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S W
Member since May 2012
668 commentaries - 5 followers

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has posted a comment on the article :

Chill out dudes

- Bron Suchecki - Perth Mint

Mate there is plenty of gold. It is almost impossible to destroy the stuff.
Gold is not a commodity like wheat, sugar,rough rice etc which are subject to supply/demand issues.
Even though gold is traded on the futures market I would suggest that the contracts are 99.9% of the time are cash settled.
Bron showed that Comex has plenty of Gold and Perth Mint ship tons to Asia.

However none of that really matters. Gold is money.
I am of the firm belief that there will be a total disconnect between the physical and paper price because people will not want to sell their gold for confetti in the future.

For eg say someone had enough cash to step into the futures market and go long today and they were right in their timing and the market is going up up up and they can handle the inevitable profit taking etc and they roll over for a couple/few of years and have made a handsome paper profit because gold is $100,000 an ounce he can cash out but he wont be able to buy gold because it wont be for sale at any price except by an idiot.

Commented 4013 days ago

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Beginning of the headline :OK, it is all getting a bit silly out there on the gold interwebs, particularly in respect of the supposed physical-paper price disconnect. I have been trying to kill this meme ever since it first appeared in 2008 but it seems the idea of production capacity shortages seems too difficult for many to get. The "real" price of gold isn't what you pay for a 1oz coin on eBay. As Mish says "Premiums on small denomination coins is not the same a general premium on physical gold itself." But don't ta... Read More

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