This page has been archived and commenting is disabled.
Screen Traded Fiat Gold Could Get a Violent Wake-Up Call
Today’s AM fix was USD 1,346.75, EUR 978.81 and GBP 837.06 per ounce.
Yesterday’s AM fix was USD 1,351.00, EUR 978.28and GBP 833.69per ounce.
Gold climbed $1.50 or 0.11% yesterday, closing at $1,353.00/oz. Silver slipped $0.05 or 0.22% closing at $22.47. Platinum rose $9.20 or 0.7% to $1,382.00/oz, while palladium climbed $6.50 or 0.9% to $707/oz.
Gold for immediate delivery gained as much as 0.6% to $1,360.76/oz, prior to a sharp bout of concentrated selling just before European markets opened at 0800 GMT, that saw gold fall to just above $1,340/oz .
Gold had been near the highest level in five weeks after U.S. economic data showed how weak the U.S. economy remains leading to concerns that the Fed will continue with ultra loose monetary policies.
Gold in US Dollars, 10 Days - (Bloomberg)
Gold is currently 1.3% higher in October. Gold fell into the middle of the month (see chart below) and then as U.S. lawmakers wrangled over the nation’s budget and debt ceiling, triggering a 16-day partial government shutdown, gold began to recover and is now nearly $100 above the low seen mid October at $1,252/oz.
U.S. factory output trailed forecasts in September, while pending sales of previously owned homes fell the most in three years, separate reports showed yesterday.
Asian demand remains robust and holdings in the SPDR Gold Trust, the biggest gold exchange traded product, held steady at 872.02 metric tons yesterday.
Gold in US Dollars, 1 Month - (Bloomberg)
In the Financial Times, veteran financial journalist and gold watcher, John Dizardnoted the increasing strain in the physical gold market and detailed how that should lead to much higher
gold prices.
“Something is unsettling the animals in the forest of the gold market. Usually there is a chorus of chirrups and squeaks that are significant, momentarily, for one species or another, such as a few cents of arbitrage between Zurich and London, or a dollar-an-ounce rise in India caused by a dealer's near insolvency. Then the noise settles down to the murmur of wind through the trees
However, the continuing high level of premiums for physical gold over the kinds you can trade on a screen suggests that the next move in the major gold indices or the various exchange traded funds could be discontinuous and dramatic. It would be much better for the financial world if gold were just bumping along, with only enough volatility and liquidity to keep a few dealers' lights on. That would mean electronic or paper assets have retained their essential credibility with the public ...”
“This could turn into a very violent wake-up call for [screen-traded gold]. People talk about ‘fiat currencies’, but we also have ‘fiat gold.’ Volatility is too cheap right now.”
Taken together, this collection of persistent microeconomic signals in gold could flag macro trouble to come. These noises worried me in August. They worry me more now.
Dizard’s article, ‘Strange gofo cry heralds trouble for gold’ in the Financial Times can be read here.
He has previously warned that ETF gold holdings and central bank gold reserves may be being lent to bullion banks, who then re lend that gold into the market.
Owners of gold exchange traded funds (ETFs) would be surprised and worried to discover that certain banks might be lending out gold that they have bought and believe that they own.
The leading gold ETF, GLD has been criticised by many analysts for its extremely complex structure and prospectus. There have also been warnings about the possible conflict of interest and overall lack of transparency.
If as has been suggested, banks are lending gold into the market that has come from exchange traded funds then this would validate the many concerns raised about the gold ETF market.
Questions would again be asked as to whether many of the ETFs are fully backed by the gold that they claim to own in trust on behalf of clients.
Gold Prices / Fixes /Rates /Volumes - (Bloomberg)
Already more prudent hedge fund, investment and pension fund managers have liquidated their ETF positions in favour of allocated physical bullion.
We would expect that trend to accelerate as prudent investors rightly seek to avoid the high level of counterparty and systemic risk associated with exchange traded gold and other forms of unallocated gold and paper gold.
»
- GoldCore's blog
- 11499 reads
- Printer-friendly version
- Send to friend
- advertisements -
ETF = E xchange T raded F raud.
At the top and at the bottom - everyone is fucking the country. Hacking off their hunk of meat and taking it back to their cave.
Even foreign governments are lining up to take their hunks - respect and fear for the bully are dissapating.
The American Empire will soon be on it's knees
I gave you an upvote by I do ot agree with your last statement.
"From the top, down, from the bottom up, then inside out."
--Van Jones, well-dressed Communist.
Here is a well kept secret...the entire 'gold market' is all one big paper promise to give you the dollar equivalent of your gold when you sell it. NO ONE has to get physical from this market. The gold in GLD is leaving. Gold up gold down, it does not matter. The inventory is down from 1350 tons to 870 tons since January.
The only thing that will matter in the end is ...do you have physical IN YOUR HANDS?
If the answer is no you will likely wind up with worthless cash and probably not much of it.
If you are in derivative markets to get metal you are crazy. Even if you think you'll take delivery from Comex, when the SHTF you'll be cashed out. (Or maybe you'll get the Gerald Celente treatment....screwed out of everything, gold and cash).
If you think gold is good insurance then you had better get some bullion. It is on sale now. I suspect that in the near future it will simoly be impossible to get.
Consider this: if suddenly the dollar were to crash and China wanted to trade all of it's treasuries for all of the gold left in GLD....the cost would be 46,000 dollars per ounce...and that is if no other treasury holder is also trying to get physical. If all the treasuries outstanding bid for that same 870 tons the price would be over 200,000 per ounce. That is in current uninflated dollars.
Remember central banks hold gold and treasuries. They will not be bidding for Iowa farmland or paladium.
Gold hits 1350 and what happens next? Of course we know, the banking cartel manipulates it down and the manipulates it back up. Get out of the paper gold charde and buy the reals stuff.
Where there's complexity there's fire.
Owners of gold exchange traded funds (ETFs) would be surprised and worried to discover that certain banks might be lending out gold that they have bought and believe that they own.
***********************
If all you have in your hand is a piece of paper - then you own paper.
And no duh banks are re-selling said paper over and over and over and over. A better test is to see how much PAPER gold is out there versus how much gold has been mined in HISTORY.
Sol: "Bill, Jim is off to Asia. Let's lease his gold out to Bob."
Bill: "Great idea, Sol. Bob is leaving when Jim gets back. We can get Twice the value for that gold!"
shows how stupid and nuts this system is in its obfuscating complexity that people dont even rehypothecate gold , they rehyp paper
A Precious Metals ETF is an oxymoron.
We've been hearing this for years. Does anyone have anything of substance to report?
Ponzi schemes have two well documented characteristics:
1.) They go on longer than one would believe possible.
2.) They end much quicker than one would believe possible.
Impatience could fuck you very hard.
I'm wishing that impatience would at least dicktease us a little, you know.....at least something. This ponzi seems to say "to infinity and beyond!" and it is growing rather tiresome.
Heh. Yeah My family have been calling me a wackjob for over 12 months now.
Fuck it. I'd say they're wrong, but history wouldn't bear me out.
I'll go buy some more flour now. Like 100 kg or so.
Ponzis are never fueled by facts, they are fueled by emotion.
If you were running a Ponzi would you want something different than the perception of 'infinity'? Ponzi's work because people believe they will be out before it ends. The Baby-Boomers are absolutely sure the next generation will pay, not them. Ask not for whom the Bell tolls.
meanwhile, over at Jesse's:
http://jessescrossroadscafe.blogspot.de/2013/10/paper-gold-versus-physic...
looks like almost 100:1 leverage, and that was in 2010!
I'd recommend that all EFT holders ultrasound their share certificates.