Gold at EUR1,000/oz - Strong Physical Demand Leading To Illiquid Conditions

Tyler Durden's picture

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Bigger Dickus's picture

Tyler, you really gotta stop hyping gold. The gold bugs index chart is hurting for a squirtin. and by that I mean a big correction.

anvILL's picture

Why do you think it's due for a big correction? Near the 50DMA, there is a good chance for a correction.
However I don't see any good reason why we should be so concerned of a big correction. I am definitely not denying the possibility of a big correction, but I would like to know why you are so concerned by it.

tmosley's picture

You mean like the one that just ended three days ago?

william the bastard's picture

Like the whopper that's coming when QE ends.

EscapeKey's picture

Well, given that you don't short Gold yourself, who the hell cares about your advice?

william the bastard's picture

Alan Blinder just said on Bloomberg "odds are strongly against QE3".


malikai's picture

Sounds like an excellent indicator of a looming squeeze in PMs.

EscapeKey's picture

Well, then you are a FOOL not to short, right?

And yet, you don't.

Sean7k's picture

QE2 is open ended. The FED never put an upward limit. The US is still creating debt in excess of it's revenues and has zero plans to change this policy. Consequently, the US must continue to sell more debt. What part of that is hard to understand? Blinder is a moron.

Just Observing's picture

The US will continue to TRY to sell it's debt, but as noted above, 62% of the 3 year notes didn't sell.  And how many of the 38% that did sell went to those mystry buyers in the Carribean banks ?  Yeah....wonder who THEY are ?


This shit gets funnier all the time.

Sean7k's picture

Sure they sold. The PD's bought 'em, will sell back in POMO and then the FED will be nice enough to hold them on their balance sheet- until they dump them onto the Taxpayer. Sarc.

The history of Ponzi schemes is well known and yet, the sell and buy your own debt to pay off old debt still plays on. 

tmosley's picture

That's what they said about QE2.

High Plains Drifter's picture

QE will never end.  You don't get it do you?

trav7777's picture

Japan is still in QE/ZIRP after what, 20 years?

they may certainly give this tightening or austerity thing a try but the wheels will come right the fuck off overnight if they do.

QE was a response to the conditions of total financial collapse in 2008; none of the underlying problems (that of unsustainable debt) have been resolved.

EscapeKey's picture

Oh, I don't know about that. A lot of insiders managed to get out.

Hephasteus's picture

Yup. Seems to be what they want us to believe. Thanks for parroting the rumor.

ColonelCooper's picture

Yeah, it worked so well the first time it ended.

jus_lite_reading's picture

QE ended when the "recession ended in June 2009"... right?

Why is anyone even considering QE 3 when the recession is OVER 2 years ago!

william the bastard's picture

There is a significant argument for ended QE2 ahead of schedule.

ColonelCooper's picture

Whats the argument? That if we don't end it early, our computers won't be able to factor that many zeroes?

william the bastard's picture

Isn't this the point in the thread where you call me a homo or is that your next post?

tickhound's picture

"There is significant argument to end "ed" QE2 ahead of schedule"

So now Bernanke wants to crash the stock market? The Fed has the ability to cause inflation, but they can't direct it to a specific asset class. That works both ways. Junior, when I get home I'm gonna smack your momma.

ColonelCooper's picture

You have a three toed sloth at home?

gmrpeabody's picture

You mean when QE ends in 5 to 7 years, when the dollar reaches it's end. That whopper?

gwar5's picture

I was thinking the same thing about the Dow....

The cliffhanger with gold and silver right now is the decoupling of paper and physical.

That event may happen anytime and must not be missed by serious persons.

That would be truly world changing. It would be the stake in the heart to the USD WRC

Cracks are appearing.... stayed tuned to ZH at all times.

malikai's picture

I wonder. Could a serious decoupling or a squeeze in any one PM lead to a cascade and eventual run on treasuries? My thoughts are yes, but how would it play out? CP risk would probably kill anyone who jumped in on the paper markets. In the physical markets, controls are assured to follow, especially if there's any semblance of a gold/silver/wheat/oil currency standard. I hold the metal in my hand but wonder how it would actually play out.

hamurobby's picture

Well, there seems to be less and less gold for sale on ebay. Kruggerands and $50 Eagles are going for about $100 over spot on a per coin basis. Double eagles are $1400+, I saw a 2010 ungraded Eagle sell for $1586 last night, (item #160541441624). Wtf is so special about that coin?  

Blindweb's picture

a big correction back to the several thousand year old trend line

hampsterwheel's picture

People are going to need a massive mindset change soon - we left normal trading some time ago.

Historically in the early phases of massive inflation people sell when they achieved their normal expected returns - 10%, 15%, even 20% - not realizing that this was just the beginning. Even in Wiemar Germany those that sold at 300% return found several months later that they lost a great deal of stored wealth selling so cheaply.

You have to get out ahead of the trend - and that means getting out of your normalcy bias - based on the massive fiat debt, the Chinese tightening, the Fed's commitment to cheap dollars you'd have to be pretty dense to be selling physical gold... if you want to trade gold isnt the vehicle during the times we live in....



bronzie's picture

"based on the massive fiat debt, the Chinese tightening, the Fed's commitment to cheap dollars you'd have to be pretty dense to be selling physical gold"

the primary trend (up) in the precious metals will continue at least until the economy is fixed

'fixed' means: real interest rates are positive (Volker needed double-digit interest rates to accomplish this back in the late 70's), the multi-trillion dollar annual US deficit has been mostly eliminated (and not just by accounting hanky-panky), several hundred trillion dollars worth of derivative positions are unwound, the massive unfunded US liabilities are reduced or funded, etc

on top of all these issues that need to be fixed, the world is probably going to replace the US dollar as reserve currency

until the economy is fixed the precious metals bull market continues ...

DoChenRollingBearing's picture

And I see no sign that the economy will get fixed anytime soon.

Bigger Dickus's picture

Can you spell I-N-E-P-T  L-O-S-E-R? Well, no need to anyway. Just look yourself in the mirror and take a good look at what PMs are doing.

Bay of Pigs's picture

Really? Obvious from your post above you didn't read the article.

Nice try chump.

Gold over $1360  +284.30  26% YOY

Silver over $30    +14.74    95% YOY 

Bigger Dickus's picture

Dude, look at recent performance.

DoChenRollingBearing's picture

Recent performance matters little unless you are a trader.

I am a holder.  I am very happy hanging on to my PMs to give them to my kid (or maybe grandchildren if/when that time comes).

Bigger Dickus's picture

Dude you gotta stop rationalising every loss you make otherwise you will never be uber rich. Deal with your losses and NEVER double down on non-revenue generating assets.

trav7777's picture

so unless something always goes up every single day, it should be sold?

JonNadler's picture

sell your gold! Bernanke will raise rates soon, he will raise rates to 20% before May, I have it on good authority! Never mind that the interest on the debt will explode or that the economy will implode, he will raise rates, caus a dick told me......Bigger Dickus that is 

Hephasteus's picture

Recent performance is a paper lie. These markets will be put in massive backwardation.

The dollars dead. No exceptions.

JonNadler's picture

Bigger Dickus is not me and am not Bigger Dickus, although I, JonAdler are a big d......

lawrence1's picture

It's his site, he can and should do anything he likes, we're consenting adults, so fuck off.

sudzee's picture

Cental bank vaults are empty except for skids of paper. For the last 10-12 years the connected and the "little guy" have been buying the shiny stuff that the the paper ponzi was built upon.

Central banks and gov'ts running on thin air. The only possible supply of gold to keep kicking the can down the road is the PM etf's. Expect a massive selldown in these etf's as a grab for the last real wealth available.


financeguru500's picture

Sudzee you are so far off. Yes people that come on zerohedge are most likely buying gold but the "little guys" are not the ones buying up all the gold. Non-Western Central banks are buying up gold and the rich are buying up gold. Both are doing so as hedges to the dollar. Don't count on the "little guys" having more than maybe a 5% share of the entire amount of gold that is out there.

sudzee's picture

So much hoopla has been raised about China's increase of 650 tonnes of gold added to reserves over a period of 3 years. India inports last year were 650 tonnes officially. Import taxes on gold has created a black market in gold for years. Possible importation of a few hundred tonnes to skirt the tax. Indian official central bank reserves of gold have barely increased over the last 10 years. The little guy has been stashing gold for a good many years.