Gold strategy in the current economy

[Flying Dutchman]

If your "due diligence" is based on what people say and the statements they link to on internet forums then it's not due diligence, it's dicking about before you gamble your money.

Wake up and do your own analysis

This is not financial advice

Back along I was quite happy not to have to "dick" about on forums, but as a saver I have been forced to seek a other ways to protect my wealth against inflation. The contributors here link to interesting bullish and bearish articles that help in lifting the veil on the secretive and opaque shenanigans in the pm's market.

"Analysis" do me a favour, I'm not stock-picking FFS.

FD

[eztiger]

Sorry if a repost,

1300 tonnes of leased gold allegedly missing from the BOE between April and June this year

clicky clicky

[SpectrumFX]

"Analysis" do me a favour, I'm not stock-picking FFS.

FD

So so far your internet forum due diligence has taught you that PM investment doesn't need analysis

Your funeral

[warpig]

Nice bounce. Seems the FED have backtracked on reducing QE...

Possible, the bear trend line from mid september last year is yet to be broken so a retest could technically be on the cards. The bears dont have alot of time left though, the 'summer doledrums' are almost at and end, the USD index is now very close to topping out and starting its next leg down and eastern seasonal eastern demand is waiting in the wings.

I'll make a guess that the spot price will bounce along the 1300 mark until the end of august before any serious trend breaking rises appear.

[warpig]

Investing.com - U.S. non-farm payrolls rose less-than-expected last month, official data showed on Thursday.

In a report, the U.S. Department of Labor said non-farm payrolls rose to a seasonally adjusted 162K, from 188K in the preceding month whose figure was revised down from 195K.

Analysts had expected U.S. non-farm payrolls to rise 184K last month.

http://www.investing.com/news/economic-indicators/u.s.-non-farm-payrolls-rise-less-than-expected-250966

[Errol]

Expect more fun this afternoon with the US Jobs report.

As I said, more fun and games.

[Errol]

So so far your internet forum due diligence has taught you that PM investment doesn't need analysis

Your funeral

Many financial advisors would say that 5% of your assets should be in precious metals. Nothing extreme or outrageous about that. That would only by £5000 out of £100,000. I'm not sure it requires much analysis, other than a bit of reading around the subject.

[SpectrumFX]

Many financial advisors would say that 5% of your assets should be in precious metals. Nothing extreme or outrageous about that. That would only by £5000 out of £100,000. I'm not sure it requires much analysis, other than a bit of reading around the subject.

So you're 5% PM's and that's what you've been advocating all these years?

[Errol]

So you're 5% PM's and that's what you've been advocating all these years?

Of course not. I'm not advocating anything. Everyone can make their own decision.

[Errol]

Barrick Gold Closing Mines to Curb Output as Price Drops

Barrick Gold Corp. (ABX) plans to either sell, close or curb production at 12 of 27 mines as the world’s largest gold producer tries to bolster profitability

http://www.bloomberg.com/news/2013-08-02/barrick-gold-closing-mines-to-curb-output-as-price-drops.html

[Mark Uttley]

Many financial advisors would say that 5% of your assets should be in precious metals.

Utter tosh. You are confusing assets with portfolio, and not for the first time, so I assume you either don't understand the difference, or that you are deliberately trying to mislead.

It's quite possible to have substantial assets and zero portfolio, in which case the correct holding of PMs is zero.

An obvious example would be an elderly couple, who own their £100K house and have £4K in savings. According to you, they should sell their furniture and stack up their front room with gold.

[From_Up_North]

Whats the best / safest way of making an investment in Gold ?

[Errol]

Utter tosh. You are confusing assets with portfolio, and not for the first time, so I assume you either don't understand the difference, or that you are deliberately trying to mislead.

It's quite possible to have substantial assets and zero portfolio, in which case the correct holding of PMs is zero.

An obvious example would be an elderly couple, who own their £100K house and have £4K in savings. According to you, they should sell their furniture and stack up their front room with gold.

lol lol.

[Errol]

Whats the best / safest way of making an investment in Gold ?

Bullion coins from a reputable dealer - coininvestdirect, Baird etc etc. Stick to the well known bullion coins.

[Errol]

COMEX Registered Gold Inventory Continues To Drift Lower

the great tension between supply, demand, and price continues on, and will unfold over the next few weeks until the end of this delivery period on August 31st.

http://jessescrossroadscafe.blogspot.co.uk/2013/08/comex-registered-gold-inventory.html

[DiggerUK]

......1300 tonnes of leased gold allegedly missing from the BOE between April and June this year clicky clicky

More evidence of Max Headbanger at work. It's time people recognised him for the comedian he is.

First thing to realise, is that there are a little over 310 tonnes of UK gold reserves.

Then you have to realise that the BOE has one of the biggest depositaries for gold in the world.

Most of this BOE gold is leased out, and that is all this guy was reporting. The headbanger was just spinning it up to be a story about gold that had 'disappeared' from the BOE vault, and is not the case......listen to the interview. From 13.12 if anybody can be bothered.

Can you honestly believe that 1300 tonnes of missing gold would not be a world scandal by now if true.

This non story is up there with the eternal nonsense with 'backwardation' and Comex about to run out of gold. Stories so "rare" that they have been coming up for, how many years now?

..._

[weaker]

More evidence of Max Headbanger at work. It's time people recognised him for the comedian he is.

First thing to realise, is that there are a little over 310 tonnes of UK gold reserves.

Then you have to realise that the BOE has one of the biggest depositaries for gold in the world.

Most of this BOE gold is leased out, and that is all this guy was reporting. The headbanger was just spinning it up to be a story about gold that had 'disappeared' from the BOE vault, and is not the case......listen to the interview. From 13.12 if anybody can be bothered.

Can you honestly believe that 1300 tonnes of missing gold would not be a world scandal by now if true.

This non story is up there with the eternal nonsense with 'backwardation' and Comex about to run out of gold. Stories so "rare" that they have been coming up for, how many years now?

..._

Mate, it's not missing, it's leased.

The IMF actvely encourages the Central Banks of the world to list their "Gold and Gold Swapped" as one line item under the assets column.

http://www.imf.org/external/np/sta/ir/IRProcessWeb/data/ECB/eng/CURecb.HTM

(4) gold (including gold deposits and, if appropriate, gold swapped)5

so you see, we plebs will never know what they did with it, till it's all gone.

EDIT: why would they need to list gold swapped as an asset?

EDIT: Not likely to be an isolated case. The 1300 tonnes could easily come from many sources stored in London.

http://austriantimes.at/news/Business/2012-11-22/45593/Call_to_bring_Austrian_gold_back_home_from_the_UK

Since 2007 Austria's National bank had had a constant reserve of around 280 tons of gold. Through leasing of its gold the Austrian National Bank has in the last 10 years earned around 300,000,000 euros.

The bank's governor Wolfgang Duchatczek revealed the statistics after a question by social Democrat MP Matznetter who wanted to know why Great Britain was regarded as the best place to store Austrian gold .

Duchatczek said: "The bank has always made it clear that our gold reserves are stored at the main gold trading centres."

an old analysis:

http://www.gata.org/node/5275

Edited August 3, 2013 by weaker

[DiggerUK]

Mate, it's not missing, it's leased....

The IMF actvely encourages the Central Banks of the world to list their "Gold and Gold Swapped" as one line item under the assets column....... we plebs will never know what they did with it, till it's all gone.

EDIT: why would they need to list gold swapped as an asset?.......

Yes, it is leased. All very normal....so why the hoohah from Max Headbanger? Chances are that the reduction in tonnage in the vault is because it has gone somewere other than the BOE vault....so what?

It's listed as an asset by whoever owns it....same as Hertz cars leased out, show as an asset on Hertz books.

Whoever has leased it, puts it as an asset as part of normal double entry bookeeping. They also have the fees they pay as a liabilty on the other side of the double entry accounts. edit, and they have the liabilty to pay it back on the other side of the double entry.

It's a non story....just like backwardation, and Comex defaulting...(not)

..._

Edited August 3, 2013 by DiggerUK

[weaker]

Yes, it is leased. All very normal....so why the hoohah from Max Headbanger? Chances are that the reduction in tonnage in the vault is because it has gone somewere other than the BOE vault....so what?

It's listed as an asset by whoever owns it....same as Hertz cars leased out, show as an asset on Hertz books.

Whoever has leased it, puts it as an asset as part of normal double entry bookeeping. They also have the fees they pay as a liabilty on the other side of the double entry accounts.

It's a non story....just like backwardation, and Comex defaulting...(not)

..._

See, the thing is it's listed as an asset by whomever bought the gold from the bullion bank. It's also listed as an asset by the Central Bank who leased it.

So, the gold itself is counted as an asset by two parties, at the very least.

[DiggerUK]

See, the thing is it's listed as an asset by whomever bought the gold from the bullion bank. It's also listed as an asset by the Central Bank who leased it.

So, the gold itself is counted as an asset by two parties, at the very least.

Yes, and is normal bookeeping practice. Nothing fraudulent here...move along please.

..._

[weaker]

Yes, and is normal bookeeping practice. Nothing fraudulent here...move along please.

..._

Erm.. nope.

it's dandy until they both actually want it.

[DiggerUK]

Erm.. nope.

it's dandy until they both actually want it.

Both of them realise, that they both can't have it at the end of the day.

Just like that nice car you rent has to go back to the rental company, unless you carry on paying the leasing charges.

Get over the puerile fallacy of fraudulent manipulation etc., it doesn't exist.

It's way past my bedtime. Time for my cocoa. Night, night.

..._

[robmatic]

See, the thing is it's listed as an asset by whomever bought the gold from the bullion bank. It's also listed as an asset by the Central Bank who leased it.

So, the gold itself is counted as an asset by two parties, at the very least.

Obviously. And as a liability by one of the parties, surely?

[weaker]

Both of them realise, that they both can't have it at the end of the day.

Just like that nice car you rent has to go back to the rental company, unless you carry on paying the leasing charges.

Get over the puerile fallacy of fraudulent manipulation etc., it doesn't exist.

It's way past my bedtime. Time for my cocoa. Night, night.

..._

That's not the case, because someone like Bill Kaye (see link below) has the gold in their safe.

You think Bill is going to give up his recast gold bars, to give back to a Central Bank, who leased it to HSBC, who sold it to him? Never gonna happen.

So, the Central Bank is never getting that gold back. Holding it in the safe is the ownership, period.

link to Bill Kaye:

http://www.24hgold.com/english/contributor.aspx?article=4437262556G10020&contributor=Chris+Powell

I suppose the question for me really is: are the leases rolled over for years on end?

Good night, btw.

Obviously. And as a liability by one of the parties, surely?

I'd have thought so too, but it appears not. Both Central Bank and (e.g. as per above) Bill Kaye count the gold as an asset.

Only the party with the gold in the safe can really say that, though, can't they..?

Edited August 3, 2013 by weaker

[EmpiricalBear]

I'd have thought so too, but it appears not. Both Central Bank and (e.g. as per above) Bill Kaye count the gold as an asset.

Only the party with the gold in the safe can really say that, though, can't they..?

The CB lists the gold as an asset (they can, because they have the leasing relationship with HSBC)

Kaye has an asset, the actual gold.

Most likely

HSBC have a liability to the CB to return the Gold (which they would have to buy from someone else if it had to be delivered)

HSBC also have the money in the bank they got from selling it to Bill Kaye, they could use part of that money to buy a future or option to cover that liability to the CB.

Nothing wrong here, all normal it seems to me.. thats what derivatives and banking is all about, the virtualisation of assets to create more liquidity.

The whole thing goes kerflump if HSBC didn't do their sums correctly and we're back to 2008. In that case, Bill Kaye could well be in the best position.

But at no point has any Gold 'disappeared' mysteriously.