Gold Price About To Be Manipulated . F. T. Article

[quibble]

No it won't it will mean you have a worthless bit of paper that you will use to flap in peoples faces, despratley trying to convince people you own the gold. Except the computer keeps saying 'noooooo' because the government confiscated it.

You would have some credence if you had taken physical delivery (which I doubt)

Daft argument. Goldbugs buy physical - that's one of the main beliefs of bugs.

[dr ray]

And to all these idiots who are arguing for the sake of arguing about rather having food than gold. Have you actually got months and months supplies of food?

I very much doubt you're putting your money where your mouth is. However, I bet you all own a fair bit of paper money don't you? Good luck with that.

For the record I am prepared with a month's worth of food so I can lock up and keep the wolf from the door in the event of a disease epidemic or the shops suddenly being temporarily empty for a bit. Like someone else said, food needs warehousing. Well the farmers can do that and I'd pay them in gold to buy some of their excess food (like people do with paper at the moment - it's a tried and tested system see!) - that's if my gold hadn't all been stolen of course.

Really sorry to hear that. Genuinely.

Of course mine has been stolen too. All of it. Not an earring stud left.

Isn't it terrible that the government has forced internet providers to reveal the identity of bloggers?

[endgame]

Gold sceptic more like. I bought gold a long time ago in the form of sovereigns and dumped them in about 1980 before the great gold crash. I got near the peak (c. $800) which, if translated into today's value, would be around $2236.79. A shockingly poor investment if held over that period.

This latest manipulation ploy is designed to get the masses interested and I think Warren Buffett's rule might be the wisest--when the herd buy its sell signal.

I agree its a "bullish" article which is why I think it is may be tiome to sell--its too bullish.

How is it that you started out smart and then became stupid?

You have been a gold sceptic for some time now and gold has gone up!

[Stay Beautiful]

"Gold about to be manipulated"

Imho, gold is manipulated every single day.

[Number79]

Range bound perhaps. Seems to hit $1k and drop. Almsot like people are bubble shy. If deflation hits gold will drop below $300. Chances for deflation? High IMO.

I used to think that you knew what you were talking about rb, thanks for clearing the matter up.

[Take Me Back To London!]

Range bound perhaps. Seems to hit $1k and drop. Almsot like people are bubble shy. If deflation hits gold will drop below $300. Chances for deflation? High IMO.

I would be very pleased if we had some decent deflation, however we have not even had a sniff of it. We had, like now, deflation propaganda back in 2003 and all we have had since is the constant erosion by inflation.

[Errol]

'About' to be manipulated?

It's been the subject of manipulation for decades.

[Yoss]

Range bound perhaps. Seems to hit $1k and drop. Almsot like people are bubble shy. If deflation hits gold will drop below $300. Chances for deflation? High IMO.

Many an international gold agreement on limits sold expire on the 26th, and given CB's red ink, I would expect a (healthy) correction.

[grumpy-old-man-returns]

So what do you reckon RB? Below $300 by Christmas?

you are on the ball Minos, there's no doubting that...

[DiggerUK]

The "revelation" that Barrick is de hedging surfaced recently in a report by BNP Paribas. I first noticed it on Kitco in their News and Reports window on August 11th.

The way people are talking seems to convey the picture that only Barrick are doing this. They're not.

Going back to source documents is always a good exercise, and this one is an eye opener. It is a length, but if you only read pages 7 and 8 you will find out that 32 of the biggest 43 miners are doing exactly the same, and have been for some time.

http://www.virtualmetals.co.uk/pdf/FHB0908.pdf

Bullish for gold, ask me again when pog is at $300.

[endgame]

Realistbears prediction is proving accurate. He is only 1 out. Gold is going to $1300

[Toto deVeer]

You need to read what happened in Argentina when it went from a first world to a third world state. Society broke down and the currency worthless.

Pretty soon entrepreneurs started up and a market of sorts started to function. If you had something to trade you could buy fuel and food.

The currency was US dollars and gold. Fancy gold jewelry and rare coins just fetched someway below bullion price but they still have a value.

Maybe US dollars will still have a value if and when the UK goes the same way but I prefer not to take the risk.

OK, enough is enough.

Ray...Renewable and all the other dreamers out there....

Argentina before accepted, and Zimbabwe today accepts gold because there is a very liquid multi-currency exchange market. They can take that gold and immediately exchange it for Dollars or Euros or Rand and go out and buy more flower and yeast.

In the case of Armageddon, there will be no national or international currency exchange market. There will be no mechanism to determine the value of gold, or to determine it's value in terms of goods and labour.

Under the Armageddon scenario, do you think that any government would allow a private gold money to flourish? Of course not. Under this scenario, there will be a return to gold-backed currency, there is no doubt. Your gold will only be worth what your government is prepared to give you for it, which is nothing, as they will take it from you. This is a conclusion that is witnessed countless times in history. Wonder why China advises it's citizens to buy gold? Hmmmm....

Why is gold of value to central banks? Well in the case of a collapsed international exchange system, it -

LIMITS THE AMOUNT OF FIAT PRINTING THAT CAN BE DONE, AND FORCES A FAIR RECONCILIATION OF INTERNATIONAL TRADE ACCOUNTS.

You will still be forced to use a national currency for your transactions, and go to jail if you have gold. That is for sure.

Those who think that under an Armageddon scenario their gold coins are going to bring then wealth and security are greatly mistaken. The world will never return to the ancient days of Rome, where gold coin was the medium of exchange. And even then gold legal tender had the image of Caesar, as the New Testament tells us.

Coins for 6,500,000,000 people? Get real.

So enjoy your speculative activities, for that is exactly what gold is, and ride the bubble while you can. But don't be surprised if you get badly burnt. Gold has no value other than the amount of money that delusional goldbugs are willing to throw at it.

BTW, those who think that the ETF's are the culprit here are heading for an unpleasant surprise. The rise of ETF's has facilitated demand and made the market much more liquid, just like buying on margin helps facilitate rising share prices. If these vehicles are attacked, you may see a negative move, as these tools are a part of the bubblicious environment surrounding this folly.

If Armageddon hits, I will eat my bread and you can eat your gold.

[DiggerUK]

OK, enough is enough.

If Armageddon hits, I will eat my bread and you can eat your gold.

I won't be eating my gold, and you won't be eating your bread then.

Armageddon isn't going to happen. The world's changing not ending.

As to this thread, what is your take on the de-hedging going on in the gold mining industry.

Remember this is a thread not a newspaper, so please, don't post a sheet of wallpaper.

[Toto deVeer]

I won't be eating my gold, and you won't be eating your bread then.

Armageddon isn't going to happen. The world's changing not ending.

As to this thread, what is your take on the de-hedging going on in the gold mining industry.

Remember this is a thread not a newspaper, so please, don't post a sheet of wallpaper.

At the moment there are seasonal effects in the gold and silver markets that are in play, and some momo action, and it is too early to say whether this could be sustained.

But eventually gold will prove to be just another speculative bubble. Speculative bubbles can go on longer than expected. My personal view is that there is still some upside in gold but that at some point soon the downside is going to be rather large.

There is an abundance of 'cheer leading' (ie 'The Beijing Put!') and precious little knowledge as to what is going on. Why a central bank would announce in advance that they are going to be big buyers of something is beyond me. Has anyone done a logic exercise on this?

The role of unwinding etf's is too complex to fathom. The effects of volume and timing are not fully understood. This unwind could be underpinning the market, depending upon how it is executed on whole. Once it is completed though, things could get ugly. There is a confluence of many anomalous events at the moment that may overwhelm the effect of etf's anyway. I think that examining one asset class in isolation is just not valid presently.

My biggest concern as far as asset prices in general are concerned, is whether China's threats regarding derivatives are serious. If this proves true it would dwarf all other unwinding effects; that is where my eyes are cast at the moment. There are a lot of others out there who would be delighted to escape their derivatives liabilities, and a general unwind could ensue.

Edited September 16, 2009 by Toto deVeer

[quibble]

Ray...Renewable and all the other dreamers out there....

Note who the Armageddonites on this thread are [i.e. those who first started going on about it]

Personally, I see gold as a hedge against general currency devaluation, more specifically continued sterling depreciation. The only thing imo that will stop house prices continuing to crash is Mad Gordon somehow winning the next election and continuing the devaluation of the pound.

If you can think of a better hedge, I'd like to know what it is - if it's a foreign currency, which one? I'd go for remembi if there was a FSCS covered interest bearing yuan account.

[DiggerUK]

At the moment there are seasonal effects in the gold and silver markets that are in play, and some momo action, and it is too early to say whether this could be sustained.

But eventually gold will prove to be just another speculative bubble. Speculative bubbles can go on longer than expected.

The seasonal effects argument never holds a great deal of water for me, like weather reports you can't predict with any accuracy by this method.

As to the de-hedging effect, it has to be taken into account that the hedges have been reduced dramatically from what they were, and has been going on for a long time.

This report shows the following.

http://www.virtualmetals.co.uk/pdf/FHB0908.pdf

De-hedging has been an important and positive feature of the gold market over the

last six years. Global gold mining companies, which had sold forward more than

100 Moz of their output by 2001, have steadily reduced that to less than 20 Moz

today.

This isn't momo action in play

Speculative bubbles are based on credit, gold has to be paid for upfront. Gold overpriced is one thing, but in a bubble it ain't. The only possible source of gold in a bubble is paper gold.

Edited September 16, 2009 by DiggerUK

[Toto deVeer]

Speculative bubbles are based on credit, gold has to be paid for upfront. Gold overpriced is one thing, but in a bubble it ain't. The only possible source of gold in a bubble is paper gold.

So I suppose that a speculative bubble like the one that occurred in the early 80's is not possible then?

[DiggerUK]

So I suppose that a speculative bubble like the one that occurred in the early 80's is not possible then?

I don't see the 1980 spike as a bubble. Panic buying is all it was.

Opec had boosted their prices, the perceived threat to oil supplies following the Iranian revolution was freaking everyone out, and there was the small matter of Russia invading Afghanistan, at a time when the cold war was very hot.

You also need to take into consideration that in the 12 months prior to the spike, pog was as low as 110GBP, and within the next 12 months could be bought as low as 220GBP.

From the 370GBP spike, within a month it was down to 280GBP, and kept going down.

The spike lasted one day, pog today has been rising for a lot longer than today.

Can I see a panic driving pog vertical, yes I can. Black swans land when black swans land.

When that happens, don't buy, wait, will be my advice.

http://www.lbma.org.uk/?area=stats&pag...d/1980dailygold

http://www.lbma.org.uk/?area=stats&pag...d/1979dailygold

Edited September 16, 2009 by DiggerUK

[Toto deVeer]

Digger,

I'm not a big fan of seasonal effects, but I have seen a lot of data regarding end of year dollar, gold and oil behaviour. What's playing out right now is within the bounds of seasonal effects. But it could be indicative of something else.

I suppose it depends upon how one defines a bubble. To me a bubble is when prices are irrationally inflated, by whatever mechanism. Over the last 12 months, gold has varied from about $1000 down to $688 to about $1020. Who knows what the future path will be. I think that this is a bubble geting ready to blow off. But time will tell.

[Toto deVeer]

Hey 'bugs,

Check this out...

Something's wrong with the volumes...is this lemon being juiced?

[quibble]

If you can think of a better hedge, I'd like to know what it is - if it's a foreign currency, which one?

Is that a 'no'?

[Toto deVeer]

Is that a 'no'?

For a 3 to 6 month period, I will choose the $ over gold. Once there is a correction, I might go the other way.

Common sense tells me to buy $ low and sell gold high. Dollar is oversold, gold is overbought.

Edit: And September /GC volume is tepid at best when compared to YTD. This isn't good.

Edited September 16, 2009 by Toto deVeer

[quibble]

For a 3 to 6 month period, I will choose the $ over gold. Once there is a correction, I might go the other way.

Common sense tells me to buy $ low and sell gold high. Dollar is oversold, gold is overbought.

Edit: And September /GC volume is tepid at best when compared to YTD. This isn't good.

Might work for a short term trade, but one of the disadvantages of physical gold is that it's expensive to trade. You're talking about trading, not preservation of purchasing power over a multi year period.

The time to get out of sterling and buy dollars or gold was a over a year ago, before sterling took it's 1st leg down.

[dr ray]

For a 3 to 6 month period, I will choose the $ over gold. Once there is a correction, I might go the other way.

Common sense tells me to buy $ low and sell gold high. Dollar is oversold, gold is overbought.

Edit: And September /GC volume is tepid at best when compared to YTD. This isn't good.

Yes I agree. Using the same logic I'm cancelling my life policies now because as I get older and sicker they are becoming more expensive. They were good value when I was 20 and at peak health.

[quibble]

BNP Paribas reckons the pound AND the dollar are toast. They're a bunch of bankers, but It sounds feasible they could become the next carry trades:

http://www.bloomberg.com/apps/news?pid=206...id=aN1QyFidJWxA

The euro will surge to parity versus the pound and reach its highest level in more than a year against the greenback as investors borrow low-cost funds in the U.K. and U.S. to buy higher-yielding assets, BNP Paribas SA said.

The Bank of England and Federal Reserve are flooding their financial systems with cash to keep borrowing costs low on expectations their economies will recover slowly from recession. That will spur investors to use funds from the nations to buy securities in countries with higher interest rates, BNP Paribas said. The bank raised its forecast for the yen and expects it to climb to its highest since 1995 against the dollar by year-end.

“Sterling is likely to be the weakest currency in town followed by the U.S. dollar,†analysts led by Hans-Guenter Redeker, London-based global head of currency strategy at BNP Paribas, wrote in a note to clients yesterday. “The U.S. dollar has been used as a funding and a reserve currency simultaneously, suggesting the U.S. dollar will depreciate less than sterling.â€