May

14

 New York City has gone frenzied this week, led by the Hard Asset conference at Marriott Times Square, and sprawling into a dozen of gourmet restaurants' lunch and dinner pitches by exploration and mining companies. Here are some things that bounced off my ear:

1. Gold is not only a commodity with largely non-existent new supply. It is chiefly a currency, which is beginning to replace both the dollar and the euro!


2.
Official sector selling has been gradually diminishing since 2005, and turned into net buying by last quarter of 2009.

3. Governments will ban private ownership of physical gold, as they have done many times throughout modern history.

4. Gold historically always got stronger as paper (stocks and bonds) got weaker.

5. We are on the way back to Dow:Gold parity of one ounce = Dow Index, as we were in 1980! In fact, this is probably on the conservative side: outlook has $2500 gold vs. 600 Dow, or roughly one/quarter ounce = Dow!

6. Another decades-long bug calls $5000 gold and even more dramatic Silver gain!

7. European mints ran out of Gold and are about to start running out of Silver.

8.
Gold is sooo under-owned, it's not even funny. Practically no one has yet positioned themselves in Gold– except for the likes of Paulson, Soros and Tudor Jones. Asia is only waking up to Gold…

Lars Van Dort replies:

Gold vending machineHere are some more signs for the contrarian that gold may be peaking soon:

1. In Abu Dhabi, an ATM that dispenses 24-carat gold bars has been opened. Think about it…See this video. The clip says Abu Dhabi is the first site with such a machine, but this is not correct. There is already one at the airport in Frankfurt. The company plans, 'for a start', to install 200 more of such ATM's in Germany, Austria and Switzerland. Which will no doubt be followed by world-wide presence. The company explains the brilliance of their concept on their website as follows: "Potential buyers WILL BE ENCOURAGED BY CURRENT PRICES and instant delivery as well as the attractive appearance of the precious metals in the gold vending machine." Yes, of course they will, who doesn't like to buy high…

2. A Dutch newspaper interviewed several gold dealers today. Some reported double sales compared to last week. Some are out of stock. The gold is mainly bought by consumers who are worried about Greece and the euro. The situation appears the same in a lot of other European countries.

3. My father told me investing in gold seemed like a good idea to him. You don't know him, but he's a good contrarian indicator. If there are too many bulls, the market must go down.


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