Mr Vet > Kaplan would love Exchange Traded Gold to be a failure, but these figures belie his wishes
I didn't get the feeling that Kaplan was prejudiced against the gold funds, only that he wasn't particularly impressed with their performance. After all, 7.19 tonnes v 6.4 is not a difference of major dimensions, certainly compared to the +/-3000 tonnes of gold sold annually in world markets.
My concern, as is Kaplan's and others', is that the present bull "run" is being driven by speculation on Comex, using derivatives, and not by the purchase of bullion. The tail is wagging the dog rather than the dog wagging its tail. In other words, actual gold sales, despite your contention, have become increasingly irrelevant to the gold price. In fact, taking the gold/derivative situation to its extreme conclusion, it will ultimately resemble the Cheshire cat, in Alice in Wonderland, where the cat vanished and all that was left was its smile. Indeed, as Kaplan points out, actual gold sales are unimportant, what matters is the speculative interest on Comex.
In fact, after thinking about this dilemma for some time, I see a comparison between gold investors and speculators and that of the Anglican church concerning homosexuality. Thus, I can identify the gold "fundamentalists", like myself, who believe that the gold price should be the result of actual demand for the metal and the gold "revisionists" who believe that demand for the metal is unimportant in the setting of the price and what matters is the betting at the casino, however it comes about.
What we see at the moment is a profound contradiction in the way the gold price has been set, and therefore what that price actually means or signifies. And, in fact, the relatively high price for paper gold, in the casino, is impacting seriously on the demand for real gold in the market place. And there can be no doubt if the "casino price" was not being maintained by currency and other speculators, the true gold price, as determined only by demand for the metal itself, would be considerably lower. |
