The GOLD scream room

[yankees60]

Lincoln’s Treasury secretary immediately recognized that the government, too, would be forced to go off gold. A despondent Chase alerted Cisco, “I deplore exceedingly the suspension . . . it is certain that the Govt cannot pay coin unless the Banks do.” Chase had fought harder than anyone to stay on specie. Now, he would have to fight the war with paper."

Was this the paper that was ultimately called greenbacks?

It was!

Up until then it was a totally foreign concept for the any branches of the US government or banks to issue anything that did not pay interest.

I've read farther in the book since the above and the greenbacks instantly became a great success. Giving the North yet another advantage over the South as the North paper was much more highly valued than the South paper.

In addition to that being a first in the country's history the Civil War was also the first time there was an income tax levied.

[yankees60]

"With Congress bickering over the tax, the Treasury secretary’s bill to ban gold futures was brought to the floor. Sherman, doing Chase’s bidding, said the aim was to prevent “gambling.” Even members who voted aye realized it was a desperate attempt to interfere with supply and demand. Thomas Treadwell Davis, a New York congressman, sardonically proposed an amendment to suspend not only the laws of trade but also the law of gravity. The New York Evening Post called the bill the work of “ignoramuses.” Still, it passed, and on June 17, Lincoln signed it. The gold room in New York was shuttered; similar restrictions were placed on foreign currency. But trading off-exchange continued. By June 21, gold had risen to 200, meaning the greenback had fallen to fifty cents. The deeply discounted greenback represented an enormous opportunity for anyone who believed that the U.S. Treasury would, eventually, redeem its paper at full value. At the moment, though, it seemed a repudiation of Chase’s years of labor. The trading ban wasn’t helping; it was hurting. Bankers begged the government to let the market function. Chase could not see it. An unhappy Strong despaired, “Pauperism probably awaits me.”"

[yankees60]

https://seekingalpha.com/article/476875 ... must_reads


Go For Gold: 2 Gold ETFs To Beat Volatility
Mar. 19, 2025 12:00 PM ETIAUM, GLDM, GLD, XAUUSD:CUR, IAU, SGOL, PHYS26 Comments

Steven Cress, Quant Team
SA Quant Strategist


Summary
Gold has surged to a record high of $3,000 per troy ounce as tariff fears, inflation, and slower economic growth boost demand for the safe-haven asset.
Demand for the precious metal has exploded since Donald Trump took office in January, rising +15.6% YTD while also pushed higher by expected interest rate cuts.
Investing in gold ETFs can help investors diversify their portfolios while hedging against inflation, rotating into a safe-haven asset class, and reducing portfolio volatility.
With a one-year price performance on the Gold Spot of 36.5%, two gold-focused ETFs can offer investors a simple way to invest in the precious metal.
Based on SA’s Quant Ratings, these ETFs possess incredible momentum and a hedge against a falling stock market.
I am Steven Cress, Head of Quantitative Strategies at Seeking Alpha. I manage the quant ratings and factor grades on stocks and ETFs in Seeking Alpha Premium. I also lead Alpha Picks, which selects the two most attractive stocks to buy each month, and also determines when to sell them.

[yankees60]

https://www.etf.com/sections/etf-basics ... ead%20More


Does Vanguard Have a Gold ETF?
The low-cost leader offers mutual funds with limited gold exposure.


By Kent Thune, CFP
Edited by: David Tony

[dualstow]

I used to have that precious metals & mining fund mentioned in the article.
Pre-pp but l was very late to the party.

[yankees60]

"* Typical of the era’s reverence for gold, Hugh McCulloch, a banker who would become Lincoln’s third Treasury secretary, was to write that precious metals had been devised by the Almighty to give civilizations a standard of value"

[yankees60]

"* Gold movements during the Civil War were a complicated business—more than Lincoln acknowledged and more than may interest the lay reader. From the time the shooting started, large volumes of metal left San Francisco for foreign ports, much of it ultimately reaching China and other countries that were filling the void of southern cotton. Since the United States maintained a positive (though declining) trade balance, one would have expected the gold to return—but through the war, the Union exported significantly more bullion and coin than it imported. Fessenden admitted to being puzzled. “What direction the gold product takes to avoid assay and coinage it is not easy to state,” he wrote in 1864. “This diversion of treasure from its usual course [New York] is large. . . . Much of it may be, and probably is, held as undrawn deposits abroad, or used when the market favors.” This suggests that, amid the great financial uncertainty of the war, speculators preferred to hold assets overseas rather than in the United States."

[seajay]

"* Gold movements during the Civil War were a complicated business—more than Lincoln acknowledged and more than may interest the lay reader. From the time the shooting started, large volumes of metal left San Francisco for foreign ports, much of it ultimately reaching China and other countries that were filling the void of southern cotton. Since the United States maintained a positive (though declining) trade balance, one would have expected the gold to return—but through the war, the Union exported significantly more bullion and coin than it imported. Fessenden admitted to being puzzled. “What direction the gold product takes to avoid assay and coinage it is not easy to state,” he wrote in 1864. “This diversion of treasure from its usual course [New York] is large. . . . Much of it may be, and probably is, held as undrawn deposits abroad, or used when the market favors.” This suggests that, amid the great financial uncertainty of the war, speculators preferred to hold assets overseas rather than in the United States."

There's more gold vaulted in London than the entire US's 250 million ounces https://www.lbma.org.uk/prices-and-data ... vault-data and unlike 'Fort Knox' gold is audited/assayed.

At that time international trade was settled by moving gold between individual countries vaults/cages i.e. London, being central global hours/time, was the global hub for finance/accounting/law

[pmbug]

...
There's more gold vaulted in London ...

London claimed 8,477 tonnes at the start of March. The LBMA doesn't offer any breakdown on how much of that is actually unencumbered and available to the market (not owned by ETFs, central banks, bullion banks, etc.). The LBMA's technical default with T+60 delivery delays and recent blowouts in leasing rates would indicate that London is struggling to find unencumbered supply.

[seajay]

...
There's more gold vaulted in London ...

London claimed 8,477 tonnes at the start of March. The LBMA doesn't offer any breakdown on how much of that is actually unencumbered and available to the market (not owned by ETFs, central banks, bullion banks, etc.). The LBMA's technical default with T+60 delivery delays and recent blowouts in leasing rates would indicate that London is struggling to find unencumbered supply.

I don't know why LBMA are defined as a market participant when largely they are a market facilitator/provider. Hold/move/refine gold as part of market provision. Is it not just delays in movement and refinement - where in the main the Swiss do the refining, so a case of having to identify/locate individual bars within the vault, securely move/transport them to Switzerland where they're refined into perhaps a 10Kg bar that's delivered to Comex (US)/wherever. To later have other 10Kg bars sourced from Comex having to be delivered to Switzerland to be converted into 400oz London Good Delivery Bars and transported to the London where they're assayed and vaulted.

As part of market provision the LBMA obviously has to maintain a float of gold, and it is that float that is being stress tested. Outside of that and the gold is already owned/accounted for - backs what is actually being traded between parties in the market (if someone writes a Future contract to deliver x amount in a month/whatever time then it is their gold that is behind that and delivered to whoever buys that contract).

When largely contracts were being cash settled the relatively small number of workers/resources moving gold around/refining it ...etc. could cope. The transition over to high numbers of contracts being actually settled in physical gold has stretched those resources beyond ability. It's daft to be continually having gold being moved and refined into different forms/weights only to later perhaps having that completely reversed again.

Swiss gold exports to (and from) the US (Comex) could very well have risen to be one of the largest value exports/imports as of recent, but if that is just a zero sum carousel is ... unproductive to say the least.

[dualstow]

There’s a WSJ article called ‘Everyone is a Gold Bug Now’
Subheader: First-time investors and longtime enthusiasts worry about Trump-era volatility and global tensions
https://www.wsj.com/finance/investing/g ... g-36268c5a

[Ugly_Bird]

Sitting tight.

Just was thinking.
The Gold portion of my 4x25 HBPP is close to 30%.
In order to reach 35% bracket it should get to $3500.
Is it even realistic?

Every once in a while, gold goes straight up. So yes, I think it's realistic.

If the price growing rate continues its current pace, Au should hit $3500 around mid summer.

[ochotona]

Gold could correct. It could go down to $2650 - $2800. That would be a good buyable dip. The run has been too strong too fast. Nothing goes up in a straight line on the log chart. Market prices are fractal in nature.

What's more interesting to me is if gold is down 10%-15% in the short term, what do miners do? Go down more %, or less %?

[seajay]

In 1980 gold was high, 2000 it was low. Plot a inflation adjusted chart for the price of gold since 1980 and recently its "up-there" (high). Much fear/concerns coupled with the realization that bitcoin isn't all it was thought it would be - isn't anonymous/safe (can't beat physical in-hand gold).

Silver and gold broadly track each other, silver however is more inclined to do well during times of prosperity as its widely used in manufacturing (and is refined as a bi-product of refining copper). The recent gold/silver ratio is >90, relatively high (gold expensive/silver cheap), plotting inflation adjusted silver versus gold in portfoliovisualizer since 2007 (the limits of its silver data (SLV)) and silver is low/modest (fair value). The GSR ratio might not decline/narrow until prosperity returns, Trumps tariffs don't help in that respect - so the GSR could further widen possibly out to 100 or more before that reverses. For mid to longer term investors however silver looks to be the better of the two. May continue to somewhat track gold if gold continues on upwards, fall less if gold 'corrects'. Anyone selling gold at 90 GSR to later swap back to gold at a GSR of say 60 will end up with 50% more ounces of gold compared to if they'd just held gold alone, if that occurs within 5 years then that's a 8.5% annualized gain benefit factor.

[yankees60]

https://www.etf.com/sections/news/gld-e ... ead%20More


GLD: Are Record Gold Prices a Contrarian Indicator?
The first quarter of 2025 was the best quarter for gold in nearly 40 years.


By Kent Thune
Apr 02, 2025
Edited by: David Tony

[dualstow]

Gold’s price rise recently pushed my % of (pp+vp) to 9+. That is, gold is more than 9% of my total.
Tomorrow morning, it will be well into 10% for the first time, even though gold has come down.

[ochotona]

Gold & silver were exempted from the tariffs. Thank goodness. they are MONEY

[ochotona]

This thing is going to correct, maybe by a lot, it can't be going up like an arrow.

[perfect_simulation]

This thing is going to correct, maybe by a lot, it can't be going up like an arrow.

HB said "During normal times, a crisis is a good for the dollar. But if inflation is high, then a crisis is good for gold. "

[seajay]

This thing is going to correct, maybe by a lot, it can't be going up like an arrow.

Even with the recent dip the S&P500 is still up something like 15% annualized over the last 5 years. Dipping a further 25% would reduce that to a modest 8% annualized (still reasonable given relatively low inflation over those years).

Golds also more in vogue now. When your shoe-shine boy starts wearing gold rings/necklaces and chats about gold being so great - the up arrow might have peaked, turn and start a down-run. Stocks PE down from recent 26 to half of that.

[welderwannabe]

Golds also more in vogue now. When your shoe-shine boy starts wearing gold rings/necklaces and chats about gold being so great - the up arrow might have peaked, turn and start a down-run. Stocks PE down from recent 26 to half of that.

You must travel in different circles. All I hear about is stocks being down and the price of bitcoin. When I bring up gold and that its at an all time high, and has outperformed everything in the last 18 months, the people look surprised.

[seajay]

Golds also more in vogue now. When your shoe-shine boy starts wearing gold rings/necklaces and chats about gold being so great - the up arrow might have peaked, turn and start a down-run. Stocks PE down from recent 26 to half of that.

You must travel in different circles. All I hear about is stocks being down and the price of bitcoin. When I bring up gold and that its at an all time high, and has outperformed everything in the last 18 months, the people look surprised.

Try walking in straight lines rather than going around in circles No, seriously, all of the dealerships I know have been like sweat-shops over the last weeks/months. Little time for banter/chat, just a mad rush to get gold in and out. One has even ramped 'standard' sell spreads up to spot+4% (from +1.5%).

[pmbug]

China is driving the gold bus, not US retail.

[ochotona]

Incredible above $3400

[dualstow]

Incredible above $3400

I have to think in 1/4 ounces now, it’s gotten so high.
Not that I’ll ever sell.