Gold’s Moment

17 thoughts on “Gold’s Moment”

1. What’s even more ironic is that people treat it as a doomsday hedge, yet hold it in a brokerage account through a ticker that merely claims there’s gold stored somewhere securely. Can’t make this stuff up.

2. I was too old to watch Duck Tales after coming home from school but I did anyway.

3. Silver, platinum and palladium have also gone parabolic over the past 6 months. I agree that liquor, canned goods, cigarettes, guns, ammunition and snicker bars are more valuable post apocalypse but precious metals pre-apocalypse sure seems like a good bet.

   1. Add insulin, baby formula to the post-apocalypse list.

      The move has taken some portfolios to 8% gold, I’m cutting those back.

4. Up $62 this morning. To the moon, Alice!

5. We know Trump has added $100 mil in treasuries to his holdings and has a bunch of bitcoin to go with his real estate. So how much gold do you suppose the has?

   1. Approximately one Fort Knox worth.

      1. Funny, but that is also a frightening thought.

      2. My enthusiasm is tempered by a related risk. What happens to the price of gold if the Bessent Boys decide to issue bonds backed by gold in Fort Knox? The immediate bullion market probably would be to sell the metal. But the impact would probably be lessened if the bonds were not redeemable into gold.

         Maybe they would trade like convertible bonds where funds routinely buy the convertible bond and run active hedges by shorting the stocks as prices of the underlying stocks move, therefor constantly changing the required hedge short ratios.

         1. Stupid. On further thought, I’d wager that the Bessent Boys have already thought about or put into motion the issuance of “Stable Coins” with each token backed by an ounce of gold held in Fort Knox. It’s interesting to ponder how such a thing would be structured. Could they be converted into USD or physical gold?

      3. I think he has already used that to decorate the Oval Office.

      4. What happened to the great Fort Knox audit by Trump and Bessent?

         I always thought “the plan” (besides outright theft) was to mark our gold reserves to market and produce a phony windfall for Trump to exploit in his budget shenanigans.

         1. Yes, so a stable coin or gold-backed bond would make sense versus just dumping some gold on the market. There are still people in “the base” who would like to see us go back to the gold standard to enforce fiscal discipline rather than use it to fund more deficit spending. But one never knows these days.

6. I am up about 1,300% on some gold I bought in 1999. That’s 26-years of no interest, no dividends, and a $75 a-year fee for a safe deposit box to store it in. Since then, we have witnessed Y2K, the DotCom Bubble, 9/11, separate wars in Iraq and Afghanistan, the GFC, Covid, two (failed) impeachment attempts, and the January 6th Insurrection. Not once have I felt compelled to “cash out” in order to secure “safe passage” somewhere, nor have I needed it to buy rationed goods on the black market (at least not yet). Gold at $4,000 an ounce? I’ll pass.

7. I’m sure hedge funds have gone all in with leverage over the past 9-12 months. When we get a sharp market drawdown wouldn’t be surprised to see gold positively correlated in the short term with forced unwinds. But what do I know, I’m just a caveman!

   1. “When we get a sharp market drawdown wouldn’t be surprised to see gold positively correlated in the short term with forced unwinds.”

      Yes, that. That’s it right there.

   2. I forget where to check, but if they were using futures to lever up wouldn’t it show up in the open interest reports? Or don’t they issue them anymore?

      Instead, I suppose they might get exposure via structured products or options. The sellers would be doing the hedge buying in the market, perhaps making it less concentrated looking. For large specs, that’s a desirable thing.