Gold goes Flatline

by Robert Wood - Sociologist 
The day gold goes flatline will not happen! No matter how much CO2 gold mining is adding to the global heat-up, the excavation will not stop until mankind is extinct.



Anyway, gold makes the financial world spin, and at the beginning of 2019 people were willing to pay 1282 American dollars for one ounce (31,103 gram) of the yellow metal. The reasons are many, but greed and fear will run hand in hand through the world of finance in 2019. Greed is motivated by human nature, and Fear is motivated by the five Horsemen of the Apocalypse; War, Famine, Plague, Death and Inflation. The latter, Inflation, has modernized and drives a Vintage Ford Mustang.
   No matter, gold is no joke. Or is it? Let’s not forget the famous words of Warren Buffett. He has been very vocal about his disdain for gold as an investment. He sees little, or no value in it. What Buffett refers to as a lack of value results from a lack of usefulness. He once stated about gold:“Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.” But, then again… even if everybody know that gold has no real value, everybody believe that gold has value. Belief  Trumps knowledge. Always!

Greed is the Brother of Gold
Sometimes greed is stronger than death. That is… many gold investors would rather die than go to their grave without gold coins placed on their eyes. The ancient Greeks believed that you had to pay Charon, the Ferryman of Hades to carry your soul across the river Styx to the land of the dead. If you could not pay, you had to wander the shores for one hundred years.
   As with most other commodities gold is traded in the hope of making a profit, and you find the biggest name of the game in London. LBMA (London Bullion Marked Association) began publishing monthly data showing how much gold and silver are stored in London’s precious metals vaults. At the end of August 2018, there were 7,528 tonnes of gold, valued to 294.7 billion dollars and 35,094 tonnes of silver valued (at the end of August 2018) to 16.1 billion dollars. This is more than approximately 602,276 gold bars and 1,169,799 silver bars. London gold

602,276 gold bars…
… equal 7,528 tonnes of gold, valued to 294.7 billion dollars. As written above, the gold is stored in precious metals vaults as a symbol of the values traded by the members of the LBMA. The amount of gold and its believed value fluctuate from month to month. Nevertheless, the numbers underpin the trading the LBMA members do every workday: 30 million ounces (939 tonnes) – 37 billion dollars change hands. The minimum wager is 2000 ounces of gold, so this kind of trading is not for the poor or weak of heart. Anyhow, Greed is the driving factor. The members of LBMA want more gold for the sake of getting more gold, but such is the gilded world of gold finances. Money for Nothing.

2019
People are able to predict the near future. You can, for example, decide if you in the next ten seconds will drop a handheld pencil on a table or not. Chances are quite high that this will happen if you really have made up your mind to let it happen.

   But how about the price of gold for 2019? 1920? Nobody really knows. It is ten years since the last economic burn-out when the housing-bubble burst and a downward spiral started on Wall Street. It is not difficult to predict that people with surplus money will buy gold and that prices of the precious metal will soar like a stairway to financial heaven if the almighty dollar takes a ride with Charon.