Rich Not Buying Gold By The Bar--They Are Buying By The Ton

[Kazuya]

I wonder when we will see gold at £1000 per ounce.

[Lagarde's Drift]

I wonder when we will see gold at £1000 per ounce.

A shop here in the far east is selling at £978. May be a combination of big mark-up and piss-poor exchange rates but still, it's not far away.

[GinAndPlatonic]

Still not seeing an answer here to what seems a simple question- if gold is on an inevitable would anyone who knew the secret of becoming rich need to sell it for money?

So why would someone selling a product on the basis that it will outperform fiat money sell that product for....fiat money?

These people are using gold the same way house flippers were for the last ten years.......easy. So they are making fiat now as opposed to ten years time. It`s a business...pure and simples...tcch

Many poeple however are using gold as a store of wealth.

Just because you see people selling gold doesn`t make your question invalidate the argument for buying gold.

Edited October 6, 2010 by GinAndPlatonic

[xux42]

In the end why not put some money on trap 6 at Romford, because that is all you're really doing.

Not really - if it spikes up from here I will sell more and finish with about 50% profit over 3 years, 2/3 of which was banked 18months ago.

If/when gold plunges I'll be back in hopefully taking another few grand from the people on the other side of my bargains.

Its good to be partly out of FIAT but not in something like gold that could, and has, plunged 10-20% faster than you can carry out a sensible analysis and sell.

Accumulating gold as an 'insurance' against social & economic collapse won't work.

It will be more effective to take resources from the weak in the event of genuine chaos.

Those with hoards of physical will need to expend a lot of resources protecting it from people who's strategy will be

to remove some of it from them.

Accumulating PM ahead of a non-chaotic depression might work, but there are other ways to thrive in that scenario.

[GeordieAndy]

Accumulating gold as an 'insurance' against social & economic collapse won't work.

It will be more effective to take resources from the weak in the event of genuine chaos.

Those with hoards of physical will need to expend a lot of resources protecting it from people who's strategy will be

to remove some of it from them.

Accumulating PM ahead of a non-chaotic depression might work, but there are other ways to thrive in that scenario.

How can you take resources from the weak in the scenario you are talking about? Are you saying you will use paper money or just go in and remove things with physical force?

Also what other ways can you thrive in a non-chaotic depression.

Btw I am not trying to be clever just genuinely interested.

[Take Me Back To London!]

Those with hoards of physical will need to expend a lot of resources protecting it from people who's strategy will be

to remove some of it from them.

The wisest course of action for anyone with "hoards of physical" would be to get the hell out of anywhere which has degenerated into Mad Max Land and set themselves up somewhere that is civilised, which there will be.

[I want a house!]

Gold is going to crash now...

[xux42]

How can you take resources from the weak in the scenario you are talking about? Are you saying you will use paper money or just go in and remove things with physical force?

Also what other ways can you thrive in a non-chaotic depression.

Btw I am not trying to be clever just genuinely interested.

Collapse wouldn't happen overnight - I would increasingly organise/get involved in one of the tribes that would inevitably form, marshalling resources, establishing supply lines, arranging security, obtaining weaponry. That or try to move to one of the enclaves the existing military will retreat into.

Removing resources by force from producers would be unwise, they need to be protected and output channelled to the tribe. Non-productive people sitting on hoards - well its kinda asking for it in a mad max scenario.

Collapse will see us temporarily return to primary production and the population drop to pre-industrial levels, albeit a lot healthier.

In a depression rationing and shortages point to the black economy and/or pawnbroking.

Seriously looked at pawnbroking in 2007 but 1. middle class friends & family don't see it as very 'nice' and 2. Gordo ruined the business model by bailing out the overleveraged.

Might be time to review....

[sesim]

Once the central banks have finished offloading it they will declare that they have no interest in buying any back.

If the central banks had no interest in gold TODAY they would not have any to sell today, since they would have already sold it to the market/gold bugs in the knowledge that gold is just a useless old piece of metal that you dig out of the ground then put it back in the ground again.

Truth is that central banks are terrified of gold, as it shows how useless their fiat currencies are:

Greenspan himself. (OK, not the sharpest tool in the box, but he represents a general viewpoint here):

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. ... This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.

The CB's hate gold. Which is why the hold so much. And it's the CB's, in concert with bullion banks (who - once they have made their profit) will take the price down by either selling what they have or loaning gold in vast quantites via the bullions banks to crash the price. And then they will just buy it back again at the bottom.

This will probably happen just before interest rates begin to rise, so the banksters can get out of the market at the optimal time.

Make sure you get your timing right goldbugs!

Edited October 6, 2010 by sesim

[GeordieAndy]

Well I have jumped in and bought Sovereigns at 3% over Spot and at a price that is at least 4% less than what others are selling for. We are putting these away for end of the £ kind of scenarios as an insurance and won't sell unless it is to get somewhere in a hurry!

[red11]

I'm still buying gold. I think it still has a way to climb before it peaks.

[Old Nis]

I'm still buying gold. I think it still has a way to climb before it peaks.

+1. It has a very, very long way to go yet. Timing it right, of course, may be difficult....

[GeordieAndy]

+1. It has a very, very long way to go yet. Timing it right, of course, may be difficult....

You are looking to sell and swap back into paper / flat at some point then?

[xux42]

+1. It has a very, very long way to go yet. Timing it right, of course, may be difficult....

I think it will reach higher, eventually to $2000/oz+ but I refuse to miss out on the trading opportunities.

Ridiculed on here when I sold some at $43,050/kg after a massive spike. Yes it carried on, but is now falling hard, down $1100 in the last 24hrs to $42,640.

The hostility of gold bugs to anyone who sells at any price is just perverse.

Ludicrous, illogical attitude.

[Old Nis]

I think it will reach higher, eventually to $2000/oz+ but I refuse to miss out on the trading opportunities.

Ridiculed on here when I sold some at $43,050/kg after a massive spike. Yes it carried on, but is now falling hard, down $1100 in the last 24hrs to $42,640.

The hostility of gold bugs to anyone who sells at any price is just perverse.

Ludicrous, illogical attitude.

There are two ways of looking at this. My view is that I have a sufficient position in gold to protect my financial situation, and I will not sell my gold holdings until I see a continuing drop-off from a massive spike (i.e. the obvious end of a bubble). I will then attempt to calculate approximately when gold has fallen to a reasonable value and then re-take my position without fail. I will use the difference (profits as measured in FRNs) at this point to invest in any alternative market, leaving the original gold position intact (as measured in FRNs). I may invest the profits whenever I see an opportunity, but I will NOT use the full original gold position to re-enter the stock market unless we see a VERY much more stable financial environment, something similar to the early eighties, for example.

The alternative way to view the gold market is to take a position in physical gold, and then put any spare cash into Goldmoney or any similar AUDITED equivalent and then trade the dips with the non-physical account. I have no problem with anyone doing this, but just as it is a basic rule of investment to "gamble" with some funds and put other funds into safer investments, so one should "gamble" with the electronic version of gold, and keep the physical as the "safer" investment. An ETF should have no place in any fund until that investor has 1) a position in physical; 2) some electronic gold, and 3) some gold shares/stocks. At that point, by all means fill your boots, but ETFs, at the end of the bubble, are risky in the extreme.

Remember at the end of the bubble EVERYONE will want to get out, and there is no-where NEAR enough gold to satisfy all investors, A default is almost inevitable at that point, as it would be for any bank, no matter how well-funded, if the queues for repayment went around the block. Goldmoney is as safe as physical (in theory) but an ETF is certainly not.

[xux42]

The alternative way to view the gold market is to take a position in physical gold, and then put any spare cash into Goldmoney or any similar AUDITED equivalent and then trade the dips with the non-physical account.

Wow - a refreshing change from some of the unthinking "Gold good, FIAT bad" mantras we see on here sometimes.

Personally I hold Physical silver & trade paper silver & gold in BV. Hopefully that's reasonable - I will think carefully about your post.

Thanks

[Kazuya]

I don't think RB understands what a Ponzi scheme is.

On another note, I would suggest some prudence with the current gold price. While it's going much higher longer term (anywhere from $5000 to $50000+), there's no point in paying more than you have to. Don't price chase.

Buy on weakness. As Jim Sinclair says, buy on the 'fishing rods/lines' and sell on the 'Rhino horns'. That said, I'm only talking about trading positions as gold should really be held as insurance.

What do you think gold will correct to (pullback) in the very short term? $1200? There was quite a hefty correction in 2009.

Edited October 8, 2010 by Kazuya

[Take Me Back To London!]

What do you think gold will correct to (pullback) in the very short term? $1200? There was quite a hefty correction in 2009.

From my observations there is a majority consensus that gold will correct. IMO gold and silver will continue to do the opposite.

With all this s*** going on, If anything gold and silver are seriously undervalued.

Edited October 9, 2010 by Take Me Back To London!

[Kazuya]

From my observations there is a majority consensus that gold will correct. IMO gold and silver will continue to do the opposite.

With all this s*** going on, If anything gold and silver are seriously undervalued.

Yeah, I'm waiting for a bigger dip than the one we had a few days ago to buy some more shiny stuff.

Better to have plenty of Oz gold before the parabolic mania phase!

[Old Nis]

I was kind of making the same point- if owning gold is such an obvious right move right now- why is anyone willing to take fiat credit in return for it?

Why would ANY gold holder sell right now? To make fiat profits that are likely to either devalue in gold terms incrementally day by day or be wiped out in a hyperinflation?

Can any of the Gold bugs explain to me why the people they buy from want their fiat? What's their motivation?

Anybody?

There are two kinds of "action" in a normal gold market. The first is the general movement of PM's (Gold, Silver, and to a lesser extent Palladium and Platinum) from weak hands to strong. This is the "Cash for Gold" market. People without the faintest idea of the real value of what they are selling, are getting a price way below spot by selling items for which they currently have no use. They are passing the gold into the refinery market, where it is turned into saleable gold for the second part of the market.

This is the trade and investment market. A person takes an item, adds value to it, and sells it. He takes all the Cash-for-Gold 9 carat jewellery and refines the copper out of it or melts it into new 9 carat gold wire; this gold wire is then turned into chain for the jewellers. He sells the items at a profit, because he cannot hold onto it for ever, he is just not wealthy enough to constantly accumulate, and must sell finished items to make a living. He just happens to be trading in gold rather than oil or handbags or whatever.

This does not nullify the truth of the bull market. I hope this explains the apparent paradox in the forums.

[Perishabull]

RB is the Jonathan Davis of Gold.

Marc Faber, George Soros, Jim Rogers, John Paulson, David Einhorn

Now, do you want to listen to them, who made billions, or Realist Bear?

Edited October 13, 2010 by Perishabull