This page has been archived and commenting is disabled.
In The Strange Case Of Gold's Regular Morning Mugging
Submitted by Adam Taggart of Peak Prosperity blog,
Not everyone is a morning person. And few people like Mondays.
But if you're a precious metals investor, mornings – especially Mondays – are brutal.
The Evidence
The precious metals are routinely sold off at or soon after the 8:20am EST morning open of the New York NYMEX exchange.
Below are the daily gold price charts (source: Kitco) for each Monday (or Tuesday, if Monday was a holiday) since early this year. The current day's gold price is noted by the bright green line. The morning takedown is highlighted by the orange oval.
Monday, January 7
Gold is taken down $10 immediately after the 8am NYMEX open
Monday, January 14
A late breaking rally begun on the London exchange is quickly contained at the NYMEX open, and then beaten down nearly $10. Notice that the previous Friday's gold price action (the bright blue line) also showed the same behavior at the same time, but with an even more severe response once the NYMEX opened.
Monday, January 21
The 8am sell-off is smaller here (only a few $), but still noticeable.
Monday, January 28
Again, a sell-off happens after the 8am open. Note again how the previous Friday's action was similar, but even more severe.
Monday, February 4
Finally, an outlier. While there was an initial dip in the first hour of the NYMEX, the price took off soon after. So let's not count this one.
Monday, February 11
An immediate $14 drop at the 8am open. The downward momentum started in London, but the vertical downdraft once the NYMEX opened is unmistakable.
Tuesday, February 19
While less sharp, the steady selling clearly begins at 8am, beating gold down $12 to the technically significant $1,600 threshold.
Volume & Timing
Running the above data by Chris, he noted two additional observations.
The first is that the price suppression is commencing increasingly in advance of the start of the NYMEX's open outcry process at 8:20am EST (i.e., how trading happens at the NYMEX). This suggests that it's being done on behalf of powerful players granted permission to circumvent the rules.
The second is that the volume levels in this pre-open trading is similar to that seen during active hours. That is very unusual in markets, and exceptionally high.
Silver
For those wondering, the daily price charts for silver indicate measurably similar action during these gold takedowns. Not in exact lockstep, but directionally similar both in degree and timing.
[Update: after initially writing this, I noticed Zero Hedge posted a related analysis today of the takedowns in silver for the month of February so far. Like gold, the selling is concentrated in the first few hours of the day on the NYMEX]
...they appear to be strangely collected in a brief four hour window at the start of the day... the black line is the average of the day's performance in February across the dates selected.
Charts: Bloomberg
The Conundrum
It's hard to swallow that these charts are evidence of a free and efficient market. Otherwise, a pattern this predictable would be quickly removed as traders and HFT algos piled in to a "sure" bet.
Instead, this is behavior one would expect to see if powerful interests wanted to suppress the price of gold: hit the price hard and early at the start of the trading week to prevent the price from building upward momentum, as well as to make capital think twice before entering the gold market.
Who is doing this selling at the market open? Is it TBTF ("too big to fail") banks making profit on large short positions? Is it the Fed, through proxies, keeping the gold price contained so as not to signal how badly QE is devaluing the dollar? Allegations swarm across the Internet that it's one of these – or both. But we don't know for certain. The exchanges don't make that information available to the public.
But while these charts above are not enough evidence to prove that the gold price is being manipulated, they sure exhibit the symptoms one would expect to see if it is.
So, the big question is: if the precious metals market is being manipulated, is it wise to be in it?
History is littered with the bodies of investors whose investment thesis was right, but whose timing was wrong. Even though precious metals investors may be correct in their fundamental rationale for buying gold, can the precious metals markets remain held in check (or driven further down) for long enough that it's not worth the risk of owning the metals at all right now?
The Decision
As I laid out in Time To Choose, investors are facing a junction where they need to make a decision. Since rising markets and fiscal policy have divorced themselves from fundamentals, the gap between "what is" and "what should be" is widening. The weighting of your capital allocation needs to be based on which side you see winning out here.
From our perspective here at Peak Prosperity, for all of the reasons explored in the Crash Course and discussed here daily, we firmly believe that fundamentals will ultimately matter most. And when they fully express themselves, there will be a tremendous re-pricing of assets – largely higher for tangible assets that require energy to obtain, and markedly lower for paper claims on wealth (stocks, bonds, and their derivatives).
But as we've often said, the corrective process may very well take much longer than we ever expected to arrive. Frankly, we're amazed that the system has held together so well over the past 5 years with all of the thin-air money printing, trillion-dollar deficits, and $100 oil. If you are playing to the fundamentals, as we are, you need to be eyes-wide-open that you may be frustrated for far longer than you'd like to be.
So, if you decide to bet on the continued success of the status quo, your choices are easy: Get in the paper markets and go long. The Fed will be adding $85 billion of liquidity rocket fuel each month for the rest of the year to push the prices of your paper investments even higher.
But if you choose the fundamentals, here are a few important guidelines to keep in mind:
- Build your core position in allocated (or better, personally held) physical bullion. It will never go to $0, you've removed or minimized counter-party risk, it can't be rehypothecated, and is often the most anonymous way to acquire PMs.
- If you invest in "paper" gold, do it with money you can afford to lose. Risks of all sorts (price manipulation, counter-party risks, market shortages, rule changes, trackability, etc.) are all much higher. Read the prospectuses carefully, and make sure to only invest in those funds that fully back their shares with bullion (vs. futures contracts).
- Don't use leverage. Don't let your enthusiasm make you vulnerable. Many leveraged ETFs lose money over time due to transaction costs even if the metals rise. And when the markets stay flat for prolonged times – or worse, go down – they can be widowmakers.
A Time to 'Hold Fast'
It's only human to have your confidence shaken when the market acts so completely differently than you think it should for so prolonged a time. Chris and I feel the same pain, both constitutionally as well as in our wallets, as much of our net worth is invested in the PMs.
But every time we go through the exercise of challenging our assumptions, we walk away feeling certain that our charted course is the correct one – and that at some point, fundamentals will prevail.
As for what those fundamentals are, there's a seminal piece Chris wrote back in 2011 called The Screaming Fundamentals for Owning Gold and Silver that is even more true today. I highly recommend revisiting it.
Chris has mentioned many times that this market feels an awful lot like 2007, when asset prices powered ever higher month after month, even though the underlying data was deteriorating fast. As then, he sees a high and rising potential for a violent correction that will take the market by surprise and vaporize a lot of wealth before players are able to react.
It's times like these when you need to have the courage of your convictions and hold fast to whatever course of action you have decided upon after careful, considered analysis. During these trying periods, it's helpful to converse with a community of like-minded thinkers who can help remind you of the facts underlying your rationale – which is why I recommend joining PeakProsperity.com's Gold & Silver Group if you own PMs. It's a great source of both informational and emotional support.
Chris and I will continue to closely track the developments in the precious metals markets and report back on any material changes to our outlook as they develop. In the meantime, we'll be holding fast. We hope you'll be doing the same, too.
(click on image if in need of dramatic inspiration)
»
- 41486 reads
- Printer-friendly version
- Send to friend
- advertisements -
The Only Chart You Need:
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/2/20_Th...
FED PRINT MONEY...FED SELL GOLD. Can the US be negative equity? Oh wait it is!
Still waiting for the GLD/AAPL chart. Gold = just another momo.
$85billion/month of money printing and negative real interest rates are supportive of gold and silver prices. At least for gold however, it's actual level is high relative to some other assets like housing (silver not available in Fed FRED graphs). So we could have a continued trading range for a while before it takes off to the upside.
Median housing price (left axis) vs housing priced in gold (right axis). The horizontal gold line is the current ratio (159.76) given $1,558/oz gold.
Fed FRED graph
Unfortunately the CPI has been manipulated to such an extent that it is pretty useless as a level indicator, hence the use of housing instead.
If the Fed intends to stop or even slow printing then all commodities will fall including precious metals. If. Interesting that Soros just recently sold his gold holdings. No one told him ahead of time did they.
So will treasuries because nobody will buy them. And good luck with the rising rates.
Banks Must End 'Brazen, Flagrant' Manipulation: CFTC's Chilton
Isn't it all just ridiculous?These are fair and free markets! No fraud or collusion with Bernanke and his Jewsih bankers. Nope!
See the Israeli Generals Son http://www.youtube.com/watch?feature=player_embedded&v=TOaxAckFCuQ
LOL....
www.synagoguerising.com
when there are no consequences for failure and great rewards for deceptions and fraudulent behavior we as a society have decided to all get in the gutter and wallow together. The only way out is up at this point but we have yet to admit how low we have fallen. You can't eat gold and you can't eat silver. People bitch more about 4 dollar a gallon gas than having a president who lives like a King totally disregarding the rule of law or the plight of the real working man. Not the 90K a year union cops and firemen goons who lose their minds and revolt at the state capitol's when they may have to pay 7% toward their health insurance premiums. The black swans everyone so eagerly awaits are flying all around us. I am willing to take the first shot to see if they are edible because soon enough that may your only option barring soylent green for meat on the table. There is something putrid in this country and skum always floats to the top. It may take a while but it is nature's way. We do indeed live in interesting times. Count on your friends but know your neighbors better because the day comes you may need to count on them even more. Good night one and all.
Patience pays. This is obviously the last grand play here. All possibility of prosecution has been explicitly evaporated (there is a special place in hell for Eric Holder). Banks are bleeding liquidity from their eyeballs (the Fed is blindly buying toxic shit MBS at $45B/month FFS). 'Smart money' is buying up property for 'investment' regardless of price again (granted, this is mostly for laundering purposes). The sheeple are at least partly convinced that we've 'recovered' (stocks are near all time highs thanks to $85B/month Fed pump). The play now is to smash all 'safe' liquid asset prices because China and Russia are ready to announce HUGE gold holdings which would be a threat to the most holy of holy USD only if gold is worth as much as it should be. My strategy is to buy steady. The lower it goes the more I buy. Keeping dry powder is IMPORTANT because when it comes to price manipulation and the powers behind it, ALL BETS ARE OFF! Happy buying friends :-)
I have a special place for scum like Eric (place)Holder... between my huge sweaty ass cheeks. Perfect color match.
You want Holder to buttfuck you?
Nose first.
The great American Con is to belive this is a free country and that this is capitalism.
Comex lowers margins then its favorite son Bullion Banks slam the shit out of it. Bart Chilton should be in prison.
Hopefully they'd give him a haircut.
http://www.mediabistro.com/fishbowldc/files/2012/06/eastboundwill-300x23...
My miner accounts are all red, I have 0 margin, all cash accounts, and my gold and silver are safe. And I am putting an order in tomorrow for additional gold with my dealer. This is better than a sale at Kohls. I am strong in my convictions and am ready. I have confetti for the time we need some, and we are well protected. Thank you Joe Biden. lol.
BRING IT ON!
All bullion and junk silver is sold out in my town. I was gonna BTFD, too. :-(
Comex lowers margins then its favorite son Bullion Banks slam the shit out of it. Bart Chilton should be in prison.
Wasn't it the case that one of the Hunt brothers, during some congressional testimony, pointed out that the comex directors took massive short positions on silver right before making the rule changes that destroyed the Hunt Brothers?
Not that the Hunts weren't manipulators themselves mind you. Just an interesting tidbit for people who think things are more corrupt now than in days gone by.
Preaching to the converted! Let me take one piece of gold and pay 3 months wages for a reserve fireman in portugal to douse out the flames of the next fucker who sets themselves alight. Same applies to reservists in germany greece spain usa uk italy and france.
Only needle i get is when wanker Soros dumps after inside info. (nod & wink ) only to repurchase at the "imaginery bottom " some poor weak motherfucker who could not go the distance Stash.
Soros and kind are 5 times shitier than the scumbag fed aka jpm aka banker slime.
Last i would be happier to go down on a sinking ship with my crew than live with these scumballslimey parasites.
Central bank selling in the day with ChiCom/Arab buying while we sleep.
Don't be so sure about the Arabs...for the most part, they know cock-all about finance and mainly have Swiss bankers handle all their money. They are so deep in the "I gotta have cool shit" paradigm that you'd easily mistake them for teenage Japanese girls. Not a lot of stacking going on right there right now - could change I suppose though.
Acrually, I have noticed the same MO with the Arabs selling or buying Pound Sterling. They just dump it or grab it up. Happens at certain times, too.
They are sloppy about it because they're rich enough to not care what you think. It wouldn't surprise me if the a.m. dumps are coming from Arab countries.
:D
In a community where every conspiracy that ever wasn't is immediately uncovered for the truth that it isn't, I find it surprising that the one right in front of everyone has gone unnoticed. As goes the line in The Usual Suspects, "the greatest trick the devil pulled is convincing people he didn't exist". Turn that line around, go read Jesse Livermore again, and see if it doesn't become a little more clear.
"They" got you right where they want you.
"They" got you right where they want you".
Until they don't...
Reading through the comments here, I repeat, "they" have you right where they want you.
Take a long term view. You're welcome to go backward as well as forward, by the way. There's a new "greatest trade there ever was". One can just doff his cap at the genius of it all. Absolute and utter genius.
Reading through the comments here, I repeat, "they" have you right where they want you.
*************
Complete and utter bullshit-
Do you really believe they want us in gold-instead of in the credit/stock market?
Everybody gets what he wants in the end. That sounds kind of nice.
Everybody gets what he wants in the end. That sounds kind of nice.
*********
In the end we're all dead--you Keynisian bible punching prophet-
"the greatest trick the devil pulled is convincing people he didn't exist".
*******
I suspect the greatest trick ever pulled was the "virgin birth" wink..wink
Close. The biggest trick is "Original Sin". It is the Father of all tricks and "Original Debt" is The Mother of the greatest trick of all time, you gullible Christian schmucks! They had you with "Sin" and "Debt", and invisible products for thousands of years. All else is gravy. When will you people learn!?
Kirk: "I did not have sex with that woman!" ;-)
I guess quite a few 'people' know or knew the Fed's minutes would take a (supposedly) hawkish stance?
Sorry, didn't mean 'people', meant 'major banks'.
Yeah. Supposedly, hinting at maybe not printing $85B/month is considered 'hawkish'. Fucked doesn't even adequately describe the situation anymore.
In the end it's all just a gamble. These people have so much power over the rest of us it isn't even fathomable.
These are the people who use social engineering and other means to control entire generations of people's thinking. They're the ones who have destroyed the women, turned men into cowards, made a liberal mess of society, economically, politically, and socially.
So what makes anyone think the gold/silver manipulating will stop?
The PTB are still winning. People think the internet is changing it all, but these people are not letting up. They are confident in their plans. If they were losing, we'd be seeing massive arrests of Globalists, Politicians, Economists, and Militarists.
While this may or may not be true, if you lay down then they've already won.
I don't care how stacked the odd are against you, stand the fuck up, motherfucker.
Also, I would argue that they're not confident at all - They're just arrogant and desparate.
And ofcourse they're not letting up, for the very reasons you gave; they'd be arrested.
Do you feel better now?
That down arrow had to be none other than MDB.
Stand up to evil and stand on the side of life. Trust in Christ, for He hath already defeated evil at Calvary. It will get more and more hellish on earth and the Antichrist and Tribulation is coming. Those who believe on the Lord will avoid the second death.
"So what makes anyone think the gold/silver manipulating will stop?"
The very fact that they have to manipulate it means they're already losing and desperate. Otherwise, why bother? Why spend so much time and effort if you're not desperate?
This is true.
"The PTB are still winning."
Amazingly enough, the PTB also shit their pants like little boys when the man in the ski mask comes knocking on their driver's-side window... :-)
clearly, these movements are indicators of supply and demand.
OT But the ASX has dropped 105 points (2%) today and it's not over yet. Silver down to $AU27.75 (from $AU28.57)
This is a good article, Tyler.
I personally see this as a great opportunity to invest in precious metals. Isn't it ultimately about insurance against currency devaluation anyway?
Who cares if they manipulate it - Let them. Why not take advantage of it while you can?
If I could afford to invest in gold bullion right now, I most certainly would.
When you can lever multiple times an infinite supply of paper assets as collateral in selling a real asset, and one that is the ultimate threat to your paper ponzi scheme, in order to make the threat look bad.........Why the hell not?
"During these trying periods, it's helpful to converse with a community of like-minded thinkers who can help remind you of the facts underlying your rationale..."
http://2.bp.blogspot.com/-cr5KNEvOC0Y/UORsRhiwe2I/AAAAAAAAAq4/Fe3eFWdzCsc/s1600/cycle-of-market-emotions.jpg
Anxiety? Denial?
Didn't Marla warn us there would be volatility?
we'll be set afoot among the rest of the population with nothing but your wits and the goodwill of the fema camp management where guns and gold can be left at the gate for safekekeeping hahaha
gotta eat
As an investment ammo of all calibers has increased much more than gold. If your store has any.
Krugman: "Liestrong, make goldweak!"
Confucius: Golden Rule is man with gold rules.
Asia down close to 2%, China down 2% (their correction has started), but all watching the gold price, it slams through 1500 and the DXY goes into orbit, the market will punish Bernanke and the Fed on the QE experiment. Oil has bids though. The post QE sell off (like every-other time they printed) is on. ECB and Fed will have to scramble to do something, or their puts are toast. Dow and S&P looking to snap back last session losses, slight bear trap forming. This maybe the beginning of a bear market for 2013...maybe.
Chump, this isn't playing out how I thought it would post G-20. It sounded to me like there was a green light but now everyone is on pause mode. Weird.
Looks like Cable will start a reversal at about 1.51 (23% Fibo from the big move down...) and probably be range-bound for quite a while between 1.57 and 1.51.
That could give the go-ahead for corrections in the yen pairs. It is going to be a wild couple of trading days this week and all of next week promises to have volatility like we haven't seen for a long time.
Stay liquid, my friend.
Did you hear that a commodity hedge fund blew up today? Someone said it was Vermillion, which I think is owned by Carlysle Group. I can only wonder if this is the start of some major wars of the gods in the ether...
Or it was just some ex-Goldman oil man who got his ass handed to him?
Either way, it seemed like trading today was very, very different; like something had changed but we plebes aren't privy to what it was for the next couple of weeks or so.
:D
Orly, I think the gold selling was the cue, also the big BHP write-downs (i.e commodities under pressure), there is a lot of confusion in the market re: inflation/re-inflation trades, hence bonds and USD have been bid (very slightly) with the current stock market meltup. It goes back to a leveraged greed trade out of Wall Street and elsewhere. No I didn't hear about Vermillion, but Carlyle group is a private equity fund and you know what they say about private equity getting into hedge funds? So yes, the commodity crunch could be on via China slowing down with inflation on top. You say Volatility! I hops so, me and my fellow swing traders, just been so frustrating finding a position in the markets, even FX. But now, hopefully we get a good dose of healthy volatility.
As for FX, yeah, I see selling on the risk crosses, AUD just got smacked, NZD, the YEN pairs could all start to act freaky once the retail leveraged traders start getting hammered. Hedge funds probably have stopped shorting the YEN now, the rest missed the party.
Thnx Orly..always respect your input-
You're very welcome. I can expound on these ideas, if I won't bore you too much. :/
Historically, USDJPY and GBPUSD have traded as mirrors of each other; that is as opposites. As the yen pairs have ramped, the Pound has plunged as of late. However, the yen is getting very tired and needs some sort of retracement and consolidation to lock in those gains (losses for the yen itself...).
With Cable trading at such extreme levels and coming upon major support in this area, some pull-back is necessary there, too. So, the probabilities are that Cable gets bumped up and the yen pairs get knocked down.
Once the retail longs get stopped out of the yen pairs, there is nothing there to hold them. There are some options expiring at around 90 and 91 later today at 10am Eastern US time. That's a long way from here, so there really is nothing there to hold the yen pairs in place for very long.
With the inverse relationship, you can expect the GBPUSD to move in the opposite direction, though I wouldn't think that the move would be as drastic or severe.
We'll see. As they say, that is why they play the game.
Best of luck tading, JJ!
:D
Gold at 1564 and EUR/USD @ <1.32. Yen @ 93.2 and £@ 1.52
All this indicates that the "perceived" risk indicator is heading downwards on USD reserve. Yen seems still overvalued.
The banks and Cbs are now making a big push into monetary easing bigtime; one uncertainty : the US sequestration.
Until that clarifies we probably won't see clear trends n patterns.
I guess you could say, but this very layman "looking in from outside", that TA in Forex is getting very difficult with so much interference by big players.
Buy Moar!
With roughly 2.4 trillion in leverage vaporized in less than 24 hours, THE Black Swan has arrived. Welcome to America, the 3rd world; coming to a hellhole near you.
hell yeah, China crunch on.
*SSEC losses now down 3.2%
Careful though, US futures ain't moving much.
Anyone serious about metals is holding them for the long term - 5 years minimum, more likely 10+ years, as a way to protect wealth against what is most assuredly to come (as the math demands it).
The price of gold as the Walmart Faded Glory Blue Jeans (9.96$ Regular price) is relative to the U.S. dollar. Deflation is a black hole and Bernanke can do nothing about it. The dollar will buy more gold.
You must be challenged if you think deflation existsin a fiat-debt bassed currency.
I'll go with the "someone is being forced to liquidate". That someone is probably in Europe. And they probably need to pay up in dollars, not euros or gold. Gold has returned to currency status (not monetary yet), but that means it will behave like a currency right now. You're about to see dollar strength if you can believe it.
Would not SEC investigate insider information trading - FOMC minutes information leaking 2 weeks prior to be released?
How could possibly those traders obtain information from FOMC minutes and sell every morning substantial amounts knowing whats coming?
Bernanke and other FOMC members would not share this information with noone. They are the most honest people in the whole USA we know...
SEC won't do squat since they are in on the ponzi...
Not true. It's just that surfing internet porn is too time consuming to get to other things.
wow, more highly oversimplifed technical analyisis by one of the many "tyler durden's" that run ZH
...I wish trading was as easy as just knowing to always go long (or short) at a specific time of day, everyday, every week, every year...for the rest of my life
Oh, poor baby. Well, I guess that's the cross you have to bear when you spend your life counting shekels....
I read this on Peak Prosperity this morning.
Banksters have their software programs with infinite fiat at one end and now (since the end of 2011) can set the price anywhere they choose for any markets they are connected to. They also have control of the US gold and Silver reserves. The Morgue has nearly cornered the copper market as well.
It's up to them as to what the price will be.
Precious metals could be worth something during a revolution or when the banksters get removed from power. Until then good luck investing.
Faggot ass chaunceys just selling dead birds to blind kids.
I'm going to just make a countdown with just periods soon. Everything that needs to be said already has.
This means that Gold and Silver will be on sale again tomorrow so I can buy more, right?
It is time to take away one's money from one's bank.
What is the point anyway in keeping money in a bank when you do not get any interest or such little interest that it does not matter?
Imagine if all banks suddenly say you have no access to your ATM or to your account! No access to your own money.
There's no reason to bank your money anymore.
Let the TBTF banks GRF ( Get Royally Fcked) with all deposits gone.
It is the only way to teach them their lesson as the Government refuses to put them behind bars for all the frauds.
The public have it in their hands to do this while they still can.
au contraire. Bankster accounts are needed to wire fiatz to dealerz for more of my preciouses...
So how much more Vatican gold is there to sell?
Anyone would think it's options expiry day soon lol.
Well don't be fooled the bigger players are on both sides of the trade, the house never loses.
Which hedge fund they talking about?
Stockbroker Marcus Padley, author of the Marcus Today newsletter, told PM the commodities sector had possibly been hit by rumours of a US hedge fund ditching assets because it was in trouble.
"One of the stories going around is that there's a commodities hedge fund in the US that has gone belly-up or something like that and is having to liquidate positions in all sorts of commodity-orientated investments, which include, apparently, Australian equities," he said.
http://www.abc.net.au/news/2013-02-21/market-falls-sharply-back-below-50...
In those halcyon days when markets were respected, it was unlawful to manipulate them. Apparently, it's the norm today and it's being done by the criminals in power or their proxy agents in the banking system.
Although the data provided is not conclusive, it sure is persuasive. It looks like manipulation is going on. As the article alludes ...it's only necessary to make the markets appear volatile to discourage many investors (particularly private investors) and that seems to be what's happening.
What's needed is an untraceable information leak from one of the market exchanges which names the perp(s), and for it to be made public.
Yeah only fool people sell gold. When gold is up, the market works, when down is manipulation
I think it's fair to say that most markets are being manipulated to one extent or another. I think 2 things are helping to drive the selloff: 1) All the buying from central banks means someone is selling, and 2) The rising dollar as metals rarely prosper when dollar is up. Couple that with the manipulation and inefficient markets in general due to multiple levels of intervention and you have what we have. As Europe's problems resurface I think Gold/Silver continue lower unless we get an unexpected system shock that will have people scrambling for safe haven. I think 1400 or lower is quite possible. But then as the problems in Europe/Japan contage, Gold/Silver become masive bargains and the price soars as governments try to further corner the market and if/when it gets bads enough it will make holding the physical stuff illegal again. In that case I would suspect silver coins may be the best place to be. But what do I know, I don't have a Nobel Prize, a PhD, and I am not a renowned economist....or even pretend to be one for a leading newspaper.
I am still amazed that anyone is selling Au for pieces of green paper with dead presidents printed on them. In the periodic table of elements, gold is in the transition metals group of which any member contains inherent value for our civilization. Pieces of green paper with dead presidents printed on them belong to the group that includes toilet and tissue paper, cardboard, paper cups, christmas wrapping paper, etc. which are all nice but contain little or no inherent value. What group do you want to park your surplus capital in?
: "Who is doing this selling at the market open?"
Investors are dumping gold because the world is in a currency war, and they can make a fortune trading curriencies, rather than sitting on paper and physical gold. They sell gold on Monday because gold is at its highest at the closing of the previous Friday.
Without knowing the specific players involved in the slamdowns that are so consistently and easily recognizable, I hadn't thought (and am still doubtful) that they are a criminal conspiracy to manipulate.
It has looked to me like this is a conspiracy of incompetence and negligence: institutional investors unconcerned with the optimal means of disposing of large amounts of the commodities place sell-on-the-open orders into a market that doesn't have the buyers to absorb the volume all at once.
The Chart That Tells You All You Need To Know About Gold
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/2/20_Th...
Have fun..
:p
from your archive
http://www.zerohedge.com/news/overnight-longintraday-short-gold-fund-more-doubles-just-over-year-generates-43-annualized-retu
As the chart above shows, the performance is dismal. For example a hypothetical gold investment fund starting with $100m in 2001, and using it to buy gold at the AM fix and sell it at the PM fix would now be left with just $31 million, almost a 70% loss in just under ten years. Over the same time period gold prices have risen over 590%.
From this we can infer that in fact it was possible to make money shorting gold everyday for the last decade or so. If a hedge fund or even an individual trader were to have sold gold at the AM fix and covered that short position at the PM fix, for each day of this terrific bull market run in gold, that fund would have almost tripled their starting capital.
This appears to be a remarkable result, as one would presume that shorting gold everyday during a period where the yellow metal has risen 590% would have devastated any portfolio, not caused a 178.7% increase. Those who do not believe in theories of gold price suppression, often cite the fact that gold prices are at an all time high as a major piece of evidence to discredit any suggestions of price suppression. After all how can the price be being suppressed if prices are sky rocketing?
Well the answer to that question is that if the gold traders at the large banks accused of such manipulation are just trading during the intraday market between the AM to PM fix, they may not be too concerned about how gold trades overnight (provided they are not holding positions overnight of course). What matters is how gold trades during this intraday period, and if more often than not gold is falling during this time, and more often than not the banks are short gold during this period, then they are making money regardless of the overnight price action.
It would appear that subtle manipulation is more likely that blatant price suppression.
So the question on the mind of many gold bulls might be; how do I remove this downward manipulation during the intraday period? Even if I do not believe in manipulation, suppression or any other conspiracy theories, how do I eliminate this statistical fact that gold is underperforming during the intraday period?
The answer is to buy gold at the PM fix and sell it the following day at the AM fix, or more simply put, just be long gold overnight.
The graph above shows how rewarding this strategy would have been, with a return of 1797% in eleven years, a return 3.2 times greater than the 590% that would have been made simply buying gold in 2001 holding until now. With many investors and traders looking for the best way to lever their gold returns, from pouring over drill results to identify the best gold stocks to experimenting with leveraged gold ETFs and ETNs, a more simple solution could be simply to only have long exposure to gold overnight.
For the more cavalier traders, going long gold overnight and then short gold for the intraday period, makes for an even more profitable strategy.