Gold price dives through support to new low. Gold Bubble continues to deflate.; Gold price to drop another 15% this year say strategists at Societe Generale
Tweet Topic Started: 3 Apr 2013, 10:29 AM (37,652 Views)
ON April 10 this year the gld trust held 1183 tonnes now has 899, only authorised participants can aquire for real gold, another 25% less in the gld trust.
Goldman sachs tells their clients to sell. then turns around and buys to increase holdings by 540%
What a strangely confused article. So GS committed the perfect crime in trashing the gold price so they could redeem $500M worth of gold from the GLD ETF? I guess the COMEX daily volume is only about 5800 tonnes, so it would have been hard to buy it on the normal market. Except that the GLD ETF only holds "gold". I wonder if they might have felt ripped off by only redeeming "gold" instead of gold.
But hey - they have been amply punished for their crime. They bought that $540M worth of gold between $1320 and $1420 per oz, and now it's worth $1272.
And then later in the article he says that GS is setting up to commit the same crime this week to see if they can crater the price by another $160/oz, SO BUY NOW!!!!!!!!
Thatguy
15 Oct 2013, 03:47 PM
Might be worth a punt on gold today. How much longer will everyone be willing to hold US debt at no risk premium?
I think that was yesterday's punt. And maybe there will be another opportunity for the same punt in January?
But hey - they have been amply punished for their crime. They bought that $540M worth of gold between $1320 and $1420 per oz, and now it's worth $1272.
They didn't hold onto it, they used it to supply the Chinese and everyone else in the east who are big buyers. If they hadn't, and the physical gold supply had dried up, what would you imagine would have happened to the price?
There is far more profit for Goldman in the paper markets (all types) than in the spread in a few hundred tons of gold.
What a strangely confused article. So GS committed the perfect crime in trashing the gold price so they could redeem $500M worth of gold from the GLD ETF? I guess the COMEX daily volume is only about 5800 tonnes, so it would have been hard to buy it on the normal market. Except that the GLD ETF only holds "gold". I wonder if they might have felt ripped off by only redeeming "gold" instead of gold.
But hey - they have been amply punished for their crime. They bought that $540M worth of gold between $1320 and $1420 per oz, and now it's worth $1272.
And then later in the article he says that GS is setting up to commit the same crime this week to see if they can crater the price by another $160/oz, SO BUY NOW!!!!!!!! I think that was yesterday's punt. And maybe there will be another opportunity for the same punt in January?
Ripped off, there has been talk of them selling more paper gold than they have real gold, no surprises here and if not then 25% less for that market after about 283 tonnes has now been removed.
People have bought the physical like crazed animals after price drops, perth mint had record sales in april and we saw the shite the big banks overseas where up to early in the year.
Do you know where the big trouble mark is now herbie, I explained it to blondie a few days ago,over two posts, I have not looked myself, you may neeed a ruler ,but know it sits just above the 1170 mark from memory.
Gold stocks are starting to look very cheap, and our stocks have been smashed compared to say US gold stocks by comparison, some top ten us gold stocks down around 50% from a year ago ,or that they are half of what they were then , some aussie top 10 stocks are now 1/4 of a year ago, some 1/5 and 1/6th of only a year ago, one I have watched is now down to 7% of what it was worth in 2007 when gold was a lot less than now just prior to the gfc bs. its at a point where any realism has been thrown out the window , we had gold mining before the gfc but its seems the shareholders were unaware of it. there may be another big buying opportunatey like we saw late june for gold stocks if the price comes off a bit more and heads towards that 1170-1190 mark, some are already a bargain but they may still go cheaper.
They didn't hold onto it, they used it to supply the Chinese and everyone else in the east who are big buyers. If they hadn't, and the physical gold supply had dried up, what would you imagine would have happened to the price?
There is far more profit for Goldman in the paper markets (all types) than in the spread in a few hundred tons of gold.
You know, I am sure the Chinese can buy gold without the help of Goldmans.
But this also shows a fairly stunning lack of understanding of how the GLD ETF works (as does the article, by the way.)
When GLD was first setup in (I think) 2004, each share of GLD was worth 1/10 ounce of gold. Because gold has a negative yield (you actualy have to pay for storage in order to own it) the ETF managers sell of some gold periodically ion order to defray storage and management costs. It runs between 1/4 and 1/3 of a percent per annum, which is not bad for an ETF. Nevertheless today 1 share is worth about 0.097oz of gold.
Given that the ETF started with no gold and now has almost 1000 tonnes of the stuff, but had over 1200 tonnes at the peak, how does gold get in and out? This is where the authorized participants come in. The nature of an ETF is that the price of the shares and the NAV of the ETF will not track exactly without some management. If there is high demand for the ETF, the price of the ETF shares will get bid up and be selling at a premium to NAV. If there is a lot of selling, the price will go down and be at a discount to NAV.
HOWEVER. The "authorized participants", unlike everyone else who can only buy and sell shares from each other with cash, are allowed to either put gold in and get new shares or take gold out in exchange for shares that then get destroyed.
So if I am an authorised participant and I notice that the ETF is selling at a premium, I can transfer gold into the ETF and get shares back that are worth more and then sell them if they want. I can do the reverse if the ETF is selling at a discount. This way, the authorised participants get a little bit of arbitrage and the price is always kept close to the correct NAV ratio.
SO........
If Goldmans ended up the quarter with $550M more in GLD shares than they started, they almost certainly did not redeem any gold from the fund. In fact, they probably put gold *into* the fund.
I am always amused by the way goldbugs talk about "paper gold" without ever defining what they mean or even, in many cases, seeming to even know what they mean. Perhaps you could explain what you mean by paper gold and tell us all how the market for it distinguishes itself from the market for "no-paper" gold and why it is important.
The truth will set you free. But first, it will piss you off. --Gloria Steinem AREPS™
1310, it was at 1276 and went to 1318 in about five minutes,not rolling your eyes today I see,You might understand it a bit more one day herbie, if you lived in the euro or the US it might be a bit easier.
I have explained gold before ,in detail, but then again I have explained exactly what would happen with interest rates years ago, and also the job losses we will be seeing in the future years ago along with many other things, it either goes in one ear or straight out the other or people would just rather ignore it.
1310, it was at 1276 and went to 1318 in about five minutes,not rolling your eyes today I see,You might understand it a bit more one day herbie, if you lived in the euro or the US it might be a bit easier.
I have explained gold before ,in detail, but then again I have explained exactly what would happen with interest rates years ago, and also the job losses we will be seeing in the future years ago along with many other things, it either goes in one ear or straight out the other or people would just rather ignore it.
Yep, it's just a bit of fun for me MMM. I've got no real interest in it as an investment.
Though I find it's volatility 'exciting' (if that's the right word?) - When it's being volatile anyway.
But as I've said before, I've covered off on my family's jewellery needs for the next generation. So I've got 'enough'. (Though would buy a bit more if I reckoned it was cheap.)
A Professional Demographer to an amateur demographer:"negative natural increase will never outweigh the positive net migration"
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