Current Gold Price

Discussion of the latest Peak Oil news (please also check the Website News area below)

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vtsnowedin
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Post by vtsnowedin »

adam2 wrote:....
......
Nevertheless for much of recorded history an ounce of gold has been worth in the region of 350 loaves.
Today an ounce of gold is worth significantly more than 350 average loaves, suggesting perhaps that gold is overpriced at present.
Or that modern agriculture produces food at lower prices then historic averages.
Little John
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Post by Little John »

vtsnowedin wrote:
adam2 wrote:....
......
Nevertheless for much of recorded history an ounce of gold has been worth in the region of 350 loaves.
Today an ounce of gold is worth significantly more than 350 average loaves, suggesting perhaps that gold is overpriced at present.
Or that modern agriculture produces food at lower prices then historic averages.
that's a very good point. A way to evaluate its veracity would be to look at what 350 loaves was worth in other commodities historically

By the way, how are you doing mate
vtsnowedin
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Post by vtsnowedin »

Thanks for asking. So far so good. The wife and I are getting used to being home and we both are now just bothered by a persistent cough.
Got a call from the hospital today cancelling all elective surgeries but we had already made that decision. . State is closing down around us , schools bars restaurants etc. First confirmed case in my county announced today.
So the wife and I might have been a little ahead of the curve but we are looking pretty wise right now. My wife noticed when she called in to get a cough medicine prescription renewed there was audible relief when she told them she did not want to come into the office. It hasn't hit the hospitals yet and they are already stressed trying to get ready.
My wife made home made bread yesterday, first time in years. came out way too salty, will have to try again. The snow is melting, down to the last foot with lots of open patches.
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UndercoverElephant
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Post by UndercoverElephant »

https://www.thegoldbullion.co.uk/
TRADING PAUSED: Our operational system is currently under review. Phone lines and website will be live again as soon as possible.
https://www.bullionbypost.co.uk/index/g ... d-traders/
DELIVERY PAUSED - COVID-19: Due to disruption with couriers, we are not currently dispatching new orders. You can still order to lock your price, and choose either storage or deferred delivery when normal shipping resumes.
https://www.gold.co.uk/
DELIVERY PAUSED - COVID-19
Due to disruption with couriers, we are not currently dispatching new orders. You can still order to lock your price, and choose either storage or deferred delivery when normal shipping resumes.
Different dealers, same message, word for word. Monetary system is collapsing.
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UndercoverElephant
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Post by UndercoverElephant »

https://www.goldbroker.com/news/longest ... years-1789
Gittler writes that he cannot discover exactly what has driven the ratio to this extreme, but speculates that it may forecast "a tremendous deflationary period ahead."

He adds: "One other point that may be connected. I'm not sure how accurately the price of gold that I see on my screen reflects the actual demand. The gold market seems split at the moment. While the price is falling, meaning there are more sellers than buyers, everything I read on Twitter is that physical gold is nearly unobtainable. Many banks and refiners have run out of inventory. Apparently there has been a surge in retail demand for gold coins and bars at the same time as the price has been falling.

"It seems that the 'paper' market, the futures and exchange-traded funds, is determining the price and does not reflect the heightened demand on the street for hard metal during this time of insecurity. In that case, gold prices could be even higher and the ratio even higher than what we see."
boisdevie
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Post by boisdevie »

Boom. Gold has gone up £60 an ounce in the last few hours. Is this the start I wonder?
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UndercoverElephant
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Post by UndercoverElephant »

boisdevie wrote:Boom. Gold has gone up £60 an ounce in the last few hours. Is this the start I wonder?
Looks very interesting. It has broken through some sort of resistance point.
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UndercoverElephant
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Post by UndercoverElephant »

Published one hour ago:

https://www.ft.com/content/81d915e2-6ce ... bea055720b
Gold bars in short supply due to coronavirus disruption
BullionStar, a Singapore-based precious metals retailer, said it is paying a premium to buy back silver and gold coins from customers in an effort to replenish supplies, according to Ronan Manly, one of its analysts. “There’s a disconnect between prices in the physical gold market and the prices you see on your screen,� he said.
That is why you can no longer buy gold. Why should the bullion dealers sell it when they know they are being asked to sell it for the price of "paper gold"?
Little John
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Post by Little John »

Massive inflation followed by the mother of deflationary busts followed by a degree of hunger and hardship no-one alive today in this country has any conception of.

That's what's coming. Not only here, but across much of the West. However, the UK will be particularly hard hit due to our singular lack of capacity to feed ourselves.
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UndercoverElephant
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Post by UndercoverElephant »

Little John wrote:Massive inflation followed by the mother of deflationary busts followed by a degree of hunger and hardship no-one alive today in this country has any conception of.

That's what's coming. Not only here, but across much of the West. However, the UK will be particularly hard hit due to our singular lack of capacity to feed ourselves.
The price of some things is going up, but the price of a lot of other things (such as houses and oil) is going down due to massive demand destruction, because of both restrictions and people worried about their own financial situation. So we are going to have a weird combination of deflation and inflation simultaneously, depending on what the price is of.
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Post by kenneal - lagger »

The price of property might go down but the value of a property with a bit of land, even a garden, will go up. Can't say the same for a flat though.
Action is the antidote to despair - Joan Baez
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UndercoverElephant
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Post by UndercoverElephant »

I am trying to understand the economics of this, and I'm seeing more and more people predicting that we are heading towards "stagflation".

https://www.thebalance.com/what-is-stagflation-3305964
Stagflation is a combination of stagnant economic growth, high unemployment, and high inflation. It's an unnatural situation because inflation is not supposed to occur in a weak economy. In a normal market economy, slow growth prevents inflation. As a result, consumer demand drops enough to keep prices from rising. Stagflation can only occur if government policies disrupt normal market functioning.

Cause

Stagflation occurs when the government or central banks expand the money supply at the same time they constrain supply. The most common culprit is when the government prints currency. It can also occur when a central bank's monetary policies create credit. Both increase the money supply and create inflation.

At the same time, other policies slow growth. That happens if the government increases taxes. It can also occur when the central bank raises interest rates. Both prevent companies from producing more. When conflicting expansionary and contractionary policies occur, it can slow growth while creating inflation. That's stagflation.

That is exactly what we have now. Western governments are printing money (enormous amounts of it) at a time when they are constraining supply (by shutting down the economy). This doesn't just create stagflation. It creates ultra-stagflation -- stagflation on a truly epic scale.

And the last time it happened was in the 1970s, just after the US came off the gold standard, and connected to the oil shocks (all explained in that link).
First, Nixon instituted a 90-day freeze on all wages and prices. He set up a Pay Board and Price Commission to approve any increases after the 90 days. Conveniently, it would control prices until after the 1972 presidential campaign. That's how he planned to control inflation.

Second, Nixon imposed a 10% tariff on imports. He intended to lower the balance of trade and protect domestic industries. Instead, he raised import prices.

Third, he removed the United States from the gold standard. That had kept the dollar's value tied to a fixed amount of gold since the 1944 Bretton Woods Agreement. Most countries agreed to peg the value of their currencies to either the price of gold or the U.S. dollar. That had turned the dollar into a global currency.

The crisis occurred when the United Kingdom tried to redeem $3 billion for gold. The United States didn't have that much gold in its reserves at Fort Knox. So Nixon stopped redeeming dollars for gold. That sent the price of the precious metal skyrocketing and the value of the dollar plummeting. That sent import prices up even more. Learning the history of the gold standard will help you understand why the dollar then was backed by gold and why currently it isn’t.
And the killer:
Why Stagflation (Probably) Won't Reoccur

In 2011, people became concerned about stagflation again. They worried that the Fed's expansive monetary policies, used to rescue the economy from the 2008 financial crisis, would cause inflation.

At the same time, Congress approved an expansive fiscal policy. It included the economic stimulus package and record levels of deficit spending. Meanwhile, the economy was only growing 1% to 2%. People warned of the risk of stagflation if inflation worsened and the economy didn't improve.

This massive increase in global liquidity prevented deflation, a far greater risk. The Fed won't allow inflation to go beyond its inflation target of 2% for the core inflation rate. If inflation rose above that target, the Fed would reverse course and institute constrictive monetary policy.

So the solution if we get stagflation is to restrict the creation of money? When the global economy is shut down due to coronavirus???
The unusual conditions that created stagflation in the 1970s are unlikely to reoccur. First, the Fed no longer practices stop-go monetary policies. Instead, it commits to a consistent direction. Second, the removal of the dollar from the gold standard was a once-in-a-lifetime event. Third, the wage-price controls that constrained supply wouldn't even be considered today.
Nope. Something has occurred that is even less likely and far more serious.
vtsnowedin
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Post by vtsnowedin »

Inflation. Deflation stagflation? Who knows which and how much we will get. But no matter what your days labor will still be worth what it is worth in whatever currency is in use later. If they make all our money worthless then the billionaires money will also be useless so that is not likely to happen and a gallon of gas will still take your car as far no matter if it cost $0.50 or $300/ gallon.
Not worth worrying about until after the Covid-19 sweeps through the population and we see who is standing on the other side. Dead men need no gold.
boisdevie
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Post by boisdevie »

Tried to open an account with The Royal Mint so I can buy some gold. 4 days later and they still haven't been in touch for some documents they claim to need. Is there actually any gold out there to be had?
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UndercoverElephant
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Post by UndercoverElephant »

boisdevie wrote:Tried to open an account with The Royal Mint so I can buy some gold. 4 days later and they still haven't been in touch for some documents they claim to need. Is there actually any gold out there to be had?
The bullion dealers are neither selling nor buying. There appears to be no bullion market at all. Trade in physical precious metals has been de-facto suspended. They say this is because of "problems with couriers", but this makes very little sense given that you can still buy most other things via couriers. I don't know what is really going on.
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