The New Trend In Gold

Mon, Nov 5, 2012 - 9:25pm

Our bullion and coin affiliation, the Hard Assets Alliance, recently published this very interesting paper in conjunction with Casey Research.

The paper is printed below and I want you to read it very carefully. Study the charts, too. Then, what are your conclusions? Do you agree with the central tenet of the paper, namely that demand for paper metal is waning, or do the charts tell a different story?

I look forward to reading your comments.


The New Trend in Gold

By The Hard Assets Alliance Team

It's not too often that you see a major shift within the gold market.

The last such recalibration in sentiment for gold investors was the introduction of the first gold-backed ETF in 2004, and the subsequent explosion in exchange-traded products (ETPs) for bullion and precious-metals equities.

Today, another tidal change is under way, as the flow of funds into structured bullion products ebbs. I think this shift – as you'll read about in a moment – signals two things. First, it confirms that growing numbers of investors are increasingly nervous about the reckless monetary and fiscal paths being pursued on a global scale. Identifying this trend early on will let investors position themselves accordingly.

Second, it tells me that acting now – securing the gold you want and need – is critical to withstanding the likely fallout ahead from the mountain of unpayable government debt and promised benefits. If we're correct about the dismal future of all major currencies – the dollar's inexorable decay in purchasing power and the "race to the bottom" between it and other currencies – then failing to act will greatly degrade your future standard of living.

What is this new trend? It's simple, yet powerful...

Investors are shifting from paper to physical

We began to watch this trend after it was reported last year that billionaire hedge fund manager John Paulson dumped his shares in the ETF GLD, opting instead to purchase physical metal. Since then, the shift out of paper proxies for gold and into the metal itself has picked up steam, and it's now clear that a new investor trend is under way.

Here's the evidence. The following chart shows the total purchases since 2001 of gold coins and bars versus the net additions to gold ETPs.

Total coin and bar purchases are up 96% since 2009, while net additions to ETPs are down 73% over the same period.

While ETPs include the ownership of physical bars, it's clear that increasing numbers of investors are buying more bullion than proxies. This is a remarkable shift, especially given the claimed popularity of GLD.

The shift is even more dramatic with silver.

Investors have tripled their silver bullion purchases since 2007, while the exchange-traded vehicles sold 26 million ounces more than what they bought to back their funds last year.

Why is this happening? And what does it mean?

Certainly some of the shift stems from concerns with the funds themselves. While we discount allegations that these funds don't possess the metal they claim to hold, there are other issues, such as complicated custodial structures and the possibility of leasing or substituting paper certificates for physical metal.

Another reason for the shift is certainly due to global economic, fiscal, and monetary concerns. As fears of systemic risk ratchet higher, it's only natural for investors to gravitate toward the safest methods for holding physical metal. Throw in events like what happened to MF Global last year, and it's easy to understand why many investors would prefer holding their own bullion over a fund.

More important, what should we do as a result of this trend?

First, this is not a "keeping up with the Joneses" debate. We support the overall thrust of this shift into physical metal; gold is not an obscure metal that sits in a vault and "does nothing." It offers direct and immediate financial protection for you and your family like nothing else can.

Remember that gold is above all else the world's best, time-tested form of money – something people were duped into doubting in the 20th century, but are now beginning to remember. Today's environment is exactly one in which gold shines: eroding purchasing power of paper currencies, vulnerable global economies, fears of inflation and/or deflation, a shaky banking system, insurmountable public debt levels, and fanciful money-printing schemes… if there were ever a time to own gold, this is it.

Having metal in your control and at your disposal empowers you in times of turmoil and lets you avoid dependence on counterparties.

Second, this trend carries a subtle signal: diversify. If risks are at a level sufficient to encourage holding physical metal, it's also worth diversifying that risk. Stash some at home, use private vaults, and store some internationally. Even large institutional investors frequently use more than one facility. No single method or location is risk-free, so spread it around.

An easy way to do that is with a new breakthrough program: Hard Assets Alliance. Storage locations include Zurich, London, Melbourne, New York, Salt Lake City and Singapore. You can conduct all services online, and the metal is fully allocated and registered in your name. Selling and taking delivery are as easy as buying or selling GLD. Perhaps most attractive is that your order is bid out to a network of dealers who compete for your business, ensuring you get the best available price. All of the details are available in our free Action Kit.

Remember: once Main Street enters the precious metals market – whether it's an overnight event or a slow awakening over time – we expect supply for physical metal to become increasingly spotty, premiums to rise, and much higher gold and silver prices to ensue. That process may be under way now, so our advice is to make sure your stash of gold and silver is big enough to get to the other side of the crisis intact.

Bottom line: this is a trend you want to be a part of – and you don't want to be late.

About the Author

turd [at] tfmetalsreport [dot] com ()


Nov 7, 2012 - 12:31am


The Mr. Creosote of radio. "Just one more teensie bit of crow, Msr"

Nov 7, 2012 - 12:32am

well this hurts to the core

well it was nice to be an american while it lasted. I see a great rift coming in many things, but especially between urban and rural areas. best wishes to all, be prepared and keep stacking. good luck to all.


Dyna mo hum Mr. Fix
Nov 7, 2012 - 12:32am


He might sell them a sub base or a carrier or two. Or get him a spot on dancing with the stars.

Mr. Fix
Nov 7, 2012 - 12:32am

@ Dyna mo hum

Funny, I was thinking exactly the same thing.

I've been listening to Rush since he went national, but in the run-up to this particular election, I think he's been living in an echo chamber.

I know many other people that listen to him, and as they were looking forward to the “unexpected” massive Romney win,

I was the only one saying that Rush was wrong.

My reply was always that in a free and fair election, he might be right,

but this particular election was not going to be free, and was not going to be fair.

I have known since looking at Obama's face in the very first debate,

that there was simply no way he was concerned with the outcome of the election.

It was already in the bag then.

Tonight's results were just a well choreographed TV show.

Nov 7, 2012 - 12:35am

(No subject)

The Libertine - beginning
Dyna mo hum
Nov 7, 2012 - 12:36am

Colorado weed

At least those folks can just stay smashed for the next 4 years.

Nov 7, 2012 - 12:38am

and the ending speech after

and the ending speech after The Libertine has died.

Video unavailable
Nov 7, 2012 - 12:46am

Another 4 years od Obama

means bullish on gold and silver.

Sad to think of the country's future but must plan accordingly.

Mr. Fix
Nov 7, 2012 - 12:46am

I offer some apologies to Turdville.

Occasionally my rants go to far as far as “conspiracy theories” are concerned.

I knew full well that Obama would not be leaving office,

I just was having a little difficulty in figuring out exactly how he planed on pulling it off.

I suspected that if he could not win the election, or rig it in his favor,

he would simply declare martial law before the election. ( I am sure he already had an appropriate false flag)

But, if he figured he could get through election day with his presidency intact,

then it would be infinitely more advantageous for them to wait until after election day to declare martial law.

I think this actually buys more time, not less.

If it looked like he was about to lose, things would have been totally screwed up by now already. (SHTF)

Now he has four more years to really screw things up.

and I know with certainty, he has a plan for doing exactly that.

I realized that such a rant does not belong on Main Street,

but it is after all election night,

and it may very well be our last.

Nov 7, 2012 - 12:52am

Certainly will be interesting

Certainly will be interesting to see government figures going forward now the election is over.

The Watchman
Nov 7, 2012 - 12:58am


Nov 7, 2012 - 1:04am

So, Is This Really a Good Thing?

Two scenarios: (1) Obama wins, or (2) Romney wins. How could Obama win in this failed economy? Either folks want his policies, or don't know or care. A vote for him was NOT a vote against Romney. Class warfare WORKED? The free shit army will grow bigger. How could Romney win? He was Obama, only white and polite. He was savvy in the primaries, went negative to win, but since he was the same as Obama, the base did not really like him. The message from this is crystal clear to me. My optimism is misplaced. Obama is bigger govt, only on steroids. His advisors are brilliant politically, meaning crony capitalism will expand exponentially. Taxes will rise, the productive will move, downsize, stop taking risks, consolidate, while the non productive will clamor for more and more. The Fed has no choice but to print like mad. How can this not force the endgame upon us sooner? Who is actively seeking to shrink expenditures at every level of govt? If revenue shrinks from lack of the productive working hard at the margins, while expenditures increase from raw demographics alone, who funds this gap? When does it crash? I refuse to believe I am wrong on this. Be right and sit tight, but damn it sure is difficult! I'm getting a Springfield M1a, with scope, and thousands of rounds. And a new safe, for a new location, so I can have two locations with an arsenal, just in case.

Nov 7, 2012 - 1:10am

George Bush Accidently Votes For Obama

George Bush Accidently Votes For Obama

Nov. 06, 2012

Former U.S. president George W. Bushaccidentally voted for Barack Obama today at a polling place near his Crawford, TX home.

According to local reports, the two-term Republican was confused by the instructions on his electronic voting machine and mistakenly cast a ballot he intended to discard.

Witnesses say Bush argued with poll workers for several minutes afterwards in a effort to redo his vote, but in accordance with state law they ultimately denied his request.

Nov 7, 2012 - 1:13am

I've decided to switch from conservative Independent to...

...full blown liberal Democrat. Where's my free shit?


Actually I'm going Galt.

Nov 7, 2012 - 1:16am

no libertarians in the GOP= no winning

Hi yeah GOP? You will continue to loose ( even to shitty opposition) when you mock and ignore the liberty loving libertarian wing of the party and place RINO's as your pick.

Obama is unaffraid about his socialism and being a divider. The GOP has been affraid of its platform since after Reagan. Reagan was bold about his principle and people like gravity were pulled to it.

If I have heard 10 GOP "conservatives" I have heard a million......gee we want what Ron Paul wants even believing it........but Romney is more electable......oh really dipshits After two losted is loosing workin for ya.

Dyna mo hum
Nov 7, 2012 - 1:17am
Mr. Fix
Nov 7, 2012 - 1:19am

@ ClinkinKY

It's too late, he's not giving out free stuff anymore, he doesn't need your vote anymore.

The party is over.

( I've already gone Galt)

thurd aye
Nov 7, 2012 - 1:21am

I wood remind the dicks let's

I wood remind the dicks let's it that there Is a Previuw buton and a spelckekker at yoor dispersal.

Mr. Fix
Nov 7, 2012 - 1:22am

back to the drawing board?

It's going to take more than that now...

A lot more!

Nov 7, 2012 - 1:25am
The Watchman
Nov 7, 2012 - 1:26am

Same as it ever was.

Cartoon from 1913-prophetic

Nov 7, 2012 - 1:32am

On the "bright side"...

...December 21, 2012 is only 6 weeks away.

Good night.

The Watchman
Nov 7, 2012 - 1:40am
The Watchman
Nov 7, 2012 - 1:43am
The Watchman
Nov 7, 2012 - 1:46am

Shorts ARE going to get PUNISHED

The World Spot Price - Asia/Europe/NY markets

SPOT MARKET IS OPEN ( closes in 15 hrs. 32 mins.)
Metals Date Time (EST) Bid Ask Change from NY Close
GOLD 11/07/2012 01:43 1726.30 1727.40



SILVER 11/07/2012 01:43 32.31 32.41




11/07/2012 01:43 1562.00 1569.00



PALLADIUM 11/07/2012 01:42 620.00 625.00



El Gordo
Nov 7, 2012 - 1:51am

At just over $32

...I guess it's not too late to just go all in and start sitting on the front porch drinking ice tea and waiting for my check to arrive just like everyone else.

Dyna mo hum El Gordo
Nov 7, 2012 - 1:55am

Gordo I am with you

Be sure to get the free phone too.

El Gordo
Nov 7, 2012 - 2:02am

Settled down now..

OK, I've had a little chance to settle down and think about this, and I can only wonder if I have just witnessed the biggest election fraud in the history of this country pulled off right before our very eyes? It just doesn't make any sense at all - he won states that even he had given up on. Shows what you can do with a bunch of buses and lots of boxes of fried chicken I guess. Nothing else makes any sense.

Nov 7, 2012 - 2:04am

Sorry, the bit I don't get

Sorry, the bit I don't get about the political process in general is the fact that we are watching politicians and their hangers on partying. Aren't they supposed to be getting a good night's sleep for a long work day tomorrow ?

Times have changed since I was a lad that is for sure. And that includes Reps as well.

Nov 7, 2012 - 2:08am

I think my favourite quote of

I think my favourite quote of the elections was this one where a commentator was talking about Romney's status as results came in. It went, "His chances are slim to nothing and Slim just left the building." I'm taking that one :)

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