Wednesday, 2 November 2011

Gold ETF Investor market report: 2 November 2011

This isn't really a market report. Here's what some other people are saying. You could spend a lot of time reading it - but would it help?

A general goldy newsy piece from Reuters: Gold rises on deepening eurozone crisis which included this on ETFs:

"In ETF flows on Wednesday, gold holdings were up by just over 11,000 ounces after an inflow into the COMEX Gold Trust.

"Last month, global holdings of gold in ETFs rose by 852,000 ounces to 67.907 million ounces, more than offsetting the 444,000 ounces outflow in September and the 297,000 ounces outflow in August."

OilnGold: Dont bet on it, gold could go down a bit more
Gold investing news: Lots more people could invest in gold soon - China makes gold owning easy for its citizens (opposite of what happens here).

Harvey Organ: Says that gold and silver prices were pushed down by the big short sellers - but suspects it'll have backfired (I still don't understand how the bear raid stuff works.)

There's loads of stuff in the Harvey Organ post including this from

ZeroHedge: How US banks are lying about their European exposure, an article saying that if anything else goes wrong it will test whether interconnecting deals between banks adds up to a safety net (hedge) or a bad bet (melt down).

ZeroHedge points to "MF Global for example, which filed bankruptcy precisely due to its hedged (?) European exposure - luckily MF was not in the business of writing CDS on European banks or else all hell would be breaking loose right now."

He applauds this Bloomberg piece which said U.S. lenders exposure to Greek debt via CDS (insurance against default) rose by $80.7 billion to $518 billion in the first half of 2011.

Too much too soon

But this is all too much for me. I'm still wondering how, why or when to buy more of a physical gold ETF (PHAU).

Yesterday I nearly bought some more. I didn't do it and tried to blame my broker.

But it was me - and the situation bought up very basic issues that I need to address.

Like how long can I go on deluding myself that I have a strategy?And why have I bought gold when I can't honestly answer these simple questions:

a) Is my aim to build up a stake in gold because I think the world is about to collapse?
b) If so, why don't I just put cash in it now?
c) How much of my cash am I actually talking about?
d) Once I've put it in, do I have any idea why or when I should take it out again?

But then the panic wanes a bit. I remember that I started off knowing that I know nothing and I shouldn't be terrified by other people knowing lots more than me.

I also need to remember that I've bought gold because otherwise I wouldn't bother looking at it.

But what did I learn from yesterday?

1. It's never going to be obvious when to buy and when I have bought it will feel like I made a mistake until its obvious that wasn't a mistake which could be never.

2. I've got to make up my mind if I'm pound cost averaging or not... if I am I should have bought PHAU at around 11am on October 22, a weekend but I would still have got a better price than now whether I'd bought before or after.

However, I don't really want to buy automatically because the reason I'm doing this is to force myself to pay attention.

3. So, if I'm not pound cost averaging, what am I doing? Should I be buying on dips (investing - catching falling knives?) or following trends up (trading - chasing bubbles)? I don't know. I need to do some reading!

4. Volatility - do I really need to think, every time I miss what looks like a low, that it was my last chance ever?

5. I need to stop looking for information to justify what I've done. I need to find out if I am doing the right thing, not prove that I am doing the right thing.

This all sounds like something out of a self help book! Find yourself - buy gold! Or am I already turning into Gollum?

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