GOLD

[ologhai]

See Mr Jones.... KEEP THE FAITH!

 

I'll consider myself told!

 

Although, in my defence, I haven't sold anything yet, and I did buy some more the day before yesterday!

[alexreeve]

Goldfinger suggested shorting as a solution, not me.

Agreed, sorry just responded to the last quote mentioning it.

The problem would arise when large amounts were involved in a market with many sellers - if the next day's fix is lower than the cash price they have to pay out today, then their cash reserves are at risk. Given the speed that gold moves at, that could be a bigger risk than one would wish to see.

Obviously didn't explain clearly enough:

They offer to sell small amounts at spot price, their market traders can do this without distorting the market dramatically.

 

If you want to liquidate more than that, it is done at the price of the next London AM fix (I think, maybe next London Fix AM or PM). So you get the money that the amount you are selling is worth at the next London AM fix.

 

They do not pay you the spot price at the time you order the sell unless it is under the limit locked value.

 

Completely agree there is a disadvantage in a collapsing market that it can take up to 24 hours to sell. There are pros and cons to all ways of holding gold.

[Magpie]

Agreed, sorry just responded to the last quote mentioning it.

 

Obviously didn't explain clearly enough:

They offer to sell small amounts at spot price, their market traders can do this without distorting the market dramatically.

 

If you want to liquidate more than that, it is done at the price of the next London AM fix (I think, maybe next London Fix AM or PM). So you get the money that the amount you are selling is worth at the next London AM fix.

 

They do not pay you the spot price at the time you order the sell unless it is under the limit locked value.

 

Completely agree there is a disadvantage in a collapsing market that it can take up to 24 hours to sell. There are pros and cons to all ways of holding gold.

 

Ah, that might help to protect GM in this scenario then.

 

I think they'd survive to be honest, I just imagine that a rapidly falling market would cause a lot of stress and cause a lot of customers to be dissatisfied with the potential delays and limits that would be created. I'd be far more genuinely worried about a gold service that didn't allocate gold as then I'd be concerned that they were operating a fractional system.

 

[G0ldfinger]

Well, for a start, if they need to start shorting in a turbulent market, it increases their chances of making cash losses that increase the danger of going out of business.

? GM would have no risk of losses, since they would lock in a price their customers have a agreed to (market price at a specific date/time) beforehand.

[G0ldfinger]

Ah, that might help to protect GM in this scenario then.

 

I think they'd survive to be honest, I just imagine that a rapidly falling market would cause a lot of stress and cause a lot of customers to be dissatisfied with the potential delays and limits that would be created. I'd be far more genuinely worried about a gold service that didn't allocate gold as then I'd be concerned that they were operating a fractional system.

Any stock broker has exactly the same problems.

[Magpie]

Any stock broker has exactly the same problems.

 

Very true.

 

[Magpie]

Overall I think you guys have persuaded me that Goldmoney would probably survive a crash - seems as though there are enough safeguards there, unless it's such an awful crash that no-one at all is buying (pretty unlikely).

 

I do think the feedback mechanism caused by them selling to cover orders would be significant, but that would occur however gold was being sold to a reluctant market, I guess.

 

I'm not entirely convinced by the 'bailment' legal status of the gold, but hopefully that will never be tested. :smile:

[Justin Thyme]

Having seen the action in gold today I fully expected to see a few more pages on this thread.

 

Isn't it nice to see gold out on its own today. WTI is off but our stuff is up 14 bucks - could this be a turning point ?

[bitbigt]

I'll consider myself told!

 

Don't listen to the gold bulls (some of them are obsessive) ...just listen to the sound logic of their arguments!

 

...an important distinction

 

[wren]

Overall I think you guys have persuaded me that Goldmoney would probably survive a crash - seems as though there are enough safeguards there, unless it's such an awful crash that no-one at all is buying (pretty unlikely).

 

I do think the feedback mechanism caused by them selling to cover orders would be significant, but that would occur however gold was being sold to a reluctant market, I guess.

 

I'm not entirely convinced by the 'bailment' legal status of the gold, but hopefully that will never be tested. :smile:

My feeling is that allocated physical (to me allocated is to be counted as physical) is not for short-term speculation. Those who are worried about a "crash" might try ETFs or spread betting.

 

I don't know law but BV have made great efforts to emphasize that they do not own the metal which the customers own. They are custodians and the owners pay for the storage and insurance. One thing I have noted is that the bailment law they refer to is under English Law. What the situation is in Swiss and American law I don't know, and whose law would apply to the holdings in those countries I don't know.

 

About the effect of GM selling onto the general markets - surely they are peanuts relative to the global market. So any amount of selling has its proportional effect on the global market but theirs would be small.

 

As I said if you want short-term speculation it's probably not for you.

 

But all the same nice to read your incisive questioning.

 

[bitbigt]

Its in the air... can't you smell it?

Golds sentiment has changed. It has gone from being something that everyone felt (or even 'KNEW') was falling and ought to fall (while moving from 1000 to 850) to something that many people now feel may well have had its bottom. Its a self-fulfilling prophecy. The TRUTH Value has risen, and so will golds price

 

...can you smell it now?

 

If you can, so can everyone else, and that's why the TRUTH Value is moving on upwards.

 

Yipee!

 

 

[marceau]

An important day coming tomorrow, I'm sure there is going to be an attempt at $900 following today's action (which I thought was really very impressive). If we can get there and hold till the close we'll be set to kill this stupid correction off once and for all. I'll be watching tomorrow's trading like a hawk, if we get a close above $900 I'm pretty sure I'll be jumping back in with both feet.

 

However....

 

If we fail below $900, or worse still at resistance around $895 then we're set up for another swan dive.

 

If we don't bother with a push up tomorrow and fall back down towards $874-$865 then I'm guessing we'll consolidate for a short while before another go at the high $800s, but it really could swing either way.

 

I haven't decided on my strategy for tomorrow yet, but I'm sure it will keep me awake tonight. In the meantime I do have a small long in place at $875, so if gold does really rocket I won't completely miss out.

 

Just one more day of rises and I can be a full on bull again!

[wren]

I'll consider myself told!

 

Although, in my defence, I haven't sold anything yet, and I did buy some more the day before yesterday!

If you are a serious long-term investor you need to hang on.

If I had a pile of cash to spend I'd be taking this as a buying opportunity (probably cost-averaging in over multiple weeks). But, of course, I believe the fundamentals are still sound.

[marceau]

...can you smell it now?

 

If you can, so can everyone else, and that's why the TRUTH Value is moving on upwards.

 

Yipee!

 

 

Still way too early to count your chickens, I'd save that until after we've gone over $900 decisively. It's easy to lose perspective when you concentrate on the short term, a quick look at the long term charts really puts this week's rises into context.

 

We've fallen so far that we have to get some massive updays to undo the damage, we may well get one tomorrow, but even if we do we'll still need far more to ensure the bears don't seize back control. A technical uptrend against falls of that size can be overturned in an instant and we can restest the lows, an annoyance if we're at $870, a tragedy if we're at $940. Today's action only really tells us that we should get an attempt at $900, you can't draw any conclusion further than that.

 

Yes, the fundamentals we believe in support us. But they haven't helped much over the past month so there's no guarantee that they'll help in the next month. All I'm doing is urging caution, quite often the safety nets we see in the market only exist in our own heads.

 

[Newbear]

Does anyone know the volume on this uptrend - strong or weak?

[G0ldfinger]

With WTI at $124, gold could trade at $1,825 today without being particularly expensive.

[electroweak]

Still way too early to count your chickens, I'd save that until after we've gone over $900 decisively. It's easy to lose perspective when you concentrate on the short term, a quick look at the long term charts really puts this week's rises into context.

 

Thanks Marceau, you are right. that down-channel on the 3-Month chart has still to be broken decisively, and I believe if we get over $900, the bulls are back in control. However, the powers that be must also know this, I'm sure. I just can't believe it would be that easy. Made some nice profits today trading physical (EDIT:sold right at the top! very unusual for me). Am now long (Edit: at $881), hoping!

[Bobsta]

Does anyone know the volume on this uptrend - strong or weak?

I can't speak for volume but one thing that I find interesting is Royal Gold's increase today. It's been struggling for the past week or so and has shot up over 5% today(!) ... Is this a sign that investors feel the current gold retracement / bear run is coming to an end?

[Steve Netwriter]

I was extrapolating - they don't actually say they couldn't reduce the limit to zero do they? They probably wouldn't though because of the panic it would cause.

 

 

 

But I thought there was no risk with this system? Now it seems there is a risk, so maybe my argument isn't complete balderdash.

 

If all the vaults were hit by a nuclear attack, AND the insurers went bust, then you'd lose your gold.

There is ALWAYS some risk in EVERYTHING.

 

My question to you. Why the concern about GM & BV ?

Have you equally detailed concerns about a house you own, or money in the bank, or shares, or your car ?

Are you asking because this is gold ?

And what about silver. GM do silver too. Do you have the same detailed questions about silver ?

I ask because I want to know whether there is an anti-gold view causing these concerns.

 

I would hope most people who have invested with GM & BV will have read all the information covered in the last few pages on here, and will already have satisfied themselves of the risks involved.

 

[Steve Netwriter]

Get the volume here:

http://bigcharts.marketwatch.com/advchart/...me=8&freq=1

 

Just select your period.

 

[wren]

If all the vaults were hit by a nuclear attack, AND the insurers went bust, then you'd lose your gold.

There is ALWAYS some risk in EVERYTHING.

Just that this reminds me of this hypothetical scenario which has been on my mind recently.

 

A massive forest fire is raging and is now 200 metres from my house. Wind strong and unfavourable (i.e. my way).

 

Do I jump on the phone to cancel my house insurance?

 

The insurance company might go bunkrupt and default, I know. But still.

[G0ldfinger]

...

My question to you. Why the concern about GM & BV ?

...

Funny, isn't it? Some people are so concerned about gold, but they buy virtually everything else, with most of it being much riskier.

 

For myself, I try to minimize the amount of Sterling I am holding. I try to have a sufficient emergency fund of coins and notes, but I only hoard English notes, since Scottish ones etc. can't really be trusted. All in all, apart from this small emergency stash, I try to get rid off Sterling as soon as I get hold of it. And I wouldn't trust any bank too much either.

[Magpie]

If all the vaults were hit by a nuclear attack, AND the insurers went bust, then you'd lose your gold.

There is ALWAYS some risk in EVERYTHING.

 

My question to you. Why the concern about GM & BV ?

Have you equally detailed concerns about a house you own, or money in the bank, or shares, or your car ?

Are you asking because this is gold ?

And what about silver. GM do silver too. Do you have the same detailed questions about silver ?

I ask because I want to know whether there is an anti-gold view causing these concerns.

 

I would hope most people who have invested with GM & BV will have read all the information covered in the last few pages on here, and will already have satisfied themselves of the risks involved.

 

I was following up a train of thought on those two in the Socratic fashion. As it happens, I feel fairly reassured that people here have looked into these questions and understand them - I have had some very clear explanations, interesting to hear.

 

I'm not anti-gold, I'm a gold sceptic. I've encountered some very intelligent goldbugs and also some boneheads. At various stages in my internet rambling I have seen people assuming that unallocated gold was safer than fiat currency, trusting that the Liberty dollar was an idealistic scheme rather than a scam, or whatever. But in this case, I think you guys seem to know your stuff and that my doubts were unfounded.

 

I suppose my interest in gold is very much a theoretical one. I'm fascinated by the economic and philosophical questions it raises. Not that concerned about the investment side of things. But as I know and think a fair amount about it, it makes sense to me to occasionally ask pertinent questions that people may not have considered. At times it may seem like trolling, of course. But don't mistake it for anti-gold sentiment. Would someone asking questions in 2005 about what would happen to Northern Rock in the case of a property crash have been "anti-property"? Gold inspires a degree of fanaticism, and historically this has sometimes blinded people to risks. In this case I don't think that's the case, but no harm in asking the questions from time to time.

 

[Magpie]

Just that this reminds me of this hypothetical scenario which has been on my mind recently.

 

A massive forest fire is raging and is now 200 metres from my house. Wind strong and unfavourable (i.e. my way).

 

Do I jump on the phone to cancel my house insurance?

 

The insurance company might go bunkrupt and default, I know. But still.

 

Nice one.

 

But what does gold actually insure you against? The collapse of fiat? The collapse of society?

 

it's insurance against inflation of course, but one that can backfire badly. If I had trusted it as insurance against inflation any time from 1980 to the late 90s, I think I'd have cancelled my policy long ago and found a new insurer.

[wren]

For myself, I try to minimize the amount of Sterling I am holding. I try to have a sufficient emergency fund of coins and notes, but I only hoard English notes, since Scottish ones etc. can't really be trusted. All in all, apart from this small emergency stash, I try to get rid off Sterling as soon as I get hold of it. And I wouldn't trust any bank too much either.

I haven't lived in the UK for a long time and lived only in England. After one visit to Scotland I had a few Scottish pound notes (when England was over to coins only) which were readily accepted in Southern England.

 

My question is, do you fear that Scottish notes might some time be less reliable?