Gold or Silver prices, what will make the prices go up?? Did we top out already?

OK, what is "significant" then? Just curious. I may not even be significant, since I only have 6-8 ounces of the stuff.

Btw, where did the 300k-600k stat come from of private US ownership?

 

Log in or Sign up to hide this ad.

HA auction indicates 200k serious numismatic collectors in the USA. Double that, probably not more.
In a densely populate zip code, I live within a five-block radius of +five billionaires and not one owns any Gold (I'm almost certain of that.)
With +15 years in financial services, I've met ~4 people who know anything about PMs (and may be presumed to actually hold.) Figure 3x more are 'sneaky,' and I could count maybe 15 people, tops. Among HNW investors, sophisticates.

I'd obviously rule out jewelry brokers, coin dealers or bullion traders because it's their business: they're 'industry' rather than 'individuals.'

Significant? You own a couple of ingots, you're in!

 

What does numismatic investing(collecting) have to do with gold investing beyond the obvious that some gold coins have a numismatic value? It seems to me this would be an invalid metric to use for what is being discussed.

 

As I said before, 90% of markets are driven by computer algorithms. It doesn't matter what non-traditional investors do. They can't make or break a market when they can at the very most impact the market by 10%, with the exception of causing failure to deliver which trumps all. The shoe shine boy analogy holds no water in today's markets. I might have agreed with you prior to 2006.

 

What an absurd claim. Retail coins and bullion are sold by almost EXACTLY the same vendors & businesses. To whom? The same clientele, just another year older? Investors in Gold Coins versus Gold bars are the same type(s), the overlap is obvious. The US demographic cohorts are essentially identical. Don't take my word for it, go ask your LCS.

To be sure, some Gold-Bugs love 'coin collecting' and others distrust the 'coin premium' altogether. Any other distinction is silly, a trifle: they're still both Gold-Bugs! (Foreign Gold-Bugs might be different, I'll grant.)

My calc from ICI stats illustrates how only ~0.023% of US households owning mfs own a PM ETF ( ~12,000 US retail investors: http://www.cointalk.com/t217554/#post1574053 ) In the USA, that's where any "growth" in US Gold-ownership has been (in Paper!) and that's still 'almost no Americans' frankly.

Americans have been SELLING their Gold & Silver (real asset), net-net. WGC stats show declining bullion sales in the USA, and the US turned into a net exporter in 2012: there's the big picture folks. Like coin collectors generally, PM coin and bullion buyers are a stagnant, aging, contracting demographic. Read it and weep. Someone on another thread half-jokingly pointed out that ANA membership hasn't increased in 30 years - well, the population of the USA was 229.5 mln in 1981 and it's 312 mln now, 36% higher. So YES, on a relative basis the overall mkt has probably shrunk by 1/3rd. Those numbers run hard against the illusion of 'collector/bullionist growth.' And burden of proof is on those who fanatsize otherwise: who/where are all these imaginary new bullionists/numismatists coming from?

Another professional perspective, elsewhere: famed commodity speculator Jim Rodgers polled a money manager conference in Prague in 2009. Of ~300 professionals/HNW investors, 76% of these sophisticates had NEVER held owned or held Gold in their or clients' portfolios. And that audience was what, 80% European and skewed German? If like-minded investors (who go to see a commodity guru!)don't hold an esoteric asset class like Gold, you can be pretty sure the mainstream isn't either. Jimmy Rodgers mocked the IDEA of Gold Bubble: "How can there be a Bubble if no one even owns it?!" And that's true, simply.

Finally: beyond the crackpots, loons, and tin-foil hatter conspiracy theorists, almost ALL talking points of bullionist rhetoric coddle 'older White Guy anxieties.' It's a very reasonable conclusion that particular appeal is market-driven, not merely coincidence. (And truth be told, my foreign friends think most American Gold-Bugs sound more anti-American than Soviet or Islamic extremist propaganda ever was!)

I'm a bullionist, but there's waaaaaaay too much nonsense on Gold sites about 'how popular' Gold/Silver are. Truth is, PMs aren't (yet.) By the numbers, we're not even close to a major trend-change.

Show the stats otherwise; anything else is just buggy blather.

[video=youtube;3w4B7QxL_n4]https://www.youtube.com/watch?v=3w4B7QxL_n4[/video]

 

^You didn't answer the question. I will restate it for you.

Why are you using numismatic sales to quantify gold bullion ownership? Bullion investing, by definition means, gold & silver investing with no numismatic value taken into account. Either you don't understand the difference or you are quoting statistics where you have incorrectly concluded what they mean. Your choice.

This simple example further demonstrates how your statements simply don't reflect any kind of reality In 2010 the US Mint sold the following American Gold Eagle coins

• Bullion Version - 1,125,000 <- Is not considered numismatic
• Proof Version - 60,000 <- numismatic

Furthermore these coins, as you incorrectly state, are not sold by the same mechanisms. The bullion version is sold through retailers, the proof version is sold directly by the US Mint and for significantly more money. You can't use the number of numismatic collectors to determine gold ownership. Period.

I get the feeling you don't know much about physical gold ownership.

 

"Computer algorithms"? You do realize that unless its only for their account, these algorithms are only trying to execute trades, not make the decision on WHETHER to buy or sell, right?

I just don't buy it. I have studied these algorithms, know what computer trading is all about. I would buy your assertion a lot more in the equity arena since there is MUCH more house trading done there.

I simply do not understand how you feel fundamental demand is still not paramount to pricing. Algorithm trading is meaningless if your fundamentals are deteriorating. To illustrate, algorithm trading I am sure was pointing out, (or trying to execute), trades in Enron stock all of the way down. The computer cannot know global movements, its good at quickly trading on tiny nuances. Knowledgable firms know when to turn off computer trading and when to have it turned on.

Therefor, I completely disagree with your hypothesis that something alluding to large, market changing demand changes is "irrelevant".

 

Juan, I would be careful. True, there is SOME overlap between the markets, but not as much as you would think. Most serious bullion buyers I know have NEVER purchases a coin from somewhere like HA. I believe you are believing there is a much higher overlap than there is, just because the same LCS may sell to both.

On cointalk, I am guessing there are a lot higher percentage of people like me who own both collectible coins AND bullion, when in the US these groups are not as tied as you would believe. Most everyone I know is one or the other, (unless you count as bullionists all coin collectors who happen to own silver or gold coins, I do not).

If you choose to believe HA's number of 200,000 serious coin collectors in the US, (not saying I disagree), then I would wager maybe 10% of that population might be serious buyers of strictly bullion. Most coin collectors prefer high grade coins, most bullion buyers want maximum bullion for their money.

Just my opinion they are not overlapping as much as you may think.

Chris

 

just 200,000 coin collectors in the USA who might hold gold?

Yet the US Mint manages to sell over a million bullion grade gold coins in just one year of just one of their gold coin products, and another 60,000 of their collectible coin also in just one year.

I'm simply not buying this figure. Maybe these are people who go after the $17,000 gold coin that I posted in the Lego topic, but it's absolutely no reflection on the number of people who hold gold. The Krugerrand has been sold in the USA for decades and it's nothing but a pure bullion purchase designed for bullion sales.

 

You said traditional investors. Traditional investors don't use algos. Even the ones that do are a drop in the ocean compared to hedge fund algos that run trillions of dollars worth as opposed to a single investor portfolio. Algo trading is non-stop, you can even see it in the daily silver chart as it looks like it's constantly vibrating. Some of these big fish have fiber cables directly across the street from the market that can execute trades literally in nanoseconds, front running every trade order they receive from their clients to buy or sell in advance of the order they know is coming so they can skim a tiny profit. It's called quote stuffing, and is a big reason why it has been proposed that individual trades are taxed so that this is not so rampant. While fundamental demand does impact the direction of the quote stuffing, it is still only a tiny fraction of the overall dynamics, and anytime a big fish doesn't like the direction things are going they have the ability to overpower fundamentals with sheer volume. The evidence I have seen algos being turned off is when they cause flash crashes, otherwise they are just "making markets" as Lloyd Blankfein puts it. Computers can and do know global movements, because they take into account news articles in near real time. AI is more advanced that most of us would feel comfortable with. Technology has advanced quite a bit since Enron, and it is also growing exponentially as per Moore's Law.

Some info here - http://www.zerohedge.com/news/guest-post-austrian-view-high-frequency-trading

 

I understand sir. Btw, I do not see where I said "traditional investors", but whatever. My point was you can "skim profits" all they want, but if fundamentals are changing, demand or supply are changing, they can be spitting into the wind. Algorithm trading is essentially lightning fast technical trading. This is fine and dandy, and do not begrudge those who wish to use it, but is meaningless versus big picture long term price movements. That was my only point, and as a part of it I believe the "shoeshine boy" analogy is still fitting today.

Believe me, I hate front running and all of the other abuses as much as anyone. I am VERY leery of the "tax" however. I would ONLY support such a thing if all of the money only went to the exchange. I never trust any politician's excuse for new taxes. They are always just that, excuses. Money is what they want, and they will tell you any lie they can come up with to get you to agree to them.

 

Neither, actually. Guess what? There is no Santa Claus, chief. Your (illusory?) "numismatic value" for US Mint product is simply a marketing ploy.
WGC and US govt (Census Bureau, Customs, etc.) stats AGGREGATE .999 coin, ingot, etc. So do I. Adults can grasp 'the difference' here, though heresy to admit.

My estimation isn't about US Mint sales (a significant but unknown percentage of the US gold hording sheeple) but a more representative proxy: significant investors with more than one or two 1/4 ozt coins stuck in a safety deposit box somewhere. HA's serious coin collectors don't ALL collect Au or Ag either, but I'd guess that's a vast majority. Double that, conservatively, to include any mass affluents who might have +5 ozt. and we're still ~400-600k.

But still - among Americans - bullionists/Pm coin collectors are the same (mostly) 'older white guys' and not some vast, different group of other people. Go to a coin shop, ask for yourself.

In the interest of "fair & balanced" LOL look at Page 4 of this FauxNews Poll 2/26/2010 and that question about Gold: 6% claim to have bought Gold, as a result of their fear for the US economy.
http://www.foxnews.com/projects/pdf/022610_govspending.pdf

6% of registered voters (2008: 169,000,000 of 212,702 eligible +18 Americans) but where 2x as many bought a gun or ammo for protection (in 2009) and where NICS background checks in 2009 were ~+1,324,000 new gun owners versus a purported ~605,000 - 667,000 "new" Gold owners.

Possible? Not likely. According to this FauxNews poll 18% of 2008 registered voters - nearly 1 in 5 ??! - stockpiled food & water. Say what, 30.4 mln adults are preppers?! Now really. The inflated estimate for 'preppers' is THREE (3) MILLION Americans, which sets total Gold ownership around 1 mln (liberal estimate.) Do you think 1/3rd of preppers own Gold? For the FauxNews poll to be accurate, more than half all bullionists would be NEW buyers and maybe all would be 'preppers.'

That's far too high and exaggerated, but I accept that TOTAL # of US bullion owners might correlate between the median prepper stat and HA's estimate of serious collectors. Again, ~400-600k for serious Gold-Bugs and maybe ~ 1mln for stockpiling Silver Fish with > 100 ozt Ag.

 

^This is noting more than opinion from someone who characterizes gold buyers as "sheepie" "horders" and "old white guys". You have presented no facts or data about gold ownership.

Basically you don't know. Your opinions from reading fox news and citing Santa Klaus don't interest me.

 

In 2008, ten years after it became possible and 6-years into the Gold Bull Market, ~62,000 individuals held one of those bullion-backed IRAs. Why so few (0.1345%), fees?
http://online.wsj.com/article/SB122765002692057681.html

In 2012, 46.1 mln Americans have an IRA - so how many more availed themeselves of a PM-backed IRA in 2012?

In 2008, according to the WSJ, the largest companies that offered self-directed IRAs and metal-investing services included Sterling Trust Co., GoldStar Trust Co. and The Entrust Group.

Sterling reported ~ 6,200 IRAs w/ PMs and ~ $ 400 mln in PMs with an average account PM balance of $64,500.
>>> In 2012,

Goldstar Trust reported ~ 7,200 IRAs w/ PMs and ~ $ 400 mln in PMs with an average account PM balance of $55,500.
>>> In 2012, 5,918 IRAs w/ PMs and ~ $ 650.5 mln in PMs w/ avg acct $110,000

Entrust reported ~ 50,00 IRAs w/ PMs and ~ $ 11 mln in PMs with an average account PM balance of $23,000.
>>> In 2012,

If someone can find/update the data, great. Just the facts.

 

I was slightly off the mark, you said "non-traditional investors" on the previous page but you are right to make the distinction between algorithms being used for technical trading vs. being used to make markets. There is a lot of potential with this technology, and I will give you some ground on this one since just because they account for 90% of trading doesn't mean that some portion of that doesn't represent fundamental trades. This one is a gray area, and I think it just depends on the market. If all the shoeshine boys are selling their government bonds, the Fed will just backstop them anyway. Apple on the other hand has had an explosion due to both the shoeshine boys and the algos, and is far more susceptible. Other governments in the East are backstopping their stock markets with QE, so it stands to reason that could happen here too, but I don't think that would be on a per stock basis.

 

I am just unsure of where you would find more facts. Problem is, most PM investors ALSO seem to have a high distrust of financial markets, so why would a PM IRA appeal to them? Answer is it doesn't. Many/most prefer to have physical control of the PM, something illegal with IRAs. Given this and many of these investors desire for secrecy, (not unwarranted), I simply believe hard numbers may be difficult to come by.

 

Indeed. For anyone who really understands PM ownership, putting physical PM in lockup for a IRA makes absolutely no sense. It was another useless metric brought up that doesn't indicated gold ownership in the USA.

When the US Mint is selling a million+ AGEs/year, there is a lot of gold ownership out there. Add in the Perth Mint, the Chinese mint, Canada's Mint, the Royal Mint and a host of others selling gold in the USA and IMO the market is large and significant. Anyone can add up these numbers and IMO millions of gold coins plus bullion like Pamp Swiss bars are not all going into just a few hands.

 

There's extensive regulation of IRAs, medoraman. PM IRAs don't exist in secret, I think you know. So again: where do I find that data, aggregated?

Guy at my LCS actually guessed the number of PM IRAs that I came up with, ~100k. He insists the retail ownership of GLD is 100x higher than ICI stats show (~12k) but he has no background in financial services. He was evasive on my gold queries but basically admitted not 1 in 100 customers is buying Au now.

The best metric for "shoeshine boys" is probably custodians of PM IRAs that have to report quarterly, they MUST report accts, balances, etc.
Tom Cloud says there are ~10 cos; the three I mentioned are still the bulk of the PM IRA mkt. He outlines fees, too:
http://etfdailynews.com/2012/11/29/tom-cloud-wholesale-gold-inventories-evaporating-nysearcagld/

I started a new thread on the PENSCO webinar scheduled for December 6, 2012 11:00 AM - 12:00 PM PST

 

As I said earlier. You don't know. You are giving us opinions based on inconclusive and irrelevant data that has been incorrectly interpreted in a fallacious manner in regards to physical gold ownership.

 

Short-term downward pressure on Gold continues: here's an explanation WHY.

http://online.wsj.com/article/BT-CO-20121204-711664.html

Closer to my short term bearish guess ~1,685 - 1,710. for 12/31/2012:
http://blogs.wsj.com/source/2012/12/04/gold-price-on-the-slide/
>>While it is hard to know where exactly gold will go from here, its immediate technical picture isn’t looking good. Having broken below $1,700/oz, the path has been paved for a deeper slide, said analysts. “Following today’s breach below $1,700/oz, gold prices show potential for further declines with next immediate support at $1,672/oz area,” said Myrto Sokou, a senior research analyst at Sucden Financial.<<