You're onto it ScrappyO. Sometimes they use the London physical market - whatever it takes to get the job done. visit www.gata.org
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You're onto it ScrappyO. Sometimes they use the London physical market - whatever it takes to get the job done. visit www.gata.org
If the theory is correct that there is a massive short outstanding position in gold, the question begged to be asked is... who has been buying up and storing all the gold that has been shorted?
Do you guys recommend buying gold stocks to take advantage of this possible gold rise?
Merrill Lynch says rich turning to gold bars for safety
Merrill Lynch has revealed that some of its richest clients are so alarmed by the state of the financial system and signs of political instability around the world that they are now insisting on the purchase of gold bars, shunning derivatives or "paper" proxies.
http://www.telegraph.co.uk/finance/f...or-safety.html
...and those TECH people, they just do not get the story until it will be too late...
Kind Regards
Dr. respectfully, I think you may have missed the point. What I said in my previous post and what JBmurc also has hinted at, is these banks which are heavily short (principally JP Morgan and Goldman Sachs) don't actually have the gold they say they do. So they are trading short with gold they don't have. This is what is known as "naked short selling" - or a "failure to deliver". It happens all the time with stocks and it is used by all the big banks and brokers to artificially drive down the price of a company so they can then load up on it at a price that is more to their liking. In effect, they create counterfeit stock positions to sell. I know it sound unbelievable.
http://en.wikipedia.org/wiki/Naked_short_selling
It is a horrible practice that under most all circumstances is illegal but the regulatory authorities do nothing about it. This is where you see the corrupt cogs of government through the SEC and the CFTC, intermeshing with the banks at the expense of the shareholders. The goal of this exercise is to exert market making control over the markets to enrich the banks at the expense of ordinary investors and shareholders.
And this is why there is no transparency in the marketplace. There have been no audits of these banks, no audits of the COMEX because they do not want to be exposed. If people only knew how manipulated the US and Canadian markets were they would be revolt.
Anyone who reads this post and is still scratching their head, I highly recommend you download listen to both of Jim Puplavas absolutely incredible interviews with a man named Bud Burrell. They are entitled "The Greatest Crime In History" and "What's Wrong With This Picture".
http://www.financialsense.com/Experts/2008/Burrell.html
It is both a fascinating and frighting look behind the Wall St. curtain with a man who has spent his life as a trader across 40 years and is now actively engaged in helping fight the corruption. After you listen to this, you will understand naked short selling and why corruption in the financial markets is such a huge problem.
As far as gold stocks are concerned, speaking personally first I made sure that I had a solid, core position of physical metal in my possession. I am also invested in several gold mining companies because I believe gold will rise in value, it follows (hopefully) that the mining companies will provide significant leverage to the price of gold because by buying shares in a mining company, you are purchasing a share in their reserves usually at a heavily discounted price. The risk you take is will they be able to bring that gold to market? And believe me, that is not as easy as one might think.
My principal investments are in Canadian miners such as Goldcorp, Agnico-Eagle, Kinross and Yamana. I also have a smaller spread of Jr miners that I believe will do pretty well.
The thing you have to understand about miners is that they are viewed as being pretty risky - but what in the market today is not? Believe me, an iron stomach and emotional strength combined with a reasonable timeline and strong convictions are required to see the rewards in this sector, but I firmly believe those rewards will be spectacular or I would not be taking the risk.
A lot of people have seen some pretty steep losses in the miners since the commodity rout began last July. However the gold miners are starting to come back very strongly, many with gains of 90% to 165% off their recent lows, and they are still screaming buys in my opinion.
But make sure you do you own due diligence and if you decide to invest, I would advise you to stick with the larger producing companies that have good accelerating growth profiles, low production costs, that are located in countries that are politically stable and have a strong financial position. If all these attributes are present then that is a very good signal that it is also well a managed company.
Cheers & Good luck.
I'm looking to position myself for the upswing in NEM, a 5m+/oz per year producer & unhedged!
Gold price tipped to soar
Economists around the world are tipping the gold price to soar this year, with the most bullish market-watchers predicting the yellow metal could hit more than $2000 an ounce.
ANZ head of commodities research Mark Pervan says the $2000 price forecast is based on speculation of a collapsing US dollar stemming from a "massive injection of US dollars into the system. People will buy gold as an alternative."
Gold is used as a safe haven in times of weak equity markets, bought as a hedge against inflation and currency markets.
It's one of the few investments that has historically produced strong returns in periods of mounting inflation and interest rates, market turbulence and economic uncertainty as exchange trade funds, listed stocks, managed funds and resource companies plummet in value as inventors or speculators dump holdings.
From a base of US$550 an ounce at the start of 2006, the gold price almost doubled to US$1000 in March last year and is hovering at US$845.
The New Zealand price in the corresponding period went from $950 an ounce to reach a high of $1670 in the last week of last year and is now at $1450 and climbing.
During the past five years, gold has risen more than 210 per cent in value, says Robert Jamieson, general manager of Goldsilverbullion.com.au, an Australian website that allows consumers to buy bullion online. This equates to an average return of 42 per cent per year.
Global demand for physical gold has surged 300 per cent since the banking crisis last September, says the New Zealand Mint's head bullion trader Michael O'Kane.
In the US alone, it climbed 900 per cent on the back of the Bear Stearns collapse.
But a supply shortage is developing as production gets "hammered", O'Kane says.
Less gold is being produced as high oil prices drive escalating mining costs, says Pervan, and no one is releasing gold from central banks.
"Supply is incredibly tight. Consumers just can't get the gold - there's just no physical material for them to buy."
The Perth Mint suspended orders in November amid a heavy run on the precious metal. The Royal Canadian Mint, South African Mint and US Mint also took breaks.
A lot of work goes into making bullion and the timeframe for delivery is getting longer,
O'Kane says. "Two years ago, I took two weeks off during January trading. This year, I have had Christmas and New Year's Day off - it's nuts, and has been since Bear Stearns went sideways."
This is all very interesting. I will do more research into. I have exposure to Gold with my holding in IRN which has 15 million ounce of gold reserve.
I do understand naked shorts. Even if you naked short, you still have to have a buyer willing to take it. I am interested to see who has been buying up all the gold that the investment banks have been shorting.
Listen to the Bud Burrell interview . . . he explains how the crooked brokers "bounce" and "borrow" these counterfeit shares between each other so they appear to acquiring them legally but they are not - because they don't exist. Also, if you have a margin account, brokers can illegally "borrow" and promise YOUR shares without your knowledge.