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Gold Within 57 Cents Of The $1,200 Limit Order Trigger
Gold hits $1,199.43 overnight, a whisper away from the limit cover orders at $1,200 that will take gold to the stratosphere and will prove to Sideshow Fred that gold is the real deal, and that the Fed has lost control of excess liquidity.
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December deliveries loom.
the dec open interest is current at 13359. your pick.
Obviously the trade has moved to the Feb contract, so does this mean the remaining longs will want delivery?
Stand & Deliver, homey!
http://yankeerev.files.wordpress.com/2009/09/stand-and-deliver.jpg
... for i am a bold deceiver, musha ring dumma do damma da
...whack for the daddy-o, there's whiskey in the jar!
I guess the economies of the world must be doing fine when all the money are speculatively piling into Gold and other commodities instead of investments which will spur economic activity. For stocks, this does look like the party we will be having for a long time. While the early participants are already starting to leave (insiders, smart money), the fools are rushing in. Party hard while it lasts.
FYI, interesting Morgan Stanley Europe report with 3 fat tail risks for 2010
1 is stronger dollar
3 is UK crisis for reasons very clear to regular ZH readers
http://www.fundmymutualfund.com/2009/12/morgan-stanley-ms-lists-uk-sover...
Amazing, we have had an overbought and irrational stock market since March, and now that gold is playing catch-up with a dollar collapse on the horizon, everyone claims the metal is "over-bought."
I am buying physical with both hands as I have since it was at $450.
Just got off the phone with Mishkin, the whole gold thing is a side show.
Good enough for me..
So that's Sideshow Fred! Thanks.
The real marketplace selling 1/10 OZ coins @242.50
The true spot price for admission to the sideshow?
http://cgi.ebay.com/2005-5-1-10-OZ-GOLD-AMERICAN-EAGLE-COIN-NGC-PROOF-70...
1) Ebay is the "real market" for gold in the same way that QVC is the "real market" for consumer goods.
2) 1/10 oz coins have always sold for a major premium, typically in the 30% range.
3) People buying 1/10oz coins on Ebay either don't know anything about buying bullion or are just looking for one little collector item, not an investment.
Did anyone here ask you for your 2cents?
Gold is a consumer good. The price paid is the market. 13 bids on that item looks like a robust market.
Conclusion: On the consumer level many people are willing to pay around $2400 an OZ for gold.
Run along now.
You obviously don't understand that this is a coin with numismatic value.
This is a discussion forum, so it doesn't matter if anyone asked.
And you obviously don't have a clue.
Yes people do pay more than twice the price for gold on eBay, but you forgot to mention that they have suffered brain damage from banging the 'Increase Maxium Bid' button with their heads.
Now you run along and get edumakated Jethro
just checked, plenty of 1 oz. eagles have sold for ~1300
this one:
http://cgi.ebay.com/50-AMERICAN-GOLD-EAGLE-1-OZ-BULLION-COIN-22K-1oz-Min...
ended yesterday. it started at 1330 and received NO BIDS.
You REALLY don't know what you are talking about.
That's not a regular gold coin, it's a 1/10 oz coin with NGC PF70 ultra cameo proof rating.
Isn't there also a distrust factor on eBay that reduces prices?
Ex. I'd pay $1,300 an ounce for gold from a trusted source vs. maybe $1,200 for a an unknown entity like eBay.
What? You don't trust seller Tungsten1? LOL!
$100 for 'trust'?
So will this be the time the Fed and its minions loose all control of the price of Gold or are the last suckers being lured into the boat before the plug is pulled one last time?
-------------
"It was probably a mistake to allow gold to rise so high."
-- Paul Volcker, ex Federal Reserve Chairman in looking back at the rise of gold from $35 to $850 during the 1970s, per "Paul Volcker: The Making of a Financial Legend" by Joseph B. Treaster
-------------------------
"Joint intervention in gold sales to prevent a steep rise in the price of gold, however, was not undertaken. That was a mistake."
Paul Volcker,from the Nikkei Weekly, which in 2004 published excerpts from his memoirs commenting on monetary policy and the rising gold price in the 1970s
you bring up a very important point. Is there going to be a point where the Treasury intervenes in the gold market? But other than symbolic reasons, why would they care? Do they even have the power to impact prices much through intervention without substantially draining their own reserves? I would love to hear this debated, investors clearly haven't thought much about it.
The Fed and it's minions don't need to sell physical Gold to push down the Gold price. They simply need to sell short paper Gold on the Comex. That said, a lot of people are wise to this scam (or don't care but just want physical) and are buying "paper" Gold on the Comex and then demanding delivery rather than simply closing their positions for cash, which was the norm for 99% of the paper Gold until recently. Contrary to their own rules, the Comex doesn't have enough Gold on hand to cover even a portion of all the shorted Gold.
http://www.cmegroup.com/trading/metals/
Very effective manipulation, right up to the point where it's no longer effective. The questions are, when will it stop and what will be the fallout when it all falls apart? We shall see.
Brian,
in gold circles that is called manipulation.
For a starter, in the balance of a central bank "gold and gold receivables" are one line instead of separate items.
A gold brick and a paper i.o.u. are apparently two different items in a balance sheet.
The probably naked short position of the bullion banks at comex is another story.
How exactly is Treasury going to intervene? By publicly selling the U.S. government gold hoard? Would the public stand for it? They will intervene via the tax code, and even that will prove only temporarily effective.
They already have done all the "intervention" they could...close to three decades running. This time they are losing control - not only have the interventions stopped working, but are proving to be counterproductive. Despite what we may think, "they" are not God.
Tick, tick, tick...boom.
Brilliant!
Steerage is awake, eh? Good morning, cupcake.
could somebody explain the 1200 limit cover orders please?
Two things. One is a limit order where when the Bid hits a target, the order is executed. Based on what is being implied, it will be buy order (because of the cover). Second, the cover is implying that there are shorts at that particular level where, when it hits, it will cause massive buying to close their transaction (at a loss - google "Short Squeeze").
THX, So are you refering to those banks like GS, C, BAC... who went short on gold and now have to cover?
Do you think anybody can look up how many short options there are?
when is this 'pull back' on gold coming ? i keep waiting, it doesn't happen ! ..... get in now ? or wait til the next big crash in stocks ?
I have many more chips I'd like to place on the gold square; I am slowly buying into this rise, but it seems so overbought. Long term I am confident it won't matter. And if gold goes to $5K, who cares if you bought it at 1050 or 1200?
Spot on. Gold will just keep on climbing because none of them know how to turn the printing press off.
Trust me, long term it won't matter even if you buy at $5k because the dollar will cease to exist at some point during the rise.
You're thinking in stock market terms. Gold doesn't follow those rules. My gold at 960 an ounce isn't any better of a buy or more profitable than someone who bought at 1100. I just didn't suffer quite as much dollar depreciation as they did. I still used and needed dollars so my having to constantly convert took away most of those gains anyway.
The true value of gold is not in it's normal functioning store of wealth. It's in it's crash protection. Yes collapses are slow events but it depends on your floor perspective as well. The people at the bottom and the top see it in the most slow motion. The people in the middle see it the fastest.
Both. Dollar-cost-averaging is popular in stocks, why not gold? I advise my family and friends to commit 30% of there anticipated investment immideately, then buy the dips from there on out. When gold was at 600 my aunt lamented she did not buy at 425 like me, and she didn't want to invest because it might come back down. My argument is always that gold is an insurance, it doesn't matter if you bought at 400, 600, 800, 900, 0r 1194 when a currency crisis comes along. If you're looking to make money, then I would also say that it is very likely gold will go to 2000, a 50% rise from here...does it really matter if you buy now or at 950? Buy some immediatley and then buy the dips and you'll sleep better at night!
+1 I wish I was "aware" sooner, but you have to play the dealt hand. Getting *what you can afford* now as insurance without waiting. You don't even think about a future dip as a loss, only an opportunity that you hadn't counted on. Remember, paper may move both directions even as physical wait times get longer and longer (for those of us of conventional means, not taking LGD bars).
With a worthless $ the Fed has screwed every American for the benefit of the few who acted recklessly and almost/did destroy this country. The Fed is not saving anybody but its cronies......audit the fed and then kill it.........it has produced nothing since its inception by kaos. We actually had fewer panics that corrected quickly before the Fed's creation than after....and it will only get worse.
The people in power right now are the ones who are backing the Fed in the first place. Its going to be tough but Paul et al. are going to get a lot of support if things dont turn around soon. This battle will not be easy unless we, the middle class who are getting royally stuffed up the ass, become one UNITED STATE of America and demand change.
what stock crash? I have been waiting for that based on technicals for several months now, and thought this time it was really coming, but here we go again, toward new highs. I am not sure this insanity will ever end.
Martin Armstrong sez a DJIA close over 10,800 in January is an indication of inflation. Like, the China in a bull shop kind.
That's good, can't wait for the "like" flag
What - GCG0 @ 1200.50 doesn't count?!? Aw shucks...
Seeing that Iceland Fred Mishkin sees gold as a "sideshow", how would he describe the US equity market? Better yet, how would he describe the US banking system?
Iceland will prove to have been the fatal blow to the UK banking system, which has been merely "running on decay heat" ever since.
Would somebody print what is the total dollar amount we are talking here (over the $1200 calls)? Is it enough to fold a few banks or what?
Can I buy an ounce of gold with 1200 pieces of printer paper , as they are now worth as much as a USD.
Do they crash the equity markets to keep gold down?
Two questions,
First, when will we have that damm pullback so I can load up some more on this shiny yellow metal?
Second, Anyone looking or investing in HBU??? it's a 2x leveraged play in Canadian dollars. I know, I know the dangers of playing with an ETF versus the real thing... and I plan on switching out eventually, for now this ETF benefits from the 2x leverage AND a weaker American dollar, it tracks COMEX gold in CAD :D
A "limit cover order" as you describe is called a stop, junior.
But hey, this isn't actually a traders' blog.
Sir, stop for what?
Gold went over $1201 a minute ago. Not very exciting though.
Looks more like limit sell orders to me (taking profits at $1200).
Agree, sell stop could be changed into higher lever.
This stuff about "it doesn't matter if you buy at $1k or $5k" doesn't make any sense to me. If I have $10k to spend, and I bought at $1k, I have 10oz. Alternatively, if I bought at $5k, I have 2oz.
Same thing for $1000 or $1100. In one case, I have 10oz, and in the other, I have 9oz.
When India made the first IMF purchase a while back at $1040/oz I immediately thought $1250 by year-end.
I never thought I would undershoot on such an optimistic prediction.
gggggggggggggrrrrrrh.
It's just so confusing!! But just in case i have my gold!
Waiting for the dip in gold? just buy small amounts while waiting for the pullback, if it happens you have some cash ready to buy more, if not at least you have some gold!
also buy silver in the mean time...