Why the big move in gold?

[dualstow]

Honestly I’m surprised there isn’t a thread on the knuckleheads forum right now where they’re all trying to convince themselves that gold is just a bubble… for the past 5000 years.

I guess they got tired of it. There are bogleheads who hold gold, but they do it more quietly now.

Edit: you might see some familiar names in this thread:
https://www.bogleheads.org/forum/viewto ... &start=200

[pmbug]

I tried to join that forum some time ago. They banned me immediately before I could post one message. Lol.

[dualstow]

I tried to join that forum some time ago. They banned me immediately before I could post one message. Lol.

Strange. You didn’t choose an obscene name or anything?
Seriously, probably an error.

[pmbug]

Same details (username, avatar, signature, registration email, etc.) as I used here. I guessed they didn't want me around because I like gold.

[seajay]

I suspect that the paper-gold to physical gold ratio will further increase from recent 122:1 levels. Looks like a big buyer, 100Bn, perhaps Russia, buying 1500 tonnes of physical gold, via Options (expiry settlement in physical gold rather than cash). With current sanctions those trades being applied via third parties (Zimbabwe ?). Not the more usual large trades at the gold fix time(s) that is more common with state level trades. Perhaps in response to the US looking to seize 300Bn of Russian owned US treasury's. The Option writers will be in panic trying to secure the physical gold prior to Option expiry, so some price (rigging) volatility is likely over coming days/weeks. Ultimately with more paper-gold having been created out of thin air. That will increase Russian gold reserves from 3000 tonnes to 4500 tonnes, but more importantly be in the form of physical gold.

Could become a recurring weekly game, he who has physical in their own vaults is king in a world where there's >100 times more paper gold than physical gold.

[dualstow]

Same details (username, avatar, signature, registration email, etc.) as I used here. I guessed they didn't want me around because I like gold.

Well, you always have a home here

[pmbug]

Thanks!

~~~

Iran/Israel getting hot. China/SGE gold closed Friday at $2,434.73 - a $90 premium to the US close. Seems to me that gold is sitting on plenty of rocket fuel.

[dualstow]

So to speak, yes.

[boglerdude]

"pmbug" sounds like a seller and they're fanatical about banning promotions. You could message the mods but you're not missing much. The personal finance section is good. Investing forum is the same endless discussions about tilting 6% or 6.2% to international/factors/metals

[dualstow]

And you can read without logging in.

[Smith1776]

Don't forget the drive-by Taylor posts where inevitably says, "See what the experts think."

[Xan]

I suspect that the paper-gold to physical gold ratio will further increase from recent 122:1 levels. Looks like a big buyer, 100Bn, perhaps Russia, buying 1500 tonnes of physical gold, via Options (expiry settlement in physical gold rather than cash). With current sanctions those trades being applied via third parties (Zimbabwe ?). Not the more usual large trades at the gold fix time(s) that is more common with state level trades. Perhaps in response to the US looking to seize 300Bn of Russian owned US treasury's. The Option writers will be in panic trying to secure the physical gold prior to Option expiry, so some price (rigging) volatility is likely over coming days/weeks. Ultimately with more paper-gold having been created out of thin air. That will increase Russian gold reserves from 3000 tonnes to 4500 tonnes, but more importantly be in the form of physical gold.

Could become a recurring weekly game, he who has physical in their own vaults is king in a world where there's >100 times more paper gold than physical gold.

Seajay, are you saying that the ETFs are not backed by physical gold as they claim to be?

[vnatale]

I suspect that the paper-gold to physical gold ratio will further increase from recent 122:1 levels. Looks like a big buyer, 100Bn, perhaps Russia, buying 1500 tonnes of physical gold, via Options (expiry settlement in physical gold rather than cash). With current sanctions those trades being applied via third parties (Zimbabwe ?). Not the more usual large trades at the gold fix time(s) that is more common with state level trades. Perhaps in response to the US looking to seize 300Bn of Russian owned US treasury's. The Option writers will be in panic trying to secure the physical gold prior to Option expiry, so some price (rigging) volatility is likely over coming days/weeks. Ultimately with more paper-gold having been created out of thin air. That will increase Russian gold reserves from 3000 tonnes to 4500 tonnes, but more importantly be in the form of physical gold.

Could become a recurring weekly game, he who has physical in their own vaults is king in a world where there's >100 times more paper gold than physical gold.

Seajay, are you saying that the ETFs are not backed by physical gold as they claim to be?

The whole ETF is a mystery to me as to how any of them are backed up by anything? Do they actually own all the stock or whatever the same way a mutual fund does? I have never owned an ETF.

[dualstow]

Stocks? Yes.

[coasting]

I suspect that the paper-gold to physical gold ratio will further increase from recent 122:1 levels. Looks like a big buyer, 100Bn, perhaps Russia, buying 1500 tonnes of physical gold, via Options (expiry settlement in physical gold rather than cash). With current sanctions those trades being applied via third parties (Zimbabwe ?). Not the more usual large trades at the gold fix time(s) that is more common with state level trades. Perhaps in response to the US looking to seize 300Bn of Russian owned US treasury's. The Option writers will be in panic trying to secure the physical gold prior to Option expiry, so some price (rigging) volatility is likely over coming days/weeks. Ultimately with more paper-gold having been created out of thin air. That will increase Russian gold reserves from 3000 tonnes to 4500 tonnes, but more importantly be in the form of physical gold.

Could become a recurring weekly game, he who has physical in their own vaults is king in a world where there's >100 times more paper gold than physical gold.

Seajay, are you saying that the ETFs are not backed by physical gold as they claim to be?

While "paper gold" is often a term used to describe gold ETFs, from the context of Seajay's comments I instead understood him to be using "paper gold" to refer to gold options. In which case, yes the outstanding gold options could far exceed the physical gold available. Most traders close out the option position prior to expiry and collect the cash. What if they don't and instead say "I'll take it, deliver my gold". Seajay, am I interpreting your comments correctly?

As far as the ETFs actually being backed by physical gold - The ones I've looked into and/or owned publish the bar list with serial #s by vault on a daily basis. And per the prospectus are audited by a third party twice a year - once on a schedule date, once on a random date. The audit results are published, too. I may have other concerns, but actual physical gold backing is not one of them.

[coasting]

I suspect that the paper-gold to physical gold ratio will further increase from recent 122:1 levels. Looks like a big buyer, 100Bn, perhaps Russia, buying 1500 tonnes of physical gold, via Options (expiry settlement in physical gold rather than cash). With current sanctions those trades being applied via third parties (Zimbabwe ?). Not the more usual large trades at the gold fix time(s) that is more common with state level trades. Perhaps in response to the US looking to seize 300Bn of Russian owned US treasury's. The Option writers will be in panic trying to secure the physical gold prior to Option expiry, so some price (rigging) volatility is likely over coming days/weeks. Ultimately with more paper-gold having been created out of thin air. That will increase Russian gold reserves from 3000 tonnes to 4500 tonnes, but more importantly be in the form of physical gold.

Could become a recurring weekly game, he who has physical in their own vaults is king in a world where there's >100 times more paper gold than physical gold.

Seajay, are you saying that the ETFs are not backed by physical gold as they claim to be?

The whole ETF is a mystery to me as to how any of them are backed up by anything? Do they actually own all the stock or whatever the same way a mutual fund does? I have never owned an ETF.

For stock/bond ETFs, yes they are backed the same as MFs and regulated the same.

Most of the products we refer to as ETFs are covered by the Investment Company Act of 1940 exactly the same as Mutual Funds. That is, your typical ETFs that hold stocks and bonds. However, gold ETFs are not covered by the "1940 act", and because of this, some sticklers don't like to call them Exchange Traded Funds. So we might use a more general term like "Exchange Traded Product". The gold ETPs are formed as trusts instead.

Here is from iShares page for IAU:
"The iShares Gold Trust is not an investment company registered under the Investment Company Act of 1940, and therefore is not subject to the same regulatory requirements as mutual funds or ETFs registered under the Investment Company Act of 1940. The Trust is not a commodity pool for purposes of the Commodity Exchange Act. Before making an investment decision, you should carefully consider the risk factors and other information included in the prospectus."

And then there are ETNs, Exchange Traded Notes, which are not backed by the underlying, whether it be stock, gold, whatever.

Stock/bond ETFs are ok, gold ETFs are probably ok, any ETN is very risky in my book.

[pmbug]

... "paper gold" is often a term used to describe ...

Futures contracts

[welderwannabe]

I guess they got tired of it. There are bogleheads who hold gold, but they do it more quietly now.

Edit: you might see some familiar names in this thread:
https://www.bogleheads.org/forum/viewto ... &start=200

This Boglehead conference attending boglehead holds gold, but yes, its not worth arguing about over there.

[dualstow]

I like that they have conferences. Even though I tend not to meet people whom I get to know online first, I think it brings civility. I don’t think people would be quite so vicious with each other on social media if they had conferences.

Looks like gold is down today, along with stocks and bitcoin and- oop, gold is up! 2380!

[welderwannabe]

Goldbugs haven't done themselves any favors, generally resorting to arguments alike that of whole life salesman. All end of the world scenarios that have never come true (thankfully). Unfortunately those over the top arguments sit like a fog over the very legitimate arguments like inflation protection, risk parity etc.

[pmbug]

Speaking of which, end of the world talk is now mainstream:

https://www.telegraph.co.uk/business/20 ... -dystopia/

[snedgar]

Speaking of which, end of the world talk is now mainstream:

https://www.telegraph.co.uk/business/20 ... -dystopia/

That's a good article. Bypassed the paywall using archive.today

[pmbug]

Sorry! I didn't even realize there was a paywall. I have NoScript extension installed on my browsers and rarely see paywalls when I browse.

[vnatale]

From Hot Dogs to Gold Bars: Costco's Latest Offering Is a Huge Hit
By: Brenden Rearick
Editor: Jordan Chussler
Published: Apr 16, 20247 min read


https://money.com/costco-is-selling-out ... aily_money

[dualstow]

^

With the bonuses Costco offers on precious metal purchases, in fact, some buyers may effectively eliminate the premium. Those who buy their bars at the store using Citigroup credit cards are eligible for 2% cash back on their purchase. Executive members at Costco can receive an additional 2% cash back.

^

That is amazing and I feel a bit envious. I wanted to buy gold in March but had to take a trip and was afraid I wouldn’t be there to receive delivery. Wish I had taken my chances!