Fast Five by Fear and GreedListener Steve asks: Been hearing non-stop about the gold price climbing. Everybody wants gold, everybody's buying it because it's safe - I get that. But WHO is actually buying it, and WHERE is it? It's not like you can just walk into Coles and Woolies and get a couple of ounces of gold from the deli. So how does it actually work?
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Welcome to Ask Fear and Greed, where we take your questions and do our best to answer them. I'm Michael Thompson and hello Sean Aylmer. Michael, great question today. This is a question that I could have almost written myself, right because it's the kind of thing that we would discuss in the office. Steve on Instagram has written to us and he says, high team, I've been hearing NonStop about the gold price rising. Everybody wants gold. Everybody's buying it because it's safe. I get that, But who is actually buying it and where is it? That's my favorite part of the question. He then says, it's not like you can just walk into colds and woolies and get a couple of ounces of gold from the delhi. So how does it actually.
Well, I would have been from the deli, I don't know more in the hardware area, wouldn't be gardening stuff.
But if you're buying it by the ounce, you would be getting it from the deli.
That's true.
I get kind of half a kilo ham, maybe three pieces of devon, and a couple of ounces of gold.
Maybe Steve can come back and tell us it's an excellent question from you, because did you know that gold is the dentest of all metals?
Ah, And the worst part was the two seconds that it actually took me to get that. You were actually a like, why would you start with dentse Oh? Thanks Sean.
Did you know that all the mind gold in the world, if you could bring it all together, would fit under the Eiffel Tower?
That's not that big a space, No, sod like a few swimming pools.
The other one, I like one ounce of gold if you smash that out, and you could smash it out to really fine gold leaf the seventeen square meters. Wow?
Yeah, did you did you just spend the entire I did just googling gold?
Did soft malleable? We love it? But the point of the quipment? Who invests in it? Well, investors invest in it? Right, we can all invested in fact, I've invested in gold. You probably have invested in gold. Has Sean got a gold ring?
Jewelry?
Yes?
Okay, I mean that's but we're talking very small quantities.
Fifty percent of gold is in jewelry. No, yeah, it's a bit less than fifty percent. Really, so most of us, not most of us that many people have bought jewelry and that's an investment in gold, and so a wedding ring could well be worth more than it was given the price of goal probably is worth more. So there's that. What's kind of more interesting though, is where is it?
Yes? Because I have an image in my head and it is probably an image because of the maybe Goldfinger James Bond was it nine and sixty four or somewhere al yep, and it's Fort Knox. I'm just picturing, but you're right, the gold bully and the bars stacked up and Goldfinger an odd job breaking in there with.
A yeah, that's it to get there. So Fort Knox is probably the biggest holder of gold. Bank of England is another really big holder of gold. In fact, the Reserve Bank I think has about eighty tons of gold. So ninety nine point nine percent of the Reserve Bank's gold is with the Bank of England. So we don't hold life keeping now we used to hold it. I told you the story when I used to work at the Reserve Bank and when you first started in orientation, you'd go in and they say lookause the gold bars and you go, wow, can I touch it? And they go no, they're just like gold bars.
But if you stick around for thirty years one of.
These, that's right anyway, So you can buy jewelry. That's one way you invest You can invest in a Northern Star, a gold mining company, you don't actually hold the gold. Then you can invest in an ETF exchange traded fund a gold ETF. The fund owner or issuer actually holds the gold, so they might purchase a gold bar. Now it's not like you purchaser and they send it express male to Mostly the gold doesn't ever move. It's just that gold bar there that belonged to that ETF or to that investor.
And typically it is staying in Fort Knox or staying in the Bank of England's vaults or yes.
Yeah, okay, yeah yeah. As an individual, you can buy something called a gold certificate. You've got to trust the person selling it to you. But like the Perth Mint, which is the Straightia's biggest mint, you can buy a gold certificate and they would have gold bars there and the certificate says Michael Thompson, you own that gold bars. You can do that as well, but you would never actually physically take it and put on the mantel piece.
Okay, just sits because I am a frequent purchaser. Not of gold, No, not of gold, but of those tickets in the like the art union raffles and things where you'll often try and win a.
You're going to say, timu bo gold.
Yeah, it arrives. It's very light for gold. No, it's like where you're buying a ticket and you're hoping to win this kind of massive house on the gold coast and the jeep and five hundred thousand dollars worth of gold bullion. And I've always had it in my head that you could actually then own the gold bully in and hold it and touch it. But I'm assuming in this case it is yours on paper, it is sitting in a vault.
Yes, disappoint you don't really get to take I mean I suppose you could, if you own it, you could take it out, but you'd be pretty stupidicular and to go.
I demand my goal.
I think that my bedroom is safer than Fort Knox.
Yeah, put it under the mattress, slightly bumpy. Okay, have you done any more gold research or have you exhausted your supplies of gold knowledge?
Now it's kind of gold really rare. In fact, there's a lot of gold seawaters. Seawater contains gold. Did you know that? Okay, I didn't know that, But to extract it would cost a lot now, so it's not actually super rare, but getting to it is really really difficult.
And a lot of products have traces of gold. Say for a mobile phone, for instance, there is gold contained in that as well. So when we're talking about the fact that half of the world's gold is in jewelry and there's a lot in these vaults, there would also been increasing amount used in technology and the electrification of stuff.
Right, Yeah, totally, and that's because of the properties that it has density things like that. You know. Actually, gold literally backed currencies up until about nineteen forty eight or something or other, So a currency value depended on how much gold the central bank had, and that's part of the reasons central banks had all this gold. Now they've sort offloaded it over the years and they called them fiat currencies now, so they're not backed by gold. But that's kind of one of the reasons why gold was so valuable, apart from it being rare, but just the fact that did back currencies, that is great, it's cool.
All right, we could do a series of episodes on gold, but.
A limited bad knowledge.
I think though we've adequately answered Steve's question. You can't buy it from Cole's Nope, you can't get it from Willie's No, not from Bunning's team, who's right out, but potentially from the Reserve Bank, via the stores.
In the Bank of England, Bank of England, maybe a gold certificate from the Perth Mint. Maybe you buy an ETF you could buy into a gold company yep. But alas Steve, I don't think unless you're buying jewelry, you're ever going to get a gold bull him.
Bar unless you are goldfinger and odd job and breaking into Fortnock. So you haven't seen.
Years ago.
Okay, all right, maybe that's your homework. Maybe all right, Thank you Steve for the question. Thank you Sean for all of your research.
Thank you Michael.
Remember, if you've got something that you would like to know, then please send through your question on LinkedIn, Instagram, Facebook, or at Fear and Greed dot com dot au. I'm Michael Thompson and this is ask Fear and Greed
