Options
For anyone wondering about recent trends of Gold/Silver.
keets
Posts: 25,351 ✭✭✭✭✭
It is interesting to me how the thread the other day about Stack's "Gold Fax Sheet" generated so much interest. It isn't only that thread but the happenings of the past several months which puzzles so many. How is it that Gold can sell for less than spot?? Why is the market for PM's sort of slow??
The events of the past week and the past two days should explain everyone's hesitance and the seeming upside down prices. For Gold, it started the week at about $1,530, made it up to almost $1,560 and now has closed around $1,505. Silver is even worse. It had been going up for the past couple weeks and then shot up from $18.40 to $19.60, only to crash down to $18.15 today.
Insanity.
Al H.
1
Comments
I have stocks that do that daily. Tweets are the biggest reason for volatility in all markets . Cuts both ways. I’m getting numb to it. Strange times.
m
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Amen to that.
"A dog breaks your heart only one time and that is when they pass on". Unknown
It would appear some people believe there is only one correct price at a particular point in time for things. These people end up disappointed a lot.
There has been a huge dissonance between "paper gold" and "physical gold" for a while now. Gold shoots up, largely as a safe haven on paper, but there is a glut of physical gold on the market. Similar with silver.
The other thing people forget is the inefficiency of the physical gold or silver market. I can buy and sell 5000 ounces of silver for $6 in transaction costs on the futures market. I'd be lucky to sell 12 ounces of silver without a $6 transaction cost on the physical market ($0.50 per ounce bid/ask spread). The people buying gold/silver as a safe haven don't do it with physical gold/silver and actually don't want physical delivery of the metal. They are just hedging their other investments and hope to close the positions before expiration of the contract.
As a result, as you point out, there is more than "one correct price".
A dip and everybody gets flustered !😄
I give away money. I collect money.
I don’t love money . I do love the Lord God.
keets, this sudden drop Is all the reason for the lack of buying physical at such a run up in price over the past few weeks. price had been climbing and climbing, lot of resistance and scared/nervous buyers around here, but over the past few weeks, a few of my older customer's started to think maybe this run up is real(many were burned hard with the price collapse from the 2012 rapid up) and get in before it goes to 25. This price correction will only cause additional pause to nervous buyers in my area, and will probably scare away any additional buyers unless they can get a super price deal.
Iv got a lot of buyers over the past months saying 20-21 is thier target out this time around.
These comments are for this area and my customers and people I interact with and have for years. It may not be this way on the national circuit, but I can tell you, based on what I have offered on the forum and one of the regional bullion dealers I deal with , they seem to indicate the same!
Its still up man ...over all.... this year!
"flustered" isn't the correct word. There is no fundamental reason for the price increase other than economic uncertainty. People need to be reminded that the price moves both ways and they should be cautious about stacking at elevated price levels.
True story. About 15 years ago, I was hooked up with a guy who had coins & paper money to sell. The man was in his early 60s, thinking retirement and he was selling collectibles in preparation for a likely bankruptcy filing.
His story:
He was a lawyer. An educated man with a solid salary.
Right before the crash in 1980, he bought gold on his credit card. Gold crashed quickly from the $800+ per ounce he paid. He held the gold for years, paying the credit card bills from other sources but unable to retire the principle. He started selling the gold off out of desparation but that still left him with over $100,000 in credit card debt. 20 years later, gold was still at $400 and he was declaring bankruptcy.
Precious metals do not go in a straight line in either direction. And precious metals can spend decades in a bear market.
We might see $25+ silver and $2000 gold this cycle. We might also return to $12 silver and $1000 gold.
Diversification is the key. And caution is not misplaced after the recent run-up we had that was driven more by fear of stocks than any real demand for PMs.
I mentioned last week, and I'll say it again: we could get $100 drop in a day if China & the U.S. resolve the trade dispute. If you want to try and ride it out for years, no big deal. If you are holding positions established at $1000 gold, no big deal. But establishing new positions even today after the 3% drop is not without risk.
This price correction will only cause additional pause to nervous buyers in my area, and will probably scare away any additional buyers unless they can get a super price deal.
I think it's especially true in a rising market that people with a short time horizon are much more likely to get burned.
I knew it would happen.
I view gold speculation as playing chicken with billionaires. I have no interest in trying that.
the price fluctuating isn't a big deal until it's compared in terms of how it has been for many months now. that is very, very slow movement. this past week was a very quick rise and then what seemed like an even quicker fall. as jdimmick said, that sort of thing tends to make the average buyer apprehensive.
3% trading range on Gold in a week is insignificant.
Hell with cautious ....take a chance and buy the dip.
I give away money. I collect money.
I don’t love money . I do love the Lord God.
3% trading range on Gold in a week is insignificant.
perhaps it isn't significant in absolute terms, in what the dollar value is. how it is very significant is in the way it affects what buyers do and more importantly, what they won't do: buy. also, the affect on Silver was at least twice as high as Gold percentage wise, about 7%. large buyers and paper traders don't care, small buyers and "stackers" worry.
I have a core position in gold. The physical represents about 15% of my net worth. I adjust my long percentage by selling paper products (GLD and Futures). I could adjust through buying and selling coins which I do on a very, very small level, but that's truly inefficient due to the bid/asked spread. To reduce my longs I sell the ETF GLD. When I am short 1000 GLD I buy back the short and sell 1 futures contract. Thus, in my case, , to increase my long physical gold I buy paper.
Both gold and silver are poised to sky-rocket within the coming year, although doubtful it will break the ten year high of $1900.30. Mid to upper $1700 perhaps, and level off again. When looking at the United States and it's role as the economic and financial driver of world markets it becomes clear. Looking back to the ten year high, this was the moment when the United States dropped from a triple A rating to a double. Currently, as uncertainty looms almost daily pertaining to trade with not only China but other countries these worries have panicked investors not only in the U.S. but globally. Despite these rumblings from Washington, the overall economy is rock solid with no signs of slowing. Even as the markets lose hundreds of points from one day to the next, the rallies continue to drive the markets upwards. The S&P in particular. In a nut shell, the adage "full faith and credit of the United States.
Kudos to someone who understands the use of GLD.
NOT using it as a gold "position" but rather to hedge and speculate.
Bravo!
I have physical Gold and I Trade the GLD.
A 3% daily/weekly move in Any market that I trade is Significant ...
Real people for the most part haven’t been dramatically affected by the trade war...yet. Last I saw, it is still going on (slowly escalating) and I strongly believe the ChiComs will try to holdout until after the 2020 elections.
If the trade war continues on after the “October talks”, which I’m very confident they will, markets will continue to get spooked and metals will continue to rise and stock market will drop. Once people start losing jobs, retirement funds etc. is when physical buying will increase. Until then, the paper markets will react to any new information regardless of any material changes take place between the US and ChiComs and will drive the price as they speculate.
My only strategy was patience. For 5-6 years, I threw gold in the back of my safe at $1,150-1,250 per oz. These were mostly $5 and $10 modern commems along with pre-1933 $5’s $10’s and $20’s. I promised myself I’d sell whenever it hit $1,500 per oz. Two weeks ago I kept my promise.
I’d start all over again at around $1,200.
I hold gold.... Lots of it...for a long time.... and purchased it at $300-400 oz.....So, I watch the market ebbs and flows with interest, and comfort. Cheers, RickO
Wish I could "tweet" to change the flow to go my way, is it like Dorothy clicking the heels of her ruby slippers?
I'm not buying your story in a million years.
.
Successful transactions with : MICHAELDIXON, Manorcourtman, Bochiman, bolivarshagnasty, AUandAG, onlyroosies, chumley, Weiss, jdimmick, BAJJERFAN, gene1978, TJM965, Smittys, GRANDAM, JTHawaii, mainejoe, softparade, derryb, Ricko
Bad transactions with : nobody to date
I bought gold below spot and it fell below that. Ah, but it's still beautiful, in hand. When eagles soar.
``https://ebay.us/m/KxolR5
The metals last couple of months solid uptick. Numismatic coins horizontal to south of steady.
Online retail sales of numismatic material picking up as summer doldrums over. Some recent show and online purchases have moved quickly at an acceptable positive margin. At Houston shows I am chasing nice slabbed gold coins near melt with some occasional slabbed numismatic buys from a major wholesaler who has a shop in SA.
The fact Nice slabbed USGTC can be acquired near melt has but a dampener on gold slabbed high grade mods eroding buyer interest, forcing them trade near melt. So many choices for the gold bug.
I believe gold and silver headed higher but like poker we need to see how the hand plays out and not commit too much to an all in.
The Royal Mint is planning on launching its own ETF for gold. It will be set up as an exchange traded commodity (ETC), backed by gold stored in the vault of the Royal Mint.
The ETF is expected to be listed on the stock exchanges of the United Kingdom, Germany and Italy.
I sold my 90% to the LCS and was quoted spot of $18.91 and was paid 6% back of spot.
I had a lil over $60 face that I had picked up on average right under $15.
$20 was my target but once we retreated from 19 I got weak hands and dumped.
If gold continues strong many others will emerge.
Currently I trad/follow....
GLD.. Very liquid no convert.
Sprott has a CEF (PHYS) in Canada (trades in US) that is backed by bullion with the added bonus that you can ask for delivery. Slight discount to NAV but very liquid. I do prefer their mixed gold and silver CEF.
THe perth mint has a fund that allows you to exercise but only into their products (AAUK). NOt particularly active.
JP MORGan has a fund (SGOL) backed by gold stored in Switzerland. If you like Switzerland? No convert.
The VanEck Merk Gold Trust (ounz) - you can convert in to coins/bars. Limited liquidity