What Happened The Last Time We Saw Gold Drop Like This?

Tyler Durden's picture




 

The rapidity of gold's drop is impressive, concerning, and disorderly. We have seen two other such instances of disorderly 'hurried' selling in the last five years. In July 2008, gold quickly dropped 21% - seemingly pre-empting the Lehman debacle and the collapse of the western banking system. In September 2011, gold fell 20% in a short period - as Europe's risks exploded and stocks slumped prompting a globally co-ordinated central bank intervention the likes of which we have not seen before. Given the almost-record-breaking drop in gold in the last few days, we wonder what is coming?

 

 

This is what it looked like in Q3 2008...

 

and in 2011...

 

and now...

 

 

and it seems safety is bid dramatically elsewhere as 2Y Swiss rates plunge 4bps to -7bps - their lowest in 4 months...

Charts: Bloomberg

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Mon, 04/15/2013 - 12:01 | 3450464 Abraxas
Abraxas's picture

If it goes much lower they'll be paying me to take it.

Mon, 04/15/2013 - 12:05 | 3450497 insanelysane
insanelysane's picture

Guy on CNBS just said "Don't buy the dip in gold"

These fuckers are always saying buy the dip on everything.

Mon, 04/15/2013 - 12:09 | 3450521 francis_sawyer
francis_sawyer's picture

What's next?... BAZOOKAS...

~~~

They have to clear out all the inventory from every dealer on the planet before they announce that QE is going to $200 billion a month & people decide to finally cash in their 401k's... They can't have that happening before they confiscate it all...

Mon, 04/15/2013 - 12:10 | 3450553 Xibalba
Xibalba's picture

banana republic wins!

Mon, 04/15/2013 - 12:14 | 3450576 cifo
cifo's picture

ZH is eerily quiet for such an interesting day.

Stunned?

Mon, 04/15/2013 - 12:15 | 3450587 Precious
Precious's picture

Wait.  

You mean the free market is sending the economists at the Central Banks a message?

Who would have guessed.

Mon, 04/15/2013 - 12:32 | 3450722 draug
draug's picture

Every other indicator posted on ZH points to a big coming drop in the S&P 500. Credit, macro data, now gold. So in other words .. BULLISH!

Mon, 04/15/2013 - 12:34 | 3450742 Cangaroo.TNT
Cangaroo.TNT's picture

JCP is up!  JCP is up?

Mon, 04/15/2013 - 13:33 | 3451085 johnQpublic
johnQpublic's picture

whats coming?

why a buy the fucking dip opportunity of course!

 

remember, all that glitters is not gold!

theres silver and platinum too!

but seriously, i think they will quickly double,triple, or quadruple the QE as needed to fuel the (sarc) recovery

Mon, 04/15/2013 - 13:43 | 3451151 JohnnyBriefcase
JohnnyBriefcase's picture

Looks like they really don't want silver over $23.

Mon, 04/15/2013 - 14:07 | 3451350 strannick
strannick's picture

What a coincidence, as a buyer of the most established anti-centralbank currency in history, I also would like an opportunity to buy silver under $23. I have more in common with the fascist bankster cabal than I thought.

Mon, 04/15/2013 - 15:47 | 3452091 The Juggernaut
The Juggernaut's picture

Add the Boston Marathon to that.

Mon, 04/15/2013 - 16:53 | 3452619 Joe Sixpack
Joe Sixpack's picture

Don't forget palladium (though not quite as glittery).

Mon, 04/15/2013 - 12:46 | 3450800 akarc
akarc's picture

Everything works until it doesn't. This time is not different from any other time historically. Gold and Oil (barring sudden missle launches) first then stocks. Gravity affects all things my friends. Even Bernanke can't stop it unless he decides to buy China.    

Mon, 04/15/2013 - 12:38 | 3450761 malikai
malikai's picture

The market is not free.

Mon, 04/15/2013 - 13:06 | 3450905 Precious
Precious's picture

The gold market is about as free as they get.

Mon, 04/15/2013 - 15:31 | 3451974 whotookmyalias
whotookmyalias's picture

.....and it is not "efficient" either.  Those lies have been uncovered.

Mon, 04/15/2013 - 12:16 | 3450591 Stackers
Stackers's picture

mini-black swans are popping off left and right. Be prepared this year guys

Mon, 04/15/2013 - 12:23 | 3450641 justinius1969
justinius1969's picture

Agreed...

Circa 1000.. then back up your amoured truck.. why don't  you gold bugs trade this?  what have you got to loose buying selling paper..

Mon, 04/15/2013 - 12:33 | 3450733 unwashedmass
unwashedmass's picture

 

i'm buying. 

Mon, 04/15/2013 - 12:39 | 3450766 Bastiat
Bastiat's picture

Ummmm, let's see . . .  everything in your account?

Mon, 04/15/2013 - 13:38 | 3451122 Urban Redneck
Urban Redneck's picture

I'm holding off 48hrs and then deciding to either commit more then, or wait for a possible better re-entry later.  But at this point concentration risk is also an issue.  

Mon, 04/15/2013 - 14:03 | 3451312 Dixie Rect
Dixie Rect's picture

*lose, not loose

Mon, 04/15/2013 - 12:43 | 3450782 LibertarianX
LibertarianX's picture

down at the gold market and it's mobbed

 

Mon, 04/15/2013 - 13:08 | 3450916 KRUZER
KRUZER's picture

,,,,,,,,,,YA!!!!!!!!!!!

Mon, 04/15/2013 - 14:08 | 3451347 Smiley
Smiley's picture

Much of the "chatter base" is busy implementing contingency plans this dip may have triggered.

Mon, 04/15/2013 - 13:10 | 3450577 Precious
Precious's picture

Watch this video on how to make a fortune flipping gold coins.

Mon, 04/15/2013 - 12:18 | 3450607 francis_sawyer
francis_sawyer's picture

Everyone around here worries about gold being confiscated... It's the 401k's that are the low hanging fruit in the equation [especially with Obamacare coming online]...

~~~

Cyprus was the template to see how easy it could be done... Not a single shot fired... Just a lot of "baaaaaaaaaaaaaaaaa"... 401k's to be DieselBOOMed in 5..4..3..2.. [but not before there's no inventory of PM's to be found in bulk, anywhere]... & bitcoins?... Ha! Go ahead & ride that bucking bronco... Not a lot of 401k tortoises around that are interested in that ride...

"Look honey, I can buy the Harley Cruiser today... Oh wait honey, better start clipping coupons..."

Mon, 04/15/2013 - 12:30 | 3450711 Dudeskis
Dudeskis's picture

The US pols might think like Euros but the US pop doesn't. Well, maybe many of us can identify with a 1789 Frenchman.

Mon, 04/15/2013 - 13:16 | 3450936 francis_sawyer
francis_sawyer's picture

As predicted ^^^^ the casual drive-by by 'Bitcoin Von Junkenheimer'...

~~~

Anyway ~ I stick to my theory [vis-a-vis 401k's]... She didn't marry you so you could blow it all in one day... She married you so SHE could blow it all in one day... [Or ~ at minimum, was playing the odds that YOU'D fuck up or die first]... So if you're not divorced or dead ~ u ain't buyin no bitcoins with no 401k...

 

Mon, 04/15/2013 - 12:11 | 3450555 James_Cole
James_Cole's picture

Market crash before fall seemed unlikely but now who knows.

Mon, 04/15/2013 - 12:13 | 3450566 catacl1sm
catacl1sm's picture

"Tanks in the streets"

Mon, 04/15/2013 - 12:40 | 3450769 Bastiat
Bastiat's picture

DHS didn't buy all that stuff for nothing.

Mon, 04/15/2013 - 13:56 | 3451272 JeffB
JeffB's picture

I thought the tanks were supposed to precede the "blood in the streets".

Mon, 04/15/2013 - 12:08 | 3450526 Spider
Spider's picture

Silver drop isnt sustainable - it costs $23 and change to mine each ounce.  Like both gold and silver, but silver MUCH MUCH more here...

http://seekingalpha.com/article/1303691-the-true-cost-to-mine-silver-complete-2012-figures

Mon, 04/15/2013 - 12:22 | 3450629 Temporis
Temporis's picture

I hope the shit drops to $5.00 an oz.

I would LOVE to buy a monster box one of these days...The more it drops, the more I can buy.

 

You only LOSE when you SELL, and most people who buy physical are in it for the long haul and NOT daily traiders.

Mon, 04/15/2013 - 12:34 | 3450732 fourchan
fourchan's picture

ill take all the monster boxes they dont want too lol

gold is a "dooms day for paper" investment, its not a trading vehicle but a fundamental trade more like the finite number of years you have to live. a fixed value for exchange with the most valuable thing any of us has, the time we have on earth.a paper system that is debased daily is a poor exchange for that value and is fundamentally evil because of its intent of robbing you silently of that which you have given your life for. the day to day swings of this evil enslaver, debt note, has nothing to do with the reason for holding gold or people too brainwashed to recognize what true value actually is. gold stands on its own, it is free, like americans were.

Mon, 04/15/2013 - 14:04 | 3451325 RockyRacoon
RockyRacoon's picture

Git ya one o' these.  I got some for the "loose" coins that didn't go down in the last boating excursion.

Empty Green Monster Box For Silver Eagle Coin Storage With Tubes

Free shipping!

Mon, 04/15/2013 - 12:24 | 3450648 Arttrader
Arttrader's picture

Here's my take.  First, adjust those mining prices to reflect a lower oil price. Then ask yourself "How much does it cost to recycle sterling scrap from the hoarders' treasure chests?" I've sold plenty to people like this on ebay, there will be another week for turnaround on retail and peer to peer selling and another week for small operators in the know to ship to places like midwestrefineries.com.  Fear is going to put piles of the physical on the market that we haven't seen since getting close to $50/ounce and they can't get ship it there fast enough. And don't count on industrial demand from Chinese electronics to make up for the flood of supply.

Mon, 04/15/2013 - 12:38 | 3450714 James_Cole
James_Cole's picture

Yep you are correct. Unfortunately, most on here won't see it. 

I would also add that overall mine production costs are very much inflated by low grade silver exclusive operations coming online in the past few years due to higher spot prices.

Mon, 04/15/2013 - 12:44 | 3450787 Bastiat
Bastiat's picture

. . . and on the supply side, don't count on increases in the silver produced as a by product of base metals, esp. copper as the world economy swirls the bowl.

Mon, 04/15/2013 - 12:26 | 3450676 ncdirtdigger
ncdirtdigger's picture

Why would a miner, one that sold foward all his mines production (at $40+-) ,give a chit what it costs to mine silver? He has his money already all he has to do now is produce it.  

Mon, 04/15/2013 - 15:42 | 3452064 gun4A
gun4A's picture

It will be cheaper for miner to buy than to produce 

Mon, 04/15/2013 - 12:29 | 3450692 Bob Sacamano
Bob Sacamano's picture

Fortunately or unfortunately, the cost to mine silver will likely have no impact on the price of silver in 2013 or 2014.  Eventually cost of production becomes a material factor to the current price, but it can take years.   Looking for $18-20 this year for next buying opportunity in size.  And will have powder for additional buys below that level.  

Mon, 04/15/2013 - 12:51 | 3450816 akarc
akarc's picture

"Silver drop isnt sustainable"

Your assuming demand is.

Mon, 04/15/2013 - 12:36 | 3450609 Anasteus
Anasteus's picture

He really said that?

But it's understandable. If significant more people started buying now the today's farce would go bust together with the whole physical market in days. They are still being scared of the possible output... and no wonder.

We can be expecting additional tide of massive brainwashing from the united pundits of the world these days. Fasten your seat belts.

The only problem is that the Easterners don't buy it and will all be happy to piling up at even steeper pace.

Mon, 04/15/2013 - 12:27 | 3450678 natronic
natronic's picture

Right but they are stocks and bonds people.  CNBC will ALWAYS tell you not to buy gold.  They might mention ETF's or Stocks but they won't tell you to buy the phyzzz.

Mon, 04/15/2013 - 12:36 | 3450746 fourchan
fourchan's picture

because buffet tells them everything they need to hear.

Mon, 04/15/2013 - 12:33 | 3450719 michigan independant
michigan independant's picture

Also they said - wait for it - as a cautionary tale since if you have to ask your not paying attention. When they have to sell to cover equity calls also yes indeed pick some up then since the end is near in a few days for that book.

Mon, 04/15/2013 - 12:35 | 3450749 Silver Bug
Silver Bug's picture

Wow something big is clearly coming. I'll be stocking up on physical gold and silver on these huge discounts. I'm buying big!

 

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