Ok fair enough - I was unclear on the definition of paper gold. But the idea that
>There is a belief that there exists a lot more paper gold than actual gold. So when the run on the reserves starts, the price of gold will explode as billions of dollars worth of gold in the market disappears.
is probably not representative of what would happen. Derivative bets can come and go without really moving the spot price.
>There is a belief that there exists a lot more paper gold than actual gold. So when the run on the reserves starts, the price of gold will explode as billions of dollars worth of gold in the market disappears.
is probably not representative of what would happen. Derivative bets can come and go without really moving the spot price.