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Bumble

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  1. @fiveshotdon Next time you are selling $1 billion dollars of gold, post it on the trading thread of the forum first. I would happily have bought it off you and saved you the commission.
  2. On Weds 20th March 2019, just as London markets closed, someone sold $1 billion of paper gold contracts, temporarily driving the spot gold price below $1300. Given that within a few hours, gold had risen to $1315, by my calculation this move cost the seller about $15 million. One can only assume that this was either a huge bet on the Fed announcing a rate rise, or a failed attempt to drive the price down before option expiry at the end of the month.
  3. Well... the various commentators I have checked seem to be equally divided on the recent gold price fall. The Elliott wavers seem to think this is just a leg down that has to happen before the next leg up. Some non-Elliott people also think this is just a correction and the momentum is still upwards. Others are saying we have broken down through the previous rising trend and the price is heading lower; perhaps much lower. For some the seasonal demand in Jan/Feb is now over and we can expect weaker prices until Sept/Oct, which is the other time of the year when gold demand tends to pick up.
  4. The fact that a bid can be retracted very quickly before it is hit is what makes the situation different. Back in the days of open outcry, a trader could not signal that he wished to trade and then retract the signal as soon as another party showed interest in making the trade. Even though this might have been a useful way of discovering what price someone else was willing to trade at, or even to manipulate the price by simulating a fake demand, it was not permitted. Now, algo traders use it routinely to discover small differences in the price, in order to gain an advantage.
  5. If house prices are dropping and there are lots of people falling behind with mortgage payments, there is no point the banks repossessing properties, because there is no market to sell them into, and prices will only fall further if they try. Banks don't want lots of vacant properties on their books, because of the cost of insurance and maintenance, and the risk of vandalism. Sitting tight and hoping prices recover and payments resume is usually the best bet. The big problem is that the extent of the price falls and the arrears can go unreported. A bank's balance sheet may look healthy, but who is to say whether its mortgage book is worth what it claims to be, or what proportion of loans will be delinquent. The drawback of bailing out banks is that they are allowed to continue doing buiness even though they would be technically insolvent if they were compelled to value their assets realistically.
  6. But as I see it, we don't get to choose the number of variables. The price of gold depends on lots of variables and that is how it is. Of course, if the value of GBP falls against USD then gold becomes more expensive in GBP, but the same reasoning holds for USD. If the American economy is strong and the USD rises against other currencies this makes gold go down against USD, but that is just an artifact of the strong dollar. It tells us nothing about changes in the global demand and supply of gold, which is what prices are supposed to do. I don't doubt that USD is the most important currency, but if we wish to derive information from the price of gold we need to abstract away from the relative movements of all the fiat currencies.
  7. Many political activists have called for a wealth tax, but I find the concept beset with practical difficulties. I remember Dennis Healey, a British Labour chancellor of the exchequer in the 1970s, saying in an interview years later that he had wanted to introduce a wealth tax but couldn't find any practical way of implementing it. Firstly, there is a problem with defining exactly what it is that I own. If I have money in a bank account, then I don't own it; it is legally the property of the bank and I am just a creditor of the bank. (If anyone reading this has just learned that for the first time, please feel free to say, "Holy bad!" as loudly as you like.) But I can hardly suppose that a government would allow that money in a bank account doesn't count towards one's wealth. The concept of ownership would have to be widened to include debts owing, but that itself is fraught with difficulties. Secondly, there is a problem with valuing collectables, especially if they are illiquid. Who is to say what they are worth? What would be the procedure for valuing them, and for challenging that valuation? Thirdly, there is a problem with promises of future receivables, such as pensions. Some people have expectations of pensions from other parties, such as employers, others have private pensions, others do not have pensions at all under that name, just investments or assets that they intend to draw down upon when they retire. I don't see any simple way to treat these on an even footing. I'm fairly sure that a public sector employee approaching retirement age would be very surprised to learn that their pension is worth £500,000 and this together with the value of their house would push them over a wealth tax threshold. I've no doubt they would want their pension pot exempted from the tax, but this just reinforces the difficulty in treating investments equitably. Fourthly, there will inevitably be all kinds of exceptions that don't count towards the assessed value, and these would give rise to anomalies. No doubt it will also give rise to clever people devising schemes for managing assets in such a way as to exclude them from the assessment. If I set up a private company and transfer some of my assets into it, who is to say what the shares in the company are worth? Fifthly, there is a problem in valuing assets, such as shares, when they are owned in large quantity by a single individual. Jeff Bezos is often described as having a net worth over $120 billion, because he owns nearly 80 million shares of Amazon at over $1500 each. But that is really a market cap, not a value. If he sold his shares the price would fall considerably and the total he would receive would be far less. The above are only concerned with how the tax applies: there is also the issue of how it would be enforced. How can the government discover the silver coins that I have buried in my garden, or the timeshare I own in Greece? Or for that matter, what will happen when wealthy people just decide to leave and reside elsewhere? Are there any examples of countries implementing an effective wealth tax?
  8. But surely, no country's currency, including the USD, is determined by the gold price. The XAU is in effect just a currency itself, and there is no special significance to the XAUUSD currency cross as compared with XAUGBP or any other currency cross. One could, I suppose, use a basket of currencies to get a kind of average value for gold: I have seen charts of gold priced in SDRs. But then it is contentious as to what currencies should be in the basket and at what weightings.
  9. It is interesting that this thread is called "Gold Monitoring Thread £ Only" and yet the chartists nearly always present their charts in $ (XAU/USD). The point is that charts of the gold price look completely different depending on the currency cross. I have read recently that gold is at or close to all time highs in approximately one third of all the currencies in the world. Looking for technical formations is bound to give completely different results for different currencies. To say, "gold is priced in dollars" is missing the point. Gold can be priced in any currency you choose just by dividing through by the dollar exchange rate. It is more appropriate to point out that gold is mostly traded in dollars, but even then, it is surely the currencies of the producers and consumers of the gold that matter most: what goes on in the supply chain in between should just come out in the wash.
  10. The £85k deposit guarantee is designed to encourage people not to make a run on the bank if they get worried. In practice, the government could only afford to cover the deposits within one medium sized bank. Anything bigger and the money would have to be obtained through expansion of government debt or money printing. Would the government cover all the deposits in the event of a systemic banking collapse? Yes, but it would take quite a while to sort out, and the debt and money printing involved would eventually be inflationary. It is better to spread deposits around. More than one bank. Maybe something in a building society or a credit union. Maybe an account offshore. Maybe some foreign currency. Maybe a gold deposit. Maybe even some crypto when the price gets cheap enough. Having enough cash for a month is a good idea.
  11. This recent presentation from Jeff Christian is worth watching. Jeff runs CPM Group, which is a commodity research outfit. He is not a pumper, and indeed during 2011-2015 he was constantly criticised by pumpers because he was bearish on gold. Now he's bullish - cautiously in the short term, but more aggressively in the longer term. https://www.youtube.com/watch?v=E5a8gTVdKDs
  12. The markets were waiting for the press release from the FOMC meeting. This was issued at 14:00 EST, which is 19:00 GMT. The Fed's comments were interpreted as 'dovish', meaning less chance of an interest rate increase, or of further monetary tighteninng. This was positive for gold, so traders moved into long positions.
  13. I ordered 100 tons of gold for my personal stash this morning. Somebody at the dealer must have leaked the news.
  14. Brexit may not happen, and if it is postponed, the pound is likely to continue to rise. Also, this is seasonally a strong time for gold because of the Chinese new year gift giving. If it were me, I'd wait a couple of months, but it's never a bad idea to buy a regular amount and benefit from cost averaging.
  15. This is an important point. Bear in mind that catalytic conversion is a chemical process, and in chemistry what matters is not the mass of substance you have but how many atoms or molecules. That is why chemists usually work with moles as a unit, not mass. Because platinum atoms have a much higher relative atomic mass than palladium, even at current prices (Pd about $1300/Toz, Pt about $800/Toz) you get more palladium atoms for your dollar than platinum atoms. If (big if) platinum and palladium were chemically equally effective as catalysts, then you would only need 5g of palladium to do the same job as 9g of platinum. I have searched for data on the web about the relative effectiveness of these metals as exhaust catalysts, but I have not managed to find anything concrete. But there is definitely no reason to suppose they are equally effective on a mass-for-mass basis. In any case, car engines are usually designed with a particular exhaust system in mind: switching from one catalyst to another is not so straightforward.