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Originally posted by endlessknowledge
So your only explanation as to why the price of gold will drop is 'what goes up must come down'??? Wow that's some serious analysis. I think I'm going to sell all of my gold ASAP. After all, who can argue against gravity.
The term paper gold means you have a piece of paper acting as a substitute for the physical gold. With paper gold, you don't own the gold; you own a promise to receive physical gold. In plain English, it means you are a creditor of the corporation issuing the paper gold certificate, thus subject to counterparty risks. Owning the physical gold has no counterparty risk and is fully under your control.
Backwardation is the opposite condition, where spot prices exceed forward prices, and the forward curve slopes downward.
The price of (paper gold) GLD does not directly interface with the price of gold, except that they supposedly buy gold from the market. The only effect selling GLD will have when the market learns they have no gold is that people will flood from GLD to miners and physical, or something else. There is no method by which such an event could have a negative effect on the price of gold.
Originally posted by FarArcher
I grow weary of trying to point out things that some folks will never, ever understand. Besides, it took me a lot of money and years of my time for my education.
Originally posted by g146541
reply to post by FarArcher
If the dollar collapses i will have the food to sell you a sammich for gold though.
or any other commodity i might want or be able to use, and if i don't sell a sammich, i eat well same as always.
Gold is syure prety, and high in minerals i'm sure but it does not digest to well.
Gold is the rich mans scam.