Reply to: Gold

[MarillionFan]

24-hour Spot Chart - Gold

Time to buy! GOLD!

[Jubber]

. I'm mid thirties so there is plenty of time.

Dear Mr Order

Ha ha ha ha ho ho ha ha

Yours
God

[petergriffin]

The futures contract is settled via the delivery of the physical commodity.
.

Not entirely true. The gold futures market is heavily manipulated.

[ASB]

Certainly it ain't going to make you super rich.

In the extreme scenario of the return of gold as currency this would imply to me major lawlessness was probably also going on. As such I would perceive individual ownership could become a huge security risk and the mob might want to relieve you of whatever you had.

In any event, even if society was well ordered who the hell will have change for a sovereign.

Outside that potential nightmare I would agree that USD losing some of its status should prove good for gold (in fiat terms). Pricing oil outwith USD and establishing a market will possibly be a bit of a warning shot.

[Zero Liability]

@ASB I appreciate that you didn't say that. I just put it out there because of the abundance of negative sentiment towards gold. Owning physical is like an insurance policy or savings fund you hope to never need. I think coins like Sovereigns take some of the difficulty with owning physical gold out of the equation. Whilst I don't think an apocalypse is imminent, central banks globally are playing a rather dangerous game, one which they may rapidly lose control of, and in some regions of the world, gold is held for that very reason, to 'store' wealth. That said, I'm not expecting a complete breakdown of the monetary system. Gradual and slow decay, perhaps.

In the event that not even gold is of use as money, there's precious little else that will be, since that'll be an effective reversion to barter until things stabilise sufficiently for money to re-establish itself. Yet like SO stated, it's always been seen as money, and there's also the possibility of the USD losing its reserve currency status. In that event, you could still make use of gold-holding firms as long as you are willing to accept the counter-party risk, which in their case may be pretty low.

However, aside from that scenario, if you're using gold (amongst other commodities, including silver) to diversify, gold holding firms, trackers and gold mining outfits are better options.

[SpontaneousOrder]

I didn't say it was a bad idea, there are reasons for it being quite a good idea depending upon your personal view of inflation and distortion caused by paper gold.

What I did say is that one of the reasons put forward for owning physical is societal breakdown. If it gets to the point that the monetary system has completely broken down then happening to own physical gold may not be any help at all. And in terms of real carnage could be a hindrance.

Gold has been considered money for thousands of years. At the very least someone is more likely to sell you food, fuel etc for gold than they are for paper money If people thin they'll be super rich because of it then I think they haven't really thought it through - unless they know someone who'll sell brains for gold. Then gold will definitely help keep the zombies at bay.
That's not why I have it though - I think that as soon as the USD stops being the world reserve currency gold & silver will move back toward their historical values. I'm mid thirties so there is plenty of time.

[ASB]

The futures contract is settled via the delivery of the physical commodity.

If you let your oils future expire you will have to handle delivery of the thousands of barrels of oils you ordered.

The commodities futures are used by companies who trade in the commodities ....physically. That's what they're there for. There are instruments called cash settled forwards, where the contract is settled via a cash transaction. That is a secondary instrument.

eg.

http://www.cmegroup.com/trading/meta...ld-futures.pdf

I used to program futures trading, and we didn't do oil because we didn't have any space for it in the office The bank however did have a vault and traded in precious metals.

There is a direct relationship between the spot and futures price of Gold, but you don't need to look at the futures price you can just look at the spot price.

Agree.

I was just (badly) trying to point out that a lot of trading is done with all sorts of secondary instruments; generally which cannot confer ownership of the physical commodity.

Most ETF's etc are synthetic, though I expect there is probably a physical backed one out there somewhere.

When I trade any commodities they are always derivatives of some description and cash settled, as such they should reflect the underlying but it won't be perfect.

[ASB]

I can't see how owning a small portion of your assets in physical gold, e.g. British Sovereigns (which sell at a 5% premium over gold bars), is that bad an idea. You could have the bulk of the gold and silver (as a subset of that subset of your portfolio devoted to commodities) stored through firms like GoldMoney, and keep a small proportion of it in physical.

If some people don't want any exposure to it, it's their choice, but I'm not going to join in with them.

I didn't say it was a bad idea, there are reasons for it being quite a good idea depending upon your personal view of inflation and distortion caused by paper gold.

What I did say is that one of the reasons put forward for owning physical is societal breakdown. If it gets to the point that the monetary system has completely broken down then happening to own physical gold may not be any help at all. And in terms of real carnage could be a hindrance.

[BlasterBates]

I think a Gold fund is a good idea. I'm invested in a Gold mining company. The way I see it is if Gold continues to go down then management will use the mining skills of the company to mine other things and make profits in other ways. So I don't have to bomb out when gold goes down, I can simply go down to the shareholders meeting and shout at the board of directors to do something about it.

[Zero Liability]

I expect to see gold sub 1000 this year. Poss 850. Not short just at the moment.

I dont personally get the apocalypse hedge idea in general. If it gets to the point i t might be useful I think it is morr likely to be a liability instead of an asset.

in terms of selling on physical provenance will be an issue.

But at least ypu know it exists and isnt just a rehypothecated piece of paper. Removes the counter party risk which could be substantial I troubled times.

I can't see how owning a small portion of your assets in physical gold, e.g. British Sovereigns (which sell at a 5% premium over gold bars), is that bad an idea. You could have the bulk of the gold and silver (as a subset of that subset of your portfolio devoted to commodities) stored through firms like GoldMoney, and keep a small proportion of it in physical.

If some people don't want any exposure to it, it's their choice, but I'm not going to join in with them.

[BlasterBates]

So, as pg said you would be looking at the futures. Probably the daily contract in this case. The london fix is at 3 which in theory sets the physical price. Not in practice of course.

as pg says if it aint physical its an iou. There is certainly a movement towards a 2 tier market.

The futures contract is settled via the delivery of the physical commodity.

If you let your oils future expire you will have to handle delivery of the thousands of barrels of oils you ordered.

The commodities futures are used by companies who trade in the commodities ....physically. That's what they're there for. There are instruments called cash settled forwards, where the contract is settled via a cash transaction. That is a secondary instrument.

eg.

http://www.cmegroup.com/trading/meta...ld-futures.pdf

I used to program futures trading, and we didn't do oil because we didn't have any space for it in the office The bank however did have a vault and traded in precious metals.

There is a direct relationship between the spot and futures price of Gold, but you don't need to look at the futures price you can just look at the spot price.

[milanbenes]

‘I invested in gold three years ago and lost 70pc – should I sell?’ - Telegraph

I wonder how Milan is doing with his gold investments?

I'm up, if you remember I started buying in 2005 when it was 400usd an ounce

The most I have paid is 600quid an ounce

What's new ?

I might have to liquidate though, because plan b's latest loaf of bread is taking the war chest down to the bone

Milan.

[d000hg]

Always believe in your soul

You're indestructuble.

[SpontaneousOrder]

There is certainly a movement towards a 2 tier market.

thats why I'm not too concerned about the spot being low - the lower the spot goes the higher the physical premium goes. So far at least.

[ASB]

So, as pg said you would be looking at the futures. Probably the daily contract in this case. The london fix is at 3 which in theory sets the physical price. Not in practice of course.

as pg says if it aint physical its an iou. There is certainly a movement towards a 2 tier market.