[MountDoom]

There's a simple counterpoint to your argument: there are places that were selling physical gold for $2000 a decade ago, that were selling it for $3000 back in 2024, and that are now selling it for $4000. I don't see any of them going out of business. Online, Apmex and dozens of others seem to be doing just fine.

So evidently, there is healthy retail demand for gold at these price points. Futures markets can get weird, but they're ultimately rooted in demand for commodities. I can't sell you futures on something that no one is willing to buy.

[nlh]

Oh for sure - APMEX is selling plenty of gold and they're doing great. But they buy gold too and ship it off to refiners just like any dealer. And yes there is plenty of demand for gold - but my only point is that demand right now is for Gold The Commodity (eg a hedge fund / government / etc.) who just want the financial instrument (that happens to be backed by physical bricks in a warehouse...they hope lol) as opposed to the retail buyer who wants gold the way they want Crypto or Pokemon cards.

For example, one dealer I know last month sold $5m in physical gold coins (to consumers who wants gold) but they bought $30m in physical gold coins to be shipped off and melted. They, like APMEX, make money on both sides so they're plenty happy. But a 6:1 buy:sell ratio is pretty wild.

[klodolph]

It’s wild, but couldn’t we also explain this with a theory like “people have more trust in the institutions holding gold, and want better rates when they buy/sell?” Older generations seemed, to me at least, that they had some distrust in financial institutions, and maybe the newer gold buyers trust that their gold deposits work but don’t trust dollars or stocks as much.

[colechristensen]

Well gold is a healthy market and when there are opportunities for arbitrage people are happily taking them. There is not a disconnect if you can go to a physical dealer and get small margins on physical buying and selling compared to the spot price.