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Valentine Notes from All Over
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(February 14th, 2009 – Valentines Day) By now, I wouldn’t be shocked if you hadn’t yet received a box of chocolates, flowers, or a gift of a night on the town. It is unfortunate, but sometimes, often at the wrong times, you just have to be patient and wait for what you want.
For instance, by now I expected to be bringing you the story of one man’s realized delivery of gold purchased on the Comex in December of 2008. I have been following this transaction since last November, when he told me of his intent to take delivery of two 100- ounce .995 or better gold bullion bars, as is his right in settlement of two December Comex gold contracts.

I last spoke with him in mid-January, and at that time he was keeping a time-lined diary of the continual delays, roadblocks, and assorted hassles that he was experiencing in the simple act of trying to get possession of that which he had bought and paid for.

Finally, in early February, he received his promised gold. I’ve asked him to write the story for us, and I hope to be able to share all the gory details here soon.

Gold continues to fly off the shelf here, where we specialize in delivering real gold bullion in a timely manner. The size of our average sale continues to grow, as more and more money pours into the gold market. Many of these purchases are by individuals who are swapping out positions in an exchange traded fund for gold.

Usually that ETF is GLD, an electronically traded unit which represent one-tenth of a ounce of pure gold, stored in a London depository. GLD has been such a success that its gold holdings now exceed that of either the central bank of Japan or Switzerland.

Many of our customers have noticed that GLD trades at a discount to the spot gold markets. Although there is certainly price correlation between GLD and real gold, the expenses incurred by the exchange traded fund mean that a single unit of GLD is only sort of a tenth of an ounce of gold, due to the constant storage and administrative expenses.

So, our word to the wise is, take the GLD quotes with a grain of salt – real gold in hand is simply worth more.

Electronic gold is, in our opinion (and some disagree – see Jim Sinclair) all well and good, but what I am hearing from our customers is a simple desire to have the shiny element in their actual possession, rather than by proxy through a counterparty. In this time of reduced trust in large institutions, the idea of an electronic relationship to unseen gold bricks, held in custody in the bowels of some guarded underground fortress in London, just doesn’t cut it.

As you may already have noticed, we have restored many bullion choices to our home page. No longer will you have to check intermittent offerings on our ‘Specials” page for what’s in stock. For right now, what you see is what we have - many gold bullion choices are now in stock and most are available in large quantities.

We will continue to use the ‘Specials” page for new and/or unusual purchases and vintage coins or bullion that we consider a good deal, often available in limited quantities, or sometimes one-of-a-kind. If you’re already signed up for email notification, you will still get timely notice of new inventory and specials.

The gold market, most recently and encouragingly up against a down stock market, simply looks stronger than dirt. I can’t help but think that the era of three- digit gold prices is, after a reign of several decades, about to be over.

The events of this week, including the rather less-than-convincing public appearance of Mr. Timothy Geithner, reinforce the view that there is still a lack of adult supervision at the Treasury. The gold market will always fluctuate, but being short gold right now seems to carry much more risk than being long.

And if you disagree, we would be glad to purchase any part of your holdings.

-Richard Smith, February 13, 2009

 

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In addition to gold, silver, platinum, and palladium in coin and bullion form, we also purchase a wide range of numismatic coins and currency for our retail business. Feel free to call us for quotes or price indications on anything in coins, bullion, and paper money.

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