Gold Surges To Six-Week Highs Despite Biggest Fund Outflows In 4 Years

Tyler Durden's picture

Gold prices just hit $1280. That is the highest since The Fed raised rates in June and follows the best month since February.

 

However, as the precious metal surged 6% in July, ETF investors abandoned the barbarous relic by the most since May 2013.

 

As it seems the ETF is seeing notable liquidations... perhaps reducing the implied leverage against physical holdings?

 

As we see physical gold holdings within the ETFs being drawn down as prices surge...

Something changed.

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Looney's picture

 

Speaking of Gold…

Until someone comes up with a Crypto-Currency backed by a tangible asset like Gold and/or Silver, I won’t bother with any of that Crypto-Crap.

I am not talking about “fractional” backing or any variation of “paper” gold/silver. Physical only!

It takes a true genius to design and build a Crypto-Currency, but tying it up to Gold or Silver is just a matter of logistics and a minor programing task.

The only reason why a Crypto-Currency has not been backed by Precious Metals is that the designers want to be able to manipulate their Cryptos in the future: forks, coin dilution, splits, BitFutures, etc.

So, here’s a simple solution - don’t limit the number of CryptoCoins, but as soon as a CryptoUnit is mined, immediately back it up with AU/AG. Call it a BitActivation.

Then, I’ll be the first to dive into it.  ;-)

Looney

Eager Beaver's picture

Don't worry, GoldVu will be here in a minute to tell you all about it. Down $-.20 at the moment, so much for that...

BTW: downvote isn't mine.

This is appropriate; https://www.youtube.com/watch?v=MVVMBxkZvX0

SILVERGEDDON's picture

Man, you green pea newbie posting crypto pumpers showed up just in the nick of time. 

Raffie's picture

Don't you worry, the global powers will be beating gold/silver back down to a safe level. Gold loves the $1250 range....

PM has to keep the lie going. Looks like maybe around 2030 gold may be allowed to break to the $1300 and stay there.

 

SILVERGEDDON's picture

Only if you are trading fake paper gold, which, is not worth a pinch of coon shit. 

BaBaBouy's picture

Bitcoinz, that Barbarous Binary Concoction ....

quadraspleen's picture

Yeah. Investors are leaving Gold ETFs. Lol. I have a paper bridge. I might find someone to sell it to

python_snake's picture

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it.!pa74d: Well, it was all true and has totally changed my life. This is what I do... http://bit.ly/2f0fLIz

Eager Beaver's picture

I think you're looking for testicular cancer, that's down the hall...

tmosley's picture

Crypto can't be backed by anything. It is literally impossible. It has value by its nature, rarity and difficulty in production.

"Backing" is for ascribing unnatural value to easily manufactured goods like slips of paper with pictures of dead people on it, or 1's and 0's in a bank account.

Looney's picture

 

I hear you, but the 0s and 1s in your bank accounts are the same 0s and 1s a Crypto is built with.   ;-)

Looney

tmosley's picture

Incorrect. But you don't want to learn, so I won't try to teach you.

Creepy_Azz_Crackaah's picture

"It has value by its nature, rarity and difficulty in production."

Using your EXACT standard, Amur Leopard (only 40 in existence) dung is INCREDIBLY valuable. It, by its nature is VERY rare and is difficult/costly to produce in a laboratory environment.

So, who wants to buy some Amur Leopard dung? Only $40,000/ounce. Very rare. Can't simply reproduce it.

Hurry.

Limited time.

Valuable offer.

You're a moron if you don't see the Amur Leopard dung value...

Price is going to the MOON!

Did I mention that you are stupid if you disagree? You can't learn!...

Buy now (becasue I own a LOT of it so will pump it day in and day out).

Nobodys Home's picture

LeopardCore also has specialized dung storage vaults so you know your investment is safe.

Creepy_Azz_Crackaah's picture

The preferred leopard dung storage facility of the stars...

tmosley's picture

It isn't durable enough to be money.

If you don't know the qualities that make good money, then you are in gold and have no understanding of why. Like a dog sitting at the dinner table.

Creepy_Azz_Crackaah's picture

Great. So you agree that your standard for value is bullshit that doesn't work. (Not leopard shit, of course - that's valuable).

ExplodingEntropy's picture

Bitcoin is backed by THE PEOPLE

tmosley's picture

Ah, the old "so" tell for cognitive dissonance.

See that a lot out of you oldbugs.

OpenThePodBayDoorHAL's picture

Can't be sure if you have ANY background in computer science. But riddle me this:

"How do you bind the data to the hash?"

In other words how do you ensure that the data (Bob has a bar of gold or a pile of currency) is connected in any way to a blockchain keypair?

Answer: you can't. At the end of the day there is a HUMAN who is simply ASSERTING that the data is connected to the hash.

This is different for native blockchain assets like Bitcoin. In that case the entity asserting that the ledger is accurate is usually an anonymous person in a cave in China using stolen electricity. Mm-k?

But but but the Bitcoin supply is unchangeable, it's built into the protocol! Nonsense. It's one line of code that can be changed at any time and validated by the same Chinese fools listed above.

Lesson 101 finished. Perhaps I'll deign to give you lesson 102, on how the ONLY way to use keypairs safely is to generate them and use them to sign transactions on bare metal in a tamper-evident box protected in a data center. Not, BTW on your Android phone or on some POS device. To make keypairs safely usable then requires an intermediary (otherwise known as a BANK, like Circle). Oops, great new Magic Internet Money, fail.

Lesson 103? That the Bitcoin or ETH price can keep going up. Sure it can! At the peak you could buy four large Dutch houses for a single black tulip bulb. Knock yourself out!

tmosley's picture

>It's one line of code that can be changed at any time and validated by the same Chinese fools listed above.

Ridiculous. It's like claiming that life will end because it is "just" coded by four base pairs.

That "one line of code" is actually numerous copies of one line of code that are held in every full client and node. You can't just edit it any more than you can insert a gene into one insect and expect it to appear in all insects. The protocol just ignores your fork because it isn't at 80%. Each miner has to put in the new code themselves. And if they change the code to remove such a fundamental feature, the market will scream and will produce their own fork even if you have an 80% consensus among the miners. The value of the coin they are mining would drop to zero while the fork that follows the original protocal would take over.

Your problem is that you have some knowledge of coding, but you are also an oldbug, and as such have been consumed by cognative dissonance, effectively killing the portion of your brain responsible for rational thinking.

OpenThePodBayDoorHAL's picture

Um, hello, and precisely how many copies of the supply change code are required to be validated? About three: F2Pool, AntMiner's and one other. And then what? Oh look, there are two Bitcoins. BCC, BitcoinReallyNoReallyThisOneIsTheRealOne.com

Yeah and the bit about insects and DNA are funny, do you do standup too, where you toss out irrelevant stuff and people laugh? Stop it you're killing me

tmosley's picture

Yeah, so? Why are you so afraid of a little competition? So afraid of market selection? Are you afraid the market isn't going to select your pet rock as the new monetary standard?

centipede's picture

Is that all you got left to say? Actually, it is not a problem with market selection. The whole idea of cryptos seems to me quie bizarre. If you can reduce the basic concept of cryptocurrency and its rarity ad absurdum, it is clear, that in reality it is not going to work in any useful way, let alone the best way. Just imagine, that there would be only one bitcoin created and the algorithm would not allow to create another coin. It still would be possible to trade in fractions and by your standards it should be the most valuable safe currency later worth maybe trillions, right? I am just wondering how come nobody did not create such crypto coin. Actually, how come, that milions such rare and unique cryptocoins have not been created, claiming each one is the right one to be worth of trillions. Why is nobody creating that kind of crypto numismatics? Exactly this tells me, that the whole concept of cryptos as safe currencies is a bullshit.

tmosley's picture

>I am just wondering how come nobody did not create such crypto coin.

Because that would indicate a 100% premine, which is usually the death knell of a cryptocurrency.

>It still would be possible to trade in fractions and by your standards it should be the most valuable safe currency later worth maybe trillions, right?

The number of coins is far from the only factor in a given crypto's price. Not that you will be able to understand that simple sentence. Not because you are stupid, but because your natural ego defenses have been at full power from the start, smothering your ability to reason in cognitive dissonance.

>Why is nobody creating that kind of crypto numismatics?

It is very hard to create something specifically for it to be collectible. Usually that is something that used to be very common, but later became very rare, like comic books being thrown away by annoyed mothers.

>Exactly this tells me, that the whole concept of cryptos as safe currencies is a bullshit.

As a sufferer of cognitive dissonance, your brain will twist literally any set of inputs to tell you that you are right. It is hard, but you can overcome this bias with training. Google "overcoming bias".

centipede's picture

Why is mining necessary at all? Fractions could be bought at the beginning for a little money in similar way as IPOs of stocks. But if you insist, they could be mined as well. Couldn't they?

But number of coins was the main factor you used to justify the valuation of cryptos. I actually think that the number of cryptocoins is completely useless in valuation. It is used as some basis of an ideology of cryptocurrencies only for advertisement to lure in other people. It is irrelevant whether you deal in coins or their fractions.

And that is my point. Maybe the cryptocurrencies will be just another junk without intrinsic value thrown away by annoyed owners when the right time comes. I am not trying to make a case for gold and silver to be the only right money. I would just like to see any reslly solid rational argument why to invest into cryptos. So far the only reason could be pure gambling. If you consider skepsis to be a bias so be it. But I would like to remind you that skepsis is the foundation of scientific methodology. So you should come with facts, proofs and justfications if you claim something.

 

ejmoosa's picture

It has no value other than what some other sucker will pay you for it.

tmosley's picture

That is true of literally every single thing in the entire universe.

ejmoosa's picture

Not even close to being true.

Even a loaded gun no one might want to buy still has value to the owner.

 

Nobodys Home's picture

That owner might want to trade you a small piece of lead for your bag of gold..so that gun has immense value to it's owner.

tmosley's picture

Torturous logic. If the owner values it, then it has the value he would be willing to trade to keep it, and others would likely want it as well. Guns cost money.

This is tautological logic. Should be pretty apparent to anyone not caught in the grasp of cognitive dissonance.

Hikikomori's picture

Things derive their value two ways, and two ways only - their utility to you, and what others are willing to trade you for them.  Gold, stocks, paper money, cryptos, old masters - they are all worth whatever utility you derive from them, or what others are willing to trade you for them.

Nobodys Home's picture

Moose turd earrings are all the rage!

Nobodys Home's picture

1st monetary lesson wise old Dad taught me while collecting coins as a kid.

Buckaroo Banzai's picture

Exactly. Just as gold's unique monetary qualities are the only "backing" it needs for the ultimate physical settlement of debts, BitCoin's unique monetary qualities are what backs that particular cryptocurrency, and are making it the ultimate settler of electronic obligations.

Justin Case's picture

What if the "value" of gold or bitcoin is not measured in government fiat, but in their own potential as monetary instruments? After all, the US dollar will not outlast the US government (in its current form, at any rate), but gold will and bitcoin might. And if these instruments are not investments but hedges, that changes the meaning of their "value," doesn't it?

SunRise's picture

Crypto is backed by algorithms and trustworthy people deemed smarter than untrustworthy people.

tmosley's picture

Those are factors that contribute to the market price of bitcoin. That is different from backing. Bitcoin, gold, and dollars are all unbacked, but only dollars are fiat. Gold and bitcoin can be made by anyone--they just cost nearly as much to make (or more if you don't have the capital base) than the market cost, where any amount of fiat can be made at zero cost, but only by a (((chosen few))).

silverer's picture

Trustworthy people. Where are they?

Give us Stirling Engines's picture

You're limiting the definition of cryptocurrency if that is your opinion. The ponzi nature(easy mining rewards initially, then less rewards, and then nothing at all) of all current cryptos is NOT a feature of crypto. That is to say you can have a crypto which decouples the rewards for mining and does something totally different.

A cryptocurrency that allows people to create money out of thin air(id call it p2p bilateral transactions), not by mining, but by allowing their account to 'go negative' and give that amount to another account, that is the kind of crypto we need. Not this easy money bs. 

tmosley's picture

Your parenthesis does not describe the term preceding it in any way shape or form.

Also, your proposed solution to the "easy money bs" (actually bitcoin was the hardest money ever conceived when it was created), is the most extreme version of easy money imaginable.

Give us Stirling Engines's picture

You still haven't explained why you can't have a gold backed crypto, or anything backed crypto. Because if you can, it would only prove current cryptos worthlessness. My version of crypto is far superior but it does require more explaining than in just a comment.

tmosley's picture

For something to be "backed", you have to have a treasury window where you can trade that thing for whatever it is backed by at a fixed rate. That requires trust. A crypto that requires trust is not a crypto. It's just some digital token. There is no incentive for anyone to download and keep copies of the ledger. There is no incentive for anyone to process transactions. If you can solve those problems in a trustless manner, then you deserve the Nobel Prize in economics AND math.

centipede's picture

First of all, there can be zillions of cryptos created using simmilar algos as bitcoin. Their prices in fiat or other cryptos will be completly arbitrary without possibility to compare any intrinsic value as it is possible for gold and silver. There goes the "rarity" and any rational basis for pricing cryptos.

For trading bitcoin for real goods you need trust as well. In the same way as for backing currencies by gold. How will you make sure that you get what you payed for with your bitcoins? You send your bitcoins and wait for delivery. You trust the dealer. If the goods are not delivered you call the police. Do you trust police and government with your bitcoins?

tmosley's picture

>Their prices in fiat or other cryptos will be completly arbitrary without possibility to compare any intrinsic value as it is possible for gold and silver.

Just because you are caught in a web of cognitive dissonance doesn't mean the markets can't make decisions.

As for your counterexample RE trust, there is less trust required for that transaction than any other manner of internet based transaction aside from cryptos with built in trustless escrow accounts, which again, require ZERO trust.

The problem with gold is that it is a rock. It can't evolve. It will never do something new. Crypto can, and will.

centipede's picture

Am I claiming that market can't meke decisions? Market always can make decisions and always does. The question is, whether it makes any sense to participate in that particular market.

Of course, I can see all those guys eager to make electronic transctions without government interference and taxation to be afraid of and to trust the dealer and the escrow company on top of it. There will be electronc trail behind you that can't escape attention of governments.

Well, that is exactly what I am afraid of. That crypto can evolve into something totally unpredictable.

Buckaroo Banzai's picture

You may not have noticed Looney, but many major precious metals dealers are now accepting Bitcoin to settle physical precious metal trades. This has created a de facto precious metal backing for BitCoin.

tmosley's picture

Unless they accept it at a set rate, that isn't backing. It's just a float, like everything else.