It's looking grim again. Is gold the would-be saviour?
Discussion
hornet said:
DonkeyApple said:
Looks like Goldmans has picked up enough in the sell off and is about to give long targets.
I'm not the tinfoil hat type, but the timing of their bulletin and the subsequent market slump is a remarkable coincidence. Not about to go all Max Keiser or GATA about it, but it does look rather convenient, to say the least. Were I feeling brave, I suppose I'd buy the ETFs, but the paper side of things sits squarely in the "don't understand" pot for me, so I'm keeping my distance. Still an interested observer of the various blogs and podcasts, but going to limit things to the occasional sovereign for "ooh, shiny thing!" purposes I think 
The pressure was building from last summer when the likes of Buffett started speaking publicly that gold was pointless as an investment, then in Feb, Soros started selling.
The reality is that Goldmans just showed the other banks that they are just a little bit smarter in when they placed their sell note and how the market paid attention to it.
The foil bit is that I'm pretty sure that as their clients sold gold they put it on their book not into the market
So what do we think to this: http://www.zerohedge.com/contributed/2013-04-22/wh...
Appears the banks were using the crash, or manipulated the crash to offload their paper gold which was not backed up by any physical assets.
This appears to make sense...to my simple mind anyhow!
I also think that anyone holding 'paper gold' is just indulging in feckwitnuttery of the trusting kind!
Appears the banks were using the crash, or manipulated the crash to offload their paper gold which was not backed up by any physical assets.
This appears to make sense...to my simple mind anyhow!
I also think that anyone holding 'paper gold' is just indulging in feckwitnuttery of the trusting kind!
There is no doubt that it has transpired post sell off that much of the sales were paper.
However, this should not be a surprise as the nature of paper holders is that they are transient as opposed to physical holders.
If you still have global economic uncertainty then the traditional physical buyers will continue to buy physical and as transpired, increase their buying due to the new price weakness. At the same time the shorter term holders the paper traders) will be staying out as their game has changed for the time being.
So, inside the banks you would expect to see a fall in paper holdings and a rise in physical just due to the nature of the two assets and the nature of the client types who use them for different reasons.
Now, if you were terminally bearish and liked tin foil then you could look at this obvious event and construe something different.
I like ZH but its important to not forget who they are and what their natural bias is. And also, the anonymity of authors should always devalue the article.
However, this should not be a surprise as the nature of paper holders is that they are transient as opposed to physical holders.
If you still have global economic uncertainty then the traditional physical buyers will continue to buy physical and as transpired, increase their buying due to the new price weakness. At the same time the shorter term holders the paper traders) will be staying out as their game has changed for the time being.
So, inside the banks you would expect to see a fall in paper holdings and a rise in physical just due to the nature of the two assets and the nature of the client types who use them for different reasons.
Now, if you were terminally bearish and liked tin foil then you could look at this obvious event and construe something different.
I like ZH but its important to not forget who they are and what their natural bias is. And also, the anonymity of authors should always devalue the article.
http://www.cnbc.com/id/100672709
"Warning! Stocks to Crash, Gold to Top $10,000: Albert Edwards"
"Gold prices will top $10,000 per ounce, the stock market will tank and Treasurys will yield less than 1 percent, Societe Generale's Albert Edwards forecast in a trademark bearish report on Thursday."
Anyone got a flying pig?
I don't think I have actually seen a single bank put forward a "forecast" that has actually been accurate They have zero credibility with me.
"Warning! Stocks to Crash, Gold to Top $10,000: Albert Edwards"
"Gold prices will top $10,000 per ounce, the stock market will tank and Treasurys will yield less than 1 percent, Societe Generale's Albert Edwards forecast in a trademark bearish report on Thursday."
Anyone got a flying pig?
I don't think I have actually seen a single bank put forward a "forecast" that has actually been accurate They have zero credibility with me.
AdvocatusD said:
http://www.cnbc.com/id/100672709
"Warning! Stocks to Crash, Gold to Top $10,000: Albert Edwards"
"Gold prices will top $10,000 per ounce, the stock market will tank and Treasurys will yield less than 1 percent, Societe Generale's Albert Edwards forecast in a trademark bearish report on Thursday."
Anyone got a flying pig?
....and on the 6th April S.G. were reported to have said 1,300 http://www.prweb.com/releases/gold-coin-2013/paris..."Warning! Stocks to Crash, Gold to Top $10,000: Albert Edwards"
"Gold prices will top $10,000 per ounce, the stock market will tank and Treasurys will yield less than 1 percent, Societe Generale's Albert Edwards forecast in a trademark bearish report on Thursday."
Anyone got a flying pig?
Maybe under pressure from French gov to change their story as I think the frogs were buyers
"ECB cuts eurozone interest rate to new record low of 0.5%LIVE: ECB President Mario Draghi on interest rates
Eurozone unemployment at record high
Spain's economy continues to shrink
The European Central Bank (ECB) has cut its benchmark interest rate to a new record low amid ongoing worries about the eurozone's economic health."
http://www.bbc.co.uk/news/business-22369765
Can't help feel that despite the current beating that gold is taking, the "fundamentals" for gold are still positive.
Eurozone unemployment at record high
Spain's economy continues to shrink
The European Central Bank (ECB) has cut its benchmark interest rate to a new record low amid ongoing worries about the eurozone's economic health."
http://www.bbc.co.uk/news/business-22369765
Can't help feel that despite the current beating that gold is taking, the "fundamentals" for gold are still positive.
AdvocatusD said:
"ECB cuts eurozone interest rate to new record low of 0.5%LIVE: ECB President Mario Draghi on interest rates
Eurozone unemployment at record high
Spain's economy continues to shrink
The European Central Bank (ECB) has cut its benchmark interest rate to a new record low amid ongoing worries about the eurozone's economic health."
http://www.bbc.co.uk/news/business-22369765
Can't help feel that despite the current beating that gold is taking, the "fundamentals" for gold are still positive.
I don't think the fundamentals have changed and if anything the underlying reasons for holding physical gold have probably increased.Eurozone unemployment at record high
Spain's economy continues to shrink
The European Central Bank (ECB) has cut its benchmark interest rate to a new record low amid ongoing worries about the eurozone's economic health."
http://www.bbc.co.uk/news/business-22369765
Can't help feel that despite the current beating that gold is taking, the "fundamentals" for gold are still positive.
The issue has been the huge levels of short term, leveraged, paper positions that are still being closed out into any physical buying strength.
Digga said:
DonkeyApple said:
The issue has been the huge levels of short term, leveraged, paper positions that are still being closed out into any physical buying strength.
Add to that forced sales of the physical stuff, enacted by the MIT-Troika on places like Cyprus.AdvocatusD said:
DA, are you saying you expect gold to rise again?
I've got to say I think we'll see 1800+ again based on the general shakiness of things. I think that will be gold's last hurray and then (in the words of the dumpy lady on TV) "I'm out".
In reality, I have no real idea. I think it will go higher from here, as to where it will reach I've no idea. The US is still printing money, albeit they have stated that this is now linked to the confirmed recovery so it will ebb and flow at the rate that the recovery takes. China has slowing growth and publishes fraudulent economic data so we don't know the full picture but like Russia and other BRIC economies they are likely to remain physical buyers so long as they are not in economic decline.I've got to say I think we'll see 1800+ again based on the general shakiness of things. I think that will be gold's last hurray and then (in the words of the dumpy lady on TV) "I'm out".
The EU is a dead duck and is likely to be a net seller of gold as nation sales outweigh retail fear purchases and the UK doesn't really have any impact.
Personally, I believe sub $1000 is more likely than >$2000 in the medium term but suspect that the recent low is going to form a pretty hard base line the longer we stay above it and it gets ingrained in our minds and likewise, I think the recent massive sell off is likely to cause issues with regards to breaking into new highs. If it were to break new highs then I would be a buyer but at present I think it is a short term trading play both long and short if anything as there is no clear trend or valid argument for one either.
Guardian said:
Gold price set to fall further, forecasts Goldman Sachs
More stable economic situation and higher real interest rates will encourage investors to seek returns elsewhere, say analysts
The price of gold fell some $20 to $1277 an ounce on Monday and Goldman Sachs predicted further falls over the next couple of years as the more stable economic situation and higher real interest rates encouraged investors to seek returns elsewhere.
Even the growing popularity of gold as a wedding present in India, the biggest retail market for the precious metal, cannot stop the price tumbling further according to the investment bank.
Analysts at Goldman said hints by the Federal Reserve chairman, Ben Bernanke, that he is preparing to restrict the supply of cheap central bank funds has triggered the steep decline.
"We expect that gold prices will decline further given our US economists' forecast for improving economic activity and a less accommodative monetary policy stance.
"We expect this decline in prices to coincide with rising jewellery/retail demand, which we view as price responsive and not price setting," it added.
The bank said the price would fall to around $1,050 an ounce by the end of next year. Last autumn gold fetched almost $1,800 an ounce, up from nearer $600 an ounce in 2006.
http://www.guardian.co.uk/business/2013/jun/24/gold-price-fall-further-goldman-sachsMore stable economic situation and higher real interest rates will encourage investors to seek returns elsewhere, say analysts
The price of gold fell some $20 to $1277 an ounce on Monday and Goldman Sachs predicted further falls over the next couple of years as the more stable economic situation and higher real interest rates encouraged investors to seek returns elsewhere.
Even the growing popularity of gold as a wedding present in India, the biggest retail market for the precious metal, cannot stop the price tumbling further according to the investment bank.
Analysts at Goldman said hints by the Federal Reserve chairman, Ben Bernanke, that he is preparing to restrict the supply of cheap central bank funds has triggered the steep decline.
"We expect that gold prices will decline further given our US economists' forecast for improving economic activity and a less accommodative monetary policy stance.
"We expect this decline in prices to coincide with rising jewellery/retail demand, which we view as price responsive and not price setting," it added.
The bank said the price would fall to around $1,050 an ounce by the end of next year. Last autumn gold fetched almost $1,800 an ounce, up from nearer $600 an ounce in 2006.
Down to $1230 today.
"Gold Slips to 34-Month Low as Precious Metals Slide on Fed View
Gold plunged to a 34-month low, set for a record quarterly drop, as improving U.S. economic data strengthened the case for the Federal Reserve to reduce stimulus. Silver fell to the lowest since August 2010, platinum the cheapest since 2009 and palladium the lowest since November.
Gold dropped 23 percent this quarter, heading for its biggest loss since at least 1920. Fed Chairman Ben S. Bernanke said last week the central bank may slow its asset-purchase program this year if the economy continues to improve. U.S. durable-goods orders rose more than expected, home sales advanced to the highest in almost five years and consumer confidence climbed, data showed yesterday. "
http://www.bloomberg.com/news/2013-06-26/gold-head...
"Gold Slips to 34-Month Low as Precious Metals Slide on Fed View
Gold plunged to a 34-month low, set for a record quarterly drop, as improving U.S. economic data strengthened the case for the Federal Reserve to reduce stimulus. Silver fell to the lowest since August 2010, platinum the cheapest since 2009 and palladium the lowest since November.
Gold dropped 23 percent this quarter, heading for its biggest loss since at least 1920. Fed Chairman Ben S. Bernanke said last week the central bank may slow its asset-purchase program this year if the economy continues to improve. U.S. durable-goods orders rose more than expected, home sales advanced to the highest in almost five years and consumer confidence climbed, data showed yesterday. "
http://www.bloomberg.com/news/2013-06-26/gold-head...
Digga said:
"More stable economic situation and higher real interest rates will encourage investors to seek returns elsewhere, say analysts"
More stable where?
China, Brazil, Italy....?
Or is this another media piece about aliens (in vogue this week) and another global economy altogether?
What they actually mean rather than 'more stable' is reduced money printing which has been the true driver of the upward trend.More stable where?
China, Brazil, Italy....?
Or is this another media piece about aliens (in vogue this week) and another global economy altogether?
ked.hornet said:
How long before the price is low enough that people waiting on the sidelines come in and start buying, I wonder? I've been looking to buy one or two Sovereigns, but I'm now starting to seriously consider taking the plunge with a Krugerrand instead.
It doesn't matter as retail purchases have insufficient weight.Govt buying and fund buying are the only two forward drivers of note and the latter is only going to happen if govts, esp US, start printing currency again.
From a retail perspective buying in a falling market is always foolhardy. Gold is in a clear bear trend and so you would never go long or increase your exposure if you were aiming for direct returns on the position.
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