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Gold investment and buying

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  1. #21
    Quote Originally Posted by freeier:
    which boc branch you try to purchase at ? their key gold desk is the one beside HSB HQ. BOC HQ has almost nothing.
    But agree, their stocks can run out early.. on days where gold price drop abit (1~2%, or more), you see aunties and uncles queuing at 8am outside the central branch buying up the gold available in the branch.
    Connaught Road Branch next to HSB headquarters. Only one counter at the VIP centre was staffed. Very poor. It used to be much quicker.

  2. #22

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    Quote Originally Posted by traineeinvestor:
    Reviving an old thread.

    Does anyone have any experience buying bullion from Kitco and LPM in Hong Kong? If so, how does it compare to buying from BOCHK and the other banks?

    Many thanks
    For gold Hang Seng bank is best, as they have only 50$ spread per ounce.
    Buying from Kitco is more expensive, but straight forward. I have done both.

  3. #23

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    Quote Originally Posted by traineeinvestor:
    Not sure why anyone would pay a premium for one coin over another when they contain the same amount of gold. As a side point, I believe (and please feel free to correct me if I am wrong) that the Maple Leaf is likely to be easier to sell outside of HK than the Panda.
    I started out having the same gold is gold attitude.. then got bored collecting too many boring kangaroos and maples.

    My beliefs, gold will be gold. i do have small number of maples for necessary liquidation if it comes to that (for people who would only believe in maples) but otherwise i don't see any additional value of maples gold versus, for that matter, panda or eagles. If and when gold takes the mainstream, people will recognize the element gold itself, regardless of the shape.

    Then why fixed mintage coins? Well, I don't go for coins that are too high in premium.. unless they are really rare ones that i find in second hand (pawn) shops and are selling at much below the street values. Generally the premium i am paying are like maybe 20% above spot.. Some of the interesting ones I got my hand on are the new south korean coins, or the Israelis mint bullion.. I treat the extra 15~20% I pay above maple as cost of hobby.

    But that said, as an asset allocation, I really have no idea when the sh*t will hit the fan and gold will come mainstream again. I believe it will, but it might be our next generation. So in the interim I pay the premium as an option that maybe some of these lower mintage coins might actually go up in rarity premium. I have sold gold pandas for 15~20% profit a few years past their mint year. For what its worth, some of the Israelis coins I bought at maybe 1600 USD (when gold price was higher several years ago) are quoted at 3500 USD now in Apmex, even though i doubt anyone would pay for them.

    Bearing in mind, maples also starting all kinds of nonsense (laser engraving, special editions, etc) to defeat counterfeits and generate interest... so it has to mean something.

    Anyway some of my recent indulgence are, for example, American the beautiful 5oz silver coins.
    Even though i don't look at them much, but seeing your collection build up is by itself a sense of fulfillment.. since nobody in Asia are likely to be as crazy as myself for collecting these. 8-)

    https://en.wikipedia.org/wiki/Americ..._Bullion_Coins
    shri and traineeinvestor like this.

  4. #24

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    Quote Originally Posted by traineeinvestor:
    I've been listening to or reading about various claims that the prices or gold and silver were manipulated (always downwards) for decades. I largely filter those claims out as background noise nowadays. I accept that there are circumstances in which the pricing of gold/silver can be distorted but that is true of just about anything.

    As tempting as some of the bars are (Pamp Suisse in particular), I'm sticking to well known coins for the physical.
    Ya, i take those as a pinch of salt, its about the same as saying FX market is manipulated or libor is manipulated..
    The problem is the design of the transaction platform.. if that allows people with big pockets to move price about by buying or selling the undelrying, then that is that.. it is not manipulation, just market ramping with real month.

    But do i believe that GLD/SLV has logistic issues keeping those physical gold/silver ? yes certainly so. 8-)

  5. #25

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    Original Post Deleted
    Ya aware of that, just trying to point out the issue with CME future contracts and the paper gold market.
    Not sure how a hike in gold price will impact the credit worthiness of BOC, but i personally would rather take UOB Sg's credit risk on gold bar than CME's/LME's contractual risk in gold delivery.

    Anyway I believe the Asian banks are more wary of the impact of gold to the financial market, and maybe the possibility of a break in correlation between paper gold and physical gold price. But I might be wrong. Anyway the only paper precious metal I have now are some pension fund related purchase of GLD listed in Singapore market.. Sticking to physicals.

  6. #26

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    Original Post Deleted
    Ok I generalized a little. but let's break down the whole Libor issue and see the history of manipulations

    Up to 2007..
    - Eurodollar was the most traded futures on earth.
    - 3mLibor, which is indirectly expressed via Eurodollar, actually has real meaning. It was the interest rate for a 3mth deposit between two AA rated banks. If one is to quote 3mL high or low, you are going to get hit with the actual trade. i.e. whoever has money on the table will get to move the market.
    - 3mL fixing was quoted by the money market traders based on their borrowing and lending trades. But they are not the swap trader that were impacted on the floating leg of the long dated swaps.

    So up to this point, most can agree that 3mL fixing is determined by market force..

    Now come 2008.. 3mL pricing shot up not just on liquidity/interest rate, but also significantly on credit risk of the borrowing banks.
    And subsequently, it dropped back into its steady routine..

    However, nobody is really keen to lend on unsecured Libor deposits anymore. You get some small trades each day.
    For tenor longer than 3m, simply no liquidity. Why? 1. credit risk, 2. capital charges.
    So you have a market underlying instrument that has no trading liquidity.
    But as a money market trader, you are still expected to quote an 11am pricing each day.

    So what is the basis of this fixing quote ?
    Flip a coin ? Check with the brokers ?

    The fundamental of fixings I would say, generally are based on 1. what market is trading, 2. bank's position in the underlying.
    Money market traders mostly do not have Libor positions now. Then how can one fix the pricing ?
    If you ask me, if I am a bank, the way I will fix is simple.. If i have more position on the long end, i will fix higher. If i have more position short, I will fix lower. It is natural. Since it would be the same i will be quoting if i am trading. If I already have heavy long position on 3mL, the next quote i am asked for 3mL would have to be higher than what current market is for me to want to lend.

    Is that manipulation ? I am not going to judge.. its up to court interpretation and public opinion.
    The fundamental problem was that BBA Libor, post 2008, was outdated and no longer meaningful. If the authorities and associations in a whole are not going to change the model, then how would they expect traders to quote these in a meaningful sense ?

    So, what is manipulation and what is not ?
    No doubt you can claim the big bank traders collaborated to fix the levels. But factually, if i am a trader and my positioning will lose money with a higher Libor level, no amount of collaboration is going to get me to fix the level higher just to benefit the other traders in my chat group.

    So who's fault at the end ?
    I don't have an answer. We can all take it at face value.