10 August 2011

Vietnam speculators cause "unstable psychology"

The Vietnam Government saga against its people's preference for gold continues. Commodity Online reports that after the gold price "skyrocketed" the State Bank of Vietnam allowed private companies to import "5 tons of gold to help stabilise domestic markets and supplement local supply. ... 'Taking advantage of the situation, speculators in the domestic market had speculated, and manipulated, causing unstable psychology among people even though the amount of Gold in the market is still high' [State Bank of Vietnam] said. The State Bank of Vietnam also said its consistent policy is to stabilize the dong’s value, and it is risky for people to buy and hold gold at the moment..."

I'd say its risky to buy and hold the dong whereas holding gold would indicate a very stable "psychology"!


  1. lol @ "hold the dong"... never gets old... sorry

  2. Hi Bron,

    This is o/t as they say. But I do want to raise this topic with your readership if you don't mind.

    Perhaps (see below) the worst advice that I ever received was in reading and believing Ted Butler and his repeated warnings about buying unallocated PMs from various companies, including (and sometimes, even particularly) from the Perth Mint. From reading your own comments, and from my own experiences, I now know that these commentaries by Butler were absolute rubbish that have probably cost me 10s to 100s of thousands.

    The perhaps is the only redeeming feature is that these articles caused me to buy physical (and a safe) which - big may - may prove to have been of value if and when free-gold (see FOFOA) eventuates.

    Meantime, however, because of the costs and inconvenience of selling, transporting, and re-buying physical, I have lost out on the major feature - and opportunity - of this volatile market: that is buying low and selling high - taking advantage of the dips and troughs.

    To your eternal credit, Bron, in a private email, as well as your writings, you advised me to buy unallocated gold for just such trading. [My only big regret here is that I did not buy silver for the huge parabolic increase - and subsequent collapse - which was an absolute gift. And, of course, my gold holdings went down 15-20% because of the rise in the AU$, but that was my mistake in timing.] However, today, this morning, feeling that we are at the (temporary, I hope) end of a parabolic rise in gold I phoned the Perth Mint to sell my unallocated gold holdings.

    The young man I spoke to could not have been more helpful (Bron - Gordon is his name) and my transaction was completed in minutes. Free. Unbelievable.

    I do not work for, nor have any association with the Perth Mint, nor have I ever met Bron. But I do have to say that this opportunity for gold trading must be the best in the world. One has to wonder about people like Butler and - of course - many other "goldbug" sites.

  3. Gordon,

    Thanks for the kind words. Holding some physical is good but also having some that can be traded easily is also useful.

    I actually think Ted Butler is an honest conservative guy who is naturally suspicious of "unallocated". There is merit in this because unallocated as defined by bullion banks and others can be purely paper.

    It is actually Perth Mint's fault for choosing the word unallocated those many years ago as it lumped our offering in with the others. There were a lot of scams in the last bull market where dealers offered "storage" but never had the metal. I think this is what Ted is weary of. I'm sure if he understood how the Perth Mint operates he'd be less critical.

    I wouldn't say the same of many other commentators, who I really see as pushing their product. The funny thing is that Perth Mint has been really piss poor in marketing the Depository. If it was a huge money making scam we'd be out there pumping it hard.

  4. PS - sorry for the hold up on the comment, google puts some comments into spam automatically and I'm not always checking every day.

  5. @ Gordon,

    IMO buying and selling the dips in the PM's is a risky game.

    Are you willing to sell at 1800, watch it drop to 1750, hope it will go back to 1600 only to find you missed out as it goes to 2000?

    When do you buy back in in that case?

    When do the people that missed out at $750 buy in? Or are they still waiting for it to go below $700?

    We know that PM's are in a bull market. So if we try to pick the highs and lows of volatile trading on the way up, sure we can gain, but it's risky.

    And you just might find yourself left with currency instead of gold. Strange from someone who reads FOFOA I think (I am also a reader).

    If you want to make cash, why not simply put some cash into the gold miners or something.

    Hindsight is 20/20, regretting historic lost profits will be a continual losing game. Imagine now that Ted was right? "Lucky I didn't get into unallocated, thanks Ted". I'd say the one at fault is you, for not doing enough research. If I listened to half the BS investment advice I stumble across I'd be a very poor fella.

    - Pete

  6. @ Pete
    Not quite sure I understand your point.
    I have my (FOFOA-type) cache in my safe. But I cannot live on it without selling it and it doesn't pay interest.
    I'm out of the share-market since I have lost before attempting to short, and it's tough.
    But gold, as you say, is in a confirmed bull market, so buying/selling the dips makes perfect sense. The great advantage of trading unallocated paper gold over, say, mining shares is that you do not have to select a company since you know for certain that it cannot go bust.

  7. @Gordon

    Good points, I see where you stand now.

    I was making a point of paper vs physical really. Particularly if someone read your post and thought maybe it was okay to go pure paper - which I believe is foolish.

    It would seem that your strategy is quite intelligent, as you have your physical already.

    Best of luck with the trading.

    - Pete

  8. Hi Bron,

    What's the best wat to ensure delivery of 1/2 dozen "dragon" coins next month? Any tips?

  9. I think 1/2oz should be fine, it is the 1oz that was massively oversubscribed by dealers.

    Just contact your dealer first thing 1 Sep.