and commodities as well.
Last week, gold ETF’s purchased a staggering 16 tonnes of the yellow metal worth $582 million. The 800 pound gorilla, the (GLD) now owns $38.5 billion of the barbarous relic, making it the sixth largest owner in the world, ahead of Switzerland and China.
These are heady inflows into such a small space. All of the gold mined in human history, from King Solomon’s mines to the bars still in Swiss bank vaults bearing Nazi eagles (I’ve seen them) would only fill 2.5 Olympic sized swimming pools. That amounts to 5.3 billion ounces, about $6.3 trillion at today’s prices. For you trivia freaks out there, that is a cube with 65.5 feet on an edge.
Peak gold may well be upon us. Production has been falling for a decade, although it popped up to 83 million ounces last year worth $108 billion. That would rank gold 17th as a Fortune 500 company, along with Wells Fargo Bank (WFC), IBM (IBM), and drug store CVS Caremark (CVS). Total above ground reserves amount to only 16% of global public debt markets worth $39 trillion (click here for The Economist magazine’s global public debt clock at http://buttonwood.economist.com/content/gdc ).
That is not much when you have the entire world bidding for it, governments and individuals alike. Talk about getting a camel through the eye of a needle! We may well see the bull market end only when those two asset classes, government bonds and gold, see outstanding values reach parity, implying a sixfold increase in gold prices from here to $7,800 an ounce.
No wonder buying is spilling out into the other precious metals, silver (SLV), platinum (PPLT), and palladium (PALL), as well as copper (CU) and other hard assets. As much as I love the gold inlays in my teeth, and sometimes leave waitresses quarter ounce gold eagles as tips at restaurants, this is the reason I have been stampeding readers into the yellow metal for the past 18 months.
This is not a riskless trade here. Obviously, there is a lot more downside potential at $1,300 than there was at $800, or $34. So if you get involved at this late date, better to play with near money calls spreads.
To see the data, charts, and graphs that support this research piece, as well as more iconoclastic and out-of-consensus analysis, please visit me at www.madhedgefundtrader.com . There, you will find the conventional wisdom mercilessly flailed and tortured daily, and my last two years of research reports available for free. You can also listen to me on Hedge Fund Radio by clicking on “This Week on Hedge Fund Radio” in the upper right corner of my home page.
»
- advertisements -
Tell me lies --
...and you expect people to be serious? Let alone truthful!
...and the avatar is a giveaway.
Ha, ha. You are precious.
No, no, no! All 1 oz coins contain exactly the same quantity of pure gold (yep, 1 oz troy). The purity figure simply indicates how much other metal (eg copper) they contain. Thus a maple is smaller than a krug, because the krug is less pure. But they contain the same amount of gold!
Whatever, you all missed my point. I am a gold holder of more than 10% NOW! You have to start somewhere.
Silver coin prices are getting nuts. In 2 months time the price is up 40%!!
Better stop buying Eagles and other popular coins now and start looking for less know sterling silver coins.
Best place to look:
CANADA!
I've bough 4 pounds of sterling silver 1oz coins 1$ BELOW silver price yesterday for only 1300$ ca with shipping.
Eagle prices are just nuts. You hardly find anymore below 27$/pc these days.
SD,
Where you getting junk in Canada eh?
Tks
10% of you portofliio -- crap propaganda nonsense.
ALL of my money is in gold. ALL of it except SHORT term living expenses are in cash stored not in a bank. And no, I don't mean paper ETF's and electronic key notes, I mean PHYSICAL GOLD COINS.
LET'S GET PHYSICAL, PHYSICAL
http://www.google.nl/search?q=LET'S+GET+PHYSICAL&hl=nl&sa=G&prmd=vi&source=univ&tbs=vid:1&tbo=u&ei=vE2kTPvBIsbCswbgzJS8CA&oi=video_result_group&ct=title&resnum=1&ved=0CCsQqwQwAA
I do think we've got our GOLD BULL THEME SONG!! :)
" All of the gold mined in human history would only fill 2.5 Olympic sized swimming pools and be worth $6.3 trillion. "
Aren't the vaults in Switzerland alone larger than that?
I've heard this stat so many times. How does anyone really know?
The gold in the Cairo museum alone would fill at least 1.5 fill about 1.5 of the 2.5.
From here:
"Last week, gold ETF’s purchased a staggering 16 tonnes of the yellow metal worth $582 million." Do you really believe that?
How do you discuss the price of gold in front of an audience like Zerohedge and not mention manipulation? http://bit.ly/cKAcxP
Yeah, like we're supposed to believe them? Sheesh, the ETF's are run by none other than the Federal Reserve bank owners, JP Morgan and Goldman Sachs.
From what I read, the last time fort knox was audited in the 70s or 80s, they had trucks running non stop leading up to the tour.
TML - I think that is incorrect about the audit. I think the last one was in the early 50's. Funny thing, I just looked on the Web for confirmation and can't find any reference to any date.
Does any ZHer know when Ft. Knox last had a genuine audit?
1954, it wasn't all audited either. It was a show for the people and congresscritters.
GATA and Ron Paul have both been making noise
http://www.bullionbullscanada.com/index.php?option=com_content&view=article&id=424:gata-seeks-audit-of-mythical-fort-knox-gold&catid=53:featured&Itemid=102
Is that like the amount in fort knox? Who verifies these holdings?
I am not sick but proud of the name goldbug and no
I am not a prudent investor having 10% invested I am all in
gold 50%,silver 50%.I do not trust any paper contract anymore and
why shoud I be prudent and loose 90% of my wealth when the
wold is already defaulting on any paper contract.They just keep on
printing money,bonds and shares to infinity(all of it interconnected via
matrix)To be prudent is nice for virgins not for adults.
King Arthur: Did you say Hedgeries?
Roger the Hedger: Yes, Hedgeries are my trade. I am a Hedger. My name is Roger the Hedger. I arrange, design, and sell Hedgeries.
Me too. I have now hedgered my Preciouses with Silver Hedgeries. Yesterday I took posession of 200 oz (12.5 lbs) of 1 oz silver bar hedgeries.
I am Strider the Hedger. I purchase, take posession, and hide my Hedgeries.
(wow! easy Captcha!)
I am not flaming! I wish i would have bought more knowing what I know now. I got involved as the standard montra 10 of this 20 of this blah blah. I did back up my position with silver also.
I am so sick of the term"Gold Bugs"! Is it not prudent to have 10% of your portfoilio invested in Gold? Thats what I was told 4 years ago when I started buying bullion coins. Does this make me a closed minded conspiracy nutter? I laugh as they said gold is nothing to pay attention to as it went from $600 to 700 800 900 1000. Whatever, it should not be a divide, its just covering your bets.
Most REAL knowledgable people have UPPED that percentage at least x's 2, and a lot even more. I look at it as what do I have, and how many ounces will it take to make me whole, if the dollar dropped in value 50%?.
5-10% was in GOOD times...........the best of times.
Yes, an honest observer cannot but notice the idiocy and hypocrisy of the rabid gold-haters such as Jon Nadler who mock and deride those who might hold 20% or 30% of their assets in precious metals as "Radical Goldbug Extremists", and yet the vast crowd who until recently (and many who still) held ALL of their savings and assets in stocks, bonds, and other fiat-denominated paper, all of it entirely subject to default and depreciation, dependent upon the naive and dangerous trust in a patently corrupt and criminal oligarchic kleptocracy, are NEVER held up as "Radical Paper Bug Extremists". Why is that?
I am trying to grow 20% of my food. I guess I'm a Radical Garden Extremist
Tell, akak,
After my recent purchase on Monday, I have arrived at 7% of my assets in gold (8.5% or so if you count silver, platinum and palladium).
My asset situation, like many others, is complicated. But I am so happy that I dove into buying gold as far back as the 1980s... Since I do not KNOW what will happen in the weeks / months / years to come, I have decided that diversification, flexibility and alertness are what will get me (you?) through what could be a nasty future.
Like I said in January, 2010 is going to be a rough year. Better have plenty to drink... Even better to have physical PMs well hidden with no trail.
This is my last post anywhere before our trip to Tahiti and Polynesia! My beautiful wife and I are celebrating our 25th Anniversary by going there!
But, 2011 is the year I CRACK DOWN. If my accounts keep going down, that's it, NO MORE TRIPS ANYWHERE!!!
Best of luck and Godspeed to those of us looking ahead!
Bon voyage! Be safe.
I'll be looking for a job at that restaurant where our author leaves $300 tips for waitresses.
Congrats to both of you on 25years! Enjoy your trip, just don't have any stop loss orders or the hft's will eat your $$$.
DoChen, I hope you have a fantastic trip! I will be right behind you, but only going half as far (Hawaii). I, too, suspect that that will be my last real vacation for a LONG time.
akak,
I live in Maui. Let me know if you are coming here. I'd like to meet you.
BofP, I would gladly take you up on that offer, but as of right now I was planning on just being on the Big Island, where I have friends with whom I will be staying. If my plans change, though, I will keep you in mind.
There is still a good portion of people who are idiots. In this day and age with info at your instant finger tips, there is no excuse for it. They go along with what they are told. Never mind they lost half of their 401k since 08.
I wrote Kitco today and asked them why Nadler was still their Head Analyst after all these years of being wrong. I've heard nothing back.
Johnny Bravo was over at Mish's board today spewing his hatred of gold so I let him have it.
This Golden Bull is starting to stomp and rampage. Been a long time coming.
BOP, Good to see you, I have added to my Gold and silver since I last saw you on mish. I gave up on mish after all the union bashing, he was focused on the wrong folks.
What's wrong with union bashing? The union leaders are commies and the people they 'control' need to wake up and overthrow the union leadership. Bye bye Trumpka!
Good for you! That vile turd of a troll deserves all the derision and contempt that anyone can heap upon him. (EDIT: I meant JB, but it equally applies to Nadler as well. I have also, three times I think, written to Brad Kitner and asked him quite pointedly why he employs a pro-bankster, gold-hating shill as their official spokesman. He equivocated, and DENIED that Nadler was anything but impeccably knowledgable and honest!)
I have never visited Mish's website, having read quite enough of his academic delusions and arrogance elsewhere, but I may be tempted to go visit now.
Please oh please don't go and provoke JB, thereby causing him to come back here. I'm tired of him threadshitting every thread with the word "gold" in its title.
I have read another poster here state that JB promised to leave if gold reached $1300 within a certain timeframe, which it did. He has been curiously (and most thankfully!) absent from this forum lately. Perhaps he did have a smidgen of integrity after all. Will wonders never cease.
That would be me. I spent some time going back to find that post but had to stop, throw up and go take a shower. I quit. Just thankful that he is gone. I wouldn't spend 5 minutes to go trash him at Mish's site. Good riddance.
I believe the amount was $1450 USD. Still haven't heard much from him lately. (chirp chirp).
I hardly never post here, lurker for many months now.. Hi!
My question is: Is it not so that if the USD is dropping in 'real' value and loosing its position as world-leading currency, that the value of gold in USD is also something to be carefull about.. I live in EU and got myself a few ounces of gold a while ago.. in Euros the stuff went ballistic for a while, peaking at Euro 1040 or something.. great.. But this was actually for a big part a drop in value of Euro compared to USD.. so we could see now something simmilar happening to the goldprice in USD, simply the drop in value of the USD is causing this 'run to the peak' of the goldprice.. The tricky part is that gold and much more really important and daily-required stuff is also primary priced in USD, this is something that will eventually give the final blow to any economic growth.. And this is causing the price rise of AU in USD to mean much less than it seems.. looking at the graphs one could conclude that EUR=AU and USD is heading for the drain.. But does it mean anything real?
I guess keeping the physical stuff at home and wait and see what will come out of this s%$tstorm ahead is the only real thing in this situation.. Gold at US$7000 but at the same time only 100 Euros does not say much about the VALUE of gold, right? In my opinion the whole thing is is going to come falling down on us, we can only pray that the empty-heads with the triggers keep their cool and realize that the only 'thing' worth a thing is live itself. Experiences from the past do not give me a great feeling about that option though..
I do understdand much more about the real value of things, the economy and money in all its forms thanks to ZH and you people visiting here.. I'd like to take this opportunity to thank you all for this added value to my live sofar. Keep it up.
Good luck all...
Patrick
Europe
"Competetive devaluations"...
Regardless of the talk, the CBs have to keep their respective currencies in reasonable price at current ratios vis a vis each other. If the US finds it can do nothing but print, (and it seems to be at that juncture) then all other major economies MUST also floow the low price leader off the cliff.
I think that is what is getting the various CB's biting each others' butts: Alot of them do not believe in this shift in US policy is where they want to go, but they either must go there OR devise a different schema.
Patrick,
Gold has gone up relative to ALL currencies, and not just a little.
More here, due to idiotic Stimulus spending.But, rest assured, this will bite you in the ass.And everone else also.
Every Soverign that has made an IMF purchase has paid GOING rate, no deals..........
Welcome to the mad house. Like your avatar. As a gold buyer and holder, and as a coin dealer for 20 years I can tell you that gold's message is clear and important. Don't over think it. Gold is a means to retain your purchasing power and store your wealth. Its "value" in paper currency is a barometer only.
I hear ya. I tell my wife that our gold isn't changing value, and that we're not richer because it increases in value relative to paper currencies. My main hope is that purchasing power is maintained, so that I can protect the value of my savings, and continue my present lifestyle. I hardly think we'll be living like multi-millionaires simply because gold is worth more dollars. We'll be lucky to be living the same.
I actually think you are wealthier now because the perception of the other currencies hasn't reflected their true drop in value yet. I can still buy a gallon of gas for about $2.50 but my ounce of gold now buys 520 gallons v. the 320 it did at $800/oz.
Fiat currency is still perceived to have value relative to good and relative to gold. When that changes and we look at the man standing behind the curtain gold will simply be the only currency left standing.
you can buy gas for 2.50?
comes to mind that if gold costs 500-600 to extract and refine as a base cost
Why would silver be so cheap? Seems reasonable to price silver at its base mining cost as established by bonafide silver miners and refiners.
Silver is often a byproduct of other mines, a bonus. Still the base cost should be the minimum price. Further since there is more gold than silver available silver is more precious and again should dictate a higher price. Silver is actually NEEDED for industry (indespensible) so recovery is neccessary but will not happen at these low prices.
bunch of bullshit words from someone who knows none..
#1st of all Peak Gold
peak of what ?? you were supposed to be journalist.. peak of price , peak production? do you #cking understand what do you write ?
#gold’s meteoric rise
there's no meteoric rise .. none... avg month volatilty less 10%.. and less then s$p500
bonds have 2x as much volatility... compare with parabolics in nsdq100 -2000, oil in 2008 etc
so.. as usual ..stupid idiot who should be put on rest..
alx
In this context, the use of the word "Peak" is generally understood to mean, as it does in the phrase "Peak Oil", the peak in world annual production.
As for the use of the phrase "meteoric rise" in reference to gold, I would tend to agree that the five or ten-year chart of gold's price looks more like a steady incline, not an exponentially rising or peaking one.
Still, no need to be so harsh.
You're wasting your time, Akak. This person posts 1 comment per article, most of them full of vitriol and hyperbole, then moves on. Does not respond to any replies to his comments. I just wasted a few minutes of my time looking into that.
This person qualifies as a TROLL!
http://www.zerohedge.com/users/alexwest/track
He's right about this one though.
Not to mention MHFT advises playing various forms of paper (which ignores the reason there is any interest in gold at all), and expresses no knowledge of the mining market or the COMEX.