Hey everyone,
I'm going to preface this by saying that I'm asking this question largely in the spirit of understanding the forces involved in the gold markets, and deepening my understanding of precious metals as an asset class beyond "an insurance policy against volitility."
But I've searched for answers in enough investing subs to know that some of you have strong opinions on gold, and you'll share them regardless of the question asked :p I'll add a comment with my specifc position in the comments so you guys have something to work with.
**The Actual Question(s)**
The bits of information I've run into suggest gold might be a bit more complicated than I thought. The only basic assumption I'm working on at the moment is "no matter how absurd something gets, it will probably get more insane soon." I haven't been wrong in this assumption yet.
1) EFTs vs Gold: I'm aware of the liquidity difference, and that EFTs can become partially detached from the spot price. I also know some EFTs are backed by bullion, and offer to convert to bullion if desired. Some are backed by miners and various mints - for these last two, what are the risks/rewards of bullion vs efts? Can these efts still decouple from the spot price? Under what conditions would that happen? This is complicated by most EFTs have amortisation built into their conversions.
2)I just learned of the gold futures market, and more importantly that it might have poor structural integrity. My research shows that the situation got flagged a few years ago, but I haven't found much follow-up info from reputable sources. Did this end up getting resolved, or is it still a house of cards? If it came tumbling, will it take the spot price with it?
3) More recently, there's been a revival of the speculation on the holdings of Fort Knox. My assumption is that if it's found to be empty, this would mean less gold in the world than thought and the price would rise in response. It seems like I have that wrong though? I'm not American so I'm not sure what the interaction is between Fort Knox and everything else.
4) Depending on your attitude towards the absurdity of the universe, and whether the powers that be are accelerationists, there is a non-zero chance the US might try to return to the gold standard. Is this economic suicide? Yes. But let's pretend it happens - I would assume this shoots the value through the roof. But I feel like I'm missing something or that it's not that straight forward. Does anyone have thoughts?
5) any other factors I should be aware of?