Category Archives: Gold Investments

Gold Investments

A Gold Forecast That Will Shock the World

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Gold Markups Add to Pain

The typical markup that bullion dealers charge customers is between 5% to 8% over spot prices and others (we won’t mention any names) skim even higher percentages!

If there’s anything that could ever make a ghastly pawn dealer look good, it might be grotesque the food chain markup in the physical bullion marketplace.

Here’s how it works:

The US Mint marks up the price of coins it produces (usually around 3%) to cover the value of the metal along with minting, shipping, and other costs. Authorized purchasers who buy from the Mint add their own markup. And if they sell to dealers who sell to the public, another markup gets added. Guess who’s at the bottom of the food chain? That’s right: physical bullion buyers.

And if bullion buyers are unfortunate enough to purchase fractional coins, they get hammered a little more. That’s because the markups for fractional coins, like a half-ounce or quarter-ounce, routinely reach above 10% to 20% of spot prices.

Here’s what it means:

In a rising gold and silver market (NYSEARCA:GLTR), rising prices can cover the steep transaction costs for buying and selling physical bullion. Conversely, in a sharply declining metals market – as we have right now – it’s impossible for lower prices to cover the ridiculously high transaction costs of taking physical delivery. And if we include the cost of storage and insurance, the pain worsens and that’s why owning physical metals are turning out to be a bad investment. Will it match the cold spell from 1980 to 2007?

Profiting From a Gold Shock

Contrary to what the very wrong gold experts have said all along, our firm has said that the real money in gold and silver would be on the short side.

On February 14, we wrote:

Despite a modestly rising stock market, the Market Vectors Gold Miners (NYSEARCA:GDX) has lagged both the broader US stock market along with the SPDR Gold Shares by a very significant margin. At present, GDX trades around $41.50 and is well below both its 50 and 200 day moving average. Buy the Direxion Daily Gold Miners Bear 3x Shares (NYSEARCA:DUST) at these levels. A double digit slide for gold would likely translate into a 20%+ loss in mining stocks. This scenario offers some big upside potential for bears.

Since then, GDX has slid 33% and our February 14 DUST trade resulted in a +29% gain. But that’s just the tip of the iceberg.

In that same report, we recommended buying JUN 40 GDX put options at $190. Today, those same GDX puts are up +525% to $1,200 per contract.

Our GDX trade was a grand slam, but forget about what already happened. What’s coming next in the gold market will shock the world.

The cute idea that frenzied buying of physical bullion by Chinese and Indian consumers is a bullish event is laughable. Consumer sentiment is always a contrarian indicator, as the gold experts, once again failed to mention. The sign of any market bottom – gold included – isn’t panic buying, but panic selling.

Our examination of the precious metals market points a very high profit opportunity for investors and traders who are 1) on the right side of the market, and 2) who are correctly positioned in the right investments. The gold shock could turn out to be one of the biggest investment themes the experts never saw coming.

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No Bear Market In Gold. “Bullish Sentiment” in the Market for Physical Gold Bullion

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You know that gold bear market that the financial press keeps touting? The one George Soros keeps proclaiming? Well, it is not there. The gold bear market is disinformation that is helping elites acquire the gold.

Certainly, Soros himself doesn’t believe it, as the 13-F release issued by the Securities and Exchange Commission on May 15 proves. George Soros has significantly increased his gold holding by purchasing $25.2 million of call options on the GDXJ Junior Gold Miners Index.

In addition, the Soros Fund maintains a $32 million stake in individual mines; added 1.1 million shares of GDX (a gold miners ETF) to its holdings which now stand at 2,666,000 shares valued at $70,400,000; has 1,100,000 shares in GDXJ valued at $11,506,000; and 530,000 shares in the GLD gold fund valued at $69,467,000. [values as of May 17]

The 13-F release shows the Soros Fund with $239,200,000 in gold investments. If this is bearish sentiment, what would it take to be bullish?

The media reports that Soros had sold his gold holdings came from misinterpreting the reason Soros’ holdings in the GLD gold trust declined. Soros did not sell the shares; he redeemed the paper claims for physical gold. Watching the gold ETFs, such as GLD, being looted by banksters, Soros cashed in some of his own paper gold for the real stuff.

The giveaway that Soros is extremely bullish on gold comes not only from his extensive holdings, but also from his $25.2 million call option on junior gold stocks. This is a highly leveraged bet on the weakest gold mines. With high production costs and falling gold price from constant short selling in the paper market, Soros’ bet makes no sense unless he thinks gold is heading up as the short raids concentrate gold in elite possession.

In previous articles I have explained how heavy short-selling triggers stop-loss orders and margin calls on investors in gold ETFs. Scared out of their shares or forced out by margin calls, investors’ add to the downward price pressure caused by the shorts. Bullion banks and prominent investors such as Soros are the only ones who can redeem GLD shares for physical metal. They purchase the shares that are sold in response to the falling gold price, and present the shares for redemption in gold metal.

Insiders familiar with the process describe it as looting the ETFs of their gold basis.

In my last column I described how the orchestration of a falling gold price in the paper market protects the dollar’s value from the Federal Reserve’s policy of printing 1,000 billion new ones annually. The other beneficiary of the operation is the financial elite who buy up at low prices the ETF shares sold into a falling market and redeem them for gold. Like all other forms of wealth in the West, gold is being concentrated in fewer hands, while the elite shout “bear market, get out of gold.”

The orchestrated decline in gold and silver prices is apparent from the fact that the demand for bullion in the physical market has increased while short sales in the paper market imply a flight from bullion. As a hedge fund manager told me, it is a Wall Street axiom that volume follows price. Bull markets are characterized by rising prices on high volume. Conversely bear markets feature declining prices on low volume. The current bear market in gold consists of paper gold declining steadily while demand has escalated rapidly for physical metal. This strongly indicates that demand for physical gold continues to be in a bull market despite the savage attacks on paper gold.

If the orchestration is apparent to me, a person with no experience as a gold trader, it certainly must be apparent to federal regulators. But don’t expect any action from the Commodities Future Trading Corporation. It is headed by a former Goldman Sachs executive.

And don’t expect any investigation from the financial press. The financial press sees a bear market while supplies of bullion decline, premiums over spot rise, and even publicly declared bears such as George Soros make highly leveraged bets that will fail in the absence of a bull market in gold.

Source: http://www.globalresearch.ca/no-bear-market-in-gold-bullish-sentiment-in-the-market-for-physical-gold-bullion/5335795

A Gold Forecast That Will Shock the World

Posted on by

Gold Markups Add to Pain

The typical markup that bullion dealers charge customers is between 5% to 8% over spot prices and others (we won’t mention any names) skim even higher percentages!

If there’s anything that could ever make a ghastly pawn dealer look good, it might be grotesque the food chain markup in the physical bullion marketplace.

Here’s how it works:

The US Mint marks up the price of coins it produces (usually around 3%) to cover the value of the metal along with minting, shipping, and other costs. Authorized purchasers who buy from the Mint add their own markup. And if they sell to dealers who sell to the public, another markup gets added. Guess who’s at the bottom of the food chain? That’s right: physical bullion buyers.

And if bullion buyers are unfortunate enough to purchase fractional coins, they get hammered a little more. That’s because the markups for fractional coins, like a half-ounce or quarter-ounce, routinely reach above 10% to 20% of spot prices.

Here’s what it means:

In a rising gold and silver market (NYSEARCA:GLTR), rising prices can cover the steep transaction costs for buying and selling physical bullion. Conversely, in a sharply declining metals market – as we have right now – it’s impossible for lower prices to cover the ridiculously high transaction costs of taking physical delivery. And if we include the cost of storage and insurance, the pain worsens and that’s why owning physical metals are turning out to be a bad investment. Will it match the cold spell from 1980 to 2007?

Profiting From a Gold Shock

Contrary to what the very wrong gold experts have said all along, our firm has said that the real money in gold and silver would be on the short side.

On February 14, we wrote:

Despite a modestly rising stock market, the Market Vectors Gold Miners (NYSEARCA:GDX) has lagged both the broader US stock market along with the SPDR Gold Shares by a very significant margin. At present, GDX trades around $41.50 and is well below both its 50 and 200 day moving average. Buy the Direxion Daily Gold Miners Bear 3x Shares (NYSEARCA:DUST) at these levels. A double digit slide for gold would likely translate into a 20%+ loss in mining stocks. This scenario offers some big upside potential for bears.

Since then, GDX has slid 33% and our February 14 DUST trade resulted in a +29% gain. But that’s just the tip of the iceberg.

In that same report, we recommended buying JUN 40 GDX put options at $190. Today, those same GDX puts are up +525% to $1,200 per contract.

Our GDX trade was a grand slam, but forget about what already happened. What’s coming next in the gold market will shock the world.

The cute idea that frenzied buying of physical bullion by Chinese and Indian consumers is a bullish event is laughable. Consumer sentiment is always a contrarian indicator, as the gold experts, once again failed to mention. The sign of any market bottom – gold included – isn’t panic buying, but panic selling.

Our examination of the precious metals market points a very high profit opportunity for investors and traders who are 1) on the right side of the market, and 2) who are correctly positioned in the right investments. The gold shock could turn out to be one of the biggest investment themes the experts never saw coming.