Put our Precious where Soros' mouth is @The Eye of Sauros

Goldum’s Precious metal hits once again the news headlines:

- Firstly, as it was reported this week that George Soros (the palindrome, not me…) more than doubled his Gold position at the end of last year, by 3.7m shares to 6.2m of the SPDR ETF, plus is long of 11,000 call options and increased his stake in the gold producer Yamaha Gold. I’ve seen some debates among the journalists, notably on FT Alphaville, whether he puts his money where his mouth is or not as the old chap declared at the World Economic forum in Davos end of Jan. that the Gold was the “ultimate bubble”. I’d say that as far as I understand it (it’s not that easy… try to read this), Soros uses his “Theory of Reflexivity” precisely to profit from the
Bubbles and Busts, so to me no contradiction in Soros’ mouth between long position and bubble, quite the opposite.

Read the full post here:
http://blog.thelordoftrading.com/2010/02/put-our-precious-where-soros-mouth-is.html

Well put Sauros. I can't say I agree with your prediction on the dollar long-term but I agree with your thesis on why to add to your long bullion position.

Batman wrote:

Well put Sauros. I can't say I agree with your prediction on the dollar long-term but I agree with your thesis on why to add to your long bullion position.

Thanks for your comment Batman.
China is said to let appreciate the Yuan sooner or later, its recent moves show that they are trying to calm down their overheat economy. It sold this week a huge block of US treasuries letting the biggest owner role to Japan. It showed at the end of last year a strong bid for gold and missed 200 tons. Well, I think I know what they'll do with the cash proceeds of their treasuries sale...

Sauros wrote:

Batman wrote:

Well put Sauros. I can't say I agree with your prediction on the dollar long-term but I agree with your thesis on why to add to your long bullion position.

Thanks for your comment Batman.
China is said to let appreciate the Yuan sooner or later, its recent moves show that they are trying to calm down their overheat economy. It sold this week a huge block of US treasuries letting the biggest owner role to Japan. It showed at the end of last year a strong bid for gold and missed 200 tons. Well, I think I know what they'll do with the cash proceeds of their treasuries sale...

How do you feel about the purchase of SPDR GLD shares vs. actual contracts. I understand that this simplifies the process. However, Chin Is buying gold derivatives as a long term asset. I'm not sure that is such a good idea. ETF's have not been around too long. There has been no legitimate test of the Funds' Strengths.

Batman wrote:

How do you feel about the purchase of SPDR GLD shares vs. actual contracts. I understand that this simplifies the process. However, Chin Is buying gold derivatives as a long term asset. I'm not sure that is such a good idea. ETF's have not been around too long. There has been no legitimate test of the Funds' Strengths.

Could sound totally crazy but I think the best for gold is to go... physical, at least as much as you can.
I'm not kidding, for instance I have myself coins and bars hidden in my garden.
Otherwise, most of FX brokers will allow you to trade gold with leverage like any major currency pair so you basically go long or short gold like you trade EURUSD...

Now back to China, let's keep in mind that last summer there were some rumours about China defaulting on its OTC derivatives (meaning it might not settle), in october runours that it required physical delivery on gold derivatives instead of rolling them, have a look at this post of mine at that time:
http://blog.thelordoftrading.com/2009/10/long-time-weve-not-spoken-about-gold.html