Gold Monitoring Thread £ GBP only

[9x883]

+£2000 🥳🥳🥳🥳🥳

[Thelonerangershorse]

Must be a while since you watched Eyes Wide Shut, I'm thinking more John Wick or Bladerunner.

[treetop1280]

On 11/05/2024 at 09:33, Bratnia said:

China prohibits exporting gold, whilst the West is permitting gold to be exported to China. With 123 times more paper gold than physical gold at some point physical gold in the West will become scarce. Western savers will have to rely more upon paper gold and the additional risks that involves - that if there is a gold-rush, sudden/high demand for physical delivery they'll be in a queue of 123 for each claim to one ounce of gold - highly likely being disappointed (lost their money). Indeed left as-is China may very well at some point opt to initiate/drive such a gold-rush, however instead as that risk rises the West (US) may very well look to impose changes such as prohibiting the export of gold, and when such policies are introduced they're more inclined to be accompanied with other conditions, such as the amount of physical gold individuals can own/hold. In part that is already evident in the higher taxation that the US applies to Americans holding gold.

Totally lost , 133 times more paper gold than real gold ??? what’s paper gold ??? How do you get it , and how do you cash it in ??? as in change it into cash , thanks 

[Chronos]

1 minute ago, treetop1280 said:

Totally lost , 133 times more paper gold than real gold ??? what’s paper gold ??? How do you get it , and how do you cash it in ??? as in change it into cash , thanks 

https://www.goldpriceforecast.com/explanations/paper-gold/

[HonestMoneyGoldSilver]

18 minutes ago, treetop1280 said:

Totally lost , 133 times more paper gold than real gold ??? what’s paper gold ??? How do you get it , and how do you cash it in ??? as in change it into cash , thanks 

Member in the tuck shop at primary school when you put in an IOU to pay back the 55p it cost for a tin of coke, 3 packets of crisps, 2 freddos and a Lambert and Butler?

Did you ever pay it back? That's paper gold

[HonestMoneyGoldSilver]

7 hours ago, Thelonerangershorse said:

So, it's Sunday morning everyone, lets have predictions for next weekend's close.

Just tell em what they want to hear - my prediction for next week is 70 quint million zillion

A new ATH might be hit before the end of the month, either this week or next, but equally I don't think it's sustainable

I'll go for a close of £1927 next week but I'm stick to anything above $2400 is too hot for this time of year. Look to September for the rocket launch

[ChrisSilver]

Some posts moved to the hangout topic, please use that topic for general chat and not the gold monitoring topic.

https://www.thesilverforum.com/topic/86368-📌-premium-members-hangout/page/297/

[HonestMoneyGoldSilver]

16 minutes ago, Thelonerangershorse said:

Just watched this, I call BS.

https://www.youtube.com/watch?v=8xh7ZRWUmMw

 

He's pushing the narrative that once the stock markets and USD collapse, the central authorities will be forced to revalue all debt and currency into gold and by extension, silver. If you do those calculations you can put gold at an insanely high price (think if the US revalued the $35 trillion debt + $35 trillion assets into gold) and thus for a limited period during the currency revaluation transition, you could buy a house for a few ounces of gold or 75-100 ounces of silver

I agree it's highly speculative but it's fun to think about. I could buy an entire street with my stack 😂

[Bratnia]

1 hour ago, treetop1280 said:

Totally lost , 133 times more paper gold than real gold ??? what’s paper gold ??? How do you get it , and how do you cash it in ??? as in change it into cash , thanks 

Options/Futures/Swaps. Mostly those are cash settled. I write (sell) a Option to deliver 100 ounces of gold on a particular future date - or many multiples of such contracts. Come that date and the contract expects the seller of 100 ounces of gold to be provided to the buyer. With many such Options/Futures contracts however, oil, pigs bellies, whatever many don't actually want to take delivery, rather they'll accept (or pay) the cash value/difference instead. Investors aren't buying to get a ton of pork delivered to them at home, rather they're buying to hopefully make gains, more money. Similarly sellers/writers create those Options in expectation of making money. One side wins, the other loses, same with any other investment such as stocks. When there are few taking actually delivery of Options, cash settlements instead, so more Options/contracts are created than what actual amount of gold/whatever is actually available. What is commonly considered as being paper-gold, exists on paper only (or nowadays in a computer system/virtual). Basically its a way to leverage, scale up gains (or losses) relative to small changes in prices. The market is more efficient when leverage is being used as even a whisper of a small change can yield a decent profit (loss) that otherwise non-leveraged might incur too much in the way of dealing fees/whatever in order to be viable to arbitrage.

You can generate a form of 'dividend' from gold with Options/Futures as the price includes a element of time-value, reflective of interest that might have been earned/paid over the length of time of the contract. So some investment houses may hold gold and buy (or sell) some Options/Futures rather than just holding gold alone. Or even just buy (or sell) Options and hold no gold. The sellers of contracts often buy those back again just before expiry (delivery date) in order to avoid having to find (buy) gold in order to hand over to the Option contract holder.

The 123 paper-gold to gold ratio is indicative that a lot more gold is being offered for delivery than what gold is actually available. If all of those that opted to buy contracts did so with the intent to take delivery of physical gold, not sell those contracts before the contract expiry date, then there's no way all of those contracts could be honoured.

[treetop1280]

I take it is for the big traders ,  so your average person would prefer the actual gold in there hands rather than a piece of paper to cash in , thanks 

[Bratnia]

42 minutes ago, HonestMoneyGoldSilver said:

He's pushing the narrative that once the stock markets and USD collapse, the central authorities will be forced to revalue all debt and currency into gold and by extension, silver. If you do those calculations you can put gold at an insanely high price (think if the US revalued the $35 trillion debt + $35 trillion assets into gold) and thus for a limited period during the currency revaluation transition, you could buy a house for a few ounces of gold or 75-100 ounces of silver

I agree it's highly speculative but it's fun to think about. I could buy an entire street with my stack 😂

Debt is (fiat) money so with around $300 trillion of total global debt and around 200,000 tonnes of gold you could peg fiat money per troy ounces of gold at around a $46,666/oz rate in order to move to a gold standard. From a US only perspective 35 trillion debt and 8000 tonnes of gold holdings = $140,000/oz price would be required, near three times higher than the global figure, or a.k.a the US dollar/debt would need to fall by around 66%. Nowhere near as bad as the Wall Street Crash when prices halved, halved again and halved yet again (-87.5% decline) ... so obviously everything is fine.

[PapaLazarou]

32 minutes ago, Bratnia said:

You can generate a form of 'dividend' from gold with Options/Futures as the price includes a element of time-value, reflective of interest that might have been earned/paid over the length of time of the contract

 

The "element of time-value, reflective of interest that might have been earned/paid" to which you refer is generally referred to as "cost of carry" as regards a futures contract. This is the term used whether the underlying product be either a physical or a financial product.

 

Options prices are based on the futures price and, as such, the "cost of carry" is already inherent.

 

"Time value" per se is a term used specifically to refer to that part of an option price which is not "intrinsic value". It is fundamentally a gauge of the expected value of the strike price of the option upon expiry. 

 

There are, of course, further elements involved (eg implied v actual volatilty) but they are relatively insignificant as a rule. 

[Bratnia]

5 minutes ago, treetop1280 said:

I take it is for the big traders,  so your average person would prefer the actual gold in there hands rather than a piece of paper to cash in , thanks 

Each standard Option is 100 ounces of gold, so north of $236K value at recent price levels. There are however E-mini alternatives that are 50 ounces of gold around $118K recent value. If you owned that much gold you could offer it up for delivery in say a years time for a particular price, and receive some interest as well (time-value). Or use Futures to do similar. So depends upon your definition of average person, whether $100K odd in gold is a lot or not. For someone with say 3 400oz standard bars they might hold a combination of gold price exposure methods, some in-hand, some in Options or other such paper-gold methods. Each method has its own distinct form of risk/benefits (such as perhaps being able to be traded 24/7 via a few mouse-clicks).

[PapaLazarou]

12 minutes ago, Bratnia said:

If you owned that much gold you could offer it up for delivery in say a years time for a particular price, and receive some interest as well (time-value)

The easiest way to think of the"interest/time-value" is to imagine yourself as an insurer. The price at which you sell the option (call in this case) is the insurance premium you receive. As long as the option expires worthless then you keep the entire premium.

If the option expires "in the money" then you are liable for potentially huge losses.

The allusion to insurance is not coincidental, hence selling an option is often referred to as "writing" (cf "underwriting") that option. 

Edited May 12 by PapaLazarou

[Bratnia]

8 minutes ago, PapaLazarou said:

The easiest way to think of the"interest/time-value" is to imagine yourself as an insurer. The price at which you sell the option (call in this case) is the insurance premium you receive. As long as the option expires worthless then you keep the entire premium.

If the option expires "in the money" then you are liable for potentially huge losses.

The allusion to insurance is not coincidental, hence selling an option is often referred to as "writing" that option. 

Thanks PapaLazarou

We've been in a low interest rate era for many years now, in higher interest rate periods it was more common to eek out additional benefits/interest via the likes of Futures/Options, much less so since 2008/9 so its many years since I last looked at/traded Futures/Options. You clearly have much more insight that myself, guess you work(ed) in that field rather than me just being a regular investor. My use used to be having a pre-known price/amount of a asset that I'd be happy to sell at and then add on contracts to yield a bit more rewards/earn 'interest' on top.

In more remote places in India, not well served by regular banking systems, I believe its quite common for individuals to save using gold. There are also money lenders that will typically lend up to 70% of the spot gold value of a individuals gold, for a 7% type pro-rata rate of interest. So someone with some gold might deposit that with a money lender in return for cash, spend that cash on whatever, and then maybe a week later once they’ve been paid pay off that loan and get their gold back. Something like a 0.13% interest cost amount to have borrowed the cash for the week (borrow £100, pay back £100.13). Both parties happy, as the lender has gold and receives up to 7%/year interest on top, individual gets cheap access to cash, and if the borrower defaults the lender has more gold on their books in effect acquired at a 30% discount price.

Just methods to potentially make your capital work that bit harder.

[jultorsk]

Surely bounces to da moon now that this BullionVault advert...., ahem, article in DM is out.  (no investment advice). 

https://www.dailymail.co.uk/money/mailplus/article-13406865/As-world-lurches-crisis-crisis-experts-share-24-carat-advice-GOLD.html

 

[Bratnia]

20 hours ago, Thelonerangershorse said:

Not me.

Nor me.

[Bratnia]

22 hours ago, HonestMoneyGoldSilver said:

On relevant things check out this video below. Start at 5:20. It's super boring and conservative but 100% on the money IMHO. Pay attention to their predictions for gold and silver the rest of the year. Mirrors what I've been saying. This summer until late August/early September will be consolidation, not wild appreciation. If gold goes above $2400 it will fall back again until we get to September. The last 4 months of 2024 will be hot for gold and silver and will continue to remain hot until the end of 2025 at the earliest if not 2026. I predicted that in the middle of 2023 BTW and have consistently said the earliest I would sell would be late 2025, if at all

 

... for the US

Much capital flighted to the US due to uncertainties/wars. The S&P500 has been pulled up a lot by the Magnificent 7. As fear subsides so might capital flight out of the dollar to ... wherever 'better' returns might be seen to potentially be made. The UK's FT All Share index has lagged, its PE is around half that of the S&P500, as money leaves the US so might the price of gold in dollars rise, as might a strengthening Pound be additional rewards for US investors who bought Pounds to buy the UK's FT All Share. If a American gives 1.25 USD to buy a Pound, and the FTAS index they buy increases by 15%, and the Pound strengthens to buy 1.35 USD, then the Americans reward is over 24%

Historically stock price only (FT Composite/All Share) to gold ratio has broadly seen the two provide similar returns. Stocks obviously pay dividends on top, however we might use that price only / gold ratio as a input into Robert Lichello's AIM - which in turn provides a indicator of how much gold weighting to start each year with in a stock and gold asset allocation/portfolio

Historically that yielded better results than just simple 50/50 yearly rebalanced stock/gold, reduced the 30 year SWR risk and in some cases scaled up the rewards considerably.

In short, what might be a case of stocks down, gold up ... for American's, needn't be true for a British investor who could see stocks up, gold down. AIM had 2024 start with just 7% gold being indicated, i.e. is suggesting that stocks may start to do well, the price of gold in Pounds may presently be relatively high.

AIM has done a reasonable job in the past, for instance with reference to the second chart in the above image late 1960's was a relatively poor start date for retirees, stocks struggled, as was the late 1990's. AIM at those times was suggesting relatively high gold weightings. In the early 1980's after large gold gains and after which gold yielded relatively low/poor returns up to the late 1990's, AIM indicated relatively low gold weightings. Again more recently it is flagging relatively low gold weightings.

Perhaps by year end 2024 the Ukraine and Israel wars might have been resolved, fear being replaced with greed, stocks up, gold down. To recent the AIM indicated 7% year start gold weighting (so 93% stock) has been a relatively bad outcome, gold has done well, stocks have been flat, so obviously it is not a great indicator across all of time and time periods, but more broadly it does tend to do a OK job of indicating reasonable/appropriate allocation weightings.

Edited May 12 by Bratnia

[BLOOMMAN101]

With Gov. Jim Pillen’s recent signature, Nebraska has become the 12th state to end capital gains taxes on sales of gold and silver.

LB 1317 is the fourth major sound money bill to become law this year, as state lawmakers across the nation scramble to protect the public from the ravages of inflation and runaway federal debt.

Under the new Nebraska law, any “gains” or “losses” on precious metal sales reported on federal income tax returns are backed out, thereby removing them from the calculation of a Nebraska taxpayer’s adjusted gross income (AGI).

Supported by the Sound Money Defense League, Money Metals Exchange, and in-state advocates, Nebraska’s sound money measure passed out of the unicameral legislature’s Revenue committee unanimously before being amended into a larger bill.

Sponsor Sen. Ben Hansen said upon news of the formal enactment of his legislation:

Gold and silver are the only forms of currency mentioned in our Constitution and with that comes the people’s ability to use it as such without penalty from the government. Saving, and using, gold and silver is our right and one of the only checks and balances to our federal government’s unending devaluation of our paper currency.

Taxpayers often realize ‘gains’ when converting the monetary metals back into Federal Reserve notes even though the ‘gains’ do not reflect an increase in real value but rather reflect the currency’s ongoing devaluation.

Despite the lack of “real” gains, the Internal Revenue Service imposes capital gains taxes on such transactions. Nebraska has now opted out at the state level, declining to carry the IRS’s position into the definition of Nebraska income.

Jp Cortez, executive director of the Sound Money Defense League, explained during his testimony before the Revenue Committee that the ferocious wave of inflation facing Nebraskans is largely caused by harmful actions of the Federal Reserve:

The state can take a different course and provide Nebraska citizens cleaner access to gold and silver ownership – and these metals are not only a proven inflation hedge but states all over the country are remonetizing constitutional sound money in the form of gold and silver.

Eleven other states already do not charge an income tax on sales of precious metals, with Arkansas, Arizona, and Utah recently enacting such laws. Meanwhile, Iowa, Georgia, Oklahoma, Missouri, West Virginia, and Kansas have been considering similar legislation in 2024.

“Investments in precious metals coins and bullion in Nebraska are now rightly exempt from both sales tax and income tax,” said Stefan Gleason, CEO of Money Metals and Chairman of the Sound Money Defense League.

Neutralizing Nebraska’s income tax treatment of the monetary metals removes significant disincentives in the Cornhusker State against the ownership and use of the monetary metals.

Meanwhile, LB 1317 revises the state’s formal definition of money by adding language that states: “Money does not include central bank digital currency.”

The new law defines central bank digital currency as “a digital medium of exchange, token, or monetary unit of account issued by the United States Federal Reserve System or any analogous federal agency that is made directly available to the consumer by such federal entities. Central bank digital currency (CBDC) includes a digital medium of exchange, token, or monetary unit of account so issued that is processed or validated directly by such federal entities.”

Sen. Hansen said: “I believe we have to be extra vigilant in our assessment and application of a Central bank digital currency to make sure they do not become a danger to our freedom. That’s why we defined in LB 1317 that CBDC’s are not classified as currency in Nebraska, which should help protect against unwarranted mandates for their use in the future.”

Versions of this “anti-CBDC language” have advanced or signed into law in Tennessee, North Carolina, and Florida, South Dakota, and Indiana . Congressman Alex Mooney has also introduced a federal measure to block the Federal Reserve’s digital currency scheme.

In his testimony, Cortez discussed the potential risks of adopting a CBDC, including creating a greater ability to track all financial transactions, disallowing certain types of purchases, or even completely “turning off” a targeted individual’s access to money.

Nebraska joins Utah, Wisconsin, and Kentucky as states to have enacted pro-sound money legislation into law so far in 2024.

Currently ranked 22nd in the 2024 Sound Money Index, Nebraska’s ranking is expected to rise.

 

[Dankanugget]

1916

[Chronos]

Meet the doomsayers waiting for the economy to crash:

https://www.businessinsider.com/economy-stock-market-crash-inflation-debt-jobs-economic-collapse-reddit-2024-5

[Thelonerangershorse]

2 minutes ago, Chronos said:

Meet the doomsayers waiting for the economy to crash:

https://www.businessinsider.com/economy-stock-market-crash-inflation-debt-jobs-economic-collapse-reddit-2024-5

If you're going to start taking investment advice from Reddit, can I also suggest the NBS.

[Gruff]

4 minutes ago, Chronos said:

Meet the doomsayers waiting for the economy to crash:

https://www.businessinsider.com/economy-stock-market-crash-inflation-debt-jobs-economic-collapse-reddit-2024-5

To be fair, the global economy has been on life support since 2008. It's never recovered and never will. It's over due another fatal event. But they've been kicking that can down the road for years. 

2 minutes ago, Thelonerangershorse said:

If you're going to start taking investment advice from Reddit, can I also suggest the NBS.

We are straight up lit on the NBS  

[Chronos]

Iranian lawmaker declares Tehran obtained nuclear bombs:

https://www.foxnews.com/world/iranian-lawmaker-declares-tehran-obtained-nuclear-bombs

[Upsidedown]

Just now, Chronos said:

Iranian lawmaker declares Tehran obtained nuclear bombs:

https://www.foxnews.com/world/iranian-lawmaker-declares-tehran-obtained-nuclear-bombs

Flash backs to 2003