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More gold bar vending machines open up in Dubai

More gold bar vending machines open up in Dubai

Old Jan 28th 2011, 4:18 am
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Default More gold bar vending machines open up in Dubai

I know we discussed this a while back, but something has been bothering me...... the article states: "The price of the bars will fluctuate to represent the spot price of gold."

But the machine has to be stocked in advance, which means the gold has to be purchased first (obviously) - so if the market spot price then falls, will the operators of the machine be happy that they will be selling the gold at a loss?

http://en.news.maktoob.com/200900005...ai/Article.htm
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Old Jan 28th 2011, 4:25 am
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Default Re: More gold bar vending machines open up in Dubai

Originally Posted by The Dean View Post
I know we discussed this a while back, but something has been bothering me...... the article states: "The price of the bars will fluctuate to represent the spot price of gold."

But the machine has to be stocked in advance, which means the gold has to be purchased first (obviously) - so if the market spot price then falls, will the operators of the machine be happy that they will be selling the gold at a loss?

http://en.news.maktoob.com/200900005...ai/Article.htm
maybe they hedge their position based on expected sales... just like mortgage provider pre-hedges fixed interest rates based on expected uptake.

More likely though they just haven't thought this through and have a graph with the gold price constantly rising and are assuming it will continue on that path forever.
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Old Jan 28th 2011, 5:24 am
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Default Re: More gold bar vending machines open up in Dubai

Originally Posted by The Dean View Post
I know we discussed this a while back, but something has been bothering me...... the article states: "The price of the bars will fluctuate to represent the spot price of gold."

But the machine has to be stocked in advance, which means the gold has to be purchased first (obviously) - so if the market spot price then falls, will the operators of the machine be happy that they will be selling the gold at a loss?

http://en.news.maktoob.com/200900005...ai/Article.htm
Also does Dhs540 for 2.5g seem a good investment? If I want to sell it on the London gold scrap market I would get only Dhs120 per gram.
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Old Jan 28th 2011, 5:28 am
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Default Re: More gold bar vending machines open up in Dubai

Originally Posted by EmiratesMillhouse View Post
maybe they hedge their position based on expected sales... just like mortgage provider pre-hedges fixed interest rates based on expected uptake.

More likely though they just haven't thought this through and have a graph with the gold price constantly rising and are assuming it will continue on that path forever.
It's fallen a little recently, having peaked at US$1,400 but fallen to US$1,330 or thereabouts, if my memory serves me right.
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Old Jan 28th 2011, 10:20 am
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Default Re: More gold bar vending machines open up in Dubai

Originally Posted by EmiratesMillhouse View Post
maybe they hedge their position based on expected sales... just like mortgage provider pre-hedges fixed interest rates based on expected uptake.

More likely though they just haven't thought this through and have a graph with the gold price constantly rising and are assuming it will continue on that path forever.
Like real estate.......
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