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Thread: Gold becomming scare?

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    Senior Member Butrcup98's Avatar
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    Default Gold becomming scare?

    I have seen in a few threads comments claiming that gold is not easy to buy in today's economy. I'm curious about this because I can buy an ounce of gold on anyone of 5 different websites. I can also walk into my local "coin trading store" and buy gold from the owner. And to top it off, gold is selling for just over $700 per ounce; which is down from the $900+ it was going for less than a year ago.

    Could someone please explain where these rumors are coming from?

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    Default Re: Gold becomming scare?

    Quote Originally Posted by Butrcup98 View Post
    I have seen in a few threads comments claiming that gold is not easy to buy in today's economy. I'm curious about this because I can buy an ounce of gold on anyone of 5 different websites. I can also walk into my local "coin trading store" and buy gold from the owner. And to top it off, gold is selling for just over $700 per ounce; which is down from the $900+ it was going for less than a year ago.

    Could someone please explain where these rumors are coming from?

    Look at Melanie's posts concerning gold and look at the people who write them, and talk up their product/ service, you have gold brokers, gold funds, etc., and those people are are basically trying to sell you their product/ service.

    This is basically like up to a number of years ao when let's say Merrill Lynch would recommend stocks x, y, and z for you to buy, but they as a company were dumping the same stocks (because they weren't worth investing in, in the first place).

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    Default Re: Gold becomming scare?

    if reading comprehension problems prevent absorption of the facts from the other gold shortage threads, I offer this option ...


    Attempt to actually buy a 1oz gold coin at a local 'coin trading store' ... if there are actually some gold coins available for purchase, see what price you are actually quoted (as in 10%+ over COMEX)

    Attempt to actually buy a 1oz gold coin off a major website. You get announcements like this one from #1 seller Kitco

    (snip)"Please note: Due to current conditions, your order fulfillment and/or shipment is being affected by delays experienced by our suppliers. Certain popular products are currently out of stock; please click here to view a list of items we normally carry. All such products will once again appear on our web page when their inventories reach adequate levels. Due to high order volumes, you may also experience shipment delays from our vaults in Canada and/or the USA. We want to assure you that we are working hard to mitigate this temporary situation. Kitco Inc. appreciates your patience and understanding, and looks forward to serving you in the best possible manner."(snip)

    In the meantime, you can find almost daily financial news reports of Russia / Saudi / India / China buying gold at record breaking levels. Most significant is that not only individuals from these countries are buying gold, but that the central banks of these countries are buying gold.

    Back to the 'conspiracy theories', historically it's easy to find many examples of similar situations of a scarcity of real goods when 'official' low prices are enforced. In other words, the 'official' price of food in the old Soviet Union was far below 'world market' levels ... but the grocery store shelves were bare !!!

    PS you wind up with <$800 per oz gold prices in the same way you wind up with <$4 per share prices for Citibank ... by naked short selling !!! However, unlike Citi shares, it's impossible to manipulate the price of gold to zero !

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    Default Re: Gold becomming scare?

    Quote Originally Posted by Melonie View Post
    Attempt to actually buy a 1oz gold coin off a major website. You get announcements like this one from #1 seller Kitco

    (snip)"Please note: Due to current conditions, your order fulfillment and/or shipment is being affected by delays experienced by our suppliers. Certain popular products are currently out of stock; please click here to view a list of items we normally carry. All such products will once again appear on our web page when their inventories reach adequate levels. Due to high order volumes, you may also experience shipment delays from our vaults in Canada and/or the USA. We want to assure you that we are working hard to mitigate this temporary situation. Kitco Inc. appreciates your patience and understanding, and looks forward to serving you in the best possible manner."(snip)!

    They didn't order enough product for their inventories. Just like when Victoria's Secret tells you an item is on back order. You have a lot of arm chair warrioirs who believe the hype when they see the commercial, and think it is so. The snip is not really a biggie.
    Quote Originally Posted by The Snark View Post
    But then I suppose the sort of people who write this kind of crap generally don't allow their opinions to be tainted by things like "facts" and "reality".
    Distortion becomes somehow pure in its wildness
    The note that began all can also destroy

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    Default Re: Gold becomming scare?

    wrong conclusion ... as evidenced by these comments from an actual online retail gold seller.


    (snip)"Recent events have put a damper on our business model of eight years, and reduced our available choices considerably over the past few weeks.

    Our first surprise, some months ago, was the absence of Austrian Philharmonics from our distributors’ inventories. Last month, the US Mint suspended production of the .9999 fine gold Buffalo which had been introduced with much fanfare in 2006.

    Of course, we experienced (and wrote about, in an exchange that went around the world) the infamous suspension of 1-ounce gold Eagle production for a few days in August. But by September the Mint was back to turning out about 20,000 1-ounce coins per week. Three weeks ago, it seemed that normalcy had returned to the gold Eagle supply chain.

    Now it’s possible that 1-ounce gold Eagles won’t be freely available until the 2009 coin release in January.

    Our ‘black swan’ event currently is the spiraling credit and banking crisis, which started making headlines about three weeks ago. All of a sudden, physical gold started to fly off our shelves as people abandoned financial instruments and institutional promises for the more solid comfort of the heavy, shiny, yellow metal which is our stock in trade.

    As the sales pace picked up, we began to re-order from distributors not just once a day, but several times a day. Soon we were re- ordering every hour or so. And we weren’t alone in experiencing this surge in demand for gold bullion products.

    For instance, the U.S. Mint produced more gold Eagles in August and September of this year (171,000 coins) than they turned out in all of 2007 (147,500 coins).

    At this point, our usual sources have simply started to run out of product. First of course it was the 1-ounce gold Eagles. Then on Tuesday the U.S Mint ran out of tenth-ounce gold Eagles. Yesterday, they ran out of half-ounce gold Eagles.

    As of this week, although we have hundreds of coins on their way to us, the Royal Canadian Mint is running about three weeks behind on gold Maple Leaf production. And although we have supplies coming, the Perth Mint no longer has 1-ounce gold Mouses available for immediate shipment.

    This morning we confirmed a purchase of new 1-ounce Krugerrands that will come to us as soon as the South Africa Mint can produce them.

    Our waiting time to receive those coins: approximately three weeks.

    Gold mints and refiners, most of which are running at full capacity, are simply not able to keep up with today’s tremendous demand. About a week ago, it started to become evident that the run on gold was not just an American phenomena, but something that was going on worldwide.

    “Demand Surges for Gold Investors Can Hold” was the headline in a front-page article in the Financial Times of 10/1/08. Written by Javier Blas from Kyoto, it began,

    “Investors in gold are demanding ‘unprecedented’ physical levels of bullion bars and coins and moving them into their own vaults as fears about the global financial system deepen. Industry executives and bankers at the London Bullion Market Association annual meeting said the extent of the move into physical gold was unforeseen and driven by the very rich.”

    “There is an enormous pick-up in investment demand. I have never seen a market like this in my 33-year career,” said Jeremy Charles, chairman of the LBMA. “The gold refineries cannot produce enough bars.”

    Mr Blas went on to quote Philip Clewes-Garner of the precious metals division at HSBC, “It is a flight into gold because it is a physical asset.”

    As a sign of the time, the above-quoted edition of the FT ran three separate articles on the growing demand for gold bullion. Mr. Blas even went so far as to address that monetary monster that our society has long kept locked in the attic, the very concept of fiat currency itself.

    “”Fiat money, in extremis, is accepted by nobody,” Alan Greenspan, the former chairman of the US Federal Reserve, told lawmakers in Washington almost as decade ago. “Gold is always accepted,” he added.""(snip)

    from


    The real issue here is a LARGE worldwide increase in retail demand for physical gold, versus the fixed capacity of the US / Canadian / Australian / South African refiners and mints. Arguably, in a 'free' economy the price of gold would be steadily bid up. However, in the real world economy which equates a ton of gold with a piece of paper written by someone who does not actually own any gold promising to deliver a ton of gold 3 months from now, prices have more or less stayed steady despite the large increase in retail sales demand.

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    Default Re: Gold becomming scare?

    Are you hopping on the gold+oil bandwagon. You realize that is the next bubble, right?

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    Default Re: Gold becomming scare?

    The mint didn't expect a surge in demand. When they produce a run, they figure about how many units are going to sell, and make a similar amount. It even said the next run was in 2009. They sold out early, not a big deal.
    Quote Originally Posted by The Snark View Post
    But then I suppose the sort of people who write this kind of crap generally don't allow their opinions to be tainted by things like "facts" and "reality".
    Distortion becomes somehow pure in its wildness
    The note that began all can also destroy

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    Default Re: Gold becomming scare?

    Quote Originally Posted by Melonie View Post
    if reading comprehension problems prevent absorption of the facts from the other gold shortage threads, I offer this option ...

    Ok Sassy

    Seriously, I'm curious to know what you are doing in this financial "crisis".

    I was always taught to buy low, so that's what I'm doing. I'm dumping a lot of money into the market, because I believe that it will come back before I die. I'm also saving a lot in an interest bearing account which earns 3.5%. I know that's not much, but it beats the long term rate of inflation. My husband and I were given a gold eagle and I'm keeping it in my bank safe box, along with a bit of cash. He has a few guns, which are worth a considerable amount of money; but, I don't want our home looking like an armory, so we are not buying anymore. I have rather Democratic views on guns, and my own life experiences have yet to prove otherwise.

    I guess my question is: What could we do to stay afloat in the future? I believe that if Americans don't do something, although I'm not preaching what that is, we are going to end up in another GD. And I'd like the opinion of someone who seems to have facts; and not just spouting propaganda.

    History does repeat itself. And so far we are seeing several similarities, like banks closing and people running out to buy gold, that are too alike to ignore.

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    Default Re: Gold becomming scare?

    Seriously, I'm curious to know what you are doing in this financial "crisis".
    as can be found discussed in other threads, I have been adding to my holdings of physical gold on market price 'pullbacks'. Other than purely speculative short term volatility investments ( like buying and selling SDS shares), I have more or less been 'out of the markets' for about a year now. With the US dollar's recent 'strength' I have been migrating some portion of my former US dollar denominated CD's into Swiss Franc denominated CD's. And I am 'packing' to leave the country by the middle of this coming January.


    I'm also saving a lot in an interest bearing account which earns 3.5%. I know that's not much, but it beats the long term rate of inflation
    actually, it probably doesn't. First, you will only get to keep 2.5% after paying (increased) income taxes on the 3.5% interest income.


    History does repeat itself. And so far we are seeing several similarities
    ... and this is arguably because 'those who refuse to learn from history are doomed to repeat it'.

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    Default Re: Gold becomming scare?

    Quote Originally Posted by Melonie View Post
    ... and this is arguably because 'those who refuse to learn from history are doomed to repeat it'.

    What history? Like the 'never again'? But it has happened many many dozen of times since the holocaust, but still they say never again. When you become so fixated on a slogan/ point/ etc., you become so fixated that you fail to see that it has happened again, and is still happening again.

    Markets go up and markets go down, then up and down, and on and on. If they go down, it doesn't mean the end is coming, or even near.

    But you also forget that prophecies can be self fulfilling.
    Quote Originally Posted by The Snark View Post
    But then I suppose the sort of people who write this kind of crap generally don't allow their opinions to be tainted by things like "facts" and "reality".
    Distortion becomes somehow pure in its wildness
    The note that began all can also destroy

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    Default Re: Gold becomming scare?

    Quote Originally Posted by glambman View Post
    Look at Melanie's posts concerning gold and look at the people who write them, and talk up their product/ service, you have gold brokers, gold funds, etc., and those people are are basically trying to sell you their product/ service.

    This is basically like up to a number of years ao when let's say Merrill Lynch would recommend stocks x, y, and z for you to buy, but they as a company were dumping the same stocks (because they weren't worth investing in, in the first place).
    You are so smart and wise. Why don't you sell me some overpriced gold, if you have some? I'll even be a pal and pay $5 more than that website you were looking at.
    Once again, the conservative, sandwich-heavy portfolio pays off for the hungry investor
    - Dr John Zoidberg

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    Default Re: Gold becomming scare?

    (repeating ) What history?
    Not wanting to elaborate in detail given that this is the Dollar Den forum, but the about to be repeated history in question stems from FDR ... i.e. the US gov't borrowing massive amounts of additional money to provide new public sector jobs at pay rates which will be far above 'world market' rates.



    Of course, the last time that this was attempted the US gov't wasn't already trillions of dollars in debt to foreign lenders to begin with !

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    Default Re: Gold becomming scare?

    Quote Originally Posted by person View Post
    You are so smart and wise. Why don't you sell me some overpriced gold, if you have some? I'll even be a pal and pay $5 more than that website you were looking at.
    Sorry but I don't have a $ incentive and am not trying to sell you anything. As part of a balanced portfolio, even I think bonds and metals should be invested in, just not the whole kit 'n caboodle.
    Last edited by glambman; 11-24-2008 at 09:54 AM.
    Quote Originally Posted by The Snark View Post
    But then I suppose the sort of people who write this kind of crap generally don't allow their opinions to be tainted by things like "facts" and "reality".
    Distortion becomes somehow pure in its wildness
    The note that began all can also destroy

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    Default Re: Gold becomming scare?

    Just got info from someone I respect and who has an excellent record of being right. Gold going to 2000 over the next year. Do with that what you wish.

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    Default Re: Gold becomming scare?

    From a trader's perspective, I bought puts on GLD yesterday. It's oversold on both the daily and weekly chart. I rode the bounce up from 70. It will probably retrace back down to 75.
    Rebecca Avalon







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    Default Re: Gold becomming scare?

    Quote Originally Posted by glambman View Post
    When you become so fixated on a slogan/ point/ etc., you become so fixated that you fail to see that it has happened again, and is still happening again.

    But you also forget that prophecies can be self fulfilling.
    I'm not doubting the fact that our economy has always jumped back. I'm merely considering the amount of time it has taken to restore itself and whether or not I'll have enough saved to "weather the storm."

    And Melonie: About the taxes I'll be paying on that savings...I pay taxes on about 50% of my income. But I believe that they don't need to know about everything. And, yes, I understand what would happen if I was audited. I'm still taking the risk.


    I just gave my investor $500 and told him to deposit it into my most aggressive fund. I'm thinking that we will see a boost for the holidays. If I'm correct, in mid January I'm going to transfer that to my least aggressive fund. I'm not claiming to be an investing wiz (obviously, I'm not), but I do try to make the most educated decisions with the time that I have to research.

    In all honesty, I'm about to start buying gold jewelry on ebay (<--That looks like an insane person laughing) I figure, I might not be able to purchase gold coins, but if the market tanks and we resort to gold currency, a few gold rings will still be worth their weight in gold

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    Default Re: Gold becomming scare?

    Quote Originally Posted by glambman View Post
    Sorry but I don't have a $ incentive and am not trying to sell you anything. As part of a balanced portfolio, even I think bonds and metals should be invested in, just not the whole kit 'n caboodle.
    Well, if you really believe you know the price should be higher or lower, you'd buy or sell. Otherwise you're just an armchair expert and are not putting your money where your mouth is. If you're actually a buyer (ie. think the price will go up), I'm confused why you're doing this trash talking.
    Once again, the conservative, sandwich-heavy portfolio pays off for the hungry investor
    - Dr John Zoidberg

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    Default Re: Gold becomming scare?

    I'm not trashing a properly divested investment strategy. Just don't put all or most of your resources into one area/ company, based on links we get here here about gold being the best thing since sliced bread. Those are sites that have an agenda.

    I am also a long term investor, I don't really care about week to week or month to month. I bought a lot of gold in the late 80's when it was 50% of what it was when Reagan took over. I'm still ahead of the curve.

    I also bought tons of oil stocks after it went down over 50% from the same time, didn't sell when it went high, but bought even more when it started going down and got to 9.00 a barrel. I'm still ahead of the curve, and the dividends are really nice.
    Quote Originally Posted by The Snark View Post
    But then I suppose the sort of people who write this kind of crap generally don't allow their opinions to be tainted by things like "facts" and "reality".
    Distortion becomes somehow pure in its wildness
    The note that began all can also destroy

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    Default Re: Gold becomming scare?

    Cool
    Once again, the conservative, sandwich-heavy portfolio pays off for the hungry investor
    - Dr John Zoidberg

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