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Gold Dropping Fast

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http://goldnews.bullionvault.com/gold_bullion_101920107

The price of Gold Bullion fell Tuesday lunchtime in London, unwinding an earlier rise against all currencies bar the US Dollar and Japanese Yen, which continued yesterday's rise.

European stock markets slipped, US crude oil fell back below $82 per barrel, and Silver Prices dropped below $24 per ounce for the second time this week.

Latest quarterly earnings showed Bank of America losing $7.7 billion between July and Oct., while Goldman Sachs' profits fell but still beat analyst forecasts.

"A deluge of monetary policy makers give their opinions on the economy this afternoon," notes one London Gold Dealer in a note, as the European Central Bank hosts a conference in Frankfurt, with speeches from ECB chief Jean-Claude Trichet, Bundesbank president Axel Weber, and new US Fed voting member Janet Yellen.

Bank of England governor Mervyn King speaks during a tour of the West Midlands manufacturing districts – a trip which "may well decide" the BoE's next round of quantitative easing, according to the Wall Street Journal.

Five bank presidents from the Federal Reserve – as well as chairman Ben Bernanke – are then scheduled to speak in the US.

"No country...can devalue its way to prosperity, to [be] competitive," said US Treasury secretary Tim Geithner to the Commonwealth Club of California in Palo Alto on Monday. "It is not a viable, feasible strategy and we will not engage in it.

"It is not going to happen in this country."

Since Geithner took office in Jan. 2009, the US Dollar has lost 10% of its value against the world's other leading currencies, and dropped more than one-third of its value against Gold Bullion.

In London trading this morning, Gold re-touched last week's 1-month high against the Euro currency, and came within £2.80 of June's record-high for UK investors, touching £868 per ounce.

US, German and UK government bonds fell, meantime, nudging the yield offered by 10-year British gilts back above 3.00%.

"We need to give careful consideration to the matter of increasing Gold Bullion volumes in our foreign reserves," said South Korean central bank governor Kim Choong-soo to a parliamentary committee in Seoul meantime.

South Korea currently holds just 0.2% of its $290 billion reserves in Gold Bullion, notes the Financial Times. The world average is nearer 10%.

Short-term, "Gold is likely to continue the rally before the Federal Reserve meeting in early November," reckons Zhu Yilin of Jingyi Futures in Shanghai, speaking to Reuters this morning.

But "Unless the Fed announces quantitative easing to a huge extent, gold will retrace. It's all about anticipation. Once the result is out, it's time to close positions."

After poor US manufacturing data dented the Dollar – and buoyed gold – late Monday, "[More] disappointing numbers might raise investors' expectations of further [monetary] accommodation and consequently send precious metal prices higher," says Walter de Wet at Standard Bank today.

But "we remain cautious on gold post-5 November. The risk remains that the Fed could disappoint in the size of QE...Seasonal jewelry demand should [also] fall away in November" after the Hindu festival of Diwali is celebrated in India, the world's No.1 consumer market for physical gold.

Silver Bullion's "steep ascent is [also] expected to lose upside momentum," writes technical analyst Axel Rudolph at Commerzbank today.

Despite Silver Prices looking "long-term bullish" after breaking both a downtrend begun in 2008 and the Sept. 1980 high of $24.25 per ounce, "Seasonality points towards a consolidation," says Rudolph.

"Five and 25-year seasonality shows October to be a month in which the Silver Price tends to consolidate."

Crunching numbers from the latest US futures' market data, the VM Group here in London notes that speculative traders cut their bullish betting on Silver Prices at the fastest pace since mid-July last week.

"Investors in silver ETFs continued to pile in, however, pushing total investment up to a fresh high."

Looks like a buying opportunity to me! :rolleyes:

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whats all that about!

This seems to be mainly a knee jerk reaction to China raising interest rates.

How that suddenly gets the US/UK/eurozone out of their economic stagnation, bank solvency problems and sovereign debt crisis I don't know?

The markets would tell us it does though, so sell all the gold (so I can buy it cheap :ph34r: )

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nothing ever goes straight up or straight down , not even in the 1929 crash

USD is long term bearish , it will start going down within a couple months again

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whats all that about!

The USD is strengthening. Almost everything is falling realtive to the USD. Something to do with China raising interest rates.

Edited by Tiger Woods?

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This seems to be mainly a knee jerk reaction to China raising interest rates.

How that suddenly gets the US/UK/eurozone out of their economic stagnation, bank solvency problems and sovereign debt crisis I don't know?

The markets would tell us it does though, so sell all the gold (so I can buy it cheap :ph34r: )

Didn't know about the Chinese interest rates.

Anyone got a Yuan/USD chart?

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isnt it the third wednesday in every month when options expire. Typically an event which would see any possible 'manipulation' occur.

and of course it is inbetween the morning and afternoon fix which is when the alleged manipulations happen (statistically alleged due to gold actually falling in price over the past 10 years if you look at the price moves from am fix to pm fix only)..........

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The USD is strengthening. Almost everything is falling realtive to the USD. Something to do with China raising interest rates.

Nothing to do with the fact that it has been totally over sold and at the bottom of its trading range,......

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Nothing to do with the fact that it has been totally over sold and at the bottom of its trading range,......

basically looks like that to me...

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Personally I am not holding any gold as I dont think it is a good investment in the long term. It should hold its value versus inflation, but it will not add extra, as it does not produce any profit or pay any dividends. That is not to say that it might not do well in the short term, but I dont think I will be able to time my exit, and for that reason I prefer other asset classes.

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China will likely export less to the US which seems to go along with their recent Treasury sales. The US/China link seems to be getting weaker by the month as their economy gets stronger and can take on more trade with the rest of the world.

Likely they don't want to be still connected to the catastrophic failure of the US dollar when it falls like a lead weight and chaos and loss of consumption takes hold in the US.

And the recently emerging and massive robo stamp foreclosure debacle in the US and its implications for the US banking system and economy won't have helped any.

Edited by billybong

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Personally I am not holding any gold as I dont think it is a good investment in the long term. It should hold its value versus inflation, but it will not add extra, as it does not produce any profit or pay any dividends. That is not to say that it might not do well in the short term, but I dont think I will be able to time my exit, and for that reason I prefer other asset classes.

You're soooooo new here.

Welcome to goldbug central.

For heaven's sake don't try arguing with them!!!

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Dropping fast? Yes, in the context of having almost touched its 20-year sterling high at noon. So I'm not panicking yet.

It dropped about $30 in about 20 minutes. Fast in any context. I hold gold and am not panicking yet either.However but it does make me suspect that there is a lot of speculation in the current price and if an event does occur which justifies a fall - that fall may be hard and fast.

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GOLD

10/19/2010

11:14

1341.10

1342.10

-28.50

-2.08%

Not much downward momentum yet. When the sell off happens we should see 10-15% down in a single session. Still too early to expect anythig but a few rumbles and buying on the dips.

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Personally I am not holding any gold as I dont think it is a good investment in the long term. It should hold its value versus inflation, but it will not add extra, as it does not produce any profit or pay any dividends. That is not to say that it might not do well in the short term, but I dont think I will be able to time my exit, and for that reason I prefer other asset classes.

What other asset classes do you prefer?

As for your view on the long term. I think there will be an optimum time to sell gold at some point, but only when fiscal sanity returns, and that can only happen after sovereign debt defaults, bank collapses and record high interest rates (not in any particular order). For those things to happen the economic situation has to become untenable first, because it means debt default etc. becomes a preferable alternative to the current reality. So we are some way from there, meaning a lot of upside potential for gold from here.

If the corrective measures are taken, which will likely result in a new/revalued currency, then gold may fall back and settle at a rate that takes account of inflation. However, in terms of inflation over the last 40 years, gold has failed to keep up, so any one investing now stands to make real gains, not to mention there will be a period of mass panic (as people rush to exit crashing fiat currency) at the top of this bull market that will drive up the price in a super spike at some point for highly leveraged gains.

It is timing the top of this spike to maximise gains that is the trick and that requires careful analysis of the economic and political situation. Of course the sensible thing to do is take a little profit as the bull market progresses and avoiding getting too greedy when things really take off and being disappointed if you miss the best exit.

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You're soooooo new here.

Welcome to goldbug central.

For heaven's sake don't try arguing with them!!!

My previous post states my response and position vis-a-vis gold to Blackgoose in well-reasoned English. I welcome a well-reasoned response to my reasoning.

By 'well-reasoned response' I do not mean simplistic answers, like:

1. Gold is a bubble, LOL!

2. Gold is overbought!

3. Everything goes up until it goes down.

4. Goldbugs are scum!

You get the picture. All I want is a well-reasoned response with some facts about why it's a bad investment at this point in time and how the fundamentals back that up. Good honest intelligent debate please.

EDIT: If you are going to offer rebuttals please do it through taking my reasoning apart, not resorting to playground name-calling, it serves no purpose but to expose your lack of critical thinking.

Edited by General Congreve

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Personally I am not holding any gold as I dont think it is a good investment in the long term. It should hold its value versus inflation, but it will not add extra, as it does not produce any profit or pay any dividends. That is not to say that it might not do well in the short term, but I dont think I will be able to time my exit, and for that reason I prefer other asset classes.

invasion_of_the_body_snatchers-1978-6.jpg

:P

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Euro is dropping faster than £.: 1.37934

Civil unwrest, sovereign debt about to blow up again and Germany's low sentiment poll.....

The icy winds of deflation?

Cor, hope so as it ain't arf bin getting boring on here again lately. :D

And one other thing:

EXPECT THE UNEXPECTED

Edited by Realistbear

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GOLD

10/19/2010

11:14

1341.10

1342.10

-28.50

-2.08%

Not much downward momentum yet. When the sell off happens we should see 10-15% down in a single session. Still too early to expect anythig but a few rumbles and buying on the dips.

Floor at $1340 like I said in your earlier thread. Time to consolidate the record gains since July. Not arguing with you, just stating my case so we can revisit and reflect in coming days and weeks.

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All I want is a well-reasoned response with some facts about why it's a bad investment at this point in time and how the fundamentals back that up. Good honest intelligent debate please.

...few popular investments are bad ....it's all about timing ....when you buy....when you sell..... :rolleyes:

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  • 220 Brexit, House prices and Summer 2020

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