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Chart Of The Day: When ETF Paper Beats Gold Rock
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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What kind of leverage is GLD running?
I know they don't have an ounce of Gold to back the value of the shares, are they doing 30X? Or more?
When their leverage on paper unwinds, won't that same leverage then be applied to REAL Gold? (as in up).
GLD reports their inventory daily: http://www.spdrgoldshares.com/assets/dynamic/GLD/GLD_US_archive_EN.csv
The interesting thing is that t has fallen from 1352 to 1001 tons since January.
Who is getting all this tonage?
To get gold from GLD you must be an AP and have at least 100,000 shares (10,000 ounces) 1/3 ton.
Thanks for that.
lasvegaspersona said: "To get gold from GLD you must be an AP and have at least 100,000 shares (10,000 ounces) 1/3 ton."
Which means the average investor can't get physical, which means the GLD is probably levered at 15X (at the least).
My father bought a lot of gold many years ago when it was $32 an ounce. Imagine his current mental state if he got upset with every price drop all those years.
Finally! A smart poster. I'm in Northern Queensland (hyperlinked)
Yes and back at you. I've always appreciated your comments since I first saw you here.
If we're dismissing effects of hedge funds and etfs unloading their paper positions, shouldn't we have then dismissed the effects of hedge funds and etfs piling into those paper positions in the first place? And too, investment demand for PMs is a tiny part of overall demand, we are just soaking up A PART of the excess supply. A better question IMO would be why did PM prices rally so high when overall demand for PMs had dropped after the housing bubble crash? And I think your chart shows why, etfs and hedge funds...
Most longs feel that lower prices for their favorite asset are unjust, unfair and unsustainable. Only goldbugs think they are untrue.
Gold to $785.
So, you've been here 2 years and 43 weeks and your first post was April 16th, 2013? (just after the smashdown).
I'm pretty sick of these trolls showing up right at the time when gold gets hammered. Who the fuck are these guys Tyler?
What bullshit this is...
Goldbugs, if your gold is worth so much more than the "paper" price, then why don't you try to go out and BUY SOMETHING WITH IT?
Only a dummy would trade PMs for a loaf of bread that they could buy with paper.
Are you really that dumb?
I personally think these are firesale precious metal prices. Think stocks post 87 crash.
They aren't going to beat us and they know it.
Why else would the ultimate insiders, central banks, be accumulating gold?
I just got ten more Tubes in yesterday.
I can't understand people who have a reluctance to purchase something that the government is artificially lowering the price of.
Wise man say 'he who does not try to catch falling knife on way down get pierced scrotum'.......
I'll be happy when GLD hits zero.
Gold (and likely all pm) would literally be 'priceless'