Spot Gold Passes $1,400

Tyler Durden's picture

We were 24 hours off with our estimate for $1,400 gold by EOD Friday. Nonetheless, the level has just been breached. It won't stop there.

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Bruno the Bear's picture

Let's try and tighten up these forecasts ZH!  :-)

Slash's picture

can someone explain to me the major factor(s) causing it's rise so far? I was expecting a pretty big correction around 1250 (obviously was dead wrong). I don't have the numbers but is Benron's money/debt creation for QE2 really enough to offset the entire market deleveraging and paying down debt (deflatinary since it takes USD out of circulation)? Is something else happening? Are excess FRN's coming home from over seas? I was under the impression they were flowing towards emerging markets, etc.

 

or is it just a combo of everyone knowing that Benron is creating FRNs, more and more people waking up to what's happening and what gold/pm's are, etc.?

EscapeKey's picture

I personally think this is the foot of the exponential curve.

Those people still having the deflation/inflation argument better make their mind up soon.

Slash's picture

you mean in terms of debt? I understand ala chris martenson about money being debt and needing constant exponential new debt to service old debt and interest.......but hasn't debt been declining? I'm just trying to get a handle on what the largest factor(s) are so I can keep an eye on them......

EscapeKey's picture

No, I meant in terms of Gold, or all the commodities for that matter.

We've reached the stage where the US is monetizing the deficit. It's the event horizon, and Ben happily stepped beyond it. The scheme is more elaborate, but it boils down to Zimbabwe/Weimar Republic economics.

Short of cutting Medicaid/Medicare, Social Security, Defence, and other mandatory spending, any "austerity" cuts will be the equivalent of rearranging the deck chairs of the titanic.

And if a party eliminates any of these, they'll never be re-elected. Fucked if they do, fucked if they don't.

Printing is therefore the easiest political option - just as it was in the Weimar Republic - and all the commodities won't look back.

Slash's picture

yes I understand that line of thinking but, as was pointed out in the a more recent ZH post in the interview with chris martenson and steve keen, the deleveraging and paying down of debt + lack of demand for new credit is far more powerful than benron printing up 600 billion. Loans create new deposits, which isn't happening right now.

 

but alas, I was asking these questions at 1250 and here we are today.......could people be losing confidence fast enough that this is what is causing the rise?

nuinut's picture

could people be losing confidence fast enough that this is what is causing the rise?

My link above answers this question exactly.

We are watching the whole thing unravel in real time, and as we do, we are attracting a crowd, and directing their attention to the spectacle before us.

Critical mass can take a while to build, but don't be fooled... it's exponential.

The whole shithouse is about to go up in flames...

Downtoolong's picture

Some big traders are short big time and getting caught in a squeeze. That's all there really is to know in the short run. Remember oil in 2008? Same reason. Watch silver, up 2+% again today. No fundamentals at play here. Wouldn't be surprised to see it trade above $40 and below $20 all within a 12 month period.

Self regulating markets my ass. As an investor, I wouldn't touch any of them with a 10 ft. pole. 

Slash's picture

but...but phd eCONomists say markets are efficient!!!! and human beings are rational!

 

 

 

 

*snicker*

ThreeTrees's picture

The market-as-regulator IS going to punish those caught short and undressed.  It's called losses.  Which is more than one can say for the State-as-regulator...

You aren't asking for rationality, you're asking for prescience.

Turd Ferguson's picture

I'd expect some resistance around 1420 if only because I expect Blythe to ultimately set up shop around 1440, and her history is to fall back in $15-20 increments. At this rate, we may see 1440 by later this week/early next. At gold 1440, what would silver be? 29? Probably.

We'd be due for a bit of profit-taking there. Maybe get a pullback to where we are right now, namely 1410 and 28. But buy, buy, buy all dips. 

Lastly, watch that crude market. Today makes three closes above resistance around 86 on the Dec10. We could see 92 real f-ing fast.

DoChenRollingBearing's picture

I like days like today when both the dollar AND gold are up.  Gives me a little bit more time to buy more PMs...

DoChenRollingBearing's picture

2:30 PM ET.  Palladium up an impressive $22.00 (kitco.com).

EscapeKey's picture

Well, I gotta admit, you do have a pretty damn good track record when it comes to predicting the price of Gold. What's your occupation for the record?

Absinthe Minded's picture

So much for buying the dip. Dammit!

schoolsout's picture

Been right there with you for a few days...

 

MsCreant's picture

I kept some powder dry too. Did the same thing in the 1200's waiting for my dip. Finally bought at 1290. Got to that 1350 I needed to clear the commission pretty damned quick. 

Don't forget silver through the roof too.

PMs female dogz. Roof Roof Roof.

SWRichmond's picture

Gold will once again be recognized as capital by more than just the central banks.  The silver upside will make some people rich.  There's a difference, and I know what it is.  I suspect you do, too.

Edit:  It's starting to look like it's gonna be a dollar day in silver.

JLee2027's picture

A dollar would be nice.

Wednesday though may be $2-3 dollars. 

tmosley's picture

Why Wednesday?

I've been busy with work and not keeping up as well as I should.

JLee2027's picture

According to Tyler here it's when the Fed monetization begins and is 2-1/2 times the POMO size effect on the markets. 

trav7777's picture

it's ok to say bitchez...nobody is going to tattle

Central Wanker's picture

Gold is cheap, if you can buy it with fiat money. Some day, you won't be able to.

DoChenRollingBearing's picture

I've been saying a long time here at ZH that gold is cheap, a bargain really, at under $1500.  Still feel that way.

Those of you who have no gold should buy some ASAP.

Mr Lennon Hendrix's picture

Bargain under $2500.

It will be expensive at $5000.

And then real expensive at $10000.

ZeroPower's picture

CURRENT POWER LEVEL OVER 9000 !!1!11111

Mr Lennon Hendrix's picture

Lightning striking twice today!

ZeroPower's picture

haha.

first time i saw that pirate (?) was with the caption:

'har har! im using teh internet!!1!111111'

 

nuinut's picture

Physical gold will continue to be cheap until it is no longer available.

 

Internet Tough Guy's picture

1400 gold is the dip, as time will show.

gringo28's picture

whatever. silver and Cu will outperform Au

DoChenRollingBearing's picture

Who knows gringo28?  I certainly do not.

That's why I have some Ag and Pt as well.  More in gold though.

Oh, yeah, I just realized that I have a 1 liter plastic bottle full of pre-1982 pennies, and almost 3 liters of nickels.

RockyRacoon's picture

Lordy, lordy.  As a coin dealer I get wheat cents by the pound.  I just threw them in a big metal bin with a view to taking a look at them for collectible coins -- when I got a little extra time.  Hell with that.   Can't melt 'em without going to jail so I guess I'll just sell 'em by the pound and scoop 'em up with a ladle.

DoChenRollingBearing's picture

OK, as a non coin dealer, I would think that getting WHEATS by the pound would be worth trolling through for collectibles.  In my liter of Cu pennies, there are maybe 2 or 3 wheats, all common dates, so into the bottle they went.

If the metal value of nickels keeps going up, I will loot the banks of theirs...

coinflation.com

trav7777's picture

what if they accidentally fell into the smelter?

Mad Max's picture

And Cu, Zn and Pb will outperform Ag... where are we going with this?

gringo28's picture

thunderdome? a few weeks back i switched to silver and am now 4:1 silver vs gold. have been long copper for a while and will stay that way. silver is just too nice these days.....

dark pools of soros's picture

im about 50/50 which looks ridiculous when stacked side by side...   silver has a nice long run coming up

unununium's picture

I was 50/50 too, until the silver rocket left the spaceport.  Now I have my hands full trying to analyze a chart that's arrived in outer space.

Heavy's picture

I'm going to flattly agree with gringo on this one spot silver is going to outpreform gold in the long run.  The good old supply and demand argument is the basis for this.  Naked silver shorts vs naked gold shorts, I am ignorant, please to enlighten me?  I always seem to want to say that silver is for barter and gold is for wealth storage, even though im not sure that will affect the value of silver significantly, and definately only comes into effect with an epic fiat fail.  BTW is anyone here predicting and epic fiat fail?  Seriously though, I'm also uncertain as to the effects of rapidly increasing ag and au values on the change to profitability of mining sources that are not being utilized currently, and the effect of their utilization on both gold and silver supply.  Any ideas/leads on this would be most appreciated.