Gold, lost its Glister?

Perelandra

bigadaj wrote: »

Or make bullets out of it? However gold is similar to lead in terms of malleability and density, so you're producing dum dums and outside the geneva convention, if this still applies in this scenario.

Gold bullets are also FAR more effective than lead ones when fighting Cybermen...

gadgetmind

dryhat wrote: »

It doesn't really inspire confidence in what he has to say about gold, does it?

In my experience, those who use the abbreviation PM the most are those who know the least about investing principles, so I'm afraid that I don't agree with the above statement.

bigadaj

gadgetmind wrote: »

In my experience, those who use the abbreviation PM the most are those who know the least about investing principles, so I'm afraid that I don't agree with the above statement.

Very true, spent some months ona gold mine last year and ever heard this before.

Glen_Clark

I googled PM before asking the question and found nothing so I guessed its not widely used.
I have noticed the Warren Buffets of this world use simple laymans terms everyone can understand.
It is invariably the less successful who use less well known words and phrases in an attempt to show how clever they are. We had a guy like that at work. Talked like he had swallowed a dictionary, always using obscure words. Nobody was impressed because nobody knew what he was on about.

bowlhead99

Never use big words when diminutive ones will suffice.

DiggerUK

padington wrote: »

Loos like the Cyprus gold sale news has smashed the metals through the major support......

You seem to suggest that 'markets are pricing in' the proposal to sell Cypriot gold. Market players are bottom feeders, not philosophers, they react to markets going up or down to make a fast profit, and aim to make money whichever way the markets go.
What happens if the proposal is dropped, or the gold is held merely as security, or nothing is done with their gold at all.

No, the phrase 'markets pricing in' is just another smart @rse way to appear knowledgeable, when not knowing what is going on. Don't forget, the IMF sold far more gold than this a few years back and did not get price of gold down.

Chances are that it is the old laws of supply and demand at work here, with the financial houses needing cash and selling.
..._

merlingrey

DiggerUK wrote: »

You seem to suggest that 'markets are pricing in' the proposal to sell Cypriot gold. Market players are bottom feeders, not philosophers, they react to markets going up or down to make a fast profit, and aim to make money whichever way the markets go.
What happens if the proposal is dropped, or the gold is held merely as security, or nothing is done with their gold at all.

No, the phrase 'markets pricing in' is just another smart @rse way to appear knowledgeable, when not knowing what is going on. Don't forget, the IMF sold far more gold than this a few years back and did not get price of gold down.

Chances are that it is the old laws of supply and demand at work here, with the financial houses needing cash and selling.
..._

Not exactly correct because these days the richest nations have the least amount of gold reserves, it's the ones in debt that have the most gold i'e the piigs, so there is the belief they might all give up their reserves for paper to cut down debt.

That said why would the gold go on the market?, it does not even have to pass the comex to go from one country to another afaik.

ColdIron

merlingrey wrote: »

Not exactly correct because these days the richest nations have the least amount of gold reserves, it's the ones in debt that have the most gold i'e the piigs

Hmm, with the exception of Italy not so sure I'd agree. In metric tonnes:

United States - 8,133
Germany - 3,391
Italy - 2,451.8
China - 1,054
Switzerland - 1,040
....
Portugal - 382
Spain - 281
Greece - 111
Ireland - 6

merlingrey

ColdIron wrote: »

Hmm, with the exception of Italy not so sure I'd agree. In metric tonnes:

United States - 8,133
Germany - 3,391
Italy - 2,451.8
China - 1,054
Switzerland - 1,040
....
Portugal - 382
Spain - 281
Greece - 111
Ireland - 6

I meant as a percentage of their reserve, China for example has about £3 trillion in reserve but only 3% is gold.

The pigs have more gold than paper (often 70-80%), so given they are in trouble they are easy prey to be bullied out of their holdings.

bowlhead99

merlingrey wrote: »

That said why would the gold go on the market?, it does not even have to pass the comex to go from one country to another afaik.

Country A currently has gold that it doesn't want (otherwise it would be keeping it)
Country B presumably currently has as much gold as it wants (otherwise it would have bought more in 'the market' already)

If Country B acquires Country A's gold, it will presumably have some spare itself, which may be sold on the market. More sells on the market, lower price.

Alternatively Country B doesn't currently have as much gold as it wants, and would have bought in the market if it weren't for the opportunity to acquire direct through a transaction with Country A. Fewer buys now in the market, lower price.

This is of course greatly simplified economics. But effectively, whenever someone is looking to offload a bunch of gold [or other commodity, or product, or investment] which they previously weren't, there is likely to be some price impact because supply changes and we've all heard that supply and demand make a market. Of course, if the sales can all be accommodated by demand from willing buyers at the current price, the price does not have to change - although generally if that solid demand existed before the new supply came online, one would assume the price could have been higher before than after.

The IMF sale referenced above, for 400 tons of gold, did not destroy the market price, as they carefully planned that the gold could be accommodated under existing ceilings from the participants in the agreement, and dripped any surplus to the regular market in small chunks over the year.

The answer to the question of whether this is 'priced in' is a little tricky. The concept that one or more countries might want to get rid of their gold is always known. Now some specifics are being mooted, the extra information moves the price. But the final specifics of exactly how much spare gold will come from which countries and when and who will want to buy how much, is still an unknown. Until it is known, people will guess at the value of an ounce of gold for delivery in 3 days time or 3 months time or 3 years time, and some will say higher and some will say lower and the point at which they'll agree to put their money where their mouth is and write a contract for it, is the price.

In this sense (if markets were perfect, which is debatable), everything is always priced in but clearly information emerging and being analysed over the next week or month or year could move the price tens of percent either way.