Chart Of The Day: When ETF Paper Beats Gold Rock

Tyler Durden's picture

Demand for physical gold across the world continues to surge at an unprecedented pace leading India to blame its soaring current account deficit, sliding currency and even deteriorating economy on it (even if failing in its attempts to regulate demand for the yellow metal), and yet gold continues to slide. How come? One word - paper, or rather, ETF paper.

And more vividly, the combined holdings of GLD and IAU.

So, for now, paper does indeed beat rock.

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flacon's picture

Short GOOG, IWM. 


GOOG is ripe for the picking:


Look at IWM (Russell 2000) - it's a good time to buy puts:


Bonus, JPM is looking like it can't keep it's erection either:


Herd Redirection Committee's picture

NFLX, GOOG, Tesla...  I don't want to try call a top, but wow, those boys have got some room to run.  To the downside.

Divided States of America's picture

I agree on IWM...but not sure about GOOG....I bought puts on IWM today.

Spider's picture

So 30% of the trust's gold is gone?  If it keeps selling it should be empty by year-end - there's your plan...

DoChenRollingBearing's picture

I am really getting tired of seeing all of these paper gold flecks all over the damn boulders and rocks here in NW Quebec.  Ohh, that is real gold?  Sorry, my bad!

Plusieurs detailles plus tard...

And when do they turn on the heat around here?  High will be 61 F, brr...

Pinto Currency's picture


GLD shares are being redeemed for physical delivery - note the post Cyprus acceleration.

It is part of the run to physical underway worldwide.

Nue's picture

Seeing as GLD shares are leveraged 100 to 1 going to be some disappointed GLD holders

Bindar Dundat's picture

They are driving the price down so that they can

a) pay paper out in cash

b) confiscate or

c)  both of the above.

Rule of investment number one:

Nothing is an accident and nothing is as it appears.

fockewulf190's picture

The only paper I'm interested in is located in the bathroom.

knukles's picture

You best be fishin', DoChen...
And catch yourself a buncha walleyes, when ya gut 'em fry the livers up in butter or better yet, Crisco, post haste
About as close to heaven as possible....

Yen Cross's picture

 Extra Virgin, Olive Oil.

Harbanger's picture

"About as close to heaven as possible...."

Eating crisco will get you there even faster.  It's a hydrogenated transfat designed to last forever.  Maybe its good for emegency food storage, but that's about it.

Chariots of the Feds's picture

Actually they make great candles for emergency and survival.  Loooooong lasting.

Diogenes's picture

Don't use Crisco lard is healthier, better for cooking and baking and tastes better.

NotApplicable's picture

I bet it's already empty. The remaining 70% is likely nothing but Comex "good as gold" delivery receipts.

midtowng's picture

Exactly. The selling is going to be over at some point, probably not too far into the future.

I've been sitting on a butt-load of cash for a couple months now waiting for the gold charts to turn up.

knukles's picture

The real philosophical question needed to be discussed broadly, in public is: "Why should the Central Bank have such influence?"
Yeah, yeah yeah, I already know the answers and arguments.
Just sayin', it's not being discussed besides venues such as this.

Needs another Hamilton/Jackson moment

ChanceIs's picture


I have been wondering the same thing the last eight years - since my monetary consciousness awakening and rising awareness that there is something other than Keynesian BS - that would be von Mises.  Of course I always suspected debt, as in B. Franklin: "I would rather go to bed hungry than wake up in debt."   Duh.  (Not to take anything away from that genius.)  I think that I will see if I can arrange to attend Bernanke's going away luncheon and present him with a copy of Franklin's Autobiography.  I were supposed to have read that in the eighth grade.

Funny how the Coinage Act of 1792 stipulted the death penalty for dicking around with the value of a dollar.  But the Dead White European Males - what did they know?

Hey!!!!  Somebody has to decide how much money is placed in circulation.  The Constitution specifies it as Congress.  Congress decided to subcontract it out.  Nothing wrong with that.  But if it went that route, they were supposed to do so dilligently - as in asking the basic question....does our contractor of choice (that would be the Fed) have a conflict of interest in performing its new role?  Duh.  Foxes watching the hen house bitchezs!!!!!!

smlbizman's picture

it is being talked about knucks...on the internet were the biggest crowds congregate...fuck tv

Ghordius's picture

why? because it's an instrument of power. like nuclear power/arms

control over the FED is control over the global fiat currency

a tremendous amount of power. and it even pays bills, btw

e-recep's picture

but but what about free market theory?

Satan's picture

The NSA say they foiled that plot.

Umh's picture

I didn't know they were into foil. They always seem to paint their opponents as into foil.

youngman's picture

From here on out..all we are going to hear about are the foiled plots the NSA caught.....100´s of them I am to be trotted out in front of some congressional keep up the good works....and funding...

spanish inquisition's picture

NSA - "Of the hundreds we foiled, we will show you 2! We are still sorting out the retarded kids the FBI was setting up and may find one or two more."

Strider52's picture

Negative: That's GOTTA be an NSA Bad Word. Your accounts have been frozen, they ARE listening to YOUR phone calls, etc. Expect a visitor you've never seen before.

Almost Solvent's picture

Fuck Langley and all those asswipes.

They can nSa my balls in their mouth.

neidermeyer's picture

Almost Solvent ,


For maximum effectiveness you need to work at including the word detonator into your conversations.

Silveramada's picture

when they are ready they 'll blow the ponzi themselves, after the suckers are dragged into stocks, s&p, bonds and shorting the PMs sector, they will buy and let the short squeeze take care of the prices...they will be already long gold & Silver

Groundhog Day's picture

tna puts make more sense since there is daily time decay in the etf,  if you can handle the volatility

neidermeyer's picture

Tesla .. Why would anyone buy a car that requires so much thought to drive ,, start planning the day before to make sure it's charged up ,, chart all the charging stations along the way , pack snacks for the wait while you charge up ...and when you forget to condition the batteries and they go flat you have a $40K bill not covered by the warranty ... Good Times I'll tell you..


For Gods sake buy a $25,000 used Mercedes SL already and DRIVE .

aka Gil's picture

Agreed, MB makes a sweet driving machine. Buying a used one coming off a 2 or 3 year lease redemption offers great value.

Tapeworm's picture

Tesla is hypertech compared to Fiskar-Fisker, or whatever.

 A 5400 pound car that does 40 miles on batteries if it runs at all. All for 100,000++ FRN's.

 I saw that Consumer Reports actually bought one to test. That is a good reason to never subscribe to their magazine. The car puked before it made any miles on the test track.

 Of course the taxcows are on the hook for the failure of such a piece of shit company and their "tech".


Any dope that knows anything at all about cars would never have considered for a moment to buy a 5400 pound turd car with those performance figures. It took the goomint maggots to put the taxcows on the hook for such a project.

midtowng's picture

While its fun to accuse all ETF's of not having gold, it isn't true. There IS some physical gold behind the ETF's, and the sooner you deal with that effect the better off you'll be.

aka Gil's picture

So what's your point? You have to redeem a very large number of shares for physical. Soros can (and probably did) pull that off, but the little fishes will end up with the heartache of a fool.

midtowng's picture

My point is that the physical market is getting temporarily saturated from all the ETF selling.

This will all end in time, of course, but it isn't just a factor of paper manipulation. That's all I'm saying.

SRSrocco's picture

Gold and silver keep falling even though gold is now getting close to break-even for the top gold miners.  Also, the majority of top 12 primary silver miners are losing money below $25-25.

Also, the price of gold and silver will continue to rise because costs are rising:

Silver Price to Rise as Top Miner’s Production Evaporates

gatorengineer's picture

Black or Red.... same odds..... Casino is rigged.

flacon's picture

How else can one make money if not for taking advantage of a rigged market? Don't tell me that you are still a PRODUCER in this environment, trying to make an "honest" wage! Pfft. Ayn Rand warned about the delusions of PRODUCERS thinking they can change the system. The only way out is to DISENGAGE. 


SheepDog-One's picture

Yep that's why I bypassed all this long ago and bought as many firearms and ammo that I could, and have been selling it off for double and triple. No need to play in their rigged casino at all.

Mugatu's picture

Yes, but now they have paper guns too!

SheepDog-One's picture

Well, plastic....but anyway you need a $5,000 special printer too.

markettime's picture

I would wait for the 50 day moving average to be breached, then buy puts or go short. Unless the fed comes out and announces a 125 billion per month print fest. 

kliguy38's picture

ETF game has destroyed any "undesirable" assets deemed "too important" for the ponzi to let rise so of course they divert the peeps funny money into these frauds......nice touch boyz

roadhazard's picture

I heard on CNBS this morning that Bernanke was going to really dump on Gold at the meeting and it will be taking a big hit. I didn't hear anymore because I left. So there might be a big sale on Gold and Silver coming.