GOLD

[confounded]

Commodities have gone down by around 33% on average. Gold is tiny compared to commodities, yet is has tracked them very well. How can anyone successfully intervene in the commodities market (over many years now, if we believe the stories)? Commodities trading is backed with real demand by real consumers. That demand stems from the entire global manufacturing industry, infrastructure development and public sector consumption. i.e. everything except services. The derivatives market is many times bigger than this. How can it be shifted by any secret organisation?

 

This is a round end pointy end thing and I am not going to war with an attempt to prove my case with reams of my views. I work in bigger picture scenarios and all I will say given the current state of the financial market is we have very lucky central banks with all the things they could wish for happening (PM/commodities down, Oil down, Dollar up, equities holding up well). Alternatively or they are trying (as you would expect them to) to beat this beast and manipulating the markets sending a message of stability with the election being a very keen focus.

 

 

 

[confounded]

sorry guys.

the job must be done, either you like it or not.

 

Can you elaborate?

[dom]

I'm looking forward to Saturday's FSN. There's been a tension in Jim's voice of late that I've not heard before. I just hope it goes lower so I can buy more.

[kernull]

Can you elaborate?

 

i mean, the charts must be done, either gold is going up or down

[wren]

According to IG it is 752 at the close of Globex. Silver down over 5% in day. If this was any of the "hated" assets (property, cash, equities) their would be "black xxxday" threads. Why the difference? It just looks like denial to me. Luckily, people don't vent here when they reach the anger stage, they just politely move on. That's what it looks like from here, FWIW.

You said it.

 

And perhaps, considering the broader scheme of things, thereby, provide the answer yourself.

[notanewmember]

I'm looking forward to Saturday's FSN. There's been a tension in Jim's voice of late that I've not heard before. I just hope it goes lower so I can buy more.

 

I hope he isnt proved wrong, nor Eric King [who is a much better trader than investor it appears]. Jim has committed himself to the Gold Bull Market - but it isnt a given that bull markets turn into a mania....

 

Gulp.

[Magpie]

I know that I if given the task of getting and keeping the gold price down would suppress the price in such a way as to produce bearish charts.

 

I do think this is the danger of the conspiracy theories around gold. There is such a ready made excuse for any fall in the price.

 

I mean, if I wanted to make house prices fall, I'd engineer a situation where they started falling. But that doesn't mean that that is the real explanation.

 

[Johan van der Smut]

Down to $748...

[wrongmove]

You said it.

 

And perhaps, thereby, provide the answer yourself.

 

Hate is an emotion, dangerous thing when investing/speculating. I put it in "" so as not to offend unneccesarily. These assets are merely "out of favour" to some here, but to others they are hated. In general, the "haters" seem to be well in and holding, whereas the less emotional seem to be waiting on the sidelines for now. Not much buying or shorting seems to gert mentioned, well not in any meaningful quantity. To me it looks like the uberbull arguments are in tatters, but they are constructed to be impossible to disprove. i.e. they never state a stop loss - they have no exit point, so they cannot be proven to fail - that 20%, 30%, now 100% (in Ag) rise, and much, much more is always just around the corner. No one can prove it isn't. When will it happen? Soon, later, whenever, but never a disprovable prediction. (With the honourable exception of DrB, who puts his cards on the table and his money where his mouth is, and fesses up and analyses his mistakes, and other notable exceptions, but anyway I am just talking about the uberbulls here - you know who you are )

 

There are a lot of people out there, who, rightly or wrongly, feel "pumped and dumped". There is a vocal handful of uberbulls on here, but I just wonder what it will take to attract back the hot money needed to form a new bubble.

 

 

 

 

 

 

 

 

 

 

[enrieb]

I'm looking forward to Saturday's FSN. There's been a tension in Jim's voice of late that I've not heard before. I just hope it goes lower so I can buy more.

 

I though he sounded quite confident and and consistent with what he has been predicting for the past five years. I suppose Puplava, Schiff and others may be under pressure to defend their investment strategy to new investors and listeners given the reversal of the dollar in the past 6 weeks, but I think that I trust their views on the economy more than I trust the mainstream. That does not mean that they cannot be wrong, just that I perceive less risk in following their advice than following the advice of the people who have been consistently wrong about all of these matters time and time again.

 

A week of sunshine and high temperatures in November it doesn't mean that its Summer, we need to stick with the fundamentals of the financial climate regardless of the day to day weather.

 

Try to remember that this CDO problem has only just begun. We have seen huge problems caused in the banking sector by the subprime defaults and we still have the option arms, Alt-A and Prime mortgages to come. We are probably witnessing the calm inside the eye of the storm, the good news is we are half way through this storm, the bad news its there are bigger storms on the way.

[wren]

Compounded said:

I know that I if given the task of getting and keeping the gold price down would suppress the price in such a way as to produce bearish charts.

I do think this is the danger of the conspiracy theories around gold. There is such a ready made excuse for any fall in the price.

 

I mean, if I wanted to make house prices fall, I'd engineer a situation where they started falling. But that doesn't mean that that is the real explanation.

Concerning your second paragraph, Magpie, err what?

 

And here you equate the housing and gold markets. Do you you honestly think that they are comparable?

 

But I do agree about the contention that people try to read optimism.

 

What about the idea that markets may be manipulated, whether before elections or otherwise?

 

[G0ldfinger]

I'm looking forward to Saturday's FSN. There's been a tension in Jim's voice of late that I've not heard before. I just hope it goes lower so I can buy more.

I didn't hear that at all. Second time you mentioned it.

[Bobsta]

If this was any of the "hated" assets (property, cash, equities) their would be "black xxxday" threads. Why the difference? It just looks like denial to me.

I do think this is the danger of the conspiracy theories around gold. There is such a ready made excuse for any fall in the price.

I think we all know both of your views on PMs. I don't see any new arguments here.

 

Can you not see that:

- Gold & Silver going up is not what any western governments want

- Gold & Silver going up is not what any major investment banks want

- Oil going up is not what any western governments want

- Stock markets going down is not what any western governments want

- House prices going down is not what any western governments want

- House prices going down is not what any major investment banks want

 

?... they're so publicly working on the latter, what makes you think they're not working equally hard on the others? The PPT is an acknowledged entity. 3 US banks together set up 10x the level of gold shorts in July compared to June - to them, it's easy, they make money, and in return for their assistance the Fed looks after them.

 

I say again, listen to Ian MacDonald's "testimony" on this week's Financial Sense Newshour. He's a respected gold market expert employed by the government of the United Arab Emerates and (almost) speaking on their behalf. And if you're fed up with the american bias, it should please you to know he's a Brit.

 

This is a dirty, painful game. But after wavering for a bit, I really don't believe that there are more GENUINE sellers of REAL gold than buyers.

 

 

[Magpie]

I think we all know both of your views on PMs. I don't see any new arguments here.

 

Not trying to make a new argument. Reiterating an old one which is that it's dangerous to always trust in conspiracy theories because it can provide an excuse for every fall in price. It's similar to housing bulls wittering about how we are 'talking ourselves into a housing crash'.

 

- Gold & Silver going up is not what any western governments want

- Gold & Silver going up is not what any major investment banks want

- Oil going up is not what any western governments want

- Stock markets going down is not what any western governments want

- House prices going down is not what any western governments want

- House prices going down is not what any major investment banks want

 

Agree with all this, though I think goldbugs overstate the importance of gold and silver to banks and governments (by casting it as the underdog that is always feared and hated by the establishment).

 

But I don't think there is anything banks and governments can do to permanently buck the market, so I think 1) the price mostly has to be in roughly the are the free market would place it at and 2) any bank or govt cartel would have the sense to allow gold and silver to float at approximately its natural value because they would know that too big a divergence from that would make it impossible to control.

 

This all leads me to believe that the degree to which the gold price is the result of conspiracies is limited, although I freely acknowledge that there is pumping and dumping and elements of collusion in driving prices at certain points. I can accept the price being driven down $50 or so by market collusion. I just find it hard to believe that conspiracy is the entire explanation for a 25%+ decline from the peak.

 

[Magpie]

But after wavering for a bit, I really don't believe that there are more GENUINE sellers of REAL gold than buyers.

 

Of course not - for every buyer there's a seller...

 

The crucial thing is the balance of demand and supply - that's what drives price equiibrium. Obvious I know, but often ignored in these conversations.

 

[wren]

There are a lot of people out there, who, rightly or wrongly, feel "pumped and dumped". There is a vocal handful of uberbulls on here, but I just wonder what it will take to attract back the hot money needed to form a new bubble.

??

 

Who has been pumped and dumped?

 

Short-termers will probably screw themselves. But they have only themselves to blame.

 

If you want to call the top of the precious metals markets, do so.

 

Has the top of the precious metals passed now? (11 September 2008).

 

Or has it not?

 

Call.

[marmite]

Anyone buying in sterling will notice that 1oz coins are still damm expensive. Only just hitting £450 now, thats only the second time since January, the first being last month before £ fell off a cliff

[CIGA]

I'm looking forward to Saturday's FSN. There's been a tension in Jim's voice of late that I've not heard before. I just hope it goes lower so I can buy more.

 

I found Jim was repeating the fundamental facts of the bull market again and again last week, i think he will again. He prides himself in the pursuit of knowledge and is surely bleeding himself now too.

 

Thing is ... Jim and John are OLD, they have been around, they LOVE the markets with a passion,they have SEEN it all before as has jim sinclair.... there is nothing new under this sun.

 

Eric King is an inspirational speaker, Jim calls him in now again to lift up the vibe, Jim for sure knows what is coming, he is unable to time it perfectly, noone is. This is why he ALWAYS says stick to the primary trend.

 

BTW.. i don't you should depend on jim puplava as to when to get out, Peru Saxona called it this time DYODD is key as to when to get out of the parabolia.. this site will be key.

 

[enrieb]

But I don't think there is anything banks and governments can do to permanently buck the market, so I think 1) the price mostly has to be in roughly the are the free market would place it at and 2) any bank or govt cartel would have the sense to allow gold and silver to float at approximately its natural value because they would know that too big a divergence from that would make it impossible to control.

 

This all leads me to believe that the degree to which the gold price is the result of conspiracies is limited, although I freely acknowledge that there is pumping and dumping and elements of collusion in driving prices at certain points. I can accept the price being driven down $50 or so by market collusion. I just find it hard to believe that conspiracy is the entire explanation for a 25%+ decline from the peak.

 

I pretty much agree, I don't see large conspiracies, more attempts, at times, to drive the price higher or lower to trigger market buy or sell orders that make money for the big players who could be covering short positions in the market. I do think that its useful for the gold price to be seen as a very volatile asset as this scares away the weak hands, those who understand the role gold plays in the market are comfortable with this risk, though if someone invests from a naive speculative perspective then they will be scared out of the market by the volatility.

 

I think that it is important for Central banks and big market players to attempt take down the price of gold from time to time to make it seem like its no-longer a safe haven for investors. Small moves can trigger larger moves both up and down.

 

In the end its all about risk, I could spend a lot of money and buy a house in the nice part of town and fit a good burglar alarm and feel quite safe about not being burgled, alternatively for far less money I could buy a house in the bad part of town and expect that it would be broken into at some point. If the nice house were to be burgled and the bad house were to be untouched it does not make my judgment of the risk unsound, its just the way events have unfolded over the short term. Ultimately, long term, if I wanted to feel secure and not have much risk I still would be better off buying the house in the nice part of town with the burglar alarm regardless of short term events.

[FLASH]

Intresting Bloomberg Article and very strange imo the fact that it is so bearsh. One guy says he would not touch Gold with a 10 foot pole. Another says it oversold yet would not buy. If any asset class is oversold why would you not want to buy? this applies to anything from housing to stocks to Gold.

 

Gold Falls on Reduced Demand for Inflation Hedge; Silver Drops

 

By Pham-Duy Nguyen

 

Sept. 10 (Bloomberg) -- Gold tumbled to the lowest price since October on speculation a drop in commodity costs and a stronger dollar will reduce demand for the metal as a hedge against inflation. Silver plunged to the lowest since 2006.

 

The Reuters/Jefferies CRB Index of 19 raw materials dropped for a ninth straight session and is down as much as 24 percent from a record reached in July. Gold has declined 26 percent from an all-time high in March and the euro is trading 13 percent below its July peak against the dollar.

 

``Gold's diseased,'' said Matt Zeman, a metals trader at LaSalle Futures Group in Chicago. ``A lot of the inflationary fear has eased because we've seen energy and commodity prices come spiraling down. The dollar has not given up a lot of its gains. That's leaving traders up in the air about what to do with gold. I wouldn't want to touch it with a 10-foot pole.''

 

Gold futures for December delivery plunged $29.50, or 3.7 percent, to $762.50 an ounce on the Comex division of the New York Mercantile Exchange. Earlier, the price touched $761.50, the lowest for a most-active contract since Oct. 24.

 

Silver futures for December delivery plummeted 82.5 cents, or 7 percent, to $10.89 an ounce. Earlier, the price touched $10.81, the lowest since Oct. 5, 2006.

 

Silver has fallen 27 percent this year, while gold has dropped 9 percent. The declines today were the biggest since Aug. 15.

 

Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, has fallen 11 percent to 631.2 metric tons from a record 705.6 tons on July 11.

 

Oil Skid

 

From mid-July to Sept. 2, commodity index investors sold $39 billion of oil futures, said Michael Masters, president of Capital Management hedge fund. Ospraie Management LLC, the hedge-fund firm run by Dwight Anderson, last month said it will shut down its commodities fund after losing 39 percent this year on wrong-way bets on energy and mining stocks.

 

Lehman Brothers Holdings Inc., which today reported the biggest loss in its 158-year history, bought a 20 percent stake in Ospraie in 2005.

 

``Commodity funds are getting out,'' said Joel Crane, a metals strategist at Deutsche Bank AG. ``Ospraie is indicative of what's happening across these markets.''

 

Funds are unwinding bets on a gain in raw materials and so- called commodity currencies, along with wagers on a falling dollar, Crane said.

 

Gold, which often climbs in times of financial turmoil, hasn't benefited from a plunge in U.S. equities and the credit crisis, analysts said.

 

Not Normal

 

``Surprisingly, people have not flocked to gold as a flight to quality,'' Zeman of LaSalle said. ``Gold is not acting like it normally would. People's risk appetite is very low. No one is willing to step in and buy at this moment.''

 

Any rebound in metal prices will be fleeting, said Dennis Gartman, economist and editor of the Suffolk, Virginia-based Gartman Letter.

 

``Gold is egregiously oversold,'' Gartman said. ``It is due for a rally, but it will be short-lived and it will be technical in orientation. The trend is down. Weakness is not to be bought.''

 

To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.

 

 

 

 

[enrieb]

Anyone buying in sterling will notice that 1oz coins are still damm expensive. Only just hitting £450 now, thats only the second time since January, the first being last month before £ fell off a cliff

 

 

Absolutely! Its the point I made at the very start of this thread. Many GEI members from the UK bought gold as protection against Sterling losing value, which we all expected would happen at some point(including HPC's anti-goldbug RB) This strategy had paid off as an investment even though the dollar price of gold has fallen in the past 6 weeks, can you imagine how high the Sterling price of gold will be when gold jumps back up to the $1000 range.

 

The fundamental problems are still there in the US/UK economies and these currencies will continue to lose value over the long term regardless of any short term bounce.

[CIGA]

Absolutely! Its the point I made at the very start of this thread. Many GEI members from the UK bought gold as protection against Sterling losing value, which we all expected would happen at some point(including HPC's anti-goldbug RB) This strategy had paid off as an investment even though the dollar price of gold has fallen in the past 6 weeks, can you imagine how high the Sterling price of gold will be when gold jumps back up to the $1000 range.

 

The fundamental problems are still there in the US/UK economies and these currencies will continue to lose value over the long term regardless of any short term bounce.

 

HmmMmmm a falling dollar will contribute to the trip back to 1000+

[enrieb]

HmmMmmm a falling dollar will contribute to the trip back to 1000+

 

I think I understand the point your making, I know that the gold price in terms of Sterling, Euro, Dollar etc do not move in perfect alignment but I do feel that even though the Dollar has enormous problems ahead of it, that its got a slightly better 'medium term' future than Sterling. The saving grace for the Dollar over the medium term is that it still remains the worlds reserve currency.

[Steve Netwriter]

I wonder how vociferous the detractors will be when gold reaches $1200.

 

I look forward to reminding them of their recent posts when that happens

 

I suspect they will go awfully quiet.

 

[Ret45]

anyone calling the bottom - or is that a pointless exercise...