Gold buying vs. Oil buying

Let’s say, for sake of argument, 80 million barrels per day of oil is produced every day. (I think it’s really more).

We know that 2,425,000 kilos of gold is mined yearly, so that equals 6,645kg daily.

As far as I know, the smallest amount of gold you can buy on the London international market is 10.9kg. That’s for 1 trade of gold. *Excluding * fees.

So, there’s only a possibility to buy 609 trades before you’ve exhausted the world’s supply for that day.

Now, every time I bring this up, I’m told that it’s totally necessary, when trading commodities, to deal in such huge relative amounts.

So if that explanation holds true, it should hold true for oil, right?

That is, one trade in oil should be 1/609th of global daily production, right?

So, the least number of barrels of oil you can buy should be 131,362 barrels.

Is that the case? Is that the minimum allowed amount of oil an individual investor can buy?

I would imagine(shorthand for saying that i don’t have a f**k*n clue)that because it is priced by the barrel on the markets that one trade in oil would be 1/8,000,000 th??

I remember reading about the fellow who broke the $100 dollar a barrel limit just so he’d have something to tell the grandkids. He bought and sold 1000 barrels which was the minimum trade allowable.

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?

you can buy 1 gram of bullion on

rock3r, have you been to

At a very high premium over spot, yes, I can buy it. You’ll always find sellers, the more one is willing to overpay.

What I’m into is buying the smallest amount possible while paying the spot price.
2.9% in US funds, 3.7% euro funds. Neither I’d call high. Maybe when the Irish Times starts its thursday Commodity Supplement circa 2012 there’ll be smaller premiums :wink:

Maybe the Irish Times will pay €50 million for a site called :laughing:

So we all think it’s likely commodities will rocket over the next few years?

The IMF is due to sell 403 tons of gold soon - how much of the world supply does that represent? Is it likely to have a big price impact?

I know you’re all discussing oil and gold but have any of you here bought silver?

Armchair, don’t start talking up a silver bubble, will someone please think of the children:

From 1980 apparently :open_mouth:

I won’t drag this any further OT

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.

I believe that’s about a sixth of global mine output for one year.

The price is up significantly from the day it was announced.

This boom is not being driven by a sudden rush to buy gold jewellery. It is being driven by the US budget deficit.

When America starts to spend less than it collects in taxes, that will be a very good time to sell or short-sell gold. Until then, it rather looks like the opposite advice applies.


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.

Gold Update: The small trade within the big trade … #post29425