What happened to the "Gold and the Dollar" thread?

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Irvinecommuter said:
awgeecdcrez said:
Those are physical gold sales.  Physical gold sales have not influenced gold prices in decades.  Is that changing?
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No..price of gold (like oil/gas) is much more driven by traders and speculation.  I mean, no reason why gas is still at mid $3s when global demand has decreased, US has increased production, and the dollars has gotten better.
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It is usually a negative sign when the average person is buying while a asset is making new highs.  What is it when the average person in Asia is buying when the price has decreased 35% off it's highs, and the average Westener is still selling?

The West, speculators, are selling paper, (selling short), and the East, average Joe, is buying physical.  BTW, the Chinese and Russian central banks are also buying physical.
 
awgeecdcrez said:
Irvinecommuter said:
nosuchreality said:
We're a fiat world.  Where does the paper and physical intersect?
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I hope not...the Fiat 500 is a pretty bad car.
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It would seem my terrible choice of speculation is outdone only by my choice of transportation.
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Do you really have a Fiat 500?  TBF, I only drove a rental car version but the interior was cheap looking and the car was underpowered.  It's also pretty darn expensive (starting at $16K)
 
Irvinecommuter said:
awgeecdcrez said:
Irvinecommuter said:
nosuchreality said:
We're a fiat world.  Where does the paper and physical intersect?
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I hope not...the Fiat 500 is a pretty bad car.
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It would seem my terrible choice of speculation is outdone only by my choice of transportation.
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Do you really have a Fiat 500?  TBF, I only drove a rental car version but the interior was cheap looking and the car was underpowered.  It's also pretty darn expensive (starting at $16K)
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Yup.  I did not want to give my daughter a new car, so I bought it last year and she will be driving in November.  I think it cost us $13,500.  I would not worry about hurting my feelings.  Anybody here who has known me for awhile may tell you that other's opinions of my decisions don't weigh too heavy on me.  :P

And when my daughter starts driving the Fiat, I will go back to driving my 8 year old Honda Odyssey mini van.
 
I don't think those small cars are that bad... good fuel economy... I just worry about safety although I read one of them (maybe the Smart?) actually holds up really well in front/rear/side impact.
 
morekaos said:
It may have bottomed   :o

http://www.cnbc.com/id/100963985

Paulson & Co more than halves gold ETF stake in Q2

Paulson & Co more than halved its stake in SPDR Gold Trust, the world's biggest gold-backed exchange-traded fund, in the second quarter, when the bullion price lost nearly a quarter of its value.

The prominent U.S. hedge fund, led by longtime gold bull John Paulson, owned 10.2 million shares in the ETF on June 30, compared to 21.8 million shares on March 31, a filing with the U.S. Securities and Exchange Commission showed on Wednesday.
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And now ... the rest of the story

John Paulson?s faith in gold unshaken despite ETF sale
http://www.ft.com/intl/cms/s/0/f087b93a-05bd-11e3-8ed5-00144feab7de.html#axzz2cKjwheYS

Soros also sold his GLD shares and said it was time to sell, as reported in the MSM.  What was not routinely reported was that he bought an equivalent amount of physical gold bullion.

I think the real reason they sold their GLD shares is because they do not think that there is the appropriate amount of bullion backing the shares as is commonly believed.  If you read the prospectus carefully, you will see that neither SSGA, HSBC, nor any other sponsor guarantees, or takes any responsibility or liability for correct amounts of gold backing GLD.

And I just read this, (take it for what it's worth, or more if you have a Bloomberg terminal);

"For those with a bloomberg terminal, type up the command: {GLD Equity PHDC1 } ... GS bought $5b USD of GLD last quarter, while they were pitching their "sell gold" call to the world."

 
Every now and then, on different blogs, I read that the 'Cash for Your Gold' shops and the sudden increase of the number of those shops is an indicator of positive sentiment.  Positive sentiment being a negative indicator.  And I have posted how I never understood that increase as being an positive sentiment indicator.  If anything, it would seem to me to be a negative sentiment indicator.  Positive sentiment is when everybody, Joe 6-pack, is buying, and extreme positive sentiment is when everybody is buying with borrowed money; leverage.  The increase in the number of 'Gold for Cash' shops would indicate that Joe 6-pack is SELLING, not buying, right?  And when I point this out, nobody ever responds to my logic, including the persons who post that the 'Cash for Gold' shops indicates a gold mania, or a positive sentiment indicator.  And I have always asked the question, "When Joe 6-pack is selling, who is buying?"  And nobody has ever answered, including the persons who say that 'Cash for Gold' shops are a positive sentiment indicator.  I have had my suspicions on where the scrap gold is going, that's what it is called, scrap gold, and have lately had my suspicions verified.

So, I ask you, is the increase in 'Cash for Gold' shops a positive sentiment indicator, a negative sentiment indicator, or no indicator at all?  And where do you suppose all that scrap gold is going?  Who is buying?

BTW, I have wondered when those shops would start going out of business, or if they would, and I just saw one that closed down.  That is the first one that I have seen close.
 
I see your point but I equate the proliferation of cash for gold corner shops to the general public getting in on any get rich quick mania.  ie.  During the real estate bubble we had everyone and their mother (quite literally) getting an agent license.  When "pot" became legal I can recall several people I know opening medicinal shops all over the place (many since closed).  This is no different, Most of these storefronts are not Goldman Sachs...they too are Mom and pop operations.  Thus an indicator of public sentiment and thus, IMHO, negative.
 
OK, but again I ask, who was buying?  We know Joe 6-pack was selling, at desperate prices, way below market.  Is the ownership of the stores the sentiment indicator, or is it market savvy of the buyers and sellers?  During the Nasdaq bubble, did we gauge sentiment by looking at the brokerages?  Real estate, yeah, we definitely look at the rise in amateurs getting their license.  But, what about gold in the past?  I have never before seen 'Cash for Gold' stores.  And now, wham!

Isn't sentiment indicated by the type of buyers and sellers, and how they are buying and selling, especially whether they are leveraged?  If Joe 6-pack is selling, are you ignoring that fact and by choice paying attention to ownership of the stores instead?  Why?
 
I'm not sure we can draw many conclusions from cash for gold stores.  They are simply following a pawn store business model and focusing on gold.  It's a lot easier to do when gold is @ $1500 an ounce vs. $500 an ounce.  Suddenly the gold in the closet is worth enough to take notice.  The sellers are either unwise or very desperate.  You still only get 33 cents on the dollar.  Not sure where the gold actually ends up, but it's pure arbitrage relative to the spot price, which is not set by cash for gold stores.
 
daedalus said:
I'm not sure we can draw many conclusions from cash for gold stores.  They are simply following a pawn store business model and focusing on gold.  It's a lot easier to do when gold is @ $1500 an ounce vs. $500 an ounce.  Suddenly the gold in the closet is worth enough to take notice.  The sellers are either unwise or very desperate.  You still only get 33 cents on the dollar.  Not sure where the gold actually ends up, but it's pure arbitrage relative to the spot price, which is not set by cash for gold stores.
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"Spot" as most know it is not set.  It is the buy price of immediate delivery at LBMA.  And the LBMA spot also responds to immediate delivery gold that is being bought and sold on other markets, ie. the Comex, Shanghai, Tocom, etc.  Those markets can also respond to whatever is being bought and sold at the 'Cash for Gold' stores, and they unequivocally respond to the stores in China that sell gold. 

When you say that, "It's a lot easier to do when gold is @ $1500 an ounce vs. $500 an ounce.", aren't you also saying that Americans are much more likely to sell when gold is $1500 than $500?  For every seller, there is a buyer who is just as willing.  Why are none of you asking or venturing forth who the buyer(s) are?  If Cash for Gold stores are some type of sentiment indicator, what are the buyers indicating?  Was Joe 6-pack so smart that he sold at the top, which he never does?  Or is it different this time?

BTW, the amount of scrap gold is calculated and published monthly.  The amount of scrap gold that was introduced into the market place at $1850 POG was more than average, but not enough to be an indicator of anything. 
 
morekaos said:
I see your point but I equate the proliferation of cash for gold corner shops to the general public getting in on any get rich quick mania.  ie.  During the real estate bubble we had everyone and their mother (quite literally) getting an agent license.  When "pot" became legal I can recall several people I know opening medicinal shops all over the place (many since closed).  This is no different, Most of these storefronts are not Goldman Sachs...they too are Mom and pop operations.  Thus an indicator of public sentiment and thus, IMHO, negative.
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So, was that a sentiment indicator of the top or bottom in the pot price?
 
I don't pretend to have studied the gold market even a tenth as much as you.  What I am saying is that offering people $500 for their $1500 worth of gold gets more action and more profiteering than offering them $166 for the same amount of gold if the gold is worth $500.  Surely you can easily find buyers @ $1000 for $1500 worth of gold, and if you paid $500, you're eating well.  The money is being made on the buy, not the sell.  I posit that most of these places are simple arbitrageurs, and not gold traders.  And to be clear, I am agnostic on the price of gold.  I have the amount I want to hold, which will neither grow nor shrink without a major move, either up or down.  And personally I do not see as many cash for gold advertisements now from newer businesses as I did when gold was @ $1800/oz.
 
daedalus said:
I don't pretend to have studied the gold market even a tenth as much as you.  What I am saying is that offering people $500 for their $1500 worth of gold gets more action and more profiteering than offering them $166 for the same amount of gold if the gold is worth $500.  Surely you can easily find buyers @ $1000 for $1500 worth of gold, and if you paid $500, you're eating well.  The money is being made on the buy, not the sell.  I posit that most of these places are simple arbitrageurs, and not gold traders.  And to be clear, I am agnostic on the price of gold.  I have the amount I want to hold, which will neither grow nor shrink without a major move, either up or down.  And personally I do not see as many cash for gold advertisements now from newer businesses as I did when gold was @ $1800/oz.
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You are absolutely correct on one thing; they are arbitrageurs, not traders.  They sell, as quickly as they can, to a refiner.
 
morekaos said:
Will he end up being right?  Said this in July...

?I wouldn?t be surprised to see a nice bounce in gold from this level up to $1400, $1440, but I don?t know if it?s sustainable after that.? His advice to investors: ?Hit the bid? once gold climbs to near $1400... $600 to $800 an ounce is certainly a possibility.?

http://finance.yahoo.com/blogs/daily-ticker/don-t-fooled-sell-gold-1-400-then-113216641.html
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Gold is going to take another big smack down, when India leases it's gold and it gets sold on the open market.  I do not know the exact time, but it should be soon.
 
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