Gold Trading Volumes Hit Record High As Dollar Crashes

As gold prices break above the election night spike highs, it seems interest in the precious metal has never been higher...

 

Gold has pulled in traders like never before on its way to the highest price in a year.

As Bloomberg details, volume on the COMEX in New York, the largest bullion futures exchange, hit a record in August as North Korean tensions and a weaker dollar boosteddemand for the metal.

Some 6.55 million contracts -- worth almost $900 billion now -- changed hands last month, more than when Donald Trump was elected U.S. president or during substantial price spikes and slumps.

Comments

American Psycho Swampster (not verified) Fri, 09/08/2017 - 14:32 Permalink

I suspect the purchasing power of the PHYS at $13.81 / troy ounce is similar to the purchasing power at $1,350 in terms of fiat. I had a chat with a co-worker about how Au preserves one's purchasing power.  I told her that in 1975 the price of gold was ~ 140 / ounce and that an average house was ~ $43,000 or 307 ounces of the shiny.   In 2010, Au = ~$1400 and an average house was $291k or 207 ounces. 

In reply to by Swampster (not verified)

techpriest American Psycho Fri, 09/08/2017 - 14:55 Permalink

Yes, exactly. If you look at the last 50 years, a house goes for between 100-700 ounces, with the average being in the 300-400 range. "A good delivery bar buys a house."

Also, most manufactured goods tend to become cheaper over time relative to gold. Look at the price of a Ford Mustang in 1970 vs. today.

It turns out that the original "investment strategy" of saving a large percentage of income worked just fine in the USA, right up until 1971. In the 1800s an item that was a dollar in your youth was priced at 50 cents when you were old, and in the late 1900s the 1 dollar item became ten.

In reply to by American Psycho

American Psycho techpriest Fri, 09/08/2017 - 16:53 Permalink

Yes sir.  Savings made sense when money was actually backed by something.  For a good read on favorable depreciation look at Tom DeLorenzo's book "How Capitalism Saved America." He does a nice job showing how increased efficiency and manufacturing technology put significant downward pressure on goods as they became more easily manufactured. The outcome was that the standard of living for all Americans rose as products that were once only available to the rich became accessible for the common man (think cell phones in today's economy). I enjoy having debates with people about why think inflation (and for the sake of convenience I let inflation = increase in cost of goods rather than the increase of money outstanding) is good.  I never get a response in the affirmative as to whether they want their insurance, food, rent, fuel, and taxes to increase.  The response I usually get is, "inflation primes the economical pump."  I have no idea what they means other than "CNN, MSNBC, NYT, and HuffPo say this, so I will repeat it."  When people say they want inflation what they mean is that they want their house values to increase and their stock portfolios. The only entity that really likes inflation is .gov since they are repaying their debts in FIAT that is less valuable than when they initially borrowed it. 

In reply to by techpriest

JPMorgan BaBaBouy Fri, 09/08/2017 - 14:41 Permalink

Does not matter.They are hemorrhaging phyisical on a global level by keeping the fiat price artifiically supressed.It will not last forever, it is physically impossible to maintain indefinitely.Something has to give, the only real question is when.They better pray we don't see the 'hundredth monkey' effect kick in... then it really will be game over.

In reply to by BaBaBouy

realmoney2015 ParkAveFlasher Fri, 09/08/2017 - 13:36 Permalink

The dollar has been crashing since 1913, when we have a private Bank cartel power over our money. Since then the dollar has lost 97% of it's purchasing power. Gold and silver have held their values and pretty much buy the same amount stuff throughout history. www.scentsaverscandles.comhttps://m.facebook.com/scentsaverscandles/We make all natural candles and out real silver coins inside to help educate friends, family and others on the value of real money. Our message is simple. End the Fed and go to a monetary system based on sound, real money. Help us spread the message. 

In reply to by ParkAveFlasher

shizzledizzle HominyTwin Fri, 09/08/2017 - 13:46 Permalink

Was looking into bitcoin options and was humored by the fact that they settle in bitcoin... Let's say I want to bet against bitcoin by way of put options. Wouldn't it be great to be correct, see the price plummet and get this... be paid in BITCOIN! Well, you thought it would be worthless, it is now and here you go paid in full with what you are betting against. Oh By the way, in the time between settlement and converting it to cash it lost half it's value again! Sorry about your luck. LOL 

In reply to by HominyTwin

Give Me Some Truth HominyTwin Fri, 09/08/2017 - 13:58 Permalink

Re: Miners down todayIf you were part of a team that controlled the prices of gold and silver; that is, you knew when prices would peak and reverse, why would you trade on this info just on the COMEX?Couldn't you also make a killing selling mining shares at their temporary top and then buying them back at their bottom? Or "shorting" a tranch of stocks like the pros short the metals? And then doing the whole thing over again in a month or two.Anyway, today's action in the shares tells us what is coming with the prices of gold and silver next week. (All of the miners probably have the Mother of All Class Action Suits they could file ... if they had the guts. They don't). 

In reply to by HominyTwin

yogibear JPMorgan Fri, 09/08/2017 - 13:43 Permalink

The Federal Reserve has already made it obvious that they intend on taking the US dollar down.No debt limit and infinite rounds of QE and well as doubling the US debt every 6 to 7 years.Any country outside the US can see that there is no intention to pay the debt back responsibly.They are printing the debt away.See how that has worked historically.

In reply to by JPMorgan

WillyGroper Fri, 09/08/2017 - 13:42 Permalink

who cares about the contracts.awan a know about delivery.this equifax breach is the perfect scapegoat amid the chaos happening across the country.no firewall & this mf'r gamble had a degree in electronic engineering from cornell. 

scatterbrains Fri, 09/08/2017 - 13:43 Permalink

900 Billion dollars?  wow that seeems like so much.   What is the upside limit to how much the fed can print out of thin air in order to maintain a cap on pricing?  Maybe they are limited to only printing a few trillion dollars of sell orders against all that demand?   lmao!!

chubbar scatterbrains Fri, 09/08/2017 - 14:17 Permalink

This is why the recent China/Russia oil for Yuan/Gold announcement is so important. The SGE only settles in physical and only physical contracts are accepted. The smokescreen of Comex is going to be blown away as soon as massive gold deliveries are required to settle Oil contracts at the SGE. When the SGE needs to source gold from around the world, one place to get it is at the Comex by standing for delivery. Let's see these asshole bankers wiggle out of that program!

In reply to by scatterbrains