Gold strategy in the current economy

[warpig]

I can only assume they've sold GLD and bought physical gold. They should have done it years ago...

In other news apparently Soros and Paulson dumped loads of GLD in the last quarter.

[DiggerUK]

If gold was widely available, the COMEX wouldn't have depleting inventory would it......

We know the COMEX won't default in terms of settlement, but they will default in terms of delivery.....

A run on warehouse gold is no sign of a looming refusal, or inability, to deliver, it just signifies demand is raised.

Comex are a warehouse, they don't settle anything. It is impossible for them not to be able to deliver.

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[warpig]

You've contradicted your own link. Are you saying price is proportional to inventory levels as per the article you've linked to or are you saying there is a run on gold, causing inventory levels to deplete..?

Consider using the term COMEX an expression to define the entire metal exchange process. Even the MSM refers to it in this context.

If it was impossible for the exchange to fail to deliver on mass, why are they failing to deliver in specific settlements?

A run on warehouse gold is no sign of a looming refusal, or inability, to deliver, it just signifies demand is raised.

Comex are a warehouse, they don't settle anything. It is impossible for them not to be able to deliver.

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[DiggerUK]

......If it was impossible for the exchange to fail to deliver on mass, why are they failing to deliver in specific settlements?

They are not failing to deliver....there are delays in delivery, that's all.

Deliveries are obviously being made, otherwise the stock levels would not be falling.

Supply bottlenecks occur in all trading scenarios. Even supermarkets run out of stock now and then.....and what happens when they do run short? they get in touch with suppliers and get stock in asap.

Anybody would think that the miners were suddenly going to find they have no gold to mine.

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[The Masked Tulip]

Silver is quite the independent thing isn't it - going off and doing something different to gold and the dow?

[weaker]

Thar she blows!!

now we get to see if the 1355-1360 margin calls ignite a real squeeze..

EDIT: should say, it's only my hunch that here are a lot of short stops in this region.

Edited August 15, 2013 by weaker

[Fully Detached]

Thar she blows!!

now we get to see if the 1355-1360 margin calls ignite a real squeeze..

It's certainly looking a little lively isn't it? Can't quite bring myself to hope it will be lasting, but lets' see.

[DiggerUK]

Calm down dears, it hasn't even reached it's June highs.

Edit; it's called volatility, nothing to get wet about.

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[DiggerUK]

World Gold Council, Press release: August, 2013

Just had delivery of this in my emails.

Haven't read it yet, so no idea what is in it as of now.

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[The Masked Tulip]

Isn't silver, and to some extend gold, a short covering rally. Once the shorts are covered we could retest lows?

[DiggerUK]

Isn't...gold, a short covering rally. Once the shorts are covered we could retest lows?

What it is, I don't know, but in the WGC press release I linked to, it had the following to say:

"•Second quarter gold demand of 856t (US$39bn) was down 12% compared with Q2 2012.", this refers to net figures on a global scale. So despite all that is happening, the overall demand for gold is very mute.

Lower demand usually leads to lower prices, so quite posibly we will retest those lows....who knows for now.

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[The Masked Tulip]

What it is, I don't know, but in the WGC press release I linked to, it had the following to say:

"•Second quarter gold demand of 856t (US$39bn) was down 12% compared with Q2 2012.", this refers to net figures on a global scale. So despite all that is happening, the overall demand for gold is very mute.

Lower demand usually leads to lower prices, so quite posibly we will retest those lows....who knows for now.

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I am not convinced by this silver rally. I know little about shorts but from what I have been following this looks like a short covering operation. It might spike up mid 24s in the coming few days before heading back down.

SLW - Silver Wheaton - would have been the share to ride on this rally though.

[warpig]

There has been several reports of the exchange settling with cash plus an additional premium as a substitute for physical delivery.

That's the problem, the supply isn't satisfying demand and this is during the lows. Imagine what it's going to be like when the gold rush comes back in earnest. It's very obvious to everyone but you, that there are supply problems and this is only going to get worse.

They are not failing to deliver....there are delays in delivery, that's all.

Deliveries are obviously being made, otherwise the stock levels would not be falling.

Supply bottlenecks occur in all trading scenarios. Even supermarkets run out of stock now and then.....and what happens when they do run short? they get in touch with suppliers and get stock in asap.

Anybody would think that the miners were suddenly going to find they have no gold to mine.

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[warpig]

Sounds like you're trying to downplay gold and silver moving off the lows. Silver usually leads gold out of the lows, so everything I see here looks normal, in fact it was over due.

SLW - Yes it was!

I am not convinced by this silver rally. I know little about shorts but from what I have been following this looks like a short covering operation. It might spike up mid 24s in the coming few days before heading back down.

SLW - Silver Wheaton - would have been the share to ride on this rally though.

[The Masked Tulip]

Sounds like you're trying to downplay gold and silver moving off the lows. Silver usually leads gold out of the lows, so everything I see here looks normal, in fact it was over due.

Nah, I am merely discussing the subject.

[warpig]

Gold and silver are so suppressed anything could happen at anytime and probably will...

Nah, I am merely discussing the subject.

[warpig]

Also don't forget about Rabobank and ABN Amro defaulting on gold deliveries. When it eventually comes out in the MSM, the gold and silver manipulation story, could be the biggest financial scandal ever told.

They are not failing to deliver....there are delays in delivery, that's all.

Deliveries are obviously being made, otherwise the stock levels would not be falling.

Supply bottlenecks occur in all trading scenarios. Even supermarkets run out of stock now and then.....and what happens when they do run short? they get in touch with suppliers and get stock in asap.

Anybody would think that the miners were suddenly going to find they have no gold to mine.

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[warpig]

Based on a letter to clients over the weekend (03/24/2013), it appears Dutch megabank ABN Amro is changing its precious metals custodian rules and "will no longer allow physical delivery." Have no fear, they reassuringly add, your account will be settled at the bid or offer price in the 'market' and "you need to do nothing" as "we have your investments in precious metals."

http://www.zerohedge.com/news/2013-03-24/another-gold-shortage-abn-halt-physical-gold-delivery

[chronyx]

http://www.zerohedge.com/news/2013-03-24/another-gold-shortage-abn-halt-physical-gold-delivery

First bullet point U kunt

[sombreroloco]

First bullet point U kunt

It means "you can". Incidentally "you c.unt" can be rendered as "Je klootzak".

[DiggerUK]

Also don't forget about Rabobank and ABN Amro defaulting on gold deliveries.......

Rubbish, neither bank defaulted, they simply stopped dealing in physical. All clients were given the option of a cash settlement, or they could transfer to another custodian. Nobodies gold was missing.

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[warpig]

Well spotted...

First bullet point U kunt

[Errol]

First bullet point U kunt

LOL.

[warpig]

Why did you just say my statement was rubbish and then resubstantiate it?

A cash settlement would be transferred to a new custodian, not physical gold. It's a massive leap of faith to conclude "nobody's gold was missing." In fact it's far more logical to conclude it was, why else would they stop delivery of bullion at the expense of losing customers? ~ Occam's Razor.

Why do you tirelessly defend this fractional reserve bullion system. You're part of the problem.

Rubbish, neither bank defaulted, they simply stopped dealing in physical. All clients were given the option of a cash settlement, or they could transfer to another custodian. Nobodies gold was missing.

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[DiggerUK]

....Why do you tirelessly defend this fractional reserve bullion system.....

There is no such thing as a "fractional reserve bullion system" it's a bit of deeply meaningful, but nonsensical, management speak.....aka, gold bug rubbish. Just like the rubbish that came about from those who couldn't read between the lines of a crap google translated document, or be bothered to research further. This was soon established at the time (go check Kitco Forums from the time) Clients had a choice, gold with another custodian, or cash. Don't you think we would have heard by now if that is what hadn't happened?

The World Gold Council report I linked to earlier, shows that demand for gold is 12% down overall from the same period a year ago.

With production from scrap and newly mined much of a sameness, that says there is more gold available now, than a year ago.

With supplies meeting a reduced demand, it seems that the reason for golds low price has an explanation that is a million miles from gatagoon stories.

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