Thursday, November 26, 2009


Demand for gold is growing faster than supply. In London, market makers are trying to settle gold futures contracts with more contracts, not bullion, because there's not enough gold to deliver. Buyers who elect to forego payment in gold are offered cash premiums for doing so. If you really want the bullion, you can buy the ZKB Gold ETF on the Zurich Stock Exchange and take it to the Zurich Cantonal Bank, owned by the Canton of Zurich. There you are given the actual bullion, which can then be stored in Zurich. This situation could lead to what is known as a short squeeze in gold. If there is enough demand for physical gold (instead of paper with promised gold) the price of gold will be bid up just to satisfy the demand and if the commodity is scarce, the price could be truly fantastic. That would not be good, but if it happens, you want to own some gold. This situation has come about due to the loss of confidence in the dollar and the budget deficits in U.S.'s future which will lead hedge funds and countries to put their money into something that will not lose its value over time. Evidence? We're seeing demand for gold all over the world. Pension funds allocate about 5% as protection against the weakening dollar. Chinese citizens are encouraged by their government to hold gold, not dollars. On Nov. 18, Russia's central bank announced it would buy any and all gold its sister organization, the State Depositary for Precious Metals and Gems, was willing to sell. Now the Vietnamese central bank has granted quotas to import 10 tons of gold for use by its banking system and gold traders. India just bought 200 tons of gold and announced it is in the market for more.

BestView has U.S. gold coins in the safe deposit box and will be adding more with an intention of having 5% of assets in gold. If you think Obama is going to reduce spending, forgo his plans to pass new taxes, and defend the dollar, buying gold is not a good idea. If you want to buy some gold coins, the company I use to buy coins online is Coast to Coast Coins at
They have reasonable prices, good communication and reliable delivery of quality coins which are as advertised. Can't ask for more than that.

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