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Comment by morley | Hacker News Reader

I'm a little confused. Maybe I'm interpreting this news or other commenter reactions incorrectly? They seem to be saying that the price of gold is on the rise, but the price of the gold ETF has gone DOWN in the last few days:

https://spdrgoldshares.com/#home

And the futures markets are down too:

https://www.investing.com/commodities/gold

Are other commenters only speculating that the price is going to go way up, and that the price is a good deal right now? If so, that doesn't seem to be supported by financial indicators, and the speculation around it doesn't seem much better than, say, saying that Bitcoin is going to go up in any given environment. I'm surprised to see this discussion on HN. I hope I'm grokking things wrong.

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Gold fell, but silver fell more.

So the ratio of gold:silver went up

My impression of the gold market is this: The gold bugs always say, that now is the right time to buy. It rarely is though. That's because issuers and supporters of fiat currency have an interest in the gold price not exploding, because it's basically a counter currency. So you see the current divide of reported gold demand and the price being "artificially" depressed.

But the gold bugs can't really win, because the fiat currency owners wield infinite power, unless inflation really kicks in at some point. So gold is usually not that great of an investment.

That's my perception, I am not at all an expert on these matters.

It's more due to the rest of the world having to sell everything to pay their dollar denominated debts, because, during this global economic shutdown, they have no USD coming in.

I don't think that fiat currency issuers have infinite power to suppress the price of gold, because they have at most limited amounts of gold to sell. They can certainly increase the price an infinite amount, though.

There are two groups: (a) gold bugs; (b) those who diversified their portfolio. These two groups can't move miners or gold in the long run. They need momentum traders, or a group of people who just want to ride that gold gravy train. And that moment has come: coronavirus, interventions by central banks. However, the momentum has stalled or that many others don't want to ride that gold train. So, that's why miners gonna crash further.

This is a graph of the _ratio_ between gold and silver.

More like silver going down. YTD -30%.

Also flight to liquidity.

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