Gold At $1600, Recoupling With Stocks Post QE2

Tyler Durden's picture

The media appears to be gorging on the 2% drop today in Gold and 11% drop in the last 4 months. Gold's demise today appears triggered by JPY's dump at around 8amET - though longer-term, it appears gold and stocks are recoupling in the reflation trade from around the start of QE2. At $1600, gold is back at August 2012 levels but +134% from the 2008 Lehman 'event'.




Charts: Bloomberg

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Boston's picture

1599. Order FILLED.

Confundido's picture

Should have waited to $1,585...

kralizec's picture

Umm, keep buying.  (Rolling eyes)

Pladizow's picture

Short the paper as far down as they hammer it and buy physical with the profits!

Fuck them at their own game!

MillionDollarBonus_'s picture

Lets review the cold hard facts:

1. Gold and silver are plummeting
2. The VIX is falling off a cliff
3. Stock shorts have been blowtorched
4. Interest rates are still at record lows

C'mon folks, this is getting silly. This is a recovery, pure and simple. The sooner doomer ZHers get that through their heads, the sooner they can get their portfolios back on track and save their retirements. Doomer ZHers are on a crash course. But it seems that no matter how many times they are warned, they simply refuse to listen.

Oldballplayer's picture

You are right.  I cashing in all of my gold and silver and going long the SPY.  Green shoots are coming out of my nose.

You know, I was talking to the thirty or forty 50 somethings at the coffee shop this morning and they were all talking about how great the economy is doing.  We all agree with you....stocks are the way to go.

Yippi-Ki Yay Motherfucker!

francis_sawyer's picture

Yeah ~ the economy is doing so good... I just got back from the coin shop... It was 'xtra' crowded this morning [I had to wait nearly 45 minutes ~ & they had 6 staff serving customers & who knows how many in the back]...


Probably the reason it was crowded was because most people were SELLING... There were around 20 customers, & based on my observation, about a dozen of them were selling gold jewelry, silverware, & old coins... That's why it was taking so long...

The half dozen BUYERS were either looking for ASE's, or AGE's... period! [cept for the stupid bitch right in front of me who wanted, inno uncertain terms, an Isle of Man gold soverign]... I have no idea how she got interested in that, because the counter guy had to school her for about a half hour on every goddamned round they had in the store ~ & she ended up walking out without buying anything]...

Note: Anecdotally ~ All the 'SELLERS' looked like they needed the cash... 

StychoKiller's picture

30 1/2 Toz rounds heading my way -- thanks, Crimex!

DoChenRollingBearing's picture

Gold is down, but the Bearing is on a Buyer's Strike, even for gold...  Why?  "Via negativa"...  Via negativa is N N Taleb's way of saying "Less is more."

Only a handful (Rocky Racoon, knukles, lakecity55) here might partly know why I write the below...

"The Via Negativa, Less is More":

Jonas Parker's picture

Stopped by a new coin shop that opened locally yesterday. One couple in front of us (early to mid 30's, shabbily dressed) were selling their silver tableware which looked to be antique from what I could see. I don't know what they were paid, but the vibes I got from the clerk indicated that the "store" was a lot more interested in buying than selling. It was pretty sad to see these folks asking where they could cash the check that they received.

francis_sawyer's picture



I feel your vibe man... I... TRULY... DO... feel SAD... when I see these folks selling...

Mr Lennon Hendrix's picture

MDB, remember two things.  There is smart money, and there is dumb money. 

Dumb money follows smart money.

So yeah, stocks are up.  Some of us have been saying they would go up for years.  But bonds are also up, and some have said that would happen.  Precious metals are also up.

MDB, everything is up....except currency.  So just spend that funny money like your life depends on it.

Pareto's picture

Low interest rates (real rates less than zero) coerced by FED swaps of longerdated crap for bank reserves is not indicative of an economy in recovery.  It means the cost of capital is essentially zero.  Does this make "recovery" sense to you?

Againstthelie's picture

Sure it's a recovery. I agree.

But it is built on what? 85 bn/month freshly printed funny money?

Why printing money, if it would be a solid self sustained recovery?

And the recovery of stocks has been going on for 4 years. So either you missed it, or why do you suggest to get into stocks at ATHs in the 4th year? Wouldn't it be less risky to wait for the next recession and buy low?

TeddyBear's picture







All you have to do is buy and set a stop.

2 simple things.

The next recession I will be shorting and setting a stop.

Margin rates are a give away, Take some of this free $$$ for yourself.



Like I said last time "gold to 1200 or 700"

Non Passaran's picture

> This is a recovery, pure and simple

And so industrial demand for silver is exploding, right?

Meth Man 2, keep trolling..,

JPMorgan's picture

Waiter. . . I'll have what that guy is smokin.

WhiteNight123129's picture

MDB are you long duration?

Are you confusing benign credit expansion driven inflation (which is benign and self-defeating) with inflation coming from money (which is Chronic and sticky)?

The first is self defeating the other absolutely not.

Do you believe we are back to normal recovery, i.e. total debt expanding faster then income? Or total debt expanding faster than GDP in other words. Is that your definition of ~back to normal~ ? If it is then you are positively deranged.

If it is not, ask yourself what is the difference between credit expansion inflation and money expansion inflation.

Credit and Money are 2 different things, the inflation coming from credit is cyclical under fixed money system. Inflation followed by deflation in Gold. The other one, money expansion is a permanetn shift of prices higher.


Darth Rayne's picture

I agree, everything is working according to Bernankes plan. He is perhaps using more force than he expected but all is well.

Bernanke believes himself to be very clever indeed. He went to Harvard and they told him how very special he was. He had an idea about the depression and what went wrong. They told him how inciteful and brilliant he was. He became a professor of economics where he was worshipped. Everyone told him he was gifted. The president gave him a job, he was to be the FED chairman as he was so special.

Everyone at the FED reveres his brilliance. Psychopaths at investment banks tell him how clever he is. Warren Buffet is on his speed dial and we know how rich he is. Ben Bernanke is brilliant, he knows he is brilliant, everyone he works with and meets tells him how brilliant he is. Bernankes brilliance is shoring up the global financial system. Ben is in control, he knows what he is doing as he is special and brilliant.

I, on the other hand, am a complete feckwit. I don't think he is special. I think he is dangerous. It is a good job MDB is here to point out the average ZHers mistakes and errors of judgement.

Thanks MDB

I am just a gifted Systems Analysis and design Engineer, so what do I know about modelling complex systems and their control systems and their application in the real world. Ben knows what bits of paper with numbers are and his models are ace. How can I compete with that!

In Engineering, complex systems fail catastrophically and without warning. If Ben was an Engineer I am sure cars would do a thousand miles a gallon and never needs servicing. Ben Bernanke is an inspiration to us all. Those who say 'fuck Bernanke' only show their own ignorance. Those who say gold is money are fools, Ben himself says Gold is traditional, nothing more. Please stop being negative and bask in Bens brilliance. A squirt of his sperm is worth more than all your silly yellow metal. Long live Ben 'the brilliant' Bernanke.

Mr Lennon Hendrix's picture

.Take a walk first thing in the morning, eat an apple and brew some tea. then do your job (and make sure it is one you like).  Kiss your kids, kiss your person, read a book, and seriously....don't think about any of this bullshit.

That is a happy life, but it isn't for everyone.  There are those of us who have put themselves on the frontline.  We have dedicated our time to studying the opposition; understanding the oilgarchy's motives; knowing what makes the banksters tick.

The point is, we have figured them out.  We have done the heavy lifting.  Now we must put the clamp down on them.

Our best offense is to take back the gold and silver supply.  We do this because gold and silver is money.  It is money because it meets all definitions of money:  It stores wealth because it never decays.  It is fungable.  It is a store of account.

We take back the supply then we have the money, which means we have the power.

Take back the money!

Buy Silver!

hankwil74's picture

Gold is money because ppl agree it's money; no other reason.  There is nothing inherently useful about gold.

hankwil74's picture

To the people who clicked on the down arrow about my comment, please explain to mr the inherent value of gold as opposed to water or arrable farm land.

Mr Lennon Hendrix's picture

Both water and land have good value, but they are not forms of money. 

ParkAveFlasher's picture

The difference between "wealth" and "money" is the difference between energy and potential energy.  Money is a wealth proxy, thus an intermediary of a trade of wealth.  If money is variable in quality, this sets a slew of wildcard factors into the trade.  The fewer the wildcard factors, the more accurate the information regarding valuation of wealth is intrinsic to the money. 

Gold is physically stable.  It is difficult to produce, thus small quantities of pure gold imply large commitments of material and energy in manpower, technology, and experience.  It is finite, and elemental, and can not be synthesized in appreciable quantity.  New supplies are rare, or covert. 

Land is wealth, true.  It can be a medium of exchange, true.  It can not be pocketed, nor can the real value of land be attained without the precondition of means to work the land to produce.  Gold has no such preconditions.  It is a ready-made loaf of bread that never spoils.


francis_sawyer's picture

I'm looking to diversify into arable bitcoins when I get the chance...

imbrbing's picture

Bitcoins to me are nothing more than more zeros and ones. Can't end good

francis_sawyer's picture

That's my take... If you can't BITE it... It ain't a COIN...

ParkAveFlasher's picture

Bit Coins to me are no different from bank passbooks.  They are an account entry and thus an ephemeral proxy for physical wealth.  My challenge to bitcoin is, how the hell do I understand without requiring a decoder of some sort, who becomes, in essence, a facilitator of the account?  It's like guaranteeing that you can't have wealth without an accountant.  How the hell do I understand what's encrypted?  Does this hardware come with software?

digitalhermit's picture

Its quite simple really, if you understand basic public-key cryptography.

There are two keys, a public and a private that operate as a pair.

Bitcoin Example:

Public Address (your public account #)


Private Key (needed to spend bitcoin in your account)


Anyone who holds the private key is a "facilitator of the account" and can construct and sign a transaction that authorizes release of funds from that account/address to someone elses account/address. This transaction is easily verified by the massive peer-to-peer swarm of bitcoin miners and accepted if it is valid, rejected if it isn't. The source code of the miner software is open source and can also be inspected/verified. So, in short - facilitation of fund transfer requires the private key and acceptance of your transaction by miners (who are also financially rewarded to accept valid transactions).

Also miners keep a ledger of all transactions that have ever occured (called the "block chain"). They use this chain to make sure you can only spend the money once from a given address (preventing the "double spend" problem). This block chain is a data structure that is built by consensus between peers with no trust of one another.


lasvegaspersona's picture

How about this:

gold, water, farm land are all forms of wealth. Gold, not because it is useful but because for 5,000 years humanity has agreed that it is the best form of preserving wealth over long periods of time.

It is given a value by currency but really currencies have value given them by gold. In the long run all the fiat currencies may come and go. Gold will always have value because people recognize it as wealth. Silver, because it is so useful will not again be used as a wealth asset. Silver may BE scarce and may be useful but as far as keeping it to preserve wealth it is a bad choice because hoarding silver is harmful like hoarding foods or lumber.

Gold was seemingly made to hoard. That is it's best and highest use.

DoChenRollingBearing's picture

+ 1

Yes, all valuable hard assets are a form of wealth.  I would include silver though.

Gold is the best wealth preservation vehicle we have however.  Exactly right: its best and highest use.

Panafrican Funktron Robot's picture

Gold does have a pretty significant industrial use floor under it's value.

"Of all the minerals mined from the Earth, none is more useful than gold. Its usefulness is derived from a diversity of special properties. Gold conducts electricity, does not tarnish, is very easy to work, can be drawn into wire, can be hammered into thin sheets, alloys with many other metals, can be melted and cast into highly detailed shapes, has a wonderful color and a brilliant luster."

So, calling it a "useless metal" pretty much auto-pegs you as either an idiot that can't do a simple internet search, or an asshole talking his book (gold short).  

Nostradamus's picture

Kinda hard to carry arable land or water in your pocket as a medium of exchange for goods.  Easy to do that with gold and silver.  Hence the reason they were used in civilized societies as money for practically all of recorded history. 

TheGardener's picture

I get the "carry" part . But "civilized" ?

Nostradamus's picture

What about it?  You've never heard of primitive tribal communities using a barter system of exchange?

Mugatu's picture

Please explain to me the inherent value of a piece of paper with George Washington's face on it?  

Value is measured by people's desire and people have decided to value gold greatly.  Yes, they also like water, real estate etc...., but why shaft gold?  Just because you can't understand why people value it does not make it worthless. It might mean that you just don't understand it.

TahoeBilly2012's picture

Listen you nitwit. I have a river behind my house I can walk down and take water all I want, and anit moving. If you go leave me some gold down by the bank I am hoofing down there to get it! Why? Because it is valuable in even small amounts. It will soon become more valuable as the paper money backed by nothing increases exponentially. At worst it's jewelry, at best it's the only real money on eerth, is water that?

Bazinga's picture

The inherent value lies with the fact that gold has been used for wealth preservation and trading for THOUSANDS of years. Fiat currencies have come and gone but gold has always survived. Besides, water and arrable farm land in the pockets doesn't travel well!


ParkAveFlasher's picture

IMO, the long history of gold's usage is an effect of its value, not a cause.

walküre's picture

I'm a farmer. Land is good. Great fresh water supply from the mountains is good too. How do I store my farming profits when the crooks are pretending the day of reckoning never comes? They live in Lalaland if they believe it can go on forever with money created from thin air. But they don't believe it themselves which is why they're buying as much of the hard assets as they can with their fraud. CBs are buying gold and silver.

Do as they do not as they say.

Today is a great day to buy more gold and silver.

francis_sawyer's picture

EVERY day is a great day to buy more gold & silver... [But today especially]... Can'treally say I even mind if they make it even BETTER tomorrow...

Harbanger's picture

Here's a question.  I have no mortgage, but I have an equity line of credit that I haven't used.  Should I use the credit to buy pm's or not.  I think the appreciation will be greater than the interest on the money.  What do you think?

francis_sawyer's picture



Reason?... There's no way of ever ending the JOOBUCK mentality until people stop borrowing 'joobucks' into existence [for WHATEVER reason ~ & if your motive for doing it is to SCAM the JEWS, then you're a JEW yourself]... I'm sure there will be people with varying POV's...

francis_sawyer's picture

[sorry for the SEND sticks above & here]

lasvegaspersona's picture


If you are asking this question this late in the game...well....the short answer is buy physical gold. Do not buy GLD the ETF. GLD is a way of betting on the price of gold. We may see the price of GLD go lower as it's price is determined by the action in the grand casino we call the market. The price of physical gold is determined by this price but the value of physical gold coins and bullion in your posession will soon become much higher than the value of those paper bets.

Others on this site will argue for silver. I say no. Silver may go up but not because it is a monetary metal. Not one single central bank on this planet uses silver anymore....just gold!

Harbanger's picture

I know, I've been buying phys for years and telling people to do the same.  I was just wondering if I should scam the banks by buying a few monster boxes with their credit or not.  My street self tells me yes, fck em, they're destroying your currency.  My gut is telling me no.