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<p>[QUOTE=&quot;desertgem, post: 2574583, member: 15199&quot;]&quot;Since I mentioned 1% that is also approximately the percentage of all gold trade that is actual bullion out of all daily transactions for gold. So for every 1 million ounces of gold bought and sold, only 10,000 ounces would be actual physical gold.&quot;</p><p><br /></p><p>Not exactly, although it is a common &#039;scare&#039; tactic. </p><p><br /></p><p>&quot;So for every<span style="color: #4da6ff"> 1 million ounces of gold bought and sold,</span> only 10,000 ounces would be actual physical gold.&quot;&nbsp; </p><p><br /></p><p>I do believe you are talking about the difference between paper contracts for gold as compared to delivery contracts for gold. The delivery contracts are for a certain quantity of gold @ then current prices to be delivered at a certain specified date. The date may be within a week or as much as years down the road. This works for bullion dealers, manufacturers such as jewelers, etc. If the price goes down by delivery, they lose on their contract play. If it is higher, it pays off as the price they paid was cheaper. Of course the middle men ask a fee for handling the process, but once the contract is purchased , they will get their gold except for delivery fees ( transportation) added.&nbsp; &nbsp; </p><p><br /></p><p>The other are contracts on the price of gold at a specific date. Option players buy long ( expecting it go up at that end date) or short&nbsp; ( expecting it to go down at that end date). The Trading House balances one side against the other, and take their cut ( fee). If it is a perfect balance, there would be same value losing as winning, and the house gets it&#039;s share no matter what. Since they get their fee on the quantity bet , they allow margin accounts so the players are encouraged to buy/sell more contracts, and the house can change the margin at any time, and the player has to come up with it. So no gold is exchanged by this game, only currency for paper. Almost 100% done by computers at high speed. It is not a game for the faint heart. And remember, this was construed by big banks that had a lot of access to gold to tempt those CONVINCED ( possibly by others) that gold was going sky high due to ____fill in the blank_____ or that the USD was going to crash. or conversely convince them to SELL their physical and hold higher risk bets to end up with more cash. Often the # of paper contracts exceed a million. Your mileage may vary.[/QUOTE]</p><p><br /></p>

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