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Accelerating Sell Off In Commodities Shows Why Fed's Hands Are Now Tied
As Mark Fisher summarized market psychology so well earlier: "parabolic up - parabolic down." The problem for the Fed now is that to kill gold, it will also have to kill stocks, which are trading lower as gold and silver get flushed. As we presented over a month ago, gold and silver are both higher beta short hedges to stocks. As stocks go up, PMs go up more, and vice versa. Alas, silver and gold here are unsustainable for the Fed, which means Bernanke has once again managed to box himself in a corner, as any gold selloff will also presuppose a stock dump. All Bernanke can then hope is that gold does not rebound. It worked last time around... for about 5 days. Then more than caught up. This time the half life, like every repeated CB intervention, will be that much shorter.
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Although the FED believes higher asset (stocks) make people feel richer, high gold price makes the FED feel poorer. Since they have their own self interests at heart, there will be a "divine wind" attack on gold.
After a rise like that for PM gold and even more silver all they need to do is a 2-3% drop to engineer a panic selling
Those buying PMs, especially silver, on margin have to be so cautious. Moves like the one we just saw will take you out of your position and could leave you broke.
The bubble is in fiat, not in the PM's.
FYI - APMEX is now out of 100 oz silver bars for immediate delivery.
Crap. I have been watching the 700oz - 100oz bars for a "sign." I did not realize that it had gotten that bad. I was hoping to purchase a couple 100oz before "the end." Was trying to wait on a pullback. I guess I'm too late already.
about 30 left at scottsdale.. and $100 less than they were yesterday
http://store.scottsdalesilver.com/product/20/100-oz-King-Stacker
Paper gold may be sold but physical will be bought. Lots of central banks want to buy a dip.
Now that they have bashed PMs down today (approx. 2:15 ET) I have an announcement:
The Central Bank of DoChenRollingBearinglandia is going to be buying physical soon. Just wanted to let you all know so you can front-run me!
I doubt the claim that the paper markets will fall while physical go up. Just think about that claim for a while and you might spot something in there. Its not a flaw in the rationale rather an alterior motive.
Ben's going to burn the house down to prove it can't be done.
Bernanke to banks: "We'll buy your treasuries... BUUUUTTT... we sure don't like precious metals going higher."
The system is so broke(and I don't mean out of liquidity) that all it will take is a fly farting(Bufferfly Effect) in China to cause a wipe out of the existing World Order
"he's polishing the brass on the Titanic. It's all going down. So f*ck off with your T-Bills and Greenbacks. I say never be complete. I say stop being the reserve currency. I say let's evolve."
let the chips fall where they may
and 1oz coins
They are going to smack the shit out of the markets for the next few days in order to supress the metals and then they resume the sneak up and pray the metals are tamed. It worked last month for a short time but as we have just seen with Silver it caught up like a mother.
Yeah, it's going to work as well as last time.
The Bearing drools...
You don't deter a pack of hungry wolves by throwing them a Chicken McNuggett.
No Kidding, they are barely food to begin with:
aspxhttp://articles.mercola.com/sites/articles/archive/2010/11/08/do-you-have-any-idea-of-the-chemicals-used-in-fast-food-chicken.
Nobody knows how to value gold and silver. Silver up 2, so what, what does it mean? Should you buy more on the way up? Buy to how high? Or sell to how low? That's why precious metals go parabolic up and down. Nobody know nothing.
And you thought that it was difficult to evaluate banks for their toxic assets!
desperation panic like moves
Please God allow the longs to be blown out of the water so I can buy more physical at ridiculous prices.
A Gold Flash Crash!!!
Nice.
Flash crash of the day is really SLW. Wow.
On gold, toldja:
http://www.zerohedge.com/forum/hft-comes-gold-market
On Silver, see my comment on RICO and "unintended consequences".
Silver was the instability here, I think.
the entire XAU/HUI took a looks like 6% swing there
And somebody just took a big long position in dollars and a nasty swipe at GBP.
SLW fm calls is the balls trade of the hour
Maybe somebody heard that JPM was trying to go long calls and bombed them.
Hehehe.
Awwwww, this flash crash is already over!
Can we go on the ride again? Can we? Can we?
Wheeeee!
That was fun.
One more time?
Flash crash all the way to yesterdays new all time high! Ya DUMBASS TROLL!
Um, I think you'll find that a "flash crash" is commonly understood to be a price change that is severe, but temporary in nature, there, Mr. Farm Animal.
Lighten up, Francis.
Yes see above sheepdog. You have a bit of keyboard diarrhea, I've noticed. Try reading and thinking more and typing less.
Is anyone taking bets on the probability of Bernanke's plane flash crashing?
Getting a bit choppy out here in the deep water...
Tomorrow will start the bull run. The rises today are nothing yet.
Anybody seen what Silver is doing AGAIN!! :)
silver just got flushed but that's great, I am buy buy buy the next few days.
it's starting to burn a bit...
Silver is gonna get its ass destroyed like an attractive stepdaughter.
Went too far? Sorry
The attack is purely on silver. They are going to get a bloody nose at $29, panicked at $35 and completely fucked by $40. If they don't pull this back soon they're done and it'll launch upwards.
I feel better now?
@@
WWW
today is all the evidence needed to confirm the manipulation of Gold & Silver...
it aint even debatable...what a fucking fraud and im still way up and aint selling a fucking ounce...
fuck a banker...
I couldn't agree more. I will never put money in any market ever again! The fraud is out of control and I am officially done.
With the PMs you don't need to put money in the markets or go toe to toe with a quant. No worries about: flash crashes, Rights issues, long term direction, deflation, inflation, waning demand or what the fuck the dollar or Benancke does. Bliss!
Bliss=my alcohol stockpile and the knowledge of how to grow some incredible chronic!
Ive been trying to tell everyone BUY CASES of pint Jack Daniels bottles (or whatever)....BEST trading medium you can buy by far!
9mm ammo is better.
Welcome to the club. I converted most of my assets to PM about 5 months ago and I'm glad I did.
thanks to all the folks here and ZH in particular for opening the yes of a now extremely pissed off ex-sheep
+ $27 (?)
Never sell your gold and silver.
Amen. Only a buyer, never a seller be, physically speaking.
I have a couple of long call options on SLW (not on margin) which got knocked down, but they will climb back up fast.
Bernake, JPM and the bankers should be be jailed and force-fed a soup of glue and ground dollars.
POMO tomorrow will cure all ills.
http://www.dreadgazebo.com/gunporn/wp-content/uploads/2007/12/50-cal-asp...
Here we go, time to load up.
Equities follow gold, not the other way around. Blythe was jealous that everyone else got in before the mid day rush, so she and Hi-Me bombed the markets. Why not? They don't care if the Rus2k is down 1% or even, they do not care if your house is foreclosed on or not, they do not care if this is a depression or the greatest depression ever, all they care is that they make a killing while they can, and they will do it for as long as possible, and as much as they can get away with.
And as far as I can tell the PDs (and most likely the PPT) have just used a lump some of cash to short PMs and buy equities. Shirakawa owns how much of the ETF market now?
PMs have found support, for now.
I love this. Since Fed has taken up the mandate of supporting the stock market, we can sue them if it ever crashes or goes down for any prolonged period.
as asshole rahm emmanuel noted - do not waste a good crisis...these crises will morph into war....and that has been the intent all along....
Wasn't it the USD? JPY is ~81.5 now. Some kind of intervention?
It's OK,
Just a mistake, a FAT finger. We'll just cancel all those trades and return to the prior-flash-crash price.
..oh Wait (whispers in ear...) Only the stock market not allowed to flash crash you say?
asymptotic...
Buyer at 1400. Thanks.
Shit, I can't watch anymore.
Ahhhhhhhhhhhhhhhhhh!
Tyler, please make it stop! A pointed and witty anecdote may work -- do it NOOOOOW!
LMAO
Looks like it might have been BOJ intervention. JPY pairs higher despite falling market....
Shit! Mish was right all along.....
LOOK OUT BELOW!!! DEFLATION!!!!
Just kidding ;)
+1 LMAO OMG .. Mish and Prechter, Mish and Prechter, Mish n' Prechter, MishNPrechter, Mishanprecter, Mrsprecter, Mrs. Prechter
It's Mrs Prechter
http://www.youtube.com/watch?v=OlmT6eRCEyQ
You got that right.
The Fed is fucked! If they take the markets down to pull silver and gold down the physical market will get wiped out. Silver at $15??? It'd all be gone in two days. COMEX split wide open. The DOW at 6,000? People would be psychologically crushed. The end.
Saw 2 tons in a vault 2 weeks ago, belonging to my dealer. My son tried to buy some yesterday, guy's sold out except for 400 0zers. (Silver that is). There is a big demand with the price going up, there won't be any to be had at a dip. Get it while you can.
Turd if you are lurking was this our pullback?
Yes. Let it come in a little more. I'm waiting with buy orders for when we get back near the lows of yesterday, namely 1390 in the Dec10 gold and 26.75 or so in the Dec10 silver.
next 3 weeks are volatile.
Santa's rally is coming to town early December.
AU $1500 12/31/10
btw, today's little freakout was caused by the rumor that the CFTC may raise margin requirements on the PMs, especially silver.
Would it surprise anyone that, in their increasingly desperate attempts to blunt the relentless advance, thwart the ownership of PMs by the little guy and protect the near-default Comex, the Evil Empire/Fed complex would scheme to raise the limits?
Of course not! Expect this rumor to be proven true!
You think that they will raise margin requirements; and how will this help them?
History repeats itself, mostly since the playbook was proven to work. From Wikipedia on Bunker Hunt's silver thursday:
"But on January 7 1980, in response to the Hunt's accumulation, the exchange rules regarding leverage were changed, when Comex adopted 'Silver Rule 7' placing heavy restrictions on the purchase of commodities on margin."
So then everyone will ask for delivery?
By further restricting margin, anyone who bought silver on margin, and who is below the margin requirement, will need to sell the contracts or provide additional capital to meet the requirement. Basically, force the margin players out.
Oh, well who cares about them anyway! Don't show up to a gunfight with a water pistol.
Exactly, Dr. No! Anything the can do to restrain the advance, they will do.
To answer Jimi's question, this is not bullish, at least not in the short term. Just a good old country fuckin for small specs (ie the little guy).
So much big$, well-connected money is now flooding the PM pits that margin limits are meaningless longterm.
Only a moron would buy PMs on margin. I'm surprised a rout of said morons caused that big of a reaction.
Stronger hands welcome the real metals.
Kudos, you called it right around 1420. I'm gonna miss Blythe and her cute shenanigans.
I don't think you're getting that turd.
I bailed. Now in turd's camp.
Turd's calls are remarkable. I will do similar to his suggestion, except I am taking the physical.
Good luck everyone, looks we will need it.
You do not know how great it is having him around. I am having difficulties with the market moving so fast.
3 cheers for Turd!
was that a typo? 27.65 or really 26.75 as that would be a correction of around 3% in silver and only 1 % for gold ... anyway great calls Turd!
Yes. Anywhere under 27 would be a good spot to buy again.
For the sake of reality, this is simply a return to yesterday's lows.
Got back in at 26.54. Hopefully the big buyers step in overnight. Turd are you Andrew Mcguire? You don't have to answer that.
there are your price targets...you pullin the trigger?
You nailed it again. Thanks man, I owe you dinner sometime.
yes.
...and the hive-mind of ZeroHedge turned toward the Turd...
The Turd is the word.
why junk that?
no dis intended
BOUNCE!
Me thinkist it may bounce! /\/\/\/\/\/\/*
Alice, you may be correct! We will find out shortly...Platinum is showing an upward trend. Silver and gold at inflection points.
Jefferson Airplane -White Rabbit-:http://www.youtube.com/watch?v=WANNqr-vcx0
No, either we are going to test this range or we move down again. Equities must be shaken in their boots! Quick, get Brian "Sackman" Sack on the phone! The PPT must start woofing down equities stat!
Most excellent tunes for this. Turn up the bass, feel the drumbeat course through your blood as your brain shivers and your vision cuts in and out in negatives and positives. Don't need acid, this market action is surreal enough.
If you're not going to use your blotter, can I have it?
LOL...when it was UP $40 the other day, no cries of manipulation, but let it drop $25 and it's OH THE HUMANITY OF IT
http://www.youtube.com/watch?v=F54rqDh2mWA
15% volatility - it's the trend that counts, unless your dollar cost averaging , how you going know where to buy in if there are no dips? This is not a bug, it's a feature.
Isnt that funny. newcommers dont realize gold has always been volatile. Look back at the candles and a $15 swing in todays price is nothing.
The selloff supposedly came about as a result of a rumor that the margin requirements for silver were going up. If that really happened, it would, in fact, be blatant manipulation. As it is, the market recognizes and fears that the market will be blatantly manipulated against them, as has been done in the past, most notably with the Hunt Brothers.
Funny, if you go to the beach, and you try to hold a beachball underwater, you apparently wouldn't recognize that the beachball rising to the surface when it slipped from your hands is not manipulation, but your forcing it down under the water is. The manipulation is in one direction only. I'm honestly dumbfounded that a smart guy like you doesn't see that the prices really have been manipulated, even now that that is the official position of the CFTC, as reported on Zerohedge.
the fact that so-called "paper gold" and "paper silver" even exists speaks to manipulation.
trav let us take a looksy, shall we?
Gold has traded on a strong dollar better than on a weaker one since the Euro began its upward move on April 21st. With all that data, only today does it move inverse to a strong dollar? How come? Not manipulation than what, increased margin requirements for gold that is not even on hand at the COMEX? What caused this then Trav?
Sarc on/ Was it all those waskily money managers that own SO MUCH GOLD and dictate market prices? Yeah, the average Joe just sold his SLW because of margin requrements and dollar strength. Recovery, bitchez! Party on!
I'm curious - are you suggesting there's no manipulation in the PM markets, despite voluminous evidence to the contrary, or are you speaking of this instance only?
No, I'm saying that every time it goes down around here it's manipulation and every time it goes up, it's not.
I'm looking at a GREEN POG in Euros. I'm inferring from this that we're not really seeing a decline in the POG per se but a revaluation of POG$ vs POGeuro around the forex.
I watch POG in a variety of currencies...I see nearly new highs in all of them, inc stronger issues like BRL. If you think the US is going to hell, what does the POG$ matter? Just that it's worth something when you get to Chile or wherever.
This is what the Bernanke Put does.
Increasing Liquidity + declining real asset values = infinite volatility
G20 flash crash...
"what dollar depreciation?"
Did anyone notice that this article by Roubini hit the front page of CNBC just as Gold started its intereventional plunge?
Roubini: Here's Why a Gold Standard Won't Work
http://www.cnbc.com/id/40088925
That article is sad even by CNBC standards. As for Roubini, he's a smart court economist. Which is sort of like being a gold medalist at the Special Olympics.
Roubini raises the following question: If you are on a gold standard, or modified gold standard, what do you do in the event of a bank run—if you don't have enough gold to fully back the currency?
Here's your answer Noriel - simply don't let that "if" - the precondition - come about. The whole idea of gold-backed currency is to always have enough to fully back all currency in circulation.
He doesn't want a backed currency, just the appearence of a backed currency and FRLending as normal. Bah.
That goes to show you either that f*tard doesn't know what gold standard means, or he just wants more of the same ponzi under the guise of a fake gold standard.
The whole idea of having a gold standard is not to let the central bank do jack shit. Everything the cenral bank does is pro-growth, which means a one-way ratchet. Just one unsustainable bubble after another.
In contrast to his idiotic claim, if you have gold as money, or a real gold standard, or any limited quantity stuff as money, the business cycle would be muted, and bubbles would be self-limiting. In such a constant-quantity-of-money world, a bubble created in one place would mean deflation in everything else.
Constant quantity of money presupposes no reserve lending scam. If you have reserve lending, indexing to gold or not, it is still a scam.
Here is a sample from the Roubini article:
"A general summary of Roubini's position on the issue would likely begin by saying that, generally speaking, a fixed exchange rate regime or gold standard limits the flexibility and range of actions that central banks can take to improve a nation's economy in fundamental ways. (For example, in a fixed exchange rate regime, central banks have less ability to maximize employment, stimulate growth, and manage price stability.) And, as Roubini specifically pointed out to me, fixed rate regimes inhibit the ability of banks to provide lender of last resort support to an economy when necessary."
So is Roubini saying that the Fed is attempting to 'maximize employment' now? 'Manage price stability' now? As for the 'lender of last resort', it is the Fed using taxpayer money, not Fed money.
They are rattled that an ex world bank president even mentioned 'gold standard'. Like a bunch of cats kicking sand. lol
it's just the classic statist vs free-market argument
So is Roubini saying that the Fed is attempting to 'maximize employment' now? 'Manage price stability' now?
Actually, those are explicitly the main two Fed mandates.
Probably the smartest statement I've read. But as true for anything. Value is perceived. Yet if gold/silver were to find a price significantly hirer than here? Trust that deliveries would get lost in the mail. Either posess and exchange or find yourself investning in nothing more than "gold ink" off the paper you're purchasing. Promises, promises.
called dealer when it was in the 29.'s...he said he had no rounds and only 5 10oz bars left...
which means that people were still buying on the rise...last week i bought at 28.00 but couldnt get rounds, only a small alottment 10oz bars...today was some straight up banker bullshit...fine lets play the stupid game for a few more weeks, or at most months...if Chilton doesnt jump ship after today and rat these funking sociopaths out then its really is all up to us the physical accumulators...fucking unreal....
As if.
Paper is dead my friends. Nobody wants to hold fucking paper, nobody.
Imagine you're a gazillionaire and you're stuck with bonds, cash and lots of other paper shit.
You couldn't sleep at nights until you have got at least 50% of that fortune converted into hard tangible assets.
In this universe like any universe before it, the only 2 very tangible and widely recognized hard assets are gold and silver.
Rock the boat. Watch the reverse moonshoot. It is just starting to get interesting.
Cash is worthless, folks.
No one wants to hold paper USD. Its worthless compared to other world currencies. Paper AUD, NZD, GBP are holding up well.
We need to introduce a currency backed by physical Gold. Today's USD backed by the Fed isn't working, especially since the world knows the Fed has not physical backing behind USD. Its printed, printed, and printed some more without any true valuation behind it.
FREEGOLD bitchez
+ $1395 (?)
fofoa.blogspot.com
No, I am not FOFOA, nor do I play him on TV!
Gold and sliver both need a 40% or so pull back front the start of this last run up (or so charts have usually run). I think at 35%, if they get there, will be a start buy point for me. Any opinion from the professional traders??
pull back of that magnitude implies that there is actually selling going on.
nobody is selling.
selling and convert into what? cash? bonds?
wtf do you do with the cash when you sell gold and silver?
scary scenarios.
any dip is being bought back stronger than the previous dip.
Only very short-term oriented selling. A fast drop like we saw is the result of bid-pulling.
Let it come in some more. Buy back around yesterday's lows of 1390 and 26.75
Uranium is doing a number as well.
Got some? Might be a few months off but the increased volume in TSX U plays is telling the way.
Juicy highly doubts turd.
Buy back around yesterday's lows of ... 26.75
You mean we ought to wait for 10 years or so?
P.S. at 22:02: OK, you were right, 10 yrs can be quite short ;)
anyone know how many SLV shares, were sold, and shorted, in the last few hours?
Watch as all POMO ops now go directly to PM shorts!
A bazillion.
TRY 10% for gold and 22% for silver
"Gold and sliver both need a 40% or so pull back ..."
Need? Why? Technicals are utterly meaningless in this market.
35%? You're expecting gold to go back to $930?
Exactly, what do you do with cash?
Got velocity of money?
At what point does the psychology turn into what it was with oil 3 years ago. Meaning, if I told any of you that I had a thousand ounces of silver I would sell you at $35 with delivery today would anyone take it? It's a huge premium but you have it today and you believe it is going up, I think I might consider it. To be clear this is not an offer, no chance I'm selling anytime soon.
Peak oil - peak silver - peak gold - the effects of realising the issue of increasing scarcity are writ large in the charts and soon enough nobody will be trading shares and commodities will be the new focus.
You can't make more silver - once its gone its gone. As we approach that point of extinction, price will move far beyond anyone's expectations. So whatever the commodity provided it is finite in its extent on Earth then look to the long term and don't get all flustered by a dollar move in the price now. All PMs, rare earths and fuels (oil, lithium, uranium) all of them are king makers in years to come.
Set to rally again. That's all folks.
As I'm watching this unfold they are very determined to defend the $28-28.2 range. Presumably their hope is that the very large inverted hammer will trigger a load of quant algos into sell mode.
Do you're fucking damnedest you fucking criminals this market is going to hand you your ass hole on a plate.
Happy trading and hope to see you in jail soon!
Sincerely Chappy
To kill Gold and Equities would increase USD. Dollar hasn't exactly had a banner year against rivaling currencies, namely GBP and EUR. Gold is inflated and is due for a retrace which would push USD valuation upwards against competing currencies.
Currently Gold and the DOW are flat, USD is having a great week taking out both EUR and GBP highs.
Here it comes ... She's gonna blow!
http://www.youtube.com/watch?v=icXFDb1Nqvk&has_verified=1
Index Bitchez. Its all a virtual digital show for all to see. The dollar, The Dow, Gold..Its all a mirage. Just tap your Ruby slippers together and repeat 3 times.. Theres no place like home, Theres no place like home, Theres no place like home.
Those ruby slippers were originally made of silver.
http://en.wikipedia.org/wiki/Silver_Shoes
I've been riding silver via forex since 25.5 (thanks to the ZH alert that short-covering was going to heat up). Made a very nice return, had a trailing stop at -$1 per ounce since then. But that last parabolic run-up over $29 was just too fast, I bailed, knowing I could buy it back cheaper within a couple hours.
Even without manipulation sometimes there are big swings in price just because of trader enthusiasm. If you like the $4-per-week pops in Silver we've seen recently, you've gotta accept at least $2 drops occasionally, unless you think nobody's actually trading the stuff.
Not to say the bastards aren't suppressing it still, just that I don't think it's necessarily been proven true yet.
I agree. This was to be expected.
CME increased margin requirements for silver by 30%.
I'd be surprised if it pushed down too far below $1400 now it's been passed.
If silver wasn't so closely correlated I'd say it was due for a bigger correction after the current increase being so palpable and dramtic in percentage terms.
Is anyone going to have an issue if silver only finishes up 2% today? I know it's a big mid-day drop but it's still up a decent amount considering the market is down.
Is China selling bonds? I think that 800 bn could get eaten up awful quick if that hot potato lands in the Feds lap. There won't be anything left for the S&P 500.