$1148 and still falling STRAIGHT DOWN! Next few months will be VERY interesting until Obama needs to raise debt ceiling...............Again!!!!
I don't see any reason now not to expect $1000 or thereabouts, and that begs the question whether even that level will hold
Another take ... SStker dccpa was quoting Jim Rogers as saying a 50% correction of gold (a commodity) in a bull market is normal. Well if we take the entire bull market in gold that would span from roughly $250 in 2001 to $1900 in 2011. That's a move of $1650. 50% of the move is $825 So a retracement of 50% of the bull market would take gold to $1075 (1900 - 825 = 1075)
^^ I agree $1050-1075 seems reasonable following the move these past days. The more important question is what happens when we bottom. Does the physical vanish due to Eastern buying and we get a take off up again or do we go sideways for months ? years repairing the damage. That is the more important issue to me rather than the final $ price.
To the tune of the robot shouting Danger Will Robinson, danger, danger - I was looking at physical pm charts yesterday and $1050 was a number that came up in gold as a possible target for this move. But after staying up late watching the election results, I don't recall if that was based upon the April-June, 2013 pattern I have been posting about. Rogers did say a 50% correction of a commodity in a bull market was normal, but he also mentioned at least the $900 area. I am too tired right now to recall specific numbers. My SWAG is that $900s will not be reached in this part of the move. That would be too quick. One would think a bear market would slowly torture you and occasionally mix in a sharp thrust like right now. It will be interesting to listen to Roger's next answer to a gold question.
People are forgetting what happens when irrational exuberance goes on for too long. As I said in another thread, we should probably have a disaster plan in place. It doesn't hurt to think about, and if we do get hit by another GFC or worse, at least some of us might cope slightly better.
November 06 2014 American Financial Markets Have No Relationship To Reality Paul Craig Roberts and Dave Kranzler As we have demonstrated in previous articles, the bullion banks (primarily JP Morgan, HSBC, ScotiaMocatta, Barclays, UBS, and Deutsche Bank), most likely acting as agents for the Federal Reserve, have been systematically forcing down the price of gold since September 2011. Suppression of the gold price protects the US dollar against the extraordinary explosion in the growth of dollars and dollar-denominated debt. It is possible to suppress the price of gold despite rising demand, because the price is not determined in the physical market in which gold is actually purchased and carried away. Instead, the price of gold is determined in a speculative futures market in which bets are placed on the direction of the gold price. Practically all of the bets made in the futures market are settled in cash, not in gold. Cash settlement of the contracts serves to remove price determination from the physical market. Cash settlement makes it possible for enormous amounts of uncovered or "naked" futures contracts paper gold to be printed and dumped all at once for sale in the futures market at times when trading is thin. By increasing the supply of paper gold, the enormous sales drive down the futures price, and it is the futures price that determines the price at which physical quantities of bullion can be purchased. The fact that the price of gold is determined in a paper market, in which there is no limit to the supply of paper contracts that can be created, produces the strange result that the demand for physical bullion is at an all time high, outstripping world production, but the price continues to fall! Asian demand is heavy, especially from China, and silver and gold eagles are flying off the shelves of the US Mint in record quantities. Bullion stocks are being depleted; yet the prices of gold and silver fall day after day. The only way that this makes sense is that the price of bullion is not determined in a real market, but in a rigged paper market in which there is no limit to the ability to print paper gold. The Chinese, Russians, and Indians are delighted that the corrupt American authorities make it possible for them to purchase ever larger quantities of gold at ever lower prices. The rigged market is perfectly acceptable to purchasers of bullion, just as it is to US authorities who are committed to protecting the dollar from a rising price of gold. Nevertheless, an honest person would think that the incompatibility of high demand with constrained supply and falling price would arouse the interest of economists, the financial media, financial authorities, and congressional committees. Where are the class action suits from gold mining companies against the Federal Reserve, its bullion bank agents, and all who are harming the interest of the mining companies by short-selling gold with uncovered contracts? Rigged marketsespecially on the basis of inside informationare illegal and highly unethical. The naked short-selling is causing damage to mining interests. Once the price of gold is driven below $1200 per ounce, many mines become uneconomical. They shut down. Miners are unemployed. Shareholders lose money. How can such an obviously rigged and manipulated price be permitted to continue? The answer is that the US political and financial system is engulfed with corruption and criminality. The Federal Reserve's policy of rigging bond and gold prices and providing liquidity for stock market speculation has damaged the US economy and tens of millions of US citizens in order to protect four mega-banks from their mistakes and crimes. This private use of public policy is unprecedented in history. Those responsible should be arrested and put on trial and they should simultaneously be sued for damages. US authorities use the Plunge Protection Team, the Exchange Stabilization Fund, currency swaps, Federal Reserve policy, and purchases of S&P futures to support an artificial exchange value of the dollar and to provide the liquidity needed to support stock and bond prices, with the latter so artificially high that savers receive negative real interest rates on their saving. The authorities have created a financial system totally out of sync with reality. When the authorities can no longer keep the house of cards standing, the collapse will be extreme. It is a testament to the complicity of economists, the incompetence of financial media, and the corruption of public authorities and private institutions that this house of cards was constructed. The executives of the handful of mega-banks that caused the problem are the people who are running the US Treasury, the New York Fed, and the US financial regulatory agencies. They are using their control over public policy to protect themselves and their institutions from their own reckless behavior. The price for this protection is being paid by the economy and ordinary Americans and that price is rising. The latest orchestrated takedown of the gold price is related to two events (see the graphs below). One is that the Federal Reserve decided to boost the upward spike in the dollar's exchange rate from the Fed's announcement of the end of Quantitative Easing (QE). The Fed's announcement of the end of dollar creation in order to support bond prices lessened the rising anxiety in the world about the US dollar's value when the supply of new dollars continued to increase faster than the US output of goods and services. The Fed reinforced the boost that its announcement gave to the dollar by having its bullion bank agents drive down the gold price with naked short-selling. Naked short selling was also used to offset the effect on the gold price by the Bank of Japan's surprise announcement on October 31 of a massive new program of QE. Apparently, the Bank of Japan either has been pressured by Washington to inflate Japan's currency in order to support the dollar's value or is applying a policy based on the Keynesian Phillips Curve that 2-3% inflation stimulates economic growth. Japan has been in the economic doldrums for a long time and is now reduced to pre-Reagan "snake oil" prescriptions in a desperate attempt to revive its economy. Japan's announcement of infinite money creation should have caused the price of gold to rise. To prevent a rise, at 3:00 AM US Eastern Time, during one of the least active trading periods for gold futures, the electronic futures market (Globex) was hit with a sale of 25 tonnes of uncovered Comex paper gold contracts, which dropped the gold price $20 dollars. No legitimate seller would destroy his own capital by selling a position in this way. The gold price stabilized and moved higher, but at 8 AM US Eastern Time, and 20 minutes prior to the opening of the New York futures market (Comex), another 38 tonnes of uncovered paper gold futures were sold. The only possible purpose of such a sale is to drive down the price of gold. Again, no legitimate investor would unload a huge amount of his holdings in this way, thereby wiping out his own wealth. Allegedly, the United States is the home of scientific economics with the predominance of winners of the Nobel Prize in economics. Despite these high qualifications, the price of gold, silver, equities, and bonds that are set in the US bear no relationship to economic reality, and American economists do not notice. The divergence of markets from economic reality disturbs neither public policymakers nor economists, who promote the interests of the government and its allied interest groups. The result is an economy that is a house of cards. www.paulcraigroberts.org Career Paul Craig Roberts has had careers in scholarship and academia, journalism, public service, and business. He is chairman of The Institute for Political Economy. Scholarship & Academia Dr. Roberts has held academic appointments at Virginia Tech, Tulane University, University of New Mexico, Stanford University where he was Senior Research Fellow in the Hoover Institution, George Mason University where he had a joint appointment as professor of economics and professor of business administration, and Georgetown University where he held the William E. Simon Chair in Political Economy in the Center for Strategic and International Studies. He has contributed chapters to numerous books and has published many articles in journals of scholarship, including the Journal of Political Economy, Oxford Economic Papers, Journal of Law and Economics, Studies in Banking and Finance, Journal of Monetary Economics, Public Choice, Classica et Mediaevalia, Ethics, Slavic Review, Soviet Studies, Cardoza Law Review, Rivista de Political Economica, and Zeitschrift fur Wirtschafspolitik. He has entries in the McGraw-Hill Encyclopedia of Economics and the New Palgrave Dictionary of Money and Finance. He has contributed to Commentary, The Public Interest, The National Interest, Policy Review, National Review, The Independent Review, Harper's, the New York Times, The Washington Post, The Los Angeles Times, Fortune, London Times, The Financial Times, TLS, The Spectator, The International Economy, Il Sole 24 Ore, Le Figaro, Liberation, and the Nihon Keizai Shimbun. He has testified before committees of Congress on 30 occasions. Journalism Dr. Roberts was associate editor and columnist for The Wall Street Journal and columnist for Business Week and the Scripps Howard News Service. He was a nationally syndicated columnist for Creators Syndicate in Los Angeles. In 1992 he received the Warren Brookes Award for Excellence in Journalism. In 1993 the Forbes Media Guide ranked him as one of the top seven journalists in the United States. Public Service President Reagan appointed Dr. Roberts Assistant Secretary of the Treasury for Economic Policy and he was confirmed in office by the U.S. Senate. From 1975 to 1978, Dr. Roberts served on the congressional staff where he drafted the Kemp-Roth bill and played a leading role in developing bipartisan support for a supply-side economic policy. After leaving the Treasury, he served as a consultant to the U.S. Department of Defense and the U.S. Department of Commerce. Letter from Ronald Reagan to Dr. Paul Craig Roberts Business Dr. Roberts was president of the Inlet Beach Water Company, president of Economic & Communication Services, advisor to J.P. Morgan asset management, advisor to Tiedemann-Goodnow, advisor to Lazard Freres Asset Management, and a member of corporate and financial boards. Books Dr. Roberts' latest book is How the Economy Was Lost: The War of the Worlds, published in January, 2010 by CounterPunch/AK Press. The Tyranny of Good Intentions, co-authored with IPE Fellow Lawrence Stratton, was published by Prima Publishing in May 2000. A new edition, now in a second printing, was published by Crown Publishing Group, a division of Randon House, in 2008. Chile: Two VisionsThe Allende-Pinochet Era, co-authored with IPE Fellow Karen Araujo, was published in Spanish by Universidad Nacional Andres Bello in Santiago, Chile, in November 2000. The Capitalist Revolution in Latin America, co-authored with IPE Fellow Karen LaFollette Araujo, was published by Oxford University Press in 1997. A Spanish language edition was published by Oxford in 1999. The New Color Line: How Quotas and Privilege Destroy Democracy, co-authored with IPE Fellow Lawrence Stratton, was published by Regnery in 1995. A paperback edition was published in 1997. Meltdown: Inside the Soviet Economy, co-authored with IPE Fellow Karen LaFollette, was published by the Cato Institute in 1990. Harvard University Press published Roberts' book, The Supply-Side Revolution, in 1984. Widely reviewed and favorably received, the book was praised by Forbes as "a timely masterpiece that will have real impact on economic thinking in the years ahead." Dr. Roberts is the author of Alienation and the Soviet Economy, published in 1971 and republished in 1990. He is coauthor with Matthew Stephenson of Marx's Theory of Exchange, Alienation and Crisis, published in 1973 by the Hoover Institution Press and republished in 1983 by Praeger Publishing. A Spanish language edition was published in 1974 in Madrid by Union Editorial.. Honors Dr. Roberts was awarded the Treasury Department's Meritorious Service Award for "his outstanding contributions to the formulation of United States economic policy." In 1987 the French government recognized him as "the artisan of a renewal in economic science and policy after half a century of state interventionism" and inducted him into the Legion of Honor.
