Is There Something to Investing in Gold? Not that I ever would.

Something that would worry me isn't gold mining stocks and other kinds of "futures" which are investments and can just go to zero in hard times... are the funds supposedly backed up by physical gold.

I've read this "paper" can have 10, 20, or more claims on each physical ounce (if any) actually held as backing. So if the sorts of economic events come along that holding gold is meant for, you might get a fraction or even nothing at all.

The paper trades in good times, does well while prices run away, and turns to trash more worthless than cash if the wheels ever come off things.
 

the gold is audited that is held in the etfs despite the nonsense that seems to circulate


SPDR Gold Trust GLD
The Trust's independent auditors audit the gold held in the Custodians' vaults as part of their annual audit. The Inspectorate International Limited conducts two counts of the gold bullion each year.
 
Hmm.

Looking to the COMEX we can get another glimpse of the ratio of paper contracts to the physical.

How many paper claims exist on the relatively small stock of bullion? For a few hints, we can look to the COMEX. As of October 30, 2012 COMEX gold Open Interest equaled 454,742 contracts (45,474,200 ounces of gold). COMEX registered inventory stood at 2,735,041 ounces for a factor of 16.6X. (CME Group, 2012)​
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Is a leverage factor of 16 enough for you to take action? For some very prominent fiduciaries, the answer is a resounding “YES”. In a 2011 interview Kyle Bass of Hayman Capital (who helped the University of Texas Endowment take delivery of nearly $1 Billion in physical gold bullion) described a conversation he had with an exchange official:​
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“When I talked to the head of deliveries at COMEX NYMEX, I was like, ‘What if 4% of the people want deliveries?’ He said, ‘Oh Kyle, that never happens. We rarely ever get a 1% delivery.’ And I asked, ‘Well, what if it does happen?’ And he said, ‘Price will solve everything’ and I said, ‘THANKS, GIVE ME THE GOLD’ – (Bass, 2011).​

Paper Gold Volumes Vs Physical Gold Volumes - Intelligent Partnership
 

there is a lot more to the story above ….

whether gold is held for delivery or not depends on whether it’s registered and has warrants against it . or-is it what’s called eligible gold

all gold with warrants has the actual gold being held.


According to Comex, eligible gold means all metal that is acceptable for delivery against the applicable metal futures contract for which a warrant has not been issued. Conversely, registered metal means an eligible metal for which a warrant has been issued. As one can see, the only difference between registered and eligible gold is whether a warrant has been issued or not. What is a warrant? It is a document of title demonstrating that the referenced quantity of the covered metal meets the specifications of the applicable metal futures contract. We can say that a warrant is a warehouse receipt which works like a check – it is a bearer instrument which represents some amount of gold in registered stocks.

not all contracts are issued with the intention of taking delivery so it’s importand to understand that there is a difference between eligible gold and registered gold




Eligible Gold (COMEX) Explained
 
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We agreed to a payment of one silver dollar per house cleaning. I have about 50 silver dollars. They are worth about $30 right now. We would about break even if we sold now. I still think it will keep going up, so I am going to wait. :)
 
there is hardly anytime frame the last two decades that a mix of stocks and gold didn’t beat the same allocation of stocks and bonds .

so much for those who say don’t buy gold , it does not pay interest
 
Dr. Jekyll said:
Pretty much everything I've read and been told by financial folks is that precious metals is the last place to go (especially for "normal" folks) after you have fully exploited all other options. If you've maxed your IRA, maxed your savings account, maxed your investment accounts, got all the treasuries you want, got all the property you want and still have money that you don't know what to do with -- then consider precious metals.
Click to expand...
Am invested in nuclear reactor "fuels", et al and land.
 
mathjak107 said:
there is hardly anytime frame the last two decades that a mix of stocks and gold didn’t beat the same allocation of stocks and bonds .

so much for those who say don’t buy gold , it does not pay interest
Click to expand...
In 2024, the value of gold ROSE by 24 percent.
 
i wasn’t referring to just a year ..

going back as much as 25 years , you would be hard pressed to find any extended time frames where equities and gold didn’t beat equities and traditional bonds
 

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