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Gold, Discussion
nipper
post Posted: Jul 4 2020, 05:10 PM
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With so much medical, economic, and political uncertainty, whats the best asset class for investor allocations today? The best asset class is also the oldest asset class gold.

For the past three months, gold has been trading in a narrow range between US$1,685 per ounce and US$1,750 per ounce (thats a 1.9% range above or below the central tendency of US$1,720 per ounce).

In recent days, that range has narrowed further to a US$1,7201,745 per ounce range, a mere 0.7% above or below the US$1,732.50 centre of the range.

When trading in a volatile asset narrows to that extent, its a sign that the asset is ready for a material technical breakout. The question is will gold breakout to the upside or downside?

Here are the fab four signs that gold will break out to the upside:

The first sign is that its already happening. In early morning trading on 22 June, gold broke out to US$1,770 per ounce. Thats a decisive break above the prior US$1,750 per ounce high end of the recent trading range. Of course, were not day traders and another pullback is always possible. Still, this kind of decisive move is confirmation that the upside breakout thesis is correct.

The second sign is continued strong buying of gold by central banks. The central banks as a whole went from net sellers to net buyers of gold in 2010. The recent buying has been growing larger, now around 500 tonnes per year. Thats a huge amount considering that the total official supply of gold is only 34,000 tonnes. When central banks are buying, you should ask yourself what theyre seeing that everyday investors may be missing.

The third factor is that global mining output is flat at around 3,500 tonnes per year. Output is not going down, but gold is getting harder to find despite low costs of capital, higher gold prices, and improved technology. When supply is flat and demand is up, then prices have nowhere to go but up.

The fourth factor is the emergence of a two-tier market. Gold futures prices and London market prices are around US$1,740 per ounce recently. But, if you call a real dealer to buy real gold, the price they quote is spot plus commission. Thats fine, but the commissions have been expanding from 2% to 4%, to 10%, and even higher in some cases.

This means that US$1,740 per ounce gold is really US$1,915 per ounce with a 10% commission. That higher commission is not the result of dealer greed. Its the result of scarcity and the dealers efforts to balance supply and demand.

What it really means is that real price of gold is closer to US$1,850 per ounce once the excess commission is added to the spot price. When it comes to gold prices, forget New York and London. Real prices are already higher than you know.

Gold is an inflation hedge for obvious reasons. It is also a deflation hedge because deflation will cause central banks to create inflation by raising the price of gold. Gold is also liquid in all states of the world. Physical gold cannot be electronically hacked, frozen, or seized. A 10% allocation of investible assets to gold is the best cure for COVID-19.

Jim Rickards



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

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nipper
post Posted: Jun 13 2020, 11:20 AM
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Gold to benefit from ongoing Fed Intervention

https://www.sharecafe.com.au/2020/06/12/gol...d-intervention/

1. Equities are expensive
2. Fed Policies Exacerbate Income Equality
3. Which brings us to gold
4. Silver emerging from Gold's shadow
QUOTE
Summary

There is a remarkable disconnect between Wall Street and Main Street. Markets have rallied sharply due to the unprecedented amount of liquidity injected into them, while most investment funds remained underweighted, and are now being forced back into the markets.
The economic and financial damage will be long-lasting and will provide ongoing support for the current precious metals rally. Gold and silver have a major role to play and there is strong upside potential with respect to both, especially if we use their post-GFC price performances as a guide ..




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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
mullokintyre
post Posted: Jun 10 2020, 10:26 AM
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Maybe time for another gold run.
Most of mine up today.
RMS is up on strength of some good drill results.
Mick



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nipper
post Posted: May 30 2020, 03:59 PM
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The Case for Gold
QUOTE
...physical gold has zero credit risk, is highly Iiquid, has generated strong long-term returns and has proved to be an effective hedge against a range of unpleasant economic outcomes, of which high inflation is just one.

https://www.livewiremarkets.com/wires/gold-...-inflation-myth

plus; Key similarities (4) and differences (7) between the GFC and COVID-19



--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
mullokintyre
post Posted: May 27 2020, 06:01 PM
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In Reply To: mullokintyre's post @ May 18 2020, 10:18 AM

And just like that, it gets crushed.
First time for six weeks its has been below 2600.
Time for some consolidation, keep ones powder dry until the next run/
The funnymentals have not changed, every CD is QE'ing like there is no tomorrow.
Debasing fiat currencies never ends well.
Mick



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sent from my Olivetti Typewriter.
 
mullokintyre
post Posted: May 18 2020, 10:18 AM
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Gold smashed the 1700 USD level, and the asian markets are pushing it towards the 1800 level.
Lifes good.
Mick



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sent from my Olivetti Typewriter.
 

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mullokintyre
post Posted: May 18 2020, 10:18 AM
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Gold smashed the 1700 USD level, and the asian markets are pushing it towards the 1800 level.
Lifes good.
Mick



--------------------
sent from my Olivetti Typewriter.
 
mullokintyre
post Posted: May 18 2020, 10:18 AM
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Gold smashed the 1700 USD level, and the asian markets are pushing it towards the 1800 level.
Lifes good.
Mick



--------------------
sent from my Olivetti Typewriter.
 
mullokintyre
post Posted: Apr 17 2020, 11:12 AM
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Sprott money are harping on about the iminent collapse of the paper derivitive gold market.
Maybe THIS time they are right.
From Sprott Money


QUOTE
These are dark times for The Bullion Banks. Their Fractional Reserve and Digital Derivative Pricing Scheme is in great peril as refineries, miners, and mints all shut down in response to the coronavirus pandemic. Will these Banks be able to scrounge up enough physical metal to keep their scheme afloat through June? That remains an open question.

You may recall that we've been warning of the outrageous volume of COMEX EFPs (Exchange For Physical) for years. For the calendar years 2018 and 2019, the COMEX swapped out over 14,000 metric tonnes of contracts for alleged "physical metal" in London. And this process grew even more extreme in 2020, as the first three weeks of the month saw 290,000 COMEX gold contracts "exchanged" this way. Here's the link from the last post dedicated to this subject, written on March 10: https://www.sprottmoney.com/Blog/comex-gold-efp-us...

For today's discussion, let's begin with a brief, simplified summary of how we got here over the past few weeks: • The Banks swap 290,000 COMEX contracts (over 900 metric tonnes) into EFPs in just the first fifteen trading days of March.
The Fed announces QE∞ on Monday, March 23. COMEX gold price soars over $100.
A party or parties seek actual, immediate delivery of COMEX 100-oz bars through EFP.
COMEX must admit that it has no 100-oz bars to deliver on Tuesday, March 24.
CME and LBMA make a joint announcement on Wednesday, March 25 that a new settlement contract will be introduced for Apr20 delivery. This contract will feature "delivery" of fractional ownership of 400-oz London bars.In short, with an unexpected global supply squeeze, the COMEX was caught without enough deliverable gold. Through the change of rules shown above, the exchange (and CME/LBMA) have been able to scrape together enough gold to maintain the illusion of physical delivery thus far through the Apr20 delivery period. But it hasn't been easy. As you can see below, there have already been nearly 30,000 contracts delivered this month...more than 3X the average volume of Aprils past.
As the supply squeeze continues—with many mines and refineries still shut down—the COMEX should expect these delivery issues to continue in May and June. Already we're seeing total open interest of the "non-delivery month" of May20 surge—going from 1,228 contracts late last week to over 4,500 contracts on Monday, April 13. What will happen if this number surges above 10,000 in the days before deliveries begin on April 30?COMEX Search & Seizure - Craig Hemke (April 14, 2020)
COMEX Search & Seizure - Craig Hemke (April 14, 2020)
By Craig Hemke 2 days ago 54409 Views 4 comments
April 14, 2020

These are dark times for The Bullion Banks. Their Fractional Reserve and Digital Derivative Pricing Scheme is in great peril as refineries, miners, and mints all shut down in response to the coronavirus pandemic. Will these Banks be able to scrounge up enough physical metal to keep their scheme afloat through June? That remains an open question.

You may recall that we've been warning of the outrageous volume of COMEX EFPs (Exchange For Physical) for years. For the calendar years 2018 and 2019, the COMEX swapped out over 14,000 metric tonnes of contracts for alleged "physical metal" in London. And this process grew even more extreme in 2020, as the first three weeks of the month saw 290,000 COMEX gold contracts "exchanged" this way. Here's the link from the last post dedicated to this subject, written on March 10: https://www.sprottmoney.com/Blog/comex-gold-efp-us...

For today's discussion, let's begin with a brief, simplified summary of how we got here over the past few weeks: • The Banks swap 290,000 COMEX contracts (over 900 metric tonnes) into EFPs in just the first fifteen trading days of March.
The Fed announces QE∞ on Monday, March 23. COMEX gold price soars over $100.
A party or parties seek actual, immediate delivery of COMEX 100-oz bars through EFP.
COMEX must admit that it has no 100-oz bars to deliver on Tuesday, March 24.
CME and LBMA make a joint announcement on Wednesday, March 25 that a new settlement contract will be introduced for Apr20 delivery. This contract will feature "delivery" of fractional ownership of 400-oz London bars.
https://www.nasdaq.com/articles/exclusive-c...wn-sources-2020
In short, with an unexpected global supply squeeze, the COMEX was caught without enough deliverable gold. Through the change of rules shown above, the exchange (and CME/LBMA) have been able to scrape together enough gold to maintain the illusion of physical delivery thus far through the Apr20 delivery period. But it hasn't been easy. As you can see below, there have already been nearly 30,000 contracts delivered this month...more than 3X the average volume of Aprils past.
As the supply squeeze continues—with many mines and refineries still shut down—the COMEX should expect these delivery issues to continue in May and June. Already we're seeing total open interest of the "non-delivery month" of May20 surge—going from 1,228 contracts late last week to over 4,500 contracts on Monday, April 13. What will happen if this number surges above 10,000 in the days before deliveries begin on April 30?
And what will happen if the next "delivery month" of Jun20 sees more delivery requests than the COMEX is fielding here in April? What if there is a demand for 40,000 or 50,000 deliveries? That would be 5,000,000 ounces. From where would COMEX source the gold then?

For now, an unprecedented disconnect continues to exist between the spot and front month futures price. This is indicative of tight supply and a failure of confidence in future delivery. This was the topic of last week's article. You continue to be told by System Apologists that "the gold is there, it's just in the wrong place". This is alleged to be the reason for the spread in price and the issues at COMEX. Oh, really? If that's the case, then there must be a shortage of silver, too, and it must also be "in the wrong place". The current spread shown below is more than 2% and even larger than the current spot-future spread in gold!
And these Apologists also claim that everything the CME/LBMA does is totally transparent and honest, with the moves such as fractional ownership of London bars just simply a nice new service that The Banks are providing. RRRrrriiiggghhhttt. If that was the case, then why is the CME/LBMA demanding complete secrecy from the CFTC regarding this new arrangement? Thanks to the guys at BullionStar, see the information below:

“COMEX secures secrecy agreement with CFTC under FOIA not to release details to the public of its market maker program for the new 400 oz gold futures contract hatched with LBMA, because ‘Disclosure Would Likely Cause Competitive Harm to COMEX’. Program begins tomorrow April 13. pic.twitter.com/QEuEyGz64m”

— BullionStar (@BullionStar) April 12, 2020
So if everything is just fine , and the delivery issue is simply being caused by gold "being in the wrong place" and the exchanges are forthright and honest brokers, THEN WHY WOULD CME/LBMA DEMAND PROTECTION FROM FREEDOM OF INFORMATION ACT (FOIA) REQUESTS?

I'll tell you why... BECAUSE IT'S ALL ONE BIG MASSIVE SCAM! The Bullion Banks have managed a just-in-time delivery scheme through increasingly mind-blowing amounts of promissory notes, delivery receipts, and unallocated accounts. For Pete's sake, the LBMA actually admitted to a total trading volume of 32,255 METRIC TONNES of gold IN MARCH ALONE! That's an annualized run rate of over 380,000 METRIC TONNES or about 135 years of global annual mine supply! WHAT?!?!

“You need to take a second. Stop what you're doing. Let this sink in. In March, the LBMA traded 1.04 Billion ounces of ‘gold’. That's 32,255 metric tonnes. In one month. That's an annualized run rate of 387,060 METRIC TONNES!! 138 YEARS of mine supply.


The last sentence is the most important.
Its that divergence between reality and digital gold that will be the killer.
Mick



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sent from my Olivetti Typewriter.

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mullokintyre
post Posted: Apr 14 2020, 08:37 PM
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In Reply To: triage's post @ Apr 14 2020, 08:06 PM

I hope like hell he is a long way ahead of the mark.
If gold does go to 10k an ounce, it probably means that the majority of the societal institutions have failed, and a general sense of anarchy has prevailed.
It doesn't take much for humans to revert to the level of savages, as history has shown.
Mick



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sent from my Olivetti Typewriter.
 
 


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