I consider a second bear raid on the gold price within this quarter to be a real possibility. Whatever forces started the near-unopposed precipitous 20% drop in USD prices last week obviously has access to massive financial resources. We're talking resources only found in an entire system of Reserve Banks and the IMF. For the last price decline to end so abruptly near USD1,350 it looks more like an ambush than a retreat. To use a pop culture metaphor, its like seeing Gozilla come ashore, wreck the seaport...and disappear without a trace. Godzilla isn't calling it a day; hes burrowing, biding his time and will pop up to wreck havoc. The recent modest 'recovery' is also nearly unopposed, another textbook bull trap feature. Buyers' queues in front of bullion dealers and jeweler are an anticipated effect. If this 'Godzilla' drives spot gold to USD$1,000/oz.t we can expect to see queues of loose-handed fiat-price-speculators trying to offload their gold. You can expect the '6-o'clock TV News' cameras to show up if that happens. The conceivable objective isn't to make gold bulls generate a loss; but to convince the public at large that gold is not a financial 'safe haven'. In other words, any move would be about extending the Usurper Reigh of Fiat by discrediting the legitimacy of gold's claim to the Throne of True Money. I'd much prefer to be wrong than right on this, but its a possibility all of us should consider.
I concur. That was my feeling after hearing about all the queues and shortages. So what if there's no physical, the big boys play with paper and do whatever the hell they like. Doubt very much that they care about any possible disconnect between the two. They press a few buttons, make a few mill and then continue with their day wearing a very expensive suit and a highly offensive smug grin! "Hey, these PM idiots didn't seem to mind that we smashed the prices. In fact, they're celebrating and saying it's a "gift" even though we wiped a nice percentage off their net worth. The ones that refer to themselves as "strong hands" will never sell so we can continue to shake everyone else out. We made millions in a few seconds... Lets do it again! WAHOOOO"
I have to admit this is a faint possibility. Seeing how public saw the recent gold price drop as a "bargain" instead of scaring them away from it. Would be interesting to see what gold permabulls have to say if prices drop even lower than 1000/ozt, and stayed there for a couple of months (maybe even longer). This may force the speculators to cut their losses and sell their gold at a discounted price. Sure supply will dry up, but what if they can force you to give up your gold? Talk about modern day gold confiscation! Haha!
Well over a hundred emails and phone calls this past week from customers clamouring for bargain price bullion. Most were interested in the basics; bullion with low premiums such as generic kilo bars, 1oz gold cast bars and 50cents pieces. If I could buy 2000 oz of generic silver right now I would sell out in a flash Unfortunately stackers here are not easily influence to swap their precious metals for fiat. 99% were buyers, only one sold me some gold. All this unfilled demand should push spot price upwards however I am often wrong making predictions
Aurora Could you comment more about what silver bullion coins were selling strongly?? Cheers H PS: Love your web-site Steve and the fact that you introduce your-self on the home page! Excellent stuff! http://www.auroraetluna.com/
I thought about this in advance of the 12th price slam. While not ruling it out , I think the low at least for gold is in. If I'm wrong then the gap between paper and physical just gets greater and must push physical higher.
People aren't fussy however I don't have much in stock; only what I buy on the secondary market or buybacks from other stackers. I boycotted the Perth Mint and have not purchase any silver from any of their distributors since August last year. Cheers
No one really knows what game TheFED are really playing......Maybe they just wanted to drive the price down thruough paper manipulation just so they can buy Cypres's Gold as cheap as possible..... Or maybe they did it just to shake out as many weak hands as possible and make Gold to be seen as a bad assest.....Either way something big is going on.
I'd say that a good indication that the market has bottomed is when a prominent silver or gold 'guru' or even youtuber decides to throw in the towel and tell us they're fed up with the market and selling their metal.
Also, I predicted months ago that if the Obama gets his way and raises or even completley removes the debt ceiling it may temporarily cause PMs to devalue because there will be no U.S default for many years later.
The newbies and the ones in it for fast cash will be flushed out but we all need to remember to think long term because that is most likely the reason why we started buying/stacking Long term gain will most likely come with shot term pain
Look at Abe of Japan's policy of doubling the currency supply. Not only does this in effect 'water down' the buying power of the yen so debt can be repaid faster, but punishes savers who have 'stored wealth' in the yen as their 'savings' are eaten up by inflation. The central bank's hope is that this inflation pressures savers to quickly 'invest' their wealth into shares or at least increase spending on goods & services in order to stimulate the national economy. They may as well use the power of their yen before it's watered down anymore. The last thing the central banks want is this wealth to be locked away where they can't control or influence it, in physical precious metals. I'd be interested to know what the demand for Gold was like in Japan just prior to this smackdown; bet you it was unprecedented. As we all know, the futures market on metals as it stands, manipulated by the bullion banks of the world, represent's a means to apply a dilution effect across all physical precious metals, just like Abe's yen printing.
House said: I know bugger all about ETF paper trading but isn't the paper a type of proxy for the real metal? If this is so, what would happen if some of these traders wanted to settle with physical supply? Does that affect what you are saying?
Even if every paper player demanded delivery of physical, I would take a guess that the contract they entered states in the fine print that the issuer can settle the contract with cash even if physical is demanded. So I don't think there will ever be a default, as such.
Argentum WOW! If that's right then there could easily be a disconnect between physical and paper, can anyone else verify this?
a lot of people that i know who have paper contract long gold position have got their margin call, and their long position forced to closed (with unimaginable loss). so that is will be the first main purpose of the manipulation. (transfer of wealth). if you see all of the charts, before it goes up higher.. it usually going through some dramatic drop.. to cut into everyone stop loss etc... those who hold physical.. get ready for some more turbulence before some clear weather ahead..
Most recent example was ABN Amro last month. They sent out a letter saying that clients PM's were safe but they would not deliver the physical if requested. Instead, the account will be settled at the bid or offer price in the 'market' :/ Translation provided by Le Google for those of you that didn't understand all that bank jargon;
This means we are suckers if we think that that buying up physical metal has any influence on the ETF world because they use fiat to settle trades in paper and have no need of supply. However they have total influence of the price paid for physical metal, the only commonality is the word silver, is this how you see it House?
