1000 barrels is one eighty thousandth of the world’s daily production (WDP).
Yet the minimum trade in gold is one six hundred and ninth of WDP.
And the weird thing is, you need extremely specialized equipment to move 1000 barrels of oil, whereas most adults can lift 10.9 kg.
This weird disparity makes no sense to me. It makes me think there’s a gap in the market for someone who caters for the smaller trader who’d like to dabble in gold, but on a smaller scale than one six hundred and ninth of WDP per individual trade.
The oil markets can function at one 80,000th WPD per trade, why not gold? Can anyone think of a good reason?
Unlike gold, oil gets consumed – (almost) none of the oil that was drilled a few years ago still exists today, whereas gold that was mined a thousand years ago still exists. So it doesn’t really make sense to compare daily production of the two.
1000 barrels of oil costs ~$100k, 10.9 kg of gold costs ~$350k. Not such a big difference.
This whole “do I buy gold” or “do I buy oil” thread is tedious to say the least. We’re discussing pop economics and in the process, multiplying fear that’s been disseminated by those in power. I personally think that both gold and oil are now over-rated. But there are plenty of Micks who’ve been dazzled by the Irish Times business section still to pile in.
You think the supply & demand picture suggests cheaper oil?
Not to mention the fact that all the new discoveries of oil are, in addition to being tiny, really dirty. And the average age of global refining capacity is one year older than recommended scrappage age.
It being boring to you is remarkably easily solved: stop reading the 0.001% of threads on the 'pin where gold is ever mentioned. Not meaning to be lippy, but what do you expect?
I bought it by the kilo in the silver market in Old Delhi. Wrought into fine or not so fine jewellry - the sort you pay top dollar for in any ‘ethnic’ shop. Buy by weight and have a cup of chah with the shop-owner while you haggle. Much more civilised than the way we shop in this country. Cheap as chips then. If it isn’t now, it will be again.
The Perth Mint, which claims to hold Aussie gold for people, has reportedly ratcheted up certain fees by 150%. The fees are fabrication fees, for those who want to physically receive the gold they bought from the Perth Mint.
This should be a lesson for everyone who thinks buying gold to be held by a third party is wise investing. The temptation to skim and cheat becomes unbearable.