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You are right. There never was a shortage of gold, only gold at the retail level. Gold in retail sizes was leaving bank vaults around the world, but there was still plenty of gold. If I want to buy wholesale gold, it has never been a problem and is very liquid. Premiums for 400 oz bars were tiny to move your gold to "allocated".


Ultimately, to make a profit on your investment you have to sell it. I wonder what would happen when the ETF investors head for the door... Again it is all about confidence. When confidence is around that gold is going up we won't see any withdrawls, however, if confidence gets shot you could see a nasty pullback.


Just to be clear, I'm not suggesting gold will go up or down, but observing that we are seeing some mania around the gold scene at the moment, not dissimilar to many other asset classes over the years. Short/Medium term direction will be governed by how strong the mania is versus reductions in demand from other areas.

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Kruggerrand Demand Pushes Output of Gold Coins to 23-Year High -

By Carli Lourens


Feb. 23 (Bloomberg) -- Rand Refinery Ltd., the world's largest gold refinery, increased coin output to the highest in about 23 years as demand for South African Krugerrands rose.


The Johannesburg refinery last month doubled weekly production to 20,000 ounces of blank coins for minting by the State's SA Mint as Kruger coins, Johan Botha, head of precious metals sales, said by phone from the city today.


Gold, the best-performing metal in 2008, is trading near its March 17 record of $1,032.70 an ounce as investors seek safer bets than equities and currencies. Goldman Sachs Group Inc. raised its three-month gold forecast by 43 percent to $1,000 an ounce this month.


"Demand for our blanks is higher than we've seen since 1986," Fourie said. "In the early 1980s gold then was a novelty and people wanted to own physical gold."


Rand Refinery has manufactured, marketed and delivered more than 46 million ounces of Krugerrands since the gold coin was introduced in 1967, according to the company's Web site.


"Record stock market lows are translating into record highs for gold and Krugerrands," Alan Demby, chairman of the South African Gold Coin Exchange, said in an e-mailed statement last week. Investors are "piling into Krugerrands and Nelson Mandela gold medallions," he said

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I'm not suggesting gold will go up or down, but observing that we are seeing some mania around the gold scene
Well said, Flash. That's been my point all along:

Once we allow excitement and prejudice to override reason, we can find "statistics" and populist "opinion" galore to quote in support. We must guess each day where a stock or share may be headed; how else could we trade? But a daily reality check is essential; and the only tool suited for that purpose is an indisputable list of actual trades; some people prefer a graphic presentation: a chart.

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The same people that ran oil and uranium up and every other commodity are playing the last scene, running up gold then smashing it down to nothing.


Cost of producing gold is reducing dramatically, as price of diesel has crashed. So fundamentally unless USA falls into the earth and disappears gold will not be high forever, as it doesn't pay a yield.


At 1000 what is the reward:risk ratio. Who really thinks its going to 5000 lol? If its actually 5000 then you probably won't have to go to work anymore as everyone will be unemployed as there will be no economy lol

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Flash, there may have been no wholesale shortage then, but according to your pie chart which was 2 years

old, IMHO there is one now following the ETF's buys and dropping mine production, you quite rightly raise

the ETF issue, but in effect that issue is really one of confidence as you say, but is there any sign that anybody

has any confidence in anything else currently?


The hysteria discussed was always inevitable, lets face it the llast 12 weeks have seen the few good ASX gold stocks

double or triple, the tyre kickers are always late on the scene!


As spot gold in USD approaches the recent all time high one expects this sort of hysteria, for those of us that

believe this time its different--and are sitting on profits--- some of us enjoy this negativity, because history

shows that when every body screams GET OUT--do the REVERSE!!!


When the gold bulls screamed GET IN---we all got laughed at!!!!


INFLATION and its brother HYPERINFLATION are some way down the track.


Given the geo politcal turmoil emerging following the inability of trillions of additional

debt to solve anything, one must be wonder what follows now?

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I was about to ask the same question. Too many other variables in a mine to make such blanket statements - grade changes, ore disposition, production rates etc. Unit production costs seem to be rising from my observation, but can't look into it today - at work!
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when does a recession become a depression? .. when there's a solvency problem with the banking system. and aren't the bulk of the banks in the U.S. and Europe technically insolvent?

so what kind of depression? .. well judging from the massive wealth destruction .. a worldwide deflationary depression and in such a deflation i would expect gold to increase wrt currency. it is a fact that the price of Homestake gold increased seven times in the 1930's.

with the current banking problems in Eastern and Western Europe this week, the deflationary trend seems to be accelerating.


where is the best place to have one's precious capital? .. i think RMB, gold and good companies selling at bargain basement prices.

the accelerating influx of money into gold EFTs is a major driver for the price of gold because they have to buy the physical. why should that influx of money suddenly stop now?



i expect the middle class in so many countries is going to be decimated.

so what's the smartest thing to do? .. i think to hedge one's total wealth against gold


Some facts ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¦


# The open interest in gold contracts on Comex is 60% of what it was one year ago at the ATH.

# The contango spread of the contract months for the rest of 2009 looks to have lessened.


It's obvious .. gold will go to new ATHs.

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At 1000 what is the reward:risk ratio.


Good question. Why would "they" want to stop it at $1000? Everything is in their favour NOT to in my view.


Why would $5000 gold mean "no economy"? It may be symptomatic of a deeper economic malaise, but where is the direct/indirect connection?

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