Garpal Gumnut
Ross Island Hotel
- Joined
- 2 January 2006
- Posts
- 13,473
- Reactions
- 9,779
Well, that didn't take long ...
gg
gg
Gold Price - Where is it heading?
- Thread starter guycharles
- Start date
-
- Tags
- gold gold price
over9k
So I didn't tell my wife, but I...
- Joined
- 12 June 2020
- Posts
- 5,245
- Reactions
- 7,360
Gold's an inflation hedge gumnut so the more we have inflation, or just news banging on about it, the more gold runs.
I bet there'd be a way to plot a graph of the number of news articles/pieces banging on about inflation over the moves in the gold price if you had some way of tracking/tallying them
- Joined
- 13 February 2006
- Posts
- 5,075
- Reactions
- 11,513
- Joined
- 13 February 2006
- Posts
- 5,075
- Reactions
- 11,513
About silver, but will affect gold:
“What we call chaos is just patterns we haven’t recognized. What we call random is just patterns we can’t decipher.”
Chuck Palahniuk
Trying to decipher the opaque London gold and silver cash markets presents a formidable challenge - especially since understanding this market, as the world’s largest physical gold and silver market, is terminal to the deception that it uses to fix the global prices of gold and silver.
Multiples of the annual global mine production of both of these monetary metals are traded in the London immediate ownership cash market, each day.
Utilizing leverage to fix prices (up or down) never ends well and thoughts of markets such as the Kuwait Souk Al-Manakh ‘Camel Market’ stock fraud come to mind.
At its peak in 1981 this Kuwaiti stock market, run out of a former parking garage, became the 3rd largest stock market by capitalization in the world.
The Kuwait Camel Market used a system of check kiting to drive Middle Eastern company stocks to the moon.
Then one day, an individual tried to cash one of the kited checks and discovered that there were no funds available. This led to further interesting discussions among other Camel Market investors, who also tried to cash their checks, with the same result.
Camel Market stocks then came back from the moon and, in a few days, suddenly nobody showed up for the Camel Market opening bell. That was it.
What the Kuwait Camel Market and the London gold and silver market share is non-existent assets (cash in the former, phantom gold and silver bars in the latter) to set market prices.
And the silver market has seen 6 years of global supply deficits of silver bars and the 2024 global silver market deficit is projected at 265 million (M) oz.
One would expect that with this level of silver to come out of vaults this year to meet global demand that the vaults in London would be drawn-down.
But what we see when we look at London silver vault stocks is that London vault holdings have, counter-intuitively, flat-lined since 2022 (see Figure 1 below).
The signal is that of the London silver ‘Float’ that is not claimed by ETFs, not all available to market.
The London silver total Float in August 2024 was 9,599 tonnes.
This next raises the question of how big is the NET vault silver Float in London that is available to market?
The London Bullion Market Association (LBMA) does not disclose this information however let’s try to estimate the figure.
Figure 1 - London Silver Vault Holdings [tonnes]; source: LBMA and goldchartsRus.com
We can see in Figure 1 above that in January 2024 London vault holdings dropped to approximately 25,500 tonnes of silver - see the vertical red arrow.
At the same time, in January 2024, the 2 months implied lease rate for silver surged to 3%, as shown by the red arrow in Figure 2 below, signaling market shortage of the metal (note also that Implied Silver Lease Rates have been elevated signaling physical market supply stress since 2022).
The implication is that the red line (the dotted red line in this case) for available London silver holdings is not far below 25,500 tonnes.
The NET London vault Float may be as little as 1,000 tonnes (32M oz.) of silver as shown by the dotted red line in Figure 1 above - or less - in a 1.3B oz. annual global silver market and with standing cash market claims in London estimated at 5B oz.
The remainder of the London vault silver Float (i.e. other than the Net Float) is assumed to be privately held and not available to market at current prices.
While there are other vault stocks of silver globally, the inability of silver vault holdings to drop materially below current levels is of interest.
While, by design, we cannot know the Net Float of London vault silver, the signals from the vault stock and implied silver lease rates bear close scrutiny as we go forward.
There may be very little actual silver, but infinite paper silver, available in London.
jog on
duc
“What we call chaos is just patterns we haven’t recognized. What we call random is just patterns we can’t decipher.”
Chuck Palahniuk
Trying to decipher the opaque London gold and silver cash markets presents a formidable challenge - especially since understanding this market, as the world’s largest physical gold and silver market, is terminal to the deception that it uses to fix the global prices of gold and silver.
Multiples of the annual global mine production of both of these monetary metals are traded in the London immediate ownership cash market, each day.
Utilizing leverage to fix prices (up or down) never ends well and thoughts of markets such as the Kuwait Souk Al-Manakh ‘Camel Market’ stock fraud come to mind.
At its peak in 1981 this Kuwaiti stock market, run out of a former parking garage, became the 3rd largest stock market by capitalization in the world.
The Kuwait Camel Market used a system of check kiting to drive Middle Eastern company stocks to the moon.
Then one day, an individual tried to cash one of the kited checks and discovered that there were no funds available. This led to further interesting discussions among other Camel Market investors, who also tried to cash their checks, with the same result.
Camel Market stocks then came back from the moon and, in a few days, suddenly nobody showed up for the Camel Market opening bell. That was it.
What the Kuwait Camel Market and the London gold and silver market share is non-existent assets (cash in the former, phantom gold and silver bars in the latter) to set market prices.
Nose Under The Tent Of The London Silver Vaults
The most most levered between the gold and silver markets in London is the silver market.And the silver market has seen 6 years of global supply deficits of silver bars and the 2024 global silver market deficit is projected at 265 million (M) oz.
One would expect that with this level of silver to come out of vaults this year to meet global demand that the vaults in London would be drawn-down.
But what we see when we look at London silver vault stocks is that London vault holdings have, counter-intuitively, flat-lined since 2022 (see Figure 1 below).
The signal is that of the London silver ‘Float’ that is not claimed by ETFs, not all available to market.
The London silver total Float in August 2024 was 9,599 tonnes.
This next raises the question of how big is the NET vault silver Float in London that is available to market?
The London Bullion Market Association (LBMA) does not disclose this information however let’s try to estimate the figure.
 |
We can see in Figure 1 above that in January 2024 London vault holdings dropped to approximately 25,500 tonnes of silver - see the vertical red arrow.
At the same time, in January 2024, the 2 months implied lease rate for silver surged to 3%, as shown by the red arrow in Figure 2 below, signaling market shortage of the metal (note also that Implied Silver Lease Rates have been elevated signaling physical market supply stress since 2022).
The implication is that the red line (the dotted red line in this case) for available London silver holdings is not far below 25,500 tonnes.
The NET London vault Float may be as little as 1,000 tonnes (32M oz.) of silver as shown by the dotted red line in Figure 1 above - or less - in a 1.3B oz. annual global silver market and with standing cash market claims in London estimated at 5B oz.
The remainder of the London vault silver Float (i.e. other than the Net Float) is assumed to be privately held and not available to market at current prices.
While there are other vault stocks of silver globally, the inability of silver vault holdings to drop materially below current levels is of interest.
 |
There may be very little actual silver, but infinite paper silver, available in London.
jog on
duc
- Joined
- 29 January 2006
- Posts
- 7,217
- Reactions
- 4,438
Another week ends and another record close for gold.
Middle East tensions are unlikely to settle any time soon, so the safe haven premium of POG looks like it will not only hold, but strengthen in the near term.
Middle East tensions are unlikely to settle any time soon, so the safe haven premium of POG looks like it will not only hold, but strengthen in the near term.
Sean K
Moderator
- Joined
- 21 April 2006
- Posts
- 22,141
- Reactions
- 11,270
There's got to be a proper correction soon.
The consolidation between April and July was healthy, but hardly a correction.
Monthly chart looking pretty parabolic, but non-log.
The consolidation between April and July was healthy, but hardly a correction.
Monthly chart looking pretty parabolic, but non-log.
- Joined
- 13 February 2006
- Posts
- 5,075
- Reactions
- 11,513
Mr Sean,
The seventies bull:
Long way to go yet!
jog on
duc
The seventies bull:
Long way to go yet!
jog on
duc
Sean K
Moderator
- Joined
- 21 April 2006
- Posts
- 22,141
- Reactions
- 11,270
- Joined
- 19 October 2005
- Posts
- 4,370
- Reactions
- 6,467
Probably what you all hunger for is guidance. I am come from the macro visionary Sri David Hunter. I carry his latest message as it pertains to gold, where it has become clear to him that a conservative terminus for this run is US$3,000 and this might well be reached this year! Or early next. He says GDX should reach 65, GDXJ -> 100, SIL -> 75. Then finally comes the global deflationary bust which will sink some big banks and everything'll get sold to meet obligations that are exacerbated by 'derivatives'. Gold could get smashed down to US$2,000, nowhere near as bad as equities and as the coordinated central banks intervene against nasty reality with unprecedented reflationary measures, gold will rise from its tomb after a year or so and begin its ascent to infinity US$20,000 and beyond by the end of the decade. Just thought you should know, I am just the blind emissary conveying his inspired message.
Sdajii
Sdaji
- Joined
- 13 October 2009
- Posts
- 2,090
- Reactions
- 2,155
A correction isn't inevitable unless it's 'overvalued', which in the case of gold is pretty much impossible to measure definitively because gold's value is entirely arbitrary at anything above its commodity value, which it has been way beyond since thousands of years ago.
I think most people would currently assume that gold's value is going to be higher in one year than it is now, and pretty much everyone would agree that it will be higher in 10 years than it is now, so I don't see any reason to be confident about an upcoming correction.
Gold's price stayed fairly stagnant for around four years and only rallied earlier this year. Inflation is through the roof in most parts of the world; if you think it's bad in Australia, you should see what it's like in other regions! I'm currently in Thailand and have been hanging out with sweatshop workers from Laos (where I'll be heading in a week or so and usually spend a lot of time) who have left their home because they can't survive on $2-3 per day so they're working like literal slaves (sleeping on the floor, working 14 hours or so until they shower, eat and sleep, then repeat and if they're lucky they may get a day or two off, all for about AU$7 per day, which is the best option they have). In Laos I used to get around 5,000 kip per Australian dollar, and I now get 15,000 kip per dollar, and that's against the Australian dollar which itself is experiencing nasty inflation as every Australian is feeling all too nastily. Obviously a backwater impoverished country like Laos is irrelevant to global economics, I just used it as an example because it's where I'm focussing my time and attention at the moment, but similar situations exist in economies around the world and Australia is doing pretty well.
Even if gold doesn't go up in relative value, simply maintaining its value relative to commodities will cause it to increase in price when measured in dollars (or skyrocket in price when measured in many other currencies).
To go down in price/have a correction while we're seeing so much inflation, gold's value would have to drop drastically. Humans may be stupid, but it is what it is, and gold is seen as a safe haven of value, so when the value of cash crashes due to absurd financial policies and utterly insane practices like we saw in response to that Chinese lab virus, and we see things like the collapse of the Chinese real estate bubble, gold really is in a position to boom.
I'm not sure if we're going to see $20,000, but even that lofty a prediction isn't too far beyond the $800 we saw in January 1980, and if you add the inflation we're seeing on top of that, $20,000 seems entirely possible (though I don't expect we'll see it). We do seem to have an almost perfect storm for gold prices, so I think $5,000 is very likely, $10,000 this decade is not out of reasonable possibility, and $20,000 within the next 5-10 years is plausible even if unlikely.
With all that being the case, a correction in the near future is unlikely, even if possible. If we do see a correction, I'll buy as much as I can manage. I'm sure plenty of people would have the same thinking, which is why I think it's highly unlikely to happen - as soon as the gold price drops a little during this time, everyone is going to get greedy, not fearful.
- Joined
- 13 February 2006
- Posts
- 5,075
- Reactions
- 11,513
So why would you want to buy gold at these prices? Haven't you missed the train?
So where are we in 2024?
We are at $500B/week roll.
Who is actually buying?
The UK is also a deficit economy, but lots of Hedge Funds domicile in the UK. Cayman Islands: Hedge Funds. Luxembourg: Hedge Funds.
Hedge Funds want highly liquid, short duration, high coupon. Yellen is rolling $500B/week to Hedge Funds.
China, Japan, et al. are net sellers, adding to the stress of Yellen. Meanwhile, Powell was keeping rates higher for longer. 50bps does not remove Yellen's headache.
With Hedge Funds being the marginal buyer, probably on high leverage, what could possibly go wrong. If something does go wrong, what actually survives and even thrives? Stocks will collapse, Treasuries toilet paper, BTC, I have no idea. Gold however will stand strong.
With sovereign debt worldwide this high, shooting wars undiminished, economic wars hotting up, what could possibly go wrong?
jog on
duc
So where are we in 2024?
We are at $500B/week roll.
Who is actually buying?
The UK is also a deficit economy, but lots of Hedge Funds domicile in the UK. Cayman Islands: Hedge Funds. Luxembourg: Hedge Funds.
Hedge Funds want highly liquid, short duration, high coupon. Yellen is rolling $500B/week to Hedge Funds.
China, Japan, et al. are net sellers, adding to the stress of Yellen. Meanwhile, Powell was keeping rates higher for longer. 50bps does not remove Yellen's headache.
With Hedge Funds being the marginal buyer, probably on high leverage, what could possibly go wrong. If something does go wrong, what actually survives and even thrives? Stocks will collapse, Treasuries toilet paper, BTC, I have no idea. Gold however will stand strong.
With sovereign debt worldwide this high, shooting wars undiminished, economic wars hotting up, what could possibly go wrong?
jog on
duc
- Joined
- 13 February 2006
- Posts
- 5,075
- Reactions
- 11,513
Going mainstream:
Nothing particularly new for those that have been keeping an eye on this train wreck.
However now that it is making the Wall St Journal, still well respected, more fuel to the gold buying frenzy that will ultimately break out as it goes further mainstream.
jog on
duc
Nothing particularly new for those that have been keeping an eye on this train wreck.
However now that it is making the Wall St Journal, still well respected, more fuel to the gold buying frenzy that will ultimately break out as it goes further mainstream.
jog on
duc
Sdajii
Sdaji
- Joined
- 13 October 2009
- Posts
- 2,090
- Reactions
- 2,155
Man, my gold post was good enough that ASF wanted to inform me in advance that people were going to like it in the future.
Very kind, but if it can tell me something about the future, on the topic of gold, maybe just give me prices next time.
Very kind, but if it can tell me something about the future, on the topic of gold, maybe just give me prices next time.
- Joined
- 12 January 2008
- Posts
- 7,227
- Reactions
- 17,924
I liked it as it was a thoughtful post. No worries I'll still like it tomorrow.
(It took me a few seconds to see your point.)
(It took me a few seconds to see your point.)
- Joined
- 13 February 2006
- Posts
- 5,075
- Reactions
- 11,513
- Joined
- 13 February 2006
- Posts
- 5,075
- Reactions
- 11,513
Still from retail, not feeling the love.
The next tranche will be the paper gold rush. Lots will buy paper gold thinking that this is the same thing. If you buy Sprott's PHYS, yes you are buying paper gold that you can then claim the physical. But other than that, you are buying paper.
You actually want the physical, in your hand. Only then do you truly own it.
jog on
duc
- Joined
- 28 May 2020
- Posts
- 6,433
- Reactions
- 12,252
Back in september 2023, Jason Greig put himself out there when he called gold " A pet Rock".
A year after that, he admitted that Gold had gone up by 20% whereas the S&P had gone up by 1%.
Never let stats get in the way of a good story.
Mick
A year after that, he admitted that Gold had gone up by 20% whereas the S&P had gone up by 1%.
Never let stats get in the way of a good story.
Mick
Garpal Gumnut
Ross Island Hotel
- Joined
- 2 January 2006
- Posts
- 13,473
- Reactions
- 9,779
I was just browsing kitco.com and Gold has had a Capital gain % in $AUD of 571% and in $USD of 543% over 20 years.
gg
gg
Nice ... no doubt there can be some improvement on them percentages ... in the short, medium and long terms...
Kind regards
rcw1
- Joined
- 25 July 2021
- Posts
- 867
- Reactions
- 2,193
I agree that this move has reached the point where it could start a correction at any time so I'm looking for any indication that one may be coming, but today it still looks strong.
Similar threads
