Gold in the hands of the public is an enemy of the state

[bizhobby]

Gold in the hands of the public is an enemy of the state

Very plausible idea... take delivery on Gold/Silver futures contract and sell at a premium 20%-50% higher.

Has anyone done that?
Can anyone familiar with the process explain the hurdles?

 

[£10kLoser]

The idea of actually taking delivery on a gold futures contract is ludicrous. Does anyone expect the broker to have a room full? Apart from that, the cost is enormous - remember, the contract is highly leveraged. The impracticalities of trying to offload it eBay for a profit is full of risk.

Add the fact that since that bozo wrote the article, gold has fallen from 850 to 770 rises are not at all guaranteed. If anyone had a futures contract that had increased in value (as he claims it is BOUND to do) they would just close the trade to make easy, certain money.

 

[bizhobby]

I wouldn't say it's ludicrous, it seems like a lot of hassle but it's not ludicrous.

Gold is still about $1100/oz on ebay!

That's what futures are - a contract where you have the OBLIGATION to buy/sell certain product at certain price.

So if you can't find gold and silver in any store at the prices that you see in the futures market why not take delivery?

Ok so it's highly leveraged big deal 33 oz is not that big nor heavy you can buy a mini gold for about $25K.

 

[£10kLoser]

It's ludicrous because the broker would not send you the gold.

And you certainly don't have the obligation to buy or sell the product otherwise we'd all have shed loads.

 

[simon1080]

discuss further!

 

[£10kLoser]

OK, you can see by the lack of response that this is a silly thread. I'll explain in full why.

For a start, a futures contract is the right NOT the obligation to take future delivery.

The mini-contracts that most of us trade are not deliverable - only the full contracts. A full gold contract is for 100 oz. So, IF and it's a very big IF you were actually able to take delivery, it would cost you about $75,000 and come as a single gold bullion bar.

Now, do you really think that if you put that on eBay for $100,000 you'd get a buyer? Of couse not - any serious gold buyer gets it from a bullion dealer and doesn't buy 'play money' 1 oz bars or coins from eBay. There is no shortage of real gold bullion, just the tiny pieces being snapped up by a scared public.

Gold in small quantities carries a premium - 20% for sovereigns and 10% for a 1 oz coin. That, combined with the shortage results in the $1,000 prices seen on eBay.

So, the idiot that wrote the story that promted this thread didn't have a clue what he was talking about and the whole idea is ludicrous.

 

[Ted Nielsen]

The CBOT mini contracts, 1000oz silver and 33.2oz gold, are deliverable. And delivery isn't as difficult as some make it out to be. The COMEX depository companies can make arrangements for delivery for a price. As for converting the larger bars into smaller bars, it isn't practical for the investor without the skills and equipment to do so.

 

[£10kLoser]

No problem then, they sell like hot cakes on eBay...