Notes on the Falling Prices of Gold (13/10/2008)
1. According to the news on bullion, it is derived that there are shortages in the market on gold bullion.
2. The public in the US, UK, Europe and other countries are experiencing shortages of gold bullion supplies.
3. It has been clear that even banks in Germany are holding up gold, as a hedge against inflation and the devaluing of the currency.
4. Silver also suffers the same condition as gold, silver investors are required to wait for 8-10 weeks for their gold shipments to arrive.
5. Despite, the conditions mentioned in the above, we are seeing gold value slumping. According to theory of supply and demand, due to scarcity factors, the value of gold should be rising higher at the moment; however, the direct opposite is happening.
6. according to some market analyst, there is some sort of disconnect on the price of bullions.
7. Some analyst had the notion that it had to do with the COMEX. How does one buy or sell an object which is not even existed? How does someone buy something without throwing any money and has the capability to sell it and reap the profits? Yes it does sounds preposterous. Well, welcome to the futures market.
8. How the hell that physical gold which is getting scarcer to obtain and high in demand is losing value as stated by COMEX?
9. The price of paper gold as in COMEX does not reflect the true value of gold. If the prices quoted by COMEX are not the true value, what is the true value of gold compared to fiat currencies?
10. Is the true value of gold is being manipulated in order to strengthen the fiat currencies? When the fiat currencies are strengthening, it will make the fiat currencies more favorable compared to bullion.
11. Is Naked Short Selling is what has caused the decline of the value of gold? If Naked Short Selling is causing for the value of gold to decline, how does the quote by COMEX on the value of gold could be deemed as the right current value? By now, the credibility of COMEX should be questioned, and the practice of naked short selling should be banned. If short selling is a tool to prevent the price of commodities from soaring too high. There need to be some sort of regulation to prevent the activities in COMEX from distorting the true value of certain commodities.
12. I'm not deeming my notes to be correct, if there's any misunderstandings or misconception please inform me so i could understand better