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DannyT

Gold Drop

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Hi there

Sorry if a silly question as not a master of finance/economics like some of you more well-established hpc'ers - but why the big drop from £900 to £840/oz or so in the last several weeks ? What political machinations could have caused this , has there been a huge sell-off lately ? Is this the 'correction before it shoots to the moon' phase that a few hpc'ers have mentioned ? thanks

Dan

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Hi there

Sorry if a silly question as not a master of finance/economics like some of you more well-established hpc'ers - but why the big drop from £900 to £840/oz or so in the last several weeks ? What political machinations could have caused this , has there been a huge sell-off lately ? Is this the 'correction before it shoots to the moon' phase that a few hpc'ers have mentioned ? thanks

Dan

Hi - Gold is priced in Dollars and the pound has strengthened against the dollar lately - that's part of it. The rest of it seems to be the markets believing that the US Recovery is happening (usual thing of the markets sending up share prices if the rate of collapse is just a bit less dismal than forecast!).

HTH,

Andy

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Not a silly question at all. Unlike other commodities, gold has little by way of underlying uses but does have a long history of being used a means of exchange and store of value. Thus there is a very strong positive historical price correlation between gold and inflation and investors tend to use gold as a protection against inflationary pressures.

Recently, because of various indicators (such as high government debt levels, high commodity prices, quantitative easing, low interest rates, yuan peg to name but a few) investors have speculated that we are entering a period of high inflation which has forced the price of gold up. Two things have changed:

- there are indications of too much spare economic capacity, in China for example, which might lead to monetary tightening and lower demand for commodities.

- USD value has improved - Gold is priced in USD so will move against the USD exchange movement, all else being equal

In terms of future direction of gold price: there is no clear indication of anything here, just over-weight investors moderating their positions slightly since the inflation story is looking less certain.

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Not a silly question at all. Unlike other commodities, gold has little by way of underlying uses but does have a long history of being used a means of exchange and store of value. Thus there is a very strong positive historical price correlation between gold and inflation and investors tend to use gold as a protection against inflationary pressures.

Recently, because of various indicators (such as high government debt levels, high commodity prices, quantitative easing, low interest rates, yuan peg to name but a few) investors have speculated that we are entering a period of high inflation which has forced the price of gold up. Two things have changed:

- there are indications of too much spare economic capacity, in China for example, which might lead to monetary tightening and lower demand for commodities.

- USD value has improved - Gold is priced in USD so will move against the USD exchange movement, all else being equal

In terms of future direction of gold price: there is no clear indication of anything here, just over-weight investors moderating their positions slightly since the inflation story is looking less certain.

To add - looks like stock markets on turn down and PM's also go down in liquidation phases initially anyway.

+ <TFH ON>

There's also an interesting campaign being carried out be ex JPMorgue traders to take down Blythe Masters by massively shorting the silver market in Feb for March delivery contracts. Rumour has it that the big bullion banks are taking down the price of gold knowing that the price of silver will probably follow and won't look quite so blatantly manipulated if they had only hit silver.

<TFH OFF>

http://messages.finance.yahoo.com/Stocks_(A_to_Z)/Stocks_J/threadview?m=te&bn=10073&tid=381868&mid=381868&tof=2&frt=2#381868

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Hi - Gold is priced in Dollars and the pound has strengthened against the dollar lately - that's part of it. The rest of it seems to be the markets believing that the US Recovery is happening (usual thing of the markets sending up share prices if the rate of collapse is just a bit less dismal than forecast!).

The other thing that needs to be taken into consideration is that the weighting of gold in a couple of major commodities indices dropped this year relative to last, hence the sell off at the beginning of January to rebalance various funds that track these indices. This was discussed by Jim Sinclair in December.

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thanks for the responses guys B) I wonder if this whole new China/America thing in Washington may have an input , what with the chinese buying loads of Gold lately and taking about the dollar being 'old news' . Seems to be a lot of 'economic warfare' in the offing :ph34r:

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Hi there

Sorry if a silly question as not a master of finance/economics like some of you more well-established hpc'ers - but why the big drop from £900 to £840/oz or so in the last several weeks ? What political machinations could have caused this , has there been a huge sell-off lately ? Is this the 'correction before it shoots to the moon' phase that a few hpc'ers have mentioned ? thanks

Dan

Step back and take a look at the bigger picture.

11hqse0.jpg

It's only a big drop if you're trying to trade gold in the short term. Perhaps this is it and the gold bull run is finally over but it should be clear from the 5 year graph that there have been nasty downward lurches in the past. Note that the chart is not quite right. Gold in GBP is about 846 not 856. That's just a consequence of the irritating way Kitco do their charts. Also, I think it can happen that if the stock market drops that can cause some gold selling to cover equity trades that have gone wrong.

P.S. I wouldn't pay much attention to that 'shoot to moon' phase talk either - just wishful thinking IMHO.

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Not a silly question at all. Unlike other commodities, gold has little by way of underlying uses but does have a long history of being used a means of exchange and store of value. Thus there is a very strong positive historical price correlation between gold and inflation and investors tend to use gold as a protection against inflationary pressures.

Recently, because of various indicators (such as high government debt levels, high commodity prices, quantitative easing, low interest rates, yuan peg to name but a few) investors have speculated that we are entering a period of high inflation which has forced the price of gold up. Two things have changed:

- there are indications of too much spare economic capacity, in China for example, which might lead to monetary tightening and lower demand for commodities.

- USD value has improved - Gold is priced in USD so will move against the USD exchange movement, all else being equal

In terms of future direction of gold price: there is no clear indication of anything here, just over-weight investors moderating their positions slightly since the inflation story is looking less certain.

But USD has been falling for the past week or so... http://www.barchart.com/quotes/stocks/$DXY

Edited by Constable

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But USD has been falling for the past week or so... http://www.barchart....tes/stocks/$DXY

USD & Gold down at the same time reeks of manipulation

More from HarveyOrgan:

"Today the banking cartel decided to raid gold and silver even though we had dollar weakness. Tomorrow is options exercise on stocks so they always raid gold and silver, prop up regular securities and bomb gold shares. Standing operating procedure.!!"

http://harveyorgan.blogspot.com/

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USD & Gold down at the same time reeks of manipulation

More from HarveyOrgan:

"Today the banking cartel decided to raid gold and silver even though we had dollar weakness. Tomorrow is options exercise on stocks so they always raid gold and silver, prop up regular securities and bomb gold shares. Standing operating procedure.!!"

http://harveyorgan.blogspot.com/

Oh and here's more reasons:

"Wonder why the smart money was rushing headlong out of gold and silver over the past few days, and especially today in the AM session? Here is your answer: in tried and true fashion the Comex just hiked margins in gold, and silver by about 6%, and threw in a few other commodities to mask things up."

http://www.zerohedge...cks-spreads-and

Edited by duckwomanloulou

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I posted this in the gold thread on the 7th

"Major hedge fund traders are going to be buying hundreds of millions of dollars of March contracts during the last 3 weeks of February. The strategy is simple-force Comex to pay a hefty premium on contracts that CANNOT be delivered. Will this work? It worked like a charm in December. Those guys were all kicking themselves because they should have bought 10 times the amount of contract that they actually had in December.

This time around, they are getting everyone they know to get involved in this trade. They will pool their money together in order to get a large number of contracts so that Comex will not be available to deliver-thus forcing a hefty premium. These former traders are gonna pull a train on Blythe with all their hedge fund buddies and there is not a thing Blythe can do about it.

HOWEVER THERE IS A CAVEAT!!!

These traders have gotten word in the last 48 hours, that Blythe and The Morgue is about to undertake a major raid on GOLD in the hopes that silver will sell off too. Therefore, these traders are advising their colleagues to refrain from buying March silver contracts unless silver breaks $31 again. Their understanding is that Blythe cannot effectivley execute a silver selloff but Blythe and The Morgue can still execute an effective GOLD SELLOFF.

If and when this GOLD selloff comes, scheduled for this Friday or perhaps next week at the latest, Blythe is hoping that gold will break $1300 and go as far down as $1250. Blythe will be short selling intermitently in the silver pit but her main goal is to cover as many silver contracts as possible.

Once this Gold induced selloff is done watch for the mother of all rally in the silver pit. The hedge funds will be buying like crazy, but the MAIN assault will not take place until February wheren these former traders expect a rise of at least $10 (which was what happened to silver from October going into December).

December was just a dry run (RAID) on the Comex. The success and ease of that RAID has emboldened these traders to re-try the same scheme with a lot more money this go around (March delivery). The only defense Blythe has is to engineer a GOLD SELLOFF in the next two weeks in order to suppress silver so that she can cover her SILVER contracts. "

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Excellent news!

Time to buy some more Sovs & Brits !

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With gold and silver getting hit hard today, King World News interviewed James Turk out of Spain. When asked about the recent action Turk commented, “The last time we spoke Eric, the two key overhead resistance levels I mentioned were $1,400 for gold and $30 for silver. I expect that we will be probing those resistance levels in the near future. The real question in my mind is whether we can take out these resistance levels on the first attempt, or whether the market needs to trade sideways longer in order to build more of a base.”Turk continues:

Regardless, the risk here is not being in the market, because once these resistance levels are taken out, both metals are ready to explode to the upside.

Right now over here in Europe, the periphery countries such as Spain and Portugal are changing the way they borrow. Their bankers are putting together a syndicate of lenders so that neither country has a failed bond auction. The net effect is not only are they trying to paper over the sovereign debt crisis, now they are trying to hide it behind closed doors with these gimmicks.

Another slight of hand which has been getting a lot of attention recently is the accounting shenanigans by the Irish central bank. The unexplained build-up of other assets on its balance sheet suggests to me that they are playing a very dangerous game. Instead of allowing Irish commercial bank assets to contract to meet the decline in deposits at those banks, the authorities are relying on accounting deception.

If the bank run on Ireland continues, which is likely, the other assets on the Irish central bank’s balance sheet will not be able to be used to obtain liquidity from the ECB, thus potentially leaving Ireland in an illiquid, precarious monetary position. Interestingly, one would expect to see these steps from a country prior to that country exiting the Euro altogether. The question then becomes, is Ireland setting up to leave the Euro?

All of these indicators are simply bullish underpinnings which are paving the way for the next leg higher in both gold and silver.”

This has been a fascinating bull/bear battle in gold and silver. The bears are making a move here, it will be interesting to see who prevails in the end.

Eric King

KingWorldNews.com

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/1/20_James_Turk_-_Gold_%26_Silver_to_Take_Off_Despite_Weakness.html

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so how long do you think it will be before gold starts to shoot up again to even higher amounts.also how far do you think gold will drop to per oz

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so how long do you think it will be before gold starts to shoot up again to even higher amounts.also how far do you think gold will drop to per oz

No lower than $1250 per troy ounce.

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No lower than $1250 per troy ounce.

i think 1650-1700 tops , dependent on many outside factors (chinese bubble burst , dollar collapse , eu failure etc) . Never realised how complex this p.m was , only invested on the 'tin hat factor' lol , still it's quite exciting getting on a rollercoaster , never a dull moment B)

EDITED : Tin hat factor , not tin foil (although similar :)

Edited by DannyT

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The party has been going for ages. Most people in the room are drunk. Newcomers are paying to get in, and desperately looking for the waiter. I do believe the waiter is out the back having a smoke and muttering words to the effect ..." I`m tired...I may just go home"

If he does go home, he will be back evenutally, but by then all the party goers will have huge hangovers and most will be back home in bed or working hard, depending on their finances.

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so how long do you think it will be before gold starts to shoot up again to even higher amounts.also how far do you think gold will drop to per oz

It's heading down to $500 an ounce as everybody piles back into the rock solid fiat money system and the stock market :rolleyes:

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i think 1650-1700 tops , dependent on many outside factors (chinese bubble burst , dollar collapse , eu failure etc) . Never realised how complex this p.m was , only invested on the 'tin hat factor' lol , still it's quite exciting getting on a rollercoaster , never a dull moment B)

EDITED : Tin hat factor , not tin foil (although similar :)

Hi.

I am also a tin foil hat wearer and bought into gold on similar grounds.

However, there are a great many economists (and I don't mean James Turk) who are coming into the public eye and stating that gold/silver and other commodities will continue to rise simply because Capital will sooner or later have no knowhere left to run.

One way or another the US Dollar is coming down. It is too late to save it and even if it wasn't, the Fed are doing all the things that will guarantee its death. With over 70% of global currency being denominated in US Dollars, that makes for a hell of a lot of capital that will be forced/coerced to run for cover into the world of real tangible assets. Also, when the shit really hits the fan, the fractional reserve practices of the gold/silver ETF's will be caught out. Since these ETFs are largely credited with keeping the price of gold/silver in its place, in the situation of a real crisis, gold/silver could rise to astronomical values presently unthinkable.

The antennae on my foil hat are picking up signals that say that the world is to move onto a gold backed global currency (and guess which banking families control most of the gold?).....but not for a good few years down the line yet.

Edited by Retardstic

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No lower than $1250 per troy ounce.

+1

I dont think that 131x will hold so we could go to 128x or even 126x but doubt we could go sub 1200.

sub 1300 looks reasonably likely right now imo.

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so how long do you think it will be before gold starts to shoot up again to even higher amounts.also how far do you think gold will drop to per oz

Time frame wise Options Expiry for PM's is Jan 26th so expect the Bullion Banks to keep hitting it down hard till that point. It may begin to rise end of next week but will depend on the wider stock markets - if they continue to slide next week then gold/silver could continue to down trend with them. I'd be looking to buy in further come mid Feb to ride the coat tails of the JPMorgan silver short squeeze on the March contracts from end feb onwards (if it hit's $31 oz). This beach ball has been held underwater for almost 4 weeks now so when they let go it's gonna rocket upwards (metaphorically speaking smile.gif)

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  • 312 Brexit, House prices and Summer 2020

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      • down 5% +
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