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I think bullion direct is running low

bronco2078bronco2078 Posts: 10,227 ✭✭✭✭✭
in Precious Metals

I was just looking and there is no 90% in the catalog at all and prices are up on nucleo and the spreads are getting wider

The other day they had 90% in the catalog at 18X and now its not listed and the sellers on nucleo want 20x

On nucleo the spread on ASE's is 2$ I've never seen it that wide

Comments

  • derrybderryb Posts: 36,825 ✭✭✭✭✭
    I think they're all running low, or holding back inventory. If they are holding back it is because they believe it will go up,

    "Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey

  • rickoricko Posts: 98,724 ✭✭✭✭✭
    I subscribe to the 'holding back' theory...Cheers, RickO
  • cohodkcohodk Posts: 19,143 ✭✭✭✭✭
    If they are holding back it is because they believe it will go up,

    I am sure they believe this. However, it doesnt mean they are right. Dealers are humans, and human hate to realize loss. PMs are much more emotional than any other asset, so the affair and despair are much stronger. This is why people tend to die with their PMs.
    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • derrybderryb Posts: 36,825 ✭✭✭✭✭


    << <i>If they are holding back it is because they believe it will go up,

    I am sure they believe this. However, it doesnt mean they are right. Dealers are humans, and human hate to realize loss. PMs are much more emotional than any other asset, so the affair and despair are much stronger. This is why people tend to die with their PMs. >>


    didn't say they were right, but I will say their perception, based on more experience and analysis than most here, is an important consideration for others. I don't think dealers such as Tulving and other big boys work from their gut feeling alone.

    "Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey

  • coinnerdcoinnerd Posts: 492 ✭✭✭
    Large bullion dealers work on their buy sell spread. They hedge their inventory with shorts on the comex when they but large to protect from a drop. As they sell inventory they purchace longs so they will be able
    to buy new inventory if the price rises. Since these are margin accounts the cost is low to protect their business. Unless they forget to hedge they don't care what the price is when they sell. If they dont' list inventory
    they don't have it.



  • derrybderryb Posts: 36,825 ✭✭✭✭✭


    << <i>Large bullion dealers work on their buy sell spread. They hedge their inventory with shorts on the comex when they but large to protect from a drop. As they sell inventory they purchace longs so they will be able
    to buy new inventory if the price rises. Since these are margin accounts the cost is low to protect their business. Unless they forget to hedge they don't care what the price is when they sell. If they dont' list inventory
    they don't have it. >>


    there was chaos with trading computer systems the day of the last crash. I suspect there was a coordinated effort to force margin calls that could not be met. Subsequent shorting to protect from positions that could not be closed because of trading computer problems drove price down further. Brilliant on someone's part.

    "Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey

  • coinnerdcoinnerd Posts: 492 ✭✭✭
    Brilliant on someone's part.

    Yes and totally illegal. But the rule of law doesn't count in banking any more.The only rule is, if you get caught and the fine is less than the profit, you did good.

    I know a bullion dealer that had their margin account with MF Global and were damaged by them. They never stopped selling at the market. I still think the large dealers don't have the inventory.
  • cohodkcohodk Posts: 19,143 ✭✭✭✭✭
    I suspect there was a coordinated effort to force margin calls that could not be met.

    What would the reason for this be?
    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • derrybderryb Posts: 36,825 ✭✭✭✭✭


    << <i>I suspect there was a coordinated effort to force margin calls that could not be met.

    What would the reason for this be? >>


    Drive those on margin out of their position which would increase the number of sellers and lower the ask amount. Another way to further drive down price.

    "Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey

  • cohodkcohodk Posts: 19,143 ✭✭✭✭✭


    << <i>

    << <i>I suspect there was a coordinated effort to force margin calls that could not be met.

    What would the reason for this be? >>


    Drive those on margin out of their position which would increase the number of sellers and lower the ask amount. Another way to further drive down price. >>



    So the buying was based on margin. Investors used the "free" money from the FED to buy PMs. So this buying was artificial?
    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • derrybderryb Posts: 36,825 ✭✭✭✭✭


    << <i>

    << <i>

    << <i>I suspect there was a coordinated effort to force margin calls that could not be met.

    What would the reason for this be? >>


    Drive those on margin out of their position which would increase the number of sellers and lower the ask amount. Another way to further drive down price. >>



    So the buying was based on margin. Investors used the "free" money from the FED to buy PMs. So this buying was artificial? >>


    Margin buying is not funded by free money from the FED, it is a "loan" from the broker. When equity in the account falls below the maintenance level due to price loss of the position the loaner (broker) sends out a margin call for additional funds to bring the account value back above the minimum level. You're choices are to send the broker more money or sell something to create more cash funds in the account. If enough position holders are affected, dumping a position will drive down the price.

    Since their is real risk in buying on margin I would argue that the use of margin is far from artificial. Is using borrowed money to purchase a house or a car considered artificial buying? Of course not because, like marging trading, it is backed by real debt.

    Didn't you used to be a stockbroker?

    "Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey

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