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Gold Bubble?
Usually in a bubble, investors are holding a bag.
Investors have been net sellers of about 100 tonnes in the last 7 months. The IMF has disposed of another few hundred tonnes. Yet gold price is higher by around 10% in the same period.
To put this into context, since December 21st alone, 2.2M ounces have been sold from the ETF, basically a bit more than an entire quarter of production from Barrick gold (the world's largest producer). The normal run rate of global recycling plus mine production is approximately 2.95M ounces per month. So in the same period, assuming GLD was the only source of outflow, total global absorbed gold supply was 5.15M ounces. If outflows continued at the current rate, the GLD ETF (the largest investor depository of gold by far) would have no gold in 18 months.
Supply increased 75% in the short term to see price only fall 4.5%.
Someone else is doing the buying, clearly.
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The entire bull market for gold I have
been a lousy timer for exactly timing
the intermediate bottoms,but every
time the price dropped I have been
adding on to my stash.The price
has been slashed many times over
the years,these are nothing but
temporary setbacks caused by big
buyers of the physical colluding with
the paperboys.200day moving average
has been a nice indicator fot the big
money to pile up?!
Just look at the 72-hr live chart from kitco:
http://kitco.com/charts/livegold.html
Price gets sucked down during NY trading hours and bid back up during Asian trading hours. You've got to be stupid to not see the trend, it's been this way for a week.
Oil down 2.24%
Am buying insurers as disinflation play. Loading up on CB- reports after the bell.
Back here on Planet Earth I think one possible reason for the decline in GLD holdings is that GLD is US domiciled, NY based. If the system implodes then the US will not be a friendly jurisdiction for holders of precious metals. And then it is likely that there will be a repeat of the confiscation of private gold that took place in 1933 under FDR. I think there is some dim recollection of this past confiscation and also unease about the likely violent response from the US financial elite against seditious traitors who dare to undermine their monopoly on power by holding gold. I think it is true (though I have not checked recently) that as GLD's assets have declined by contrast there has been an increase in gold held through ZGLD in Switzerland (gold is held in Zurcher Kantonalbank, can be physically redeemed in person in Zurich).
Certainly I would strongly recommend that you do not hold gold or assets in the US. Prompted by HIRE and other police state extraterritorial US legislation some Swiss private banks are also suggesting completely withdrawing from any holdings of individual US stocks due to the risk of confiscation by the US revenue authorities/ capital controls in the event of a crisis.
DANGER dear edmondantes!
To hedge your Swiss gorvernmental bank risk away, consider buying JBGLD from Swiss private bank Julius Baer.
HOWEVER, please make sure you buy for at least USD 500'000 ZGLD since the minimal physical delivery size is 12.5kg of gold and NOT a fraction of it. Anything lower will be returned in CHF. Read the term sheet!
Gold as a % of Swiss reserves is down to 16% of total! SNB is loosing big time on their EURO and USD position and intervention. In addition the falling currency will hurt the economy.
Another approach is to trade Silver via JBSICA, it represents roughly 30kg of silver, USD 25'000, you can optain silver physically after paying the 8% sales tax. In addition this product is hedged to any USD/CHF fall. Double whammy.
Third and best approach is to go on a nice ski trip or summer hike in Switzerland. Go to "Paradeplaz" to buy your physical silver and gold at CS or UBS over the counter, up to 10'000 CHF is no problem, and put the stuff in your vault, preferrably at yet another bank, this time Zurcher Kantonalbank ZKB!
HLandS,
Very eloquent, your thoughts are appreciated!
Some support at 1,300 but major support at 1,270. It gets that low am buying more physical gold and silver.
Shed the past people!
We live in a boldly controlled universe, one where it's easy to fall back into the trap thinking there actually is a market. There is not. If PM goes up or down it's because the PTB wants it to. Our advantage is only now to see the circumstances and predict what the manipulators will do next (placing your self in the place of the manipulator) and front-run them.
Let me be clear;
I would submit to you that not seeing it this way, or at least accepting its possibility would indicate a high probability that you are still thinking in terms of fiat, where gold is also though in terms of an 'investment'. This can be quite unhealthy for an emotional state!
Welcome to a strange new world, where the can be infinite$ on the short (or long) side because WE relinquished the power to them. The PTB also have the power to keep the COMEX from defaulting by force of the gun. Yes, to force the longs to accept premiums and keep their mouth shut, to allow and/or disallow players to play, to take the long AND short side of trades (it all occurs behind doors, so its not like we would know), the power to publish false numbers with IMPUNITY, the power to turn naysayers and whistle blowers OFF by the touch of a button through their fascist gov/bigBusiess relationship.
Because of peak ignorance, the power will be provided on a continued basis by those vested in the system, while the staying power derived through agencies that are both now self-financing AND the beneficiaries of unearned units of labor re-enforce the paradigm. There in indeed, NO power that we wield to stop them and enforce the justice we seek. There is NO power in anything PEAK that can make them submit. Peak Ignorance trumps peak oil, peak copper, peak everything. The majority, through collective unconscious have abrogated their liberty, and yours at the same time. They have forgotten what liberty is.
The PTB can do as they please with the whole world an illusory democracy. People voting for their own incarceration...very clever. At first they tried monarchy, then communism, socialism. Republics were a pain in the ass to control as were the borderline mob rule democracies.
Alas, an illusory democracy is the answer for the permanent world self-induced servitude state. The experimentation has traveled far, with the financing of various stylistic ventures of forms of government. Now, 1000's of years of experimentation and after families have been dismantled, millions starved, millions killed in symptomatic wars, they've almost achieved their goal.
We, implicitly have given them our power through pleasant unexamined ignorance. We have allowed the ponzi to grow from a one time with a huge break in between event, to a back to back repeating ponzi ad infinitum. This, is what the most clever have discovered. Gold or no Gold, now we are forced by our creator to examine the very essence of our spirit. Strange, how the source works.
Never in recorded history have we had the proper mediums in place in such a level to induce and continue self-imposed hedonism so easily. We now have the content and the delivery devices in every home, bar, restaurant, urinal, and store floor. Now, this in NOT Rome! This is something new, something more insidious where we can be our own personal Caligula while we strap our chains on.
Now its true that a large group of reliant individuals will riot, but revolt, they will not. They don't understand the concept. There's a lot of people to rid if they can't be made productive, won't part with their earned life potential, or cause too much trouble for the PTB by either not being a 'team player', or shooting their mouth off inappropriately on THEIR propaganda devices.
Those who are not willing to be permanently blinded by their own greed, complicity, and narcissism, and those not willing to suppress their shame for the sake of the overlord are likely to risk elimination.
The battle as it turns out is spiritual. And I don't like going there because so many a statement such as this is arrived at solely as a symptom of a defense mechanism based on the recognition of powerlessness. The populace at large has found their God, and its not the usual suspect (or perhaps it is), and its the burial of their ever annoying real, larger selves...spiritual death.
Some of you ZHedgers, are your hopes and dreams contingent and reliant on the vicissitudes of corruption, manipulation, and scheming? Don't get me wrong, I'm all for Gold, whether it goes to zero or not. The trick will be to navigate holdings to their proper placement and partial conversion at the correct time. I don't care if wheat goes to zero, as long as I can still eat it and it has the future potential of value for myself and others. Do you? I told my kids that if santa gives them coal, laugh, and tell him, that's O.K., I'll just save it for a day when it's cold, burn it and stay warm. Same idea!
Once more, it's an unfortunate fact that when a large enough subset of any group supports the PTB, regardless of whether its conscious or unconscious), the entire group loses its rights, sense, memory, and objectivism to a large extent. This zerohedge is a small group, and quite ineffectual in changing the diet of the beast. We can only help ourselves. Now...limited in the physical way, but profound in the spiritual.
Do not think I'm being negative. Quite the contrary, I am very positive. This my fellow ZHedgers is, albeit, a limited opportunity to get ourselves into a BETTER future financial situation (relative to what it will be like in the future if you don't act on this knowledge), but more importantly, a window of opportunity to shed all our self-imposed illusions. It is an event that, although not meant by the oligarchs, a curious launch pad to catapult us into an expansive state.
This is worth more than money, more than security or certainty, more than suppression of our shame and denial. It is the contrast that many our souls have been seeking. A chance to forgive ourselves and die with a clean heart. Some of us will end with a clean heart and a portfolio of purchasing power, others, only the prior. Its true that I prefer the first, as I was never able to completely emancipate myself from my ego. What, can you?! And I've got a well groomed coffee stained style ego.
Again, Consider strongly that gold just might be supressed until the new currency arrives. Perhaps the plan from the beginning, to reboot the new ponzi. At the moment, those PTB who are short have access to an unlimited amount of fiat dollars...slap yourself in the face and get out of your slumber. The long side has apparently, right now, and perhaps temporarily, a finite amount of dollars until it doesn't...there is no market. None. The price of gold and silver in fiat can go to essentially zero, then it could go to 10,000.
Relax and reassess your hopes and the difficulty in changing your mindset, which is especially difficult if you want justice, or it's all you $have. You'll likely need to hold on to PM's until the proper time to liquidate them (or a %) after the new currency arrives.
Hook
No offense, but you used a lot of comment space simply to reiterate FOFOA.
Very, very nice Hook. Tending to our spiritual needs within is rarely mentioned here at ZH.
+ $1300 to you!
I hereby invite you to the Party we will have if/when gold reaches $50,000 / oz. Some of the BEST here at ZH want to come. Assuming of course that society still functions.
Unfortunately for us (I physically hold some pounds AU) that $50,000/ozt price might mean that a plane ticket to wherever the party will be will cost 1 ozt instead of the $1300 it does today.
With $1325 gone, where is the next stop?
So sayeth the Seer, 1225/1275,is the bottom.
Already piling FRN's.
I've learned a lot about myself over the last 2.5 years. I know I am driven by
fear and greed. Fear of missing the next big advance, the greed of not selling
high so I can buy in lower. The only thing I've found that even comes close to
controlling my fear and greed is owning a core of physical gold and silver.
Now if I could just find the courage to stop playing the paper game in my IRA's,
yes I have fun gambling with the miners - It's like a trip to Vegas, addictive,
sell out and buy all physical, I'd probably be more successful in the long run. I
guess that makes all of you my sponsors in a self-help group.
I am not buying any more gold. I just finished my decades long program of buying. I will sit on my pile and watch what happens. And give it away to my kid (or grandchildren if the future is kind).
Physical gold. Helps me sleep serenely.
Best of luck. Looks like it is going to be a rough DECADE.
I got out of GLD and SLV at least a year ago. I used to think they were a legitimate proxy for owning gold and silver. I had to beat my brother over the head a few months ago to finally convince him to trade out of his positions. He had no idea. A lot of people are just starting to hear about the risk. The ones that get left holding the bag are probably stupid enough not to have any physical metal either and will end up with zero claim to gold.
Levered gold is like 80-100 papier to la verité. So, using the derivative, they can pour gold on the market.
Unfortunately for some folks, they are going to have to deliver at these prices. Good fucking luck out there doing that.
And these corrections happen 2 x a year, just like last winter.
Last year had a 20% pullback on gold and 25% on volatile miners.
If you bought then, you are still in the money by a longshot.
The classic countercyclical asset is a threat to the system, so using counterfeits they flush the weak hands out.
You can't buy on margin on the rise, but I suspect after breaching 1300 and scaring off some moderately weak players you could lever up and get some GDX, gdxj or your favorite miner that has been pummeled.
'New sign of the gold bubble' - WSJ
http://blogs.forbes.com/stevenbertoni/2011/01/27/new-sign-of-the-gold-bu...
BNN.ca
Eric Sprott
http://www.bnn.ca/News/2011/1/24/Precious-metals-pullback-not-concerning...
Nice link to the Forbes article. For those not linking, it describes aggressive marketing for the iAU gold ETF (Blackrock).
This reminds me of a prediction Bill Fleckenstein made a good while ago, which was that the gold bull market wouldn't be mature till Goldman et al were pumping it like mad, organizing investor trips to mines, etc. Tthis may just be the beginning of that. If so, a lengthy process of institutional involvement, the end of MSM badmouthing of gold, and distribution to the public has to ensue to allow an exit strategy for the insiders.
If this is already the top for some years to come, all we have had is a bull market but no bubble. And bull markets are often followed by new, bigger bulls after a rest or a full-fledged bear.
We should all remember that at a roughly average gold:oil ratio of 15, if oil corrects to $80, that would imply a gold price of $1200. So yes, Faber is quite right, there is lots of short-term downside potential in gold. But gold has an infinite duration. So the proper time frame for a gold owner is long term.
Considering that ETFs are based on derivatives, and actual run on the bullion ETFs would affect ETFs. If somebody is redeeming their gold out of the GLD, then this is a sign of impending trouble.
Director and insiders do not own 1 share of GLD. http://truthingold.blogspot.com/2010/08/gld-managing-director-jason-toussaint.html
The Fed has succeeded in commandeering the stock market- so whats next up? Why the competition- gold as currency.
I have heard from the Weiss people that their theory is the FED and Treasury are holding a door open for China to get as much gold for cheaper before the economy blows skyhigh.
We know, they know we know and we know they know we know that most trading is a rigged system- no one even is scared of indictments...
I'm taking this opportunity to add some junior positions( gold miners) since some are down 20 %.
nothing has changed in the economy, so there is no real reason to think that gold's utility as a storage of value will change. Except for the fact that certain parties need to close their shorts. The long positions in futures are near a capitulation point. Gold RSI hasn't been lower since the last blow up- same time last year I think. Some miners are running at a sub30 RSI- thats pretty getting close to the bottom for now.
the gold market is owned by the chinese....they (plus some russians and indians) are exchanging their crapulent ust and other paper for gold is very opaque transactions....
if you want the full story, read jim willie....
lbma and comex no longer control the gold market...they are bankrupt and impoverished....
chinese want discount on gold...chinese get...
#1 The ghouls of JPM, et al, shake the Gold Tree and all the weak & scared GLD "leaves(shares)" come falling off. #2 They then buy the fallen "leaves" at a discount(gold down) with worthless, taxpayer supplied fiat USD. #3 The sellers of their GLD's get no gold, only more worthless fiat, but taxed to the hilt by Uncle Sambo. Pretty good gig if you're a totally corrupt pig bankster or politician.........burn the fucking Castle down!
It's up, it's down, it's a bubble, it's not, it's money, it's not, it's a bird, it's a plane, fak me... it's enough to drive you crazy listening to this argument:
http://www.youtube.com/watch?v=jk7GA4EZZrw
"since December 21st alone, 2.2M ounces have been sold from the ETF"
Are these necessarily "sales"? Could some big investors be taking delivery? This could explain at least some of the decrease in trust assets.
"If outflows continued at the current rate, the GLD ETF (the largest investor depository of gold by far) would have no gold in 18 months".
And there you have it. No way the POG stays up if huge increases in supply are out there. Fact: there isn't any big stash of gold unencumbered anywhere on the planet, let alone with an ETF. GLD is nothing but a fraud.
Mutual funds and other sheep will be left holding this bag of shit.
Weird how spot's rollong over too.
How's Sprott doing on ounces of gold held? I can't find a graph.
Sure looks like people are bailing on paper GLD. About time.
Some of their 100:1 "gold" might be on a private flight from Egypt to London right now
Sprott was waiting on silver for months I don't recall it being gold.
Temp,
True it was Slvr, Gold they had no issues.
Sprott finally got all theirs word is.
An interesting outcome that a run on the bullion bank causes a temporary decline in gold prices. But I would rather believe that the sum total of holdings are being thrown at the bullion markets in some sort of histrionic attempt at fixing the price.
Shadowstats.com maintains that the 40-year inflation-adjusted average for gold should be ~$1673/oz. U.S. in 2009 constant dollars, so the bullion price has yet to completely adjust for inflation, which kind of takes the romance out of the price advance. Sure, there will be a bubble, but we're not there yet.
The weekly chart says ~$1300/oz. as the bottom of the correction:
stockcharts.com weekly gold
http://tinyurl.com/26cbjp6
BNN.ca intereview with Wayne Atwell:
http://watch.bnn.ca/friday#clip404752
IMHO, I go w/Jim Willie, Chinas behind this entire deal.Those fks always want THE best deal, and they get it, legally or not.
Why do you think they have been propping up the PIIGS??
I look for a bottom of 1,225/1275.00/
It certainly gives out the impression that the market is being auctioned down, as it had been so many occasions previous on Fed announcements.
This time, I can see this latest wrinkle as a preparation for negative swap rates or a negative discount rate:
stockcharts.com $IRX
http://tinyurl.com/4pph6u5
Negative interest rates mean that the gold price fix may fall apart, since gold lease rates are chronically in the negative, except during gold price declines. If the face value of gold leases falls behind the gold price, the lease rates should rise as the discount rate falls.
The Bank of England called, they want their gold back.
You mean the UAE called the BoE and want their gold back.
It's been sold, ALL the nations of the world gold reserves here, Unca Sugar has SOLD, without their consent.
Paid back with FRN's.
Hahahahaha, we never HAD theirs, just most everyone elses, and the SHTF is about to take place.
Our beloved gvt has sold ALL the gold held here (even other countries), to forestall the coming implosion, and folks are pissed about it.
BTFD is now, more than ever, not just a cute acronym folks, it's the best advice of this decade. Anyone holding a stash is being amazingly propagandized by even the MSM and idiots/trolls like Gartman and Kass. Hang tight: the top of Everest is visible; but it will be an interesting journey to get there.
Keep the stuff you bought, don't get overextended on margin. As Douglas Adams might tell us, "Don't panic." Remember, we bought gold under $1000 anyhow. We bought because of beliefs. And we'll be right in the longer term.
Riots everywhere. Food inflation. Dumbass bombers in a Moscow airport. None of this makes trusting in the USD seem smart.
Amen,
If your are using Margin, you are one of two camps.Filthy assed rich, or a dumb ass.Esp in this corrupt ass mkt.
Genius is usually starky simple.
GLD & SLV are pure bankster genius.
Sun Tzu could not have designed better.
Incon,
Yes, and the secondary(maybe primary) duty is to Control the Price of Physical.Using these paper whores, that the traders use, its a three way Gang bang.
The FOFOA site has a great article about the phenomena - it appears from his article the bullion banks have first call on the remaing physical while the shareholders and unallocated realise this.
To my eyes this is the SIGNAL.
It's Ben B and his criminal chums who are buying the gold, and he is doing it with the interest paid from the freshly printed money out of fresh air which he has loaned to the government... who, in turn, forces you and your children and your children's children to pay back the loan + interest via taxes on your labor and spending.
A huge transfer of wealth scam. Ben and his criminals chums are left with real assets (gold, silver, property) and you are left with debt and no assets.
But not too worry, i'm sure there is something good on the TV tonight.
@ "if.."
the world will frown on this and all the lawyers in the world
will not turn that frown upside down.
Did you miss it?.
There is NO GOLD.
It's PAPER.
Shorting the paper gold allows the powers that be to get a better price for the physical...
... until nobody uses the COMEX price as a market price anymore that is.
FMB,
I agree, just making the point there IS, never WAS any physical in any of those ETF's.