Bitcoin Surges Over $900 As Gold Vulnerable Of Fall To $1,200/oz

GoldCore's picture

Today’s AM fix was USD 1,272.25, EUR 942.13 and GBP 790.12 per ounce.
Yesterday’s AM fix was USD 1,283.50, EUR 950.04 and GBP 797.01 per ounce.

Gold fell $14.10 or 1.09% yesterday, closing at $1,273.70/oz. Silver slid $0.34 or 1.64% closing at $20.41/oz. Platinum dropped $30.50 or 2.1% to $1,406.99/oz, while palladium fell $15.47 or 2.1% to $714.83/oz.

Gold remains under pressure after the losses incurred yesterday. Gold has failed to rally despite Janet Yellen, the Federal Reserve's chief in waiting, indicating she would continue the U.S. central bank's ultra-easy monetary policy.

Gold in USD, 1 Year - (Bloomberg)

Gold prices look vulnerable to further price falls. Support is at the recent low of $1,261.42, followed by the $1,251.84 low from October 15th. A close below that mid October low could see gold fall to test the June lows of $1,180/oz.
Investor sentiment remains extremely bearish amid surging stock markets and a complete lack of awareness of real and growing risks - sovereign, monetary and systemic.

Speculators on the COMEX got less bullish on gold last week as hedge funds and banks doubled their short holdings. The net long position on the COMEX plunged 37% to 55,456 futures and options in the week ended November 12, U.S. Commodity Futures Trading Commission (CFTC) data show, the biggest drop since February. Short bets climbed to 54,143, the highest since mid August, from 26,490 a week earlier.

The world's largest gold exchange-traded fund, SPDR Gold Trust, said its holdings fell 1.2 tonnes to 864.51 tonnes on Monday - the fund's lowest since February 2009.

Physical demand, which usually tends to provide a floor for prices at lower levels, remained anaemic even after Monday's price drop. Demand has lately failed to pick up even below the $1,300  level as many bullion buyers had bought a lot of bullion when prices fell earlier in the year.

The Fed's $85 billion in monthly bond purchases are inflationary and remain very gold bullish but gold remains very weak despite this ongoing currency debasement.

This money printing and currency debasement and still elevated systemic risk has led to bitcoin surging to new record highs overnight as buyers take shelter in the new virtual currency. Yet, at the same time gold prices remain weak. This is giving further credence to allegations of price suppression.

The virtual currency rose to a high of $900.98 on the Mt. Gox exchange Monday afternoon. It surged 42% from Sunday's close and is up 107% from a week earlier.

Cross Currency Table - (Bloomberg)

Bitcoin was developed in 2009 and is a decentralized digital currency that enables low cost payments without the need for central authorities and issuers. Bitcoin is a peer-to-peer (P2P) currency system created in open source C++ programming code. Bitcoins can be accessed from anywhere in the world with an internet connection. Once a user has Bitcoins, they are stored in a digital wallet. Bitcoins can then be sent to anyone else who has a Bitcoin address.

U.S. law enforcement and regulatory agents expressed optimism and acknowledged risks for digital currencies. U.S. officials outlined the potential benefits and liabilities of bitcoin.

Federal Reserve Chairman Ben Bernanke said in a letter in absentia to the Senate panel that virtual currencies "may hold long-term promise, particularly if the innovations promote a faster, more secure, and more efficient payment system."

Bitcoin’s latest gains came despite the potential for regulation of the digital currency. The U.S. Senate Committee on Homeland Security and Governmental Affairs (HSGAC) began a hearing yesterday. The event brought representatives from different federal agencies and representatives from the bitcoin community to discuss virtual currencies.

Gold Prices/Fixes/Rates/Volumes - (Bloomberg)

Bitcoin has increased more than tenfold since the beginning of 2013. One of the reasons for the incredible surge is that bitcoin is a freely traded market and not subject to rigging or price manipulation by banks or government. Total market capitalization of bitcoins is in excess of $8 billion based on recent prices, according to

The bitcoin frenzy today will be mirrored by a gold buying frenzy which will again see gold prices surge in value in the coming months. This will only happen when prices are again dictated by physical supply and demand.

Bitcoin is an interesting speculative punt and may merit a small allocation in a portfolio however its virtual and digital nature create advantages and also risks.

Physical gold, either in your possession or in allocated accounts, remains a far safer alternative both to bitcoin, to digital gold platforms and to paper and electronic currencies in what is still a vulnerable banking system.

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MeelionDollerBogus's picture

Gold is nowhere near 1200 and bitcoin could easily drop to 50 to 100. No matter how fast it rises it can always drop the same distance in half the time & overshoot by another 50% from the prior lower level it rose FROM. The faster it rises the harder it falls. Being $900 now & $200 last week pretty much guarantees it. BTC is for suckes. Gold is for the long term. The lower the paper price & the lower the physical price with premiums the BETTER it is. It's a long-term game with purchasing power exceeding 5k of TODAY's dollars for 5 YEARS FROM NOW's needs.

sgorem's picture



Chmee's picture

Anyone know how I can short this puppy without having to go through some of the complicated strategies I've seen?  I mean, are they any put options available?  This is ripe for a fall.

Matt's picture

I will lend you 4 bitcoins, and in exchange you will put up 2 ounces of gold as collateral. In exchange, you will pay me 0.1 BTC per week interest. That's my offer, can you recommend a good escrow?

Chmee's picture

Nah, gold is too valuable for that.  That stays in the strong box.  I was thinking about using FRNs since their value is dubious.  Besides, I'd prefer to leverage the trade through puts since I can do them for pennies on the dollar and risk far less.  you can only lose the small premium if you guess wrong.

Matt's picture

You're going to have to wait for the Winklevoss bitcoin ETF BIT to come out, then you can play around with a proper margin account, calls, puts, and all that fun stuff. Don't worry, I'm sure this won't be the last bitcoin mania.

fonestar's picture

Haha go ahead and try...


quasimodo's picture

I will admit, I am scratching my head here as to how in the fuck folks would want BTC so badly and shun the real stuff. 

This shit is getting old..........

Reader1's picture

You can still invest in food, G&A, medical supplies, Road Warrior pants, and sensible shoes.

fonestar's picture

Because Bitcoin is a smuggler's, trafficker's and tax dodger's wet dream. 

Bullion, not so much.

kchrisc's picture

After the dollar melts down and takes the rest of the world economy down with it:

Bitcoin holder: "Hello kind sir, I will give you one Bitcoin for a meal."

Proprietor: "What is a 'Bitcoin?"

Bitcoin holder: "It is a crypto-secure currency that is mined, controlled and stored on the Internet."

Proprietor: "Well we ain't got no electricity, and no Internet so we only take gold or silver."

Bitcoin holder: "Well, can I wash dishes or something for a meal..."

Matt's picture

Yes, because the vast majority of people how have bitcoins, have 100 percent of their wealth in bitcoins. No one who uses bitcoins could possibly be reasonable enough to diversify their assets.

Reader1's picture

I've got skills, I can trade those.

-Sorry, the brothel's full...

fonestar's picture

"After the dollar melts down and takes the rest of the world economy down with it:"

You must think your country is still pretty important hey?

Rockfish's picture

Bitcoin = Tulip = Bitcoin

Bitcoin reaches the Diane Ream Show on NPR.  Tulip. 

fonestar's picture

It's also very easy for a layman to look at the Eiffel Tower and say, "yeah I could build that" or the SR-71 and say, "yeah I could have designed that".  It still wouldn't mean the stupidity of your comments have any validity or worthiness as input in the real world.

SilverIsKing's picture


You are one of the biggest Bitcoin cheerleaders on ZH and for your and every other BTCer's sake, I hope it works out for you.

I've seen fads that manifest as price bubbles (beanie babies come to mind) which eventually pop and this has similar characteristics.  I understand that the number of Bitcoin is very limited, that it is difficult to mine them, and they are impervious to the ruminations of .gov, although I don't think .gov will let this go without a fight.

Regardless of all that, the success of Bitcoin depends upon people having confidence in it and things will happen to shake people's confidence, even if man made, and the value of these BTCs will come crashing down when one least expects it.  A prolonged power outtage would make BTC worthless so a couple of nationwide blackouts would open people's eyes to their true value in times of need.  Don't think they would pull the plug?  Sure they would, and they'd blame it on something else.

If I was smart enough to have bought some for $100 or less, I would definitely be selling some (I would always keep a few in hand for diversification and in the event it continues rising in $ price) but some computer code, regardless of its properties, will ultimately turn out to be worth very little in the long run because people will lose confidence at some point.

It is backed by nothing other than confidence and I belive the greater fool theory applies to this phenomena.

Good luck though.

fonestar's picture

I'm not even going to get into how dumb the idea of a global power outtage is.  Bitcoin will not go to zero because although Bitcoin is virtual, it serves a very real utility in the real world.  I guess the majority of ZH readers cannot think like a criminal (criminal as in doing things your self-aggrandizing masters do not like).  Do you really think the world's most secure and ethereal currency has zero value?  If so I pitty your lack of imagination because I am coming up with new scenarios and play-books on almost a daily basis.

MeelionDollerBogus's picture

That's because you're too dumb to handle the truth.
Local & national power outages & network outages are 100% outcomes.
It's only a matter of time.
Those who depend on it, for medical devices, for bitcoin, for electronic fiat, will DIE. Starve and DIE.
End. Period. Done. Over.
The rest of us of better health & physical money will be fine. We have land, defenses, medicine, silver, gold, canned food & dried food, propane, batteries, etc.
Some go for solar panels but they're very inefficient with total cost vs total life-time so that's not my thing.
You'll be in ruins.

Currencies that can't function OFF-grid do indeed have ZERO value. The HIGHEST value is a currency that absolutely can function OFF grid because the #1 NEED for currency is OFF grid, money in hand, goods in hand, NO delivery NO power NO communications. Top-most value & 99% of what I do for purchasing.

TalkToLind's picture

Gimme a down vote if you've found a bullion dealer who will sell physical gold for bitcoins.

fonestar's picture

Give me an up vote if you found a Bitcoin holder who is dumb enough to part with their Bitcoin for gold or silver at current prices?

squid427's picture

I have been waiting 2 weeks for mt. gox to verify my account. Anyboby know what's up with that.

bcecil's picture

Thats how long it used to take, or longer for some, when I got my account last January..and Im thinking they are alot busier now :O)

 Also The article is wrong on the ten fold increase, I was buying bitcoins at $10 out of local trade systems in British Columbia. So that is almost 100 fold increase.

Took Red Pill's picture

Thought I'd see something about this on ZH.
"Ahead of a Senate committee on digital currency such as Bitcoin, DHS official Brian De Vallance sent a letter to the Senate Committee on Homeland Security...In the letter, Vallance briefly mentions a link between Silk Road and the ricin-laced mail."
This is what they'll do, tie bitcoin to terrorism.

masterinchancery's picture

That won't stop Asians from using it, or Europeans.

fonestar's picture

Um, if you were actually watching the hearings at the same time as Mt.Gox (I was) you would have seen the massive run up in Bitcoin as they were speaking.  So put two and two together.  Nobody buying Bitcoin gave a shit what some idiots in your country thought or did with their "laws".

Damn it feels good to be a cryptoanarchist. 

MeelionDollerBogus's picture

but you're not.
You're a tulip-chaser in a mania.
Nothing else.

rationaldemocracy's picture

I'm young, hip and bitcoin savvy since 2009

So let me just say,  bitcoin was something geeky and cool back then, now it's a giant bubble and people who buy into it will be hurt, mostly baby boomers who have only become aware of bitcoin through the mainstream (like all of zero hedge), the Government needs to do something about bitcoin to protect people like that.

fonestar's picture

Bitcoin can't be a bubble because it hasn't even come anywhere close to widespread adoption.  It is nowhere close to being a bubble.

If you were really tech-saavy you would know that there's nothing the government can do about p2p protocols however much they would like to stop them.

MeelionDollerBogus's picture

actually bitcoin is in a bubble because it's amplified fiat value has no other driver.
It's being driven by cash which is being driven from unknowns, large fraudulent pools, that the normal person can't get into, meaning it CAN'T support itself. These are tulip-chasers & market-pumpers who will be market-dumpers.
Various penny-stocks get into such situations and are bubbles.
You see, bitcoin will never get universal adoption. It would only get techie-adoption and sucker-adoption and then disappear.
You're already at market saturation & you can't even admit it.

Government can EASILY stop p2p protocols: all they need to do is check what is normal ftp, http, and CUT everything else. Flat out ERASE the packets at every router and HIT ROUTERS and buildings with DRONES or EMP's to finish the job.

They can and WILL DO IT. WILL DO IT WITH 100% probability.

Only a retard could come to the opposite conclusion.

pirea's picture

Yes, how do you know what percentage of bitcoin is own by people and how much is JPM owned, aka manipulated.

What is 8 bilion for the big banks? The people saying that if is kripto curency can not be manipulated don't know what are they taking about, or don't have the sense of the proportions.

fonestar's picture

And that's a real possibility.  So let them dump if they are dumb enough to dump.  It could cause a crash in Bitcoin prices relative to government fiat currencies.  It will have zero effect upon the protocol of Bitcoin and there would be millions of people scooping it up at the lows.

MeelionDollerBogus's picture

You're STILL fooled. The protocol is not the weakness. The fiat exchanges are.

There will be none to scoop at that time. ALL btc holders will be wiped out financially by the dump, who are not central banks, and they will scoop nothing. The networks will be shut the next day and stay down. The btc price will stay at 0.01 and never go back up.

Kina's picture

I am now  a bitcoin miner.


But how could I recomend to somebody to buy bitcoins with such radical fluctuations...and a promise it is going to the moon..though it is an experiment, basically a first, so nobody Really knows at all. Who really knows, and it would be irresponsible of me to say to say other family members, hey put a few hundred thousand in there because you will make a killing.


Im not against bitcoin, but I am waiting to see how it plays out as a stable form of currency.


With gold I know, many thousands of years of maintaining purchasing power, decades of Central bank manipulation to control it, it isn't dependent on any sort of architecture or infrastructure or electricity.

daemon's picture

" With gold I know, many thousands of years of maintaining purchasing power "

Yes but don't let that blind you .

Look at a gold price chart between 1970 and 2000 . Imagine 2 guys : the first bought gold in 1976 at $100/oz and the second one bought gold in 1980 at  $800/oz . Both died in 2000 .

Better yet, imagine the first guy selling his gold in 1980 at $800 .

During that limited period of time (between 1980 and 2000), what was the best store of value for these 2 guys ...  gold, or that crappy governmental fiat money called the dollar ?

Don't forget that you don't live millenia .

MeelionDollerBogus's picture

such odd inversions are the exception.
It's foolish to count on them repeating rather than the 99% of gold history that does the opposite.

Matt's picture

"Don't forget that you don't live millenia ."

The difference between peasants and aristocrats, right there. The successful dynasties are the ones that pass their wealth down, generation to generation, for millenia.

rationaldemocracy's picture

Boomers and other non tech savy people should stick with Gold...a lot of stupid people are gonna lose thier money very soon

Increasingly Annoyed's picture

Bitcoin easy for a government through law to take.

Gold not so easy to take.

Would you buy a virtual gun ?

Bitcoin easy for a government through law to make more.

Gold not so easy to make more.

Would you sell your .22 rounds right now ?

Just like Paypal. Ever read their usage agreement ?

Basically says they can do whatever they want.

Template for Bitcoin agreement.

fonestar's picture

You don't know what the hell you are talking about.  It would be difficult for a government to even prove someone had a Bitcoin client, let alone take their Bitcoin.

Jameson18's picture

. One of the reasons for the incredible surge is that bitcoin is a freely traded market and not subject to rigging or price... That statement  a LIE.

The FBI took 26,000 Bitcoins from Dread Pirate even if they can't access them either can anybody else.

W74's picture

They don't have to take your bitcoins away as long as they can take YOU away.  I'd rather lose the coins.

fonestar's picture

Uh, yeah.  So they just helped the scarcity factor.  Think before you post.

semperfi's picture

I can hold in my hand a gold coin and guard it with an arsenal.

I cannot hold in my hand a bitcoin nor can I guard it with an arsenal.

If the govt/NSA hacks/segregates/shuts down the internet I could lose all my bitcoins.

If the govt/NSA hacks/segregates/shuts down the internet I'll still be holding my gold coins in my hands.

fonestar's picture

You think the NSA can shut down the internet around the globe?  You people really are dumb.  Go travel somewhere, you might just find most places do not care about your country at all and all their stupid "laws".

GoinFawr's picture

Fone', tell us again how it is 'immune to manipulation/control', then a ZH'er will outline how simply it can be 'manipulated/controlled', then you can exclaim,

"I hope they do!"

again; pretending that you haven't been served.

For goods/services it's a beautiful idea, right up until someone pulls the lynchpin by accepting fiat currency for theirs.

fonestar's picture

I was saying I hope they do because it will just show the world how powerless they really are.

fonestar's picture

It's pretty evident that most Americans talk about freedom, liberty and all this shit.  Then they beg their government... "please, please can I own guns?  Can I use the internet?  Can I own Bitcoin?  Please, please!  I promise I will be good!  I promise I will eat my dinner!"


GoinFawr's picture

Interesting, but hardly relevant to your capitulation on the point.

According to you it can't be manipulated/controlled until (by your own admission) the fiat issuers decide to manipulate/control it, at which point that manipulation/control will prove that it can't be manipulated or controlled.