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Gold to drop short term

quickwingquickwing Posts: 1,155
in Precious Metals
Gold will drop some more as traders put on a short gold-long silver spread in expectations that the 70:1 ratio will tighten.



But you just never know!
OLDER IS BETTER

Comments

  • BAJJERFANBAJJERFAN Posts: 31,088 ✭✭✭✭✭
    So where are wholesalers like bulliondirect getting gold eagles and buffalos to sell at these prices? What do you think the lowest selling price from the mint is for a 2008 one ounce gold eagle or buffalo coin?
    theknowitalltroll;
  • quickwingquickwing Posts: 1,155
    You can buy or sell all you want.

    Go to Kitco, major brokerage house, etc. Constant and liquid market on both sides all day everyday.
    OLDER IS BETTER
  • SmittysSmittys Posts: 9,876 ✭✭✭✭✭


    << <i>You can buy or sell all you want.

    Go to Kitco, major brokerage house, etc. Constant and liquid market on both sides all day everyday. >>



    Except delays and bigger spreads
    https://www.ebay.com/str/christyscoins
  • quickwingquickwing Posts: 1,155
    Yes, spreads have widened. Risk has exploded for those with inventory.
    OLDER IS BETTER
  • BAJJERFANBAJJERFAN Posts: 31,088 ✭✭✭✭✭


    << <i>You can buy or sell all you want.

    Go to Kitco, major brokerage house, etc. Constant and liquid market on both sides all day everyday. >>



    I think you missed my gist. At what point will the suppliers to the wholesalers suspend sales because they [the suppliers] will be selling at a loss? At some point someone has to write a check for the stuff and end up having a fixed cost.
    theknowitalltroll;
  • quickwingquickwing Posts: 1,155


    << <i>I think you missed my gist. At what point will the suppliers to the wholesalers suspend sales because they [the suppliers] will be selling at a loss? At some point someone has to write a check for the stuff and end up having a fixed cost. >>



    Very good question. I'm not sure the correct answer is short or perfect in all cases.

    The buying and selling is usually done on a huge scale with hedges in place. Buy X amount at a fixed price and simultaneously sell the same amount in the futures market at slightly higher price. That is the spread. And vice versa for the other side. The futures speculators many times are saddled with loses, not the commodity traders that have a built in "spread" of profit on each transaction. (The speculators are also the ones that take large gains from time to time not the wholesale house.) So as the "warehouse" fills with metal the short positions swell in value, offsetting each other with the positive spread in tact. Remember the wholesales are not playing the movement of price change, they just want a small spread on each transaction.

    Short book on market makers spread.
    OLDER IS BETTER
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