Institutional Gold Buying

This could be an important event if others follow...

http://www.bloomberg.com/news/2011-...kyle-bass-to-hold-1-billion-in-gold-bars.html

 

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The fund...added about $500 million in gold investments to an existing stake last year...
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So the fund saw such a phenomenal profit from its investment in gold last year that it invested more this year at just under $1500 USD an ounce.

All I can say is that I wish I'd have taken my $ and done the same thing last year, instead of being content with a freaken 1/2 percent interest rate at a credit union.

And it begs this observation: The fund doesn't seem to be blinking an eye at the inflated cost of gold today. Is it predicting something that the vast willfully ignorant masses are not anticipating?

 

They probably believe so. I think it is interesting not because they are necessarily correct, but because any large move by institutions into gold could cause a large upward move in the price, even if it turns out to be the last leg of the bull market. It's another data point to watch.​

 

Agreed Cloud. Thanks for the info.

 

Good stuff cloud and indeed, this is the sort of thing that moves markets. The past couple of years, this thing has been happening more and more frequently. In addition, more and more financial advisors are suggesting their clients have 3-5% or more in gold and precious metals. All this additional demand can add up.

peace,

rono

 

I'll start worrying when I see the big corporations buying up the PM's......

 

Corporations are tiny compared to the large private foundations and hedge funds.

 

Be that as it may, from the standpoint of a guy who's just the common man in the street, The big foundations are looking to perpetuate, the hedge fund folks are looking to maximize everything in the shortest period of time, but the corporations have to slug it out day by day. When those guys buy into this fervour, then I'll start to worry.

 

What will you be worrying about then? Wouldn't big corporate buyers drive the price higher? Or are you short PMs? That's a scary position.

 

Just the man in the street Buster...

 

Ahhh yes. I take this to mean that explosive PM prices leads to the end of the fiat ponzi, which will spell pain for the man in the street.

 

Perhaps, but my faith is in the corporations. That's where my investments lie. PM's are fickle indeed. Good hard sweat equity is where true investment prospers.....

 

$987 million in gold at $1486 per oz ~ 664200 oz / 16 ~ 41500 lb / 2205 ~ 18.8 tons / 2500 ~ 0.75% of yearly global production. That's quite a slice of pie for one university!

 

This message has been here on CNBC, Forbes, about every financial and PM forum, so how much effect did it have on the price of gold? Between the S&P rating comments and this, shouldn't gold be much higher than it is, or will it kick in later this week? No , I am not a gold-bear, and I am far far from being short, but these lack of response by PM to large stimuli, does make one wonder. IMO.

Jim

 

Gold just took a pretty good size leap. Maybe this news was part of the reason. I don't think one purchase can be expected to do much more, but if numerous foundations, trusts, pension plans, etc... start announcing an increase in their portfolio allocation to gold, there could be some wild price action. But there is an offsetting sale for every purchase, so for now it's just something to keep an eye on.

 

Mmm hmm...

and I am not a gold bull, but gold has been tearing it up lately on it's way toward $1,500. A downgrade in the American Ponzi has been getting priced into PMs for a while now. Welcome to the party S&P. The booze is all gone and the cops just sent everyone home. No one was arrested, of course, but the party's over.

Word is, news of the planned S&P downgrade was known by White House insiders on Friday, so the big money had a chance to get in their positions early.

None of the short term fluctuations matter or can be trusted, anyway. All this shows is that the paper markets are more fragile than ever and fundamentals for PMs are strong. There's still time to trade your fiat for something real, but the window of opportunity is closing.

 

I think there are 14 oz per lb for materials weighed in troy oz.

 

12 troy ounces to a troy pound

Jim

 

Just did a quick calc, and todays price is imputing a 4.8% return compounded from 1920.
I do not see gold at $1500 way out of line. Its also almost the same going with 1933 at $35 an ounce as well. Gold is a store of value, it goes in an out of favor, but these prices seems somewhat normal. I am not saying I am a buyer at these prices, I like a discount on my purchases.