Discussion in 'Gold' started by GoldenEye, Jun 20, 2019.
I wish I had taken note sooner too... before interest rates went negative.
Market Closed - $2,259.60
AUD - $0.68
Some has foolishly in my opinion prophesied that Gold will drop as much as $200.00 per ounce (aud) or more in the short term but I cannot see it in todays world and lastnights American tariff announcement of increasing tariffs makes my point of no significant drop soon only an upward trend,yes I am a certified Gold Bug
The world is "getting so hot" that you will be able to refine Gold on the surface soon
Call me mad but don't call me late for dinner
The Book of Psalms Chapter 99 verses 2 & 3
The Lord is great in Zion,and He is high above all the peoples.Let them praise your great and awesome name,He is holy
Good morning ladies and gents, we're now cruising at $2300+....
$2315 AU.......GREAT START TO THE WEEK
Anyone who thinks it can't blow past the USD top is crazy, the world is starting to go gold mad
AUD dropping 25bps this morning too.
HIGH FIVE PEEPS !!!!
If there is a collapse in the derivatives, digits, paper & other make-believe money substitutes, then all of that stuff goes POOF, & it's gone.
The world is then left with 'REAL MONEY' & REAL MONEY will be measured in ounces.
Economics 101 Austrian style - not Keynesian style.
Where Does Gold Go From Here? — Ron Paul’s Prediction
Market Closed - $2,256.56
AUD - $0.67
Another great week for gold with it consolidating and even going over $2,300.00 again
What next is the question,consolidate,soften or strengthen,only time will tell,but I am still expecting a push upwards in the short term.
Until next week
The Book of Psalms Chapter 115 verse 14
May the Lord give you increase more and more,you and your children
you actually want it to pull back a bit you don't want it to run too hard too quickly which its already doing, but a decent pullback to 1450usd or something would be ideal.
Caveat: As the below comes from GoldSilver, I assume a degree of self interest from them as they sell bullion and thus have a vested view in a higher gold price and retail demand.
That said, in this short piece they do note the potential upwards swing in gold price once insto money starts to flow in and what those $ could be. I add this to the melt pot that is every other view on PM price direction I read / hear and look to find a logical thread through same.
What a Gold Shock Could Look Like: Institutional Investors Start Buying
Jeff Clark & Mike Maloney, GoldSilver.com
SEP 5, 2019
I once asked my institutional investor friend, who used to work at Goldman Sachs and has been a gold owner for many years, what would make him buy more bullion. Without hesitation he said, “When the price breaks out.”
Well, as is clear to the world, gold has broken out of its long-term trading range.
My friend is not alone in this sentiment of waiting to buy an investment until it’s rising. Institutional advisors, brokers and managers sit on the sidelines until a dormant asset class comes alive and establishes an uptrend—then they jump in.
With the recent uptrend in the gold price, it’s time to look at what kind of cash could come into the gold market from these types of investors. Institutions will want exposure. Not just because financial and market risks are higher, but because gold can net them a profit.
It’s not just me saying this. Look what CPM Group stated in their 2018 Gold Yearbook (emphasis mine):
CPM secured the best available list of 6,500 hedge fund and commodity fund managers. Of that enormous pool of managers, only 132 said they invested in metals… of the 132, 35 said they looked at macro and fundamental factors. The rest relied on computerized and traditional technical analysis based on price movements, price momentum indicators, moving averages, open interest, trading volume, and other such market data.
Only 2% of hedge funds currently have any gold in their portfolios. Further, the majority look at computerized and technical signals to tell them when to buy—by any reasonable measure gold has given them that technical signal.
So what kind of cash could enter the gold market?
Hold on to your coffee mug, because the numbers you’re about to see are staggering.
Institutional Cash vs. Gold Bullion
We tallied the Assets under Management (AUM) for some of the most common institutional investor groups. Here’s how much each category has, compared to the total known amount of above-ground investment gold, along with 2018’s investment demand.
The amount of assets under management from these investor groups dwarfs the amount of investment gold bought all of last year.
It also trumps the total amount of known gold investment holdings. But that figure is deceiving, because in a bull market most investors will be buying gold, not selling. In other words, not all of those ounces already in circulation will be available for purchase. Some of these investors could spark a bidding war, pushing the price higher and higher, but the more accurate figure to use is the amount of annual new metal that is available for sale (the last bar).
So how much gold might institutions want to buy? A general rule of thumb for fund managers is that for an investment to be relevant to the fund, they should invest a minimum of 2% of its assets in that industry.
You can probably see where I’m going with this: there’s not enough gold for these groups to invest 2% of their assets. And that chart above isn’t even a comprehensive list of institutional investors.
Here’s an example… the largest asset management company is BlackRock, with over $6.84 trillion under management. If BlackRock put 2% of its assets into gold—$136.8 billion—it would gobble up every ounce of investment gold last year (coins, bars and ETFs) and still have $83 billion left over (at $1,500 gold). This is from one institution!
Of course more than one institution will want exposure. If these groups want to buy gold, here’s what 2% minimum would look like, and 5% for those that may want more, along with the percentage they would gobble up of last year’s investment demand.
The pension fund industry alone would exceed all of 2018’s demand.
If these institutional investors as a group wanted 2% exposure to gold, it would be more than 3 times the amount of gold that went to investment last year.
There’s clearly not enough to go around.
It would look something like this.
Not every fund will want gold, of course, and some couldn’t (a dedicated bond fund, for example). But the reality of the situation is very clear:
The gold industry is so small compared to the amount of cash held by major investors that it will easily and completely overwhelm it. Gold prices could ignite from this catalyst alone.
The Coming Gold Shock is Not Far Away
None of this will keep them from trying, of course, especially as gold climbs higher and higher. Most of these institutions already expect higher prices. And just since we penned that article a few weeks ago, there have been more bullish comments from these groups:
George Topping and Puneet Singh of IA Securities expect a new gold cycle has just begun, and that the peak will be above the last cycle peak due to the trade war potentially expanding to a currency war.
UBS said it is staying long gold and predicts that the metal might hit $1,600 per ounce in the next three months.
Citigroup analyst Shyam Devani said of the gold/S&P 500 ratio, “it is only a matter of time before a significant bullish break occurs that could trigger a rally to the tune of 25% in favor of gold.”
Janet Miu of Cazenove Capital says the group favors gold over bonds as an uncertainty hedge.
Ranjeetha Pakiam of Bloomberg: “With bond prices on the rise as investors seek havens, yields they now pay are lower than the pace of consumer price gains. That’s a tremendous boon for good, which doesn’t pay interest.”
The point to all this is that there’s not enough gold for these investors to buy. And keep in mind these institutional entities have armies of analysts, millions of customers, and trillions of dollars… even just a small tidbit of cash entering the gold market could ignite it like we’ve never seen before. And the higher the price goes, the more they won’t be able to ignore it and will want to exposure.
The good thing for you and me is that we already own gold. We’ll benefit from their rush to the party. My advice is to make sure you’re positioned to fully take advantage.
Market Closed - $2,199.00.
AUD - $0.68
Gold has softened a little this week but it is still running with the bulls
The Book of Psalms Chapter 135 verse 5
For I know that the Lord is great,and our Lord is above all gods
There's only one God isn't there? Who are these other God's you're talking about?
Yes there is only one God and Jehovah is His name,the maker of heaven and earth,and Jesus Christ is His one and only Son,you know the story
Who are these other gods,for you probably yourself and thanks for asking,your question tell me that I am not wasting my time
Any time someone asks me about God it is a win for God and for me
The Book of Psalms Chapter 135 verse
Your name O Lord endures forever,you fame,O Lord throughout all generations
Watch it Davros. He's a jealous god you know.
Market Closed - $2,164.76
AUD - $0.69
Yes gold has softened as some predicted but not the $200.00 or more yet
Is the AUD stronger because we are doing better or is it because everywhere else doing worse,I say the later
With Potus and Xi Jinping talking about reducing the trade war,what affect will this have on the price of gold,either way time will tell and we won't have to wait long
But saying that gold is gold is gold
The Book of Psalms Chapter 145 verse 8
The Lord is gracious and full of compassion,slow to anger and great in mercy
Haha, I've been wondering the same thing...
Market Closed - $2,240.54 (sweet )
AUD - $0.68
Gold has had a very nice bounce since the close last week of nearly $80.00 and I reckon there is more to come with the AU going softer in my uneducated opinion
Am I an expert no,just your ordinary run of the mill Gold Bug
Buy more Gold you decide
The Book of Proverbs Chapter 8 verse 17
I love those who love me,and those who seeks me diligently will find me
It looks to me that the trade war won’t be resolved until early 2021. Usd will remain strong until then? We might see some iron supply substitution in China from reopening of local mines and scrap iron that can be recovered by demolishing ghost buildings.
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