3 ms·

I was sneaking a generic comment in with context that has little to do with the article. This article isn't particularly interesting on its own. Someone(s) wea

by roenxi 2y ago

I was sneaking a generic comment in with context that has little to do with the article. This article isn't particularly interesting on its own. Someone(s) wealthy thinks their physical gold is better off in the US than the UK. Cool. I wouldn't trust the UK with my gold either but it isn't clear what these wealthy people are thinking. There are some rumours that this is happening because of tariffs. That seems a bit weird; if the gold is happily stored in London then a tariff won't affect it - it'll still be in London. But whatever.

JumpCrisscross 2y ago
> if the gold is happily stored in London then a tariff won't affect it - it'll still be in London People aren't taking gold out of London because they're scared about it being in the UK. They're taking it out because they can sell it for more in America. There is a price gap between physical gold in America and claims on gold outside it; that's the article's point. America is a net importer of gold. Our top source of gold is Canada. If we put a 25% tariff on gold tomorrow, its cost would go up. Someone who brought in gold today would be able to sell it for more tomorrow. We know that today, so the price starts rising in anticipation of tariffs. Put another way, if you can get gold into America on the eve of the tarriffs' rollouts you can capture some of the value of that tariff yourself.
- roenxi 2y ago
  But as far as I'm aware there are no gold tariffs, there has been no announcement of gold tariffs, any new general tariffs might have an exception for gold and the tariffs we've seen to date aren't even that big - gold already has years where the price goes up 25%. There also isn't a reason for Trump to put a tariff on gold; that won't help the US - there'll be a couple of gold bugs who can't afford as much gold and not much else changing. It could be preparation for a tariff. But it might not be.
  - JumpCrisscross 2y ago
    > there are no gold tariffs, there has been no announcement of gold tariffs, any new general tariffs might have an exception for gold They might or they might not. I'm not going to defend the market's rationale. I won't even confidently pin tariffs as the reason for the price difference. What is factually certain is that there is a price difference in the global metals market that is sucking physical gold into America. London has a big, liquid gold market that's tightly tied to New York; herego, we see the ripples there clearest. This has nothing to do with BRICS or people de-risking from dollars. And it makes no sense for it to be a revolt against American influence over the gold market; the gold is being flown to America and paid for with dollars. > isn't a reason for Trump to put a tariff on gold Canada. Would be weird to exempt gold of all things.
    - robertlagrant 2y ago
      I'm imagining a literal liquid gold market.
    - roenxi 2y ago
      > This has nothing to do with BRICS The things happening in the gold market might be related to the largest players in the gold market. It seems too early to rule that out. We don't know exactly what is happening here. > Canada I very much doubt that tariffs on Canada are a factor in the UK->US movements; it'd need to be a tariff on gold specifically. If the tariff is on Canadian gold, why would they need to slip English vaulted gold (presumably of all sorts of origins) in before the tariff barrier comes down? It'd be more sensible to wait until the tariffs are a known quantity and fly the gold in on demand. The market price does that sort of logic on autopilot. If the price differential is enough to have European gold re-vaulted the market has to foresee something bigger than a Canadian tariff. Otherwise the price differential would be just enough to justify moving Canadian gold in early, but not enough to justify flying gold over the Atlantic.
    - im3w1l 2y ago
      > This has nothing to do with BRICS or people de-risking from dollars. I think it indicates Americans are derisking. Buying gold and taking delivery could be a vote of no-confidence in both dollars and paper-gold.
  - pjc50 2y ago
    There wasn't a reason for the Canada tariff proposal in the first place, and yet it happened - doing lasting damage to US-Canada relations despite being quickly reversed.
    - cwillu 2y ago
      “Reversed” seems premature, we'll presumably know in a couple weeks whether the “pause” will stick.
- carlosjobim 2y ago
  Not even European countries have tariffs or taxes on bullion. Putting a tariff on gold would be like putting a tariff on foreign currency or a tariff on stock market investments. Highly unlikely to happen.

by roenxi 2y ago

JumpCrisscross 2y ago

> if the gold is happily stored in London then a tariff won't affect it - it'll still be in London People aren't taking gold out of London because they're scared about it being in the UK. They're taking it out because they can sell it for more in America. There is a price gap between physical gold in America and claims on gold outside it; that's the article's point. America is a net importer of gold. Our top source of gold is Canada. If we put a 25% tariff on gold tomorrow, its cost would go up. Someone who brought in gold today would be able to sell it for more tomorrow. We know that today, so the price starts rising in anticipation of tariffs. Put another way, if you can get gold into America on the eve of the tarriffs' rollouts you can capture some of the value of that tariff yourself.

roenxi 2y ago
But as far as I'm aware there are no gold tariffs, there has been no announcement of gold tariffs, any new general tariffs might have an exception for gold and the tariffs we've seen to date aren't even that big - gold already has years where the price goes up 25%. There also isn't a reason for Trump to put a tariff on gold; that won't help the US - there'll be a couple of gold bugs who can't afford as much gold and not much else changing. It could be preparation for a tariff. But it might not be.
- JumpCrisscross 2y ago
  > there are no gold tariffs, there has been no announcement of gold tariffs, any new general tariffs might have an exception for gold They might or they might not. I'm not going to defend the market's rationale. I won't even confidently pin tariffs as the reason for the price difference. What is factually certain is that there is a price difference in the global metals market that is sucking physical gold into America. London has a big, liquid gold market that's tightly tied to New York; herego, we see the ripples there clearest. This has nothing to do with BRICS or people de-risking from dollars. And it makes no sense for it to be a revolt against American influence over the gold market; the gold is being flown to America and paid for with dollars. > isn't a reason for Trump to put a tariff on gold Canada. Would be weird to exempt gold of all things.
  - robertlagrant 2y ago
    I'm imagining a literal liquid gold market.
  - roenxi 2y ago
    > This has nothing to do with BRICS The things happening in the gold market might be related to the largest players in the gold market. It seems too early to rule that out. We don't know exactly what is happening here. > Canada I very much doubt that tariffs on Canada are a factor in the UK->US movements; it'd need to be a tariff on gold specifically. If the tariff is on Canadian gold, why would they need to slip English vaulted gold (presumably of all sorts of origins) in before the tariff barrier comes down? It'd be more sensible to wait until the tariffs are a known quantity and fly the gold in on demand. The market price does that sort of logic on autopilot. If the price differential is enough to have European gold re-vaulted the market has to foresee something bigger than a Canadian tariff. Otherwise the price differential would be just enough to justify moving Canadian gold in early, but not enough to justify flying gold over the Atlantic.
  - im3w1l 2y ago
    > This has nothing to do with BRICS or people de-risking from dollars. I think it indicates Americans are derisking. Buying gold and taking delivery could be a vote of no-confidence in both dollars and paper-gold.
- pjc50 2y ago
  There wasn't a reason for the Canada tariff proposal in the first place, and yet it happened - doing lasting damage to US-Canada relations despite being quickly reversed.
  - cwillu 2y ago
    “Reversed” seems premature, we'll presumably know in a couple weeks whether the “pause” will stick.
carlosjobim 2y ago
Not even European countries have tariffs or taxes on bullion. Putting a tariff on gold would be like putting a tariff on foreign currency or a tariff on stock market investments. Highly unlikely to happen.