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Precious metals; Redux

rk (6314) writes | more than 5 years ago

User Journal 4

In my journal I wrote a couple weeks ago about the prices versus availability of precious metals, particularly silver. It seems to be even worse now, if I can take Kitco's selling site to be any indication.

In my journal I wrote a couple weeks ago about the prices versus availability of precious metals, particularly silver. It seems to be even worse now, if I can take Kitco's selling site to be any indication.

Your choices are either to buy a large scale bars (the cheapest of which is an $11,000 silver bar), requiring a substantial cash outlay if you're middle or working class, or you can buy the sub 1 oz coins (and the Olympic edition Gold Maple), all of which trade at a substantial premium above spot price. Kitco still seems to be only offering a buy premium on silver at the moment.

More telling, I think, is that while gold and silver have been fairly volatile, trading up and down over the last week, the lease rates have been steadily climbing. Make of that what you will, but I think somebody somewhere knows that there's another time bomb ticking in the financial infrastructure somewhere. 2009 could be an interesting year in the so-called Chinese sense of the word.

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Tick tick tick (1)

tqft (619476) | more than 5 years ago | (#25336821)

http://www.bloomberg.com/apps/news?pid=20601087&sid=aLkOZnNcDmSQ&refer=home [bloomberg.com]

Lehman Credit-Swap Auction Sets Payout of 91.38 Cents (Update2)

"...
The Federal Reserve Bank of New York met with credit swap dealers and exchanges today to expedite efforts for a market clearinghouse that would reduce risks and absorb counterparty losses resulting from the failure of market makers such as Lehman. ...
``But fund managers or hedge funds, once they've used their cash, have only one option: to sell assets.''
"

What I am actually really wondering about is how much of the bloodbath in equities is from the unwinding of margin lending positions. Every fall forces more margin calls - which leads to more selling.

Also of a certain morbid interest is nhc.noaa.gov - another large hurricane would see the worlds largest insurer (AIG/US gov) selling assets to meet demands for payment.

Gold specifically (1)

tqft (619476) | more than 5 years ago | (#25337855)

Interesting hypothesis via cryptogon

http://www.minyanville.com/articles/GLD-etf/index/a/19428 [minyanville.com]

http://cryptogon.com/?p=4427#comments [cryptogon.com]

The short version: "published" price is tied to futures - no-one with sense is prepared to counterparty risk with gold futures.

Re:Gold specifically (1)

rk (6314) | more than 5 years ago | (#25337977)

Interesting observation. Of course, the spot premiums are a de facto increase in the spot price for physical settlement.

Y'know, I live in Arizona, there's still gold in them thar hills. I should start panning somewhere on the Salt or Verde Rivers. :-)

Re:Gold specifically (1)

tqft (619476) | more than 5 years ago | (#25351223)

"Y'know, I live in Arizona, there's still gold in them thar hills."
I live in Australia and my father damn well knows where there is a sizabkle alluvial deposit. The maps are mine when he goes.

mainstream media warning applies:
http://www.news.com.au/business/story/0,27753,24476457-462,00.html [news.com.au]
"In one Sydney bullion house in the past week, a senior Westpac Bank manager walked in and bought nearly $300,000 of physical gold, equivalent at current prices to roughly 6.5kg of the metal. ...
Gold's sister metal is also in high demand. Casegrande maintains that "there is a lot of investment at the moment in silver bullion . . . so much so that a lot of the refineries have a 10-week waiting list".
"

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