It's looking grim again. Is gold the would-be saviour?
Discussion
ZeeTacoe said:
DonkeyApple said:
Afterall, what actual use is physical gold? Seriously, what use does it have in our society?
Is it not useful for connectors and other bits in electronics?Also what do you mean by "synthetic gold"?
Synthetics are OTC contracts based on the price of gold but not necassarily backed by the physical existence of gold.
Some of these instruments have a deliberate effect of massively increasing demand as they massively increase the number of buyers by just existing. for example, gold traditionally was only available either as spot physical or a forward future based on physical delivery. Most funds such as pension funds and certainly retail investors couldn't really access this market, but if you create something like an ETF, which trades as an equity, then instantly, all the low risk and small portfolio money can invest in gold.
It's quite interesting to read up on the recent creation of the copper ETF by JPM or GS. First of all they had to buy physical to meet initial expected demand and this spiked the price but then as the ETF could be held in equity portfolios and pensions the demand went up.
If I'm honest, I can see a time and already feel we ethically should, prevent the trading of OTCs in commods for speculative purposes and go back to these products only being able to be traded and held by licensed producers and sellers. The level of premium due to sythetics is shocking and causing hideous inflation that all of us are hit by, and in fact, in some corners of the world is contributing to starvation.
Just putting this here to refer back to next year:
2012 Gold Averages: Goldman $1,810/oz, Barclays $2,000/oz and UBS $2,050/oz
Bullion banks remain positive on gold for 2012 with major banks predicting an average gold price of between 13% and 28% above today’s spot at $1,595/oz. It will be interesting to see if these forecasts get as much international media coverage as the poll of 20 hedge fund managers has.
UBS have reiterated their bullish outlook for gold and believe gold will average $2,050/oz in 2012. This is 28% above today’s spot price of $1595/oz.
Goldman Sachs said overnight that gold will average $1,810/oz in 2012 – which is 13% above today’s spot price.
Barclays Capital have said this morning that gold will average $2,000/oz in 2012 – which is 25% above today’s spot price.
Gold will move higher due to “structural pillars of support” in an environment of negative real interest rates and rising inflationary pressures, as well as continued central bank buying.
Given the risks posed to the Eurozone and indeed the UK, gold priced in sterling and euros should experience similar gains - if not more.
The ECB’s Draghi’s warning regarding a Eurozone break up, currency devaluations and the risk of a “big inflation” is a reminder that the price of gold should be considered not solely in dollar terms but also in other currencies –especially were the European single currency to become less single.
2012 Gold Averages: Goldman $1,810/oz, Barclays $2,000/oz and UBS $2,050/oz
Bullion banks remain positive on gold for 2012 with major banks predicting an average gold price of between 13% and 28% above today’s spot at $1,595/oz. It will be interesting to see if these forecasts get as much international media coverage as the poll of 20 hedge fund managers has.
UBS have reiterated their bullish outlook for gold and believe gold will average $2,050/oz in 2012. This is 28% above today’s spot price of $1595/oz.
Goldman Sachs said overnight that gold will average $1,810/oz in 2012 – which is 13% above today’s spot price.
Barclays Capital have said this morning that gold will average $2,000/oz in 2012 – which is 25% above today’s spot price.
Gold will move higher due to “structural pillars of support” in an environment of negative real interest rates and rising inflationary pressures, as well as continued central bank buying.
Given the risks posed to the Eurozone and indeed the UK, gold priced in sterling and euros should experience similar gains - if not more.
The ECB’s Draghi’s warning regarding a Eurozone break up, currency devaluations and the risk of a “big inflation” is a reminder that the price of gold should be considered not solely in dollar terms but also in other currencies –especially were the European single currency to become less single.
donna180 said:
I think the HSBC vs. MF Global lawsuit has also acused some disturbance and highlighted to inherent danger of 'investing' in synthetic gold.RichyBoy said:
Just putting this here to refer back to next year:
2012 Gold Averages: Goldman $1,810/oz, Barclays $2,000/oz and UBS $2,050/oz
Excellent. I like the idea of setting a marker and the chance for some of us to say "I told you so"!2012 Gold Averages: Goldman $1,810/oz, Barclays $2,000/oz and UBS $2,050/oz
What do we predict the value to be in $ per ounce within one week of either side of 1 March 2012?
I'm going for $1760.
Edited by AdvocatusD on Thursday 12th January 14:24
Warren Buffet said:
Today the world’s gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce – gold’s price as I write this – its value would be $9.6 trillion. Call this cube pile A.
Let’s now create a pile B costing an equal amount. For that, we could buy all U.S. cropland (400 million acres with output of about $200 billion annually), plus 16 Exxon Mobils (the world’s most profitable company, one earning more than $40 billion annually). After these purchases, we would have about $1 trillion left over for walking-around money (no sense feeling strapped after this buying binge). Can you imagine an investor with $9.6 trillion selecting pile A over pile B?
Interesting take on the gold market. Let’s now create a pile B costing an equal amount. For that, we could buy all U.S. cropland (400 million acres with output of about $200 billion annually), plus 16 Exxon Mobils (the world’s most profitable company, one earning more than $40 billion annually). After these purchases, we would have about $1 trillion left over for walking-around money (no sense feeling strapped after this buying binge). Can you imagine an investor with $9.6 trillion selecting pile A over pile B?
From Berkshire Hathaway's 2011 annual report
http://nonchalantrepreneur.com/post/18259699208/wa...
DonkeyApple said:
AdvocatusD said:
Jesus Christ. Did any of you see the way silver and gold spiked yesterday? I think I saw it go up $50 in about as many minutes!
Let's see how long it actually lasts...
Italian matress money Let's see how long it actually lasts...
AdvocatusD's $1760 for March is looking very sound.
Digga said:
More to come still I reckon - I reckon those predictions from last year look to be in the right ballpark.
AdvocatusD's $1760 for March is looking very sound.
Yup. The levels of money laundering in the EU at the moment is staggering. The southern cultures have always hoarded cash as they have a history of military instability like most slow economies. This cash is desperately trying to convert out of Euros and also evade taxation measures. There are a lot of coach trips to Switzerland at present.AdvocatusD's $1760 for March is looking very sound.
The question is how much more is there to go, what actual weighting does this effect have on the price and if it is significant then what happens when these holders become sellers, as they will.
Or, are the OTC, partly backed contracts that trade in an amount of gold that is greater than all the physical gold in existence a stronger effect?
Personally, I believe that the price would halve overnight if they restricted OTC contracts and reverted to physical trading only.
Ayahuasca said:
DonkeyApple said:
It's just a mechanism to strip the savings of silly, old people and move them to the Caymen.
Who are these Caymen? How do you get to be one?Quite a few have an end in Belize nowadays.
DonkeyApple said:
Ayahuasca said:
DonkeyApple said:
It's just a mechanism to strip the savings of silly, old people and move them to the Caymen.
Who are these Caymen? How do you get to be one?Quite a few have an end in Belize nowadays.
ZeeTacoe said:
Interesting take on the gold market.
From Berkshire Hathaway's 2011 annual report
http://nonchalantrepreneur.com/post/18259699208/wa...
That was interesting!From Berkshire Hathaway's 2011 annual report
http://nonchalantrepreneur.com/post/18259699208/wa...
TheBuffMaster said:
You can fondle the cube, but it will not respond.
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