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Guest Post: Gold Crash: What It's Not Telling Us

Tyler Durden's picture


Submitted by Lance Roberts of Street Talk Live,


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Tue, 04/16/2013 - 15:11 | 3457522 billsykes
billsykes's picture

Love how these charts came out after the price dropped, not before. Way to guru. 


Find anywhere he says sell gold:

from aug 2011:

Tue, 04/16/2013 - 15:12 | 3457554 Divided States ...
Divided States of America's picture

Why do we need Larry FUCKIN DINK Fink to say markets are cheap and keep buying...and effin Fed J-bitch Yellen says they on stand by to do more to ensure market operates normally and maintain stability...When was the markets going up every fuckin day NORMAL, thats not fuckin normal....

Yup Gold/Silver goes down 20% and soon to be going down red today also..while fuckin markets rebound after one big down day...everyone forgot that there was a bomb yesterday.

Tue, 04/16/2013 - 15:14 | 3457562 Ahmeexnal
Ahmeexnal's picture

Seems like the great market crash between april 21-april 25 is right on schedule.

Tue, 04/16/2013 - 15:19 | 3457591 ZerOhead
ZerOhead's picture

"Therefore, if you currently OWN gold I would recommend you begin taking some profits..."

I recommend that if you currently own GLD I you should begin to switch to GOLD...

Tue, 04/16/2013 - 15:32 | 3457595 Pinto Currency
Pinto Currency's picture


This article would be important if the prices on which the commentary was based reflected actual physical market demand vs supply.

For more than 6 weeks leading up to the price crash over the last couple of days, both the LBMA and Shanghai Gold Exchange were seeing 12 to 20 tonnes per day allocated for delivery.  And the spot/cash price was in backwardation vs. the near futures month for weeks on end for gold and silver.  So that crashes the price and causes the uniformed to puke up their physical holdings.

That is how manipulated markets work but not how price discovery markets work.  We know that manipulation and government intervention will always fail.

With the current price control activity, we now hear about severe physical silver market shortage and gold delivery allocation issues on the LBMA.

It's not about the price chart.

Tue, 04/16/2013 - 15:39 | 3457685 Joe Sixpack
Joe Sixpack's picture

See yesterday's inventory of 100 ozt. silver bars on APMEX graphically. People sure took advantage of the sale!

Tue, 04/16/2013 - 17:29 | 3458223 UnpatrioticHoarder
UnpatrioticHoarder's picture

The COMEX open interest for gold and silver barely shifted on Monday amidst the price carnage. There is neglible capitulation by longs, the price move is a contrived raid by short-sellers.

Tue, 04/16/2013 - 17:41 | 3458264 kill switch
kill switch's picture

I posted this today,,, there is plenty of silver...HAHA


Scroll down


Paper and phys are taking a different fork in the road,,,, ETF's Down the sink, see ya fellas!!!

Tue, 04/16/2013 - 16:08 | 3457890 trader1
trader1's picture

sorry, can't vote you up.



Tue, 04/16/2013 - 15:38 | 3457691 cifo
cifo's picture

I am guessing that Lance Roberts made a lot of money by shorting gold.

Tue, 04/16/2013 - 16:38 | 3458021 Bananamerican
Bananamerican's picture


--Love Handles on a "softened Global economy"?

Tue, 04/16/2013 - 15:43 | 3457567 New England Patriot
New England Patriot's picture

"The "gold bugs" are yelling that it is a conspiracy theory by the Fed"


This statement implies gold bugs are yelling the crash is a conspiracy theory authored by the Fed.



Tue, 04/16/2013 - 17:26 | 3458204 cynicalskeptic
cynicalskeptic's picture

Summers wrote a paper in the 80's on the correlation of hjigher gold prices to higher interest rates paid on T-Bills.  Gold is the canary in the fiscal coal mine.  Hiogher gold prices, risong rappidly scream that there are fundamental problems with a nation's financial affairs.  Volcker said hsi one regret in dealing with the 80's financial crisis was 'NOT SUPPRESSING THE PRICE OF GOLD" - a lseeon his successors learned well.

The history of gold price manipulation and suppression by central banks as part of currency control efforts is well documented.  LInks to bullion banks are evident and documented. Government 'intervention' in gold markets to help out bullion banks in trouble have also occurred.  "Brown's bottom' being the most blatant.   Gold has been flying out of London and COMEX, silver stocks are low - the world financial system is continuing its never-ending 'print' cycle with Japan being the latest to go into overdrive.....   gold was on the way up, demand was growing and those selling had problems ....

Both the bullion banks and central banks had very good reasons to smash down the price of golds - though short term 'fixes' only worsen the long term problems.

Tue, 04/16/2013 - 17:31 | 3458222 akak
akak's picture

His mistake is understandable and obvious, as the kneejerk conformist/'mainstream' analyst and man on the street is automatically programmed to equate "conspiracy" with "conspiracy theory".  In THEIR theory (which is wildly naive and historically clueless), there is no such thing in the real world as an actual conspiracy, so therefore all such accusations or implied actions are simply ipso facto "theories", to be ridiculed and dismissed out of hand.

Tue, 04/16/2013 - 15:16 | 3457574 razorthin
razorthin's picture

He's warning you about equities.  File it.

Tue, 04/16/2013 - 15:19 | 3457589 Stoploss
Stoploss's picture

Here, let me ass   ist with this.


Look at all commodities, then look at the 10 / 30 Yr.

Commodity drops of this nature always presage market declines, since in a world of CB largesse, commodities are hedges most of the time.

Any questions?

Tue, 04/16/2013 - 15:27 | 3457638 Anasteus
Anasteus's picture

The dude forgot to write that all this charting game refers to the paper gold market. If he even were right there is no connection to the physical market, which is evolving quite differently. If he had compared recent physical market fundamentals and, particularly the recent volume of buys, he wouldn’t have found any "reversion to the mean"... which, as regards the physical gold market, makes the analysis irrelevant.

Tue, 04/16/2013 - 16:40 | 3458047 Spitzer
Spitzer's picture



All this talk about COMEX, silver, GLD, manipulation is all noise to me. Even I have been caught up in this.

Why should anyone care what is going on in any gold market, paper or physical until something happens in the US and Japanese 33 year bubble bull markets ?

I still maintain as I said 2 years ago, that the onset of freegold happens when there is selling/trouble in the BOND markets mainly in the US and Japan.

$1000 dollar gold, $2000 gold , what is the difference ? Who cares ? I have paid close to both. As long as BOND prices keep rising and the FED can do no wrong, nothing matters. As long as BONDS are the premier store of value for shrimps and giants alike, long or short term, nothing matters.

Nothing matters in GLD, nothing matters at the coin dealers, nothing matters at the bullion banks, nothing matters at King World News et al.

This is like being in late 60's and early 70's yaking about the price of gold as it bounces between $35 and $60. It didn't matter if you bought at $35 or $80 then until there was trouble in the BOND market and it doesn't matter now as it bounces between $1000 and $2000 now.

Tue, 04/16/2013 - 17:30 | 3458227 cynicalskeptic
cynicalskeptic's picture

so... you really think the bond market is without problems?      The bit players are already defaulting while the majors are scrambling to keep the ponzi scheme going - opnly who's left to buy all the bonds vbeiong issued.  With the Fed buyong MORE than wnhatTreasury issued in 2011, seems to me that we're running out of time in this game of musical chairs.   What do you want to be holding when the music stops?          besides 12ga 00,, 9mm  and Nato standard that is.............

Wed, 04/17/2013 - 10:49 | 3459843 Anasteus
Anasteus's picture

Right, just a brief remark. Unfortunately, there is a difference between $1000 and $2000. You can buy two times more gold for $1000 than for $2000.

Tue, 04/16/2013 - 15:08 | 3457534 Essential Intel...
Essential Intelligence's picture

The recent looting of Cyprus was the pivotal event that triggered the great flight from European banks who can no longer be considered safe, since money stored there could now be confiscated by the troika - but the same logic also applies to gold (at least at this point in time), hence the present flow of money from Europe to the US, temporarily boosting the USD, which was the goal of this recent manipulation to begin with.  Details in our fresh report.

Tue, 04/16/2013 - 15:28 | 3457640 FieldingMellish
FieldingMellish's picture

Interesting theory except since Cyprus, the USD has been falling...

Tue, 04/16/2013 - 16:40 | 3458049 Spitzer
Spitzer's picture


This could be how the bond bubble gets pricked. (because that is all that matters anyway)

Creditor nations buy gold with dollars (bonds) from debtor Euro nations, and then the debtor nations spend the dollars they receive. Not only does this put gold in strong hands, it also puts bonds in weak hands because the Euro nations are not going to buy hold the bonds like the creditor nations did. They are going to use the proceeds to fund their their needs.

How can the US government spend the money they get from bond sales while another government in Europe spends it at the same time ?

Tue, 04/16/2013 - 19:01 | 3458506 FieldingMellish
FieldingMellish's picture

And imagine how fast the dash to the exit will be when the deficit grows as the rates start climbing and yet more junk needs to be printed to pay off the old junk. Rates will be kept as low as possible and the Fed will keep buying bonds until the last possible second... then KABOOM!

Tue, 04/16/2013 - 15:08 | 3457536 Gene Parmesan
Gene Parmesan's picture

"In a one word answer…Are you kidding me"


Tue, 04/16/2013 - 15:09 | 3457539 algol_dog
algol_dog's picture

Short UGLD since Friday .... I am so happy. Thanks Suckers!

Tue, 04/16/2013 - 16:39 | 3458044 auric1234
auric1234's picture

You suck at being a troll. Any sane person around here would be fine with shorting the worthless paper.


Tue, 04/16/2013 - 17:03 | 3458136 Watts_D_Matter
Watts_D_Matter's picture

Hey OddLot Dog, Did you short 3 shares like you usually do?

Tue, 04/16/2013 - 15:10 | 3457550 kw2012
kw2012's picture

I have to laugh at those calling for $800 gold when it costs $1200 to produce. Can the US artificially push gold lower? Probably  by selling gold it doesn't have. But how long can the US keep this up? 3 years?

Tue, 04/16/2013 - 15:15 | 3457575 uhb
uhb's picture

Source please!

Tue, 04/16/2013 - 15:22 | 3457615 aleph0
aleph0's picture

And Kitco as 2nd source as well ..

Too lazy to do your own DD ?

Tue, 04/16/2013 - 16:27 | 3457980 ParkAveFlasher
ParkAveFlasher's picture

At these prices, I expect more seismic activity, avalanches, landslides, cave-ins, floods, diseases, rainstorms, storm surges, frog plagues, and bad clams in the mining industry.

The shutdowns will continue until the prices improve.  It's Thugs vs. Galt time!!!

Tue, 04/16/2013 - 15:22 | 3457606 chubbar
chubbar's picture

From Harvey Organ's report

  1. "At the comex, the open interest in silver fell slightly to 163,331 contracts despite the massive raid on Friday. The open interest on the gold contract surprisingly rose by 13,864 contracts to 430,029. So much for gold and silver liquidation. The total amount of gold ounces standing for April rose to 34.199 tonnes and silver also had an increase to 3.145 million oz standing.

    If the OI for silver remains elevated again tomorrow despite the huge loss in price today, one must believe that only a sovereign (maybe China) could withstand that much pain. The price of silver has declined from $35.00 to $ 23.00 with open interest rising. The loss has to be gigantic and only a sovereign could be that stoic."
Tue, 04/16/2013 - 15:31 | 3457650 draug
draug's picture

Cost of production (ie. mining) is irrelevant, gold isn't a consumable. Existing gold doesn't disappear if mines go away.

Tue, 04/16/2013 - 16:35 | 3458024 sessinpo
sessinpo's picture

I see. Cost don't make a difference like deficits, right?


We'll just have to disagree on that one.

Tue, 04/16/2013 - 16:43 | 3458055 auric1234
auric1234's picture

Most existing gold is not for sale at any FIAT price.


Tue, 04/16/2013 - 19:58 | 3458733 Imminent Crucible
Imminent Crucible's picture

Only an ignorant blockhead would down-arrow you for that. Who does not realize that the VAST majority of gold stocks is simply not on the market? Not in the registered category, not in the available category--it's simply not for sale for paper money.

Tue, 04/16/2013 - 16:49 | 3458083 Kirk2NCC1701
Kirk2NCC1701's picture

"Irrelevant"?  "Isn't consumable"?  What star cluster do you come from?  Aah, a Ferengi.  Of course.

It is relevant to real demand.  Whether that demand comes from CB's, industry (for consumption!), jewelry or hoarders/stackers.

e.g. I just 'demanded' that my PM provider convert my Unallocated Pool Account holdings into my Allocated Bullion Account.   I can now visit it or take it out.  If someone else wants my non-hypothecated PM, they'll just have to get someone else's -- while they can -- or get more from the miners (via minters).

Tue, 04/16/2013 - 17:35 | 3458246 Fedaykinx
Fedaykinx's picture

<insert obvious comment about silver>

Tue, 04/16/2013 - 15:12 | 3457556 terryfuckwit
terryfuckwit's picture

silver gold and and bitcoin bitchez

Tue, 04/16/2013 - 15:14 | 3457569 uhb
uhb's picture

At the current level, i would be very careful being long bitcoins. wait for the end of the correction.

Tue, 04/16/2013 - 15:20 | 3457594 The Abstraction...
The Abstraction of Justice's picture

I did see the bottom today in Bitcoin, and it does have a history of bouncing back...and collapsing again. Still if you want to gamble, probably a bit safer than the average one armed bandit.

Tue, 04/16/2013 - 15:19 | 3457599 The Abstraction...
The Abstraction of Justice's picture

Well it did bounce back for about 2 hours.

Tue, 04/16/2013 - 15:33 | 3457658 draug
draug's picture

Yeah I'd like me some of those bitcoin bitchez.

Tue, 04/16/2013 - 15:13 | 3457559 uhb
uhb's picture

Well Done Mr Roberts!

Despite the correct comment of billsykes. If Roberts knew price movements before, he wouldn't be writing.

Knowing where there market will be in 5 minutes took me more than 8 years. Knowing where there market will be in 5 months is extremely difficult... nobody knows for sure.

Tue, 04/16/2013 - 15:14 | 3457560 Yen Cross
Yen Cross's picture

   The metals are being" BIG TIME", manipulated. The dollar sells off and the metals continue to sell off? WTF?

Tue, 04/16/2013 - 15:13 | 3457564 PontifexMaximus
PontifexMaximus's picture

Nice charts, big rubbish, move on.

Tue, 04/16/2013 - 17:33 | 3458236 cynicalskeptic
cynicalskeptic's picture

It takes a hell of a lot of effort and $$ for TPTB to paint those charts.......    it's not easy manipulating maerkets to create the patterns so sought by the chartists.  It's easy to bang closes now and then but th paint long term chartts - that'takes skill.

Tue, 04/16/2013 - 15:13 | 3457565 urbanelf
urbanelf's picture

Why 34 weeks?  What's magical about that time frame?

Tue, 04/16/2013 - 15:15 | 3457566 razorthin
razorthin's picture

In the meantime - the real concern for investors should not be the fall of gold - but the overall stock market.


Tue, 04/16/2013 - 15:17 | 3457582 aleph0
aleph0's picture



Not one word about Mining Costs .- $1100 - $1200 / Oz. all lín costs - according to Hinde Capital and Kitco IIRC.

Miners were  barely making profts on a $1600 Gold Oz.

Tue, 04/16/2013 - 15:19 | 3457588 The Abstraction...
The Abstraction of Justice's picture

'both arguments, while great for headlines, are wrong.'


Package the lie in a half truth and then wave it away dismissively. Think we cannot see through that old trick?

Tue, 04/16/2013 - 15:19 | 3457590 strannick
strannick's picture

This Twat leaves out how in Aug 2011 we had waterfall margin increases and how on Friday we had a 500 ton paper gold sale while Londons LBMA was unexpectedly closed for physical delivery. Conspiracy fact, not theory you stupid cunt

Tue, 04/16/2013 - 15:23 | 3457613 billsykes
billsykes's picture

+1 for uncensored foul language. 

Tue, 04/16/2013 - 15:51 | 3457776 Oldballplayer
Oldballplayer's picture

Women hate that word.  Thats why I use it.

Tue, 04/16/2013 - 16:05 | 3457866 gmrpeabody
gmrpeabody's picture

He did capitalize it...

Tue, 04/16/2013 - 17:36 | 3458244 akak
akak's picture

And yet the ax wounds have no problem slinging around the words "prick" and "cock" with casual disregard.

Tue, 04/16/2013 - 18:09 | 3458343 gtb
gtb's picture

ax wounds...I'm 55 and this was the first time I've heard that...and I thought I'd heard 'em all.  Well done.  With your permission I too will use the term. 

Tue, 04/16/2013 - 19:43 | 3458673 Imminent Crucible
Imminent Crucible's picture

"ax wounds"---Whoa, dude! That's semantic overkill and then some.

After all, even Shakespeare used "prick" and a lot of other words that today would only be used by, uh, by someone in a Robert de Niro mobster movie.

How did we get onto swearology?

Tue, 04/16/2013 - 15:21 | 3457600 realtick
realtick's picture

nice charts

Tue, 04/16/2013 - 15:22 | 3457609 Uncle Remus
Uncle Remus's picture

Cheap physical gold is a problem because...?

Tue, 04/16/2013 - 15:21 | 3457610 billsykes
billsykes's picture

Duh, its been 5 yrs back to another ression/depression thing again.

But if it does or doesn't happen I would say put your wealth building in something with your own hands, not clicking the buy or sell button on your trading account. build something (business, aprtment building, fish farm) or buy something and sell it for more (opium, slaves, etc)

Don't listen to these 2 and 20 guys looking to position themselves as gods of investments- they are cheap salesmen nothing more. Bet his audited returns mimic govt bonds at best over the last decade, otherwise he would not be trolling for punters writing his own shit. 


Tue, 04/16/2013 - 15:26 | 3457630 10PastMidnight
10PastMidnight's picture

was that opium or hopium? slaves pay to be slaves these days, no need to purchase them, they're called Amerikan citizens. in any case i agree.

Tue, 04/16/2013 - 15:36 | 3457677 billsykes
billsykes's picture

interchangeable with Hopium (like the author of the article), or the real thing.

Slaves- could be real, tons of this still don't even have to leave america, could be just or assuming student loan debt for mandatory employment traditionally called apprenticeship. If you have a kind heart, you could assume their student debt and just employ them as apprentices to build you a multifamily structure to house them and then have them work off this old debt and then the new one they got into when they are living in your apartment building, they could supervise the building of a new complex for the new slaves you bought at auction. The unfit ones can be sold for parts and the debt extracted from their offspring. 


Tue, 04/16/2013 - 20:07 | 3458777 Forty Six and 2
Forty Six and 2's picture

The Real Thing -

Tue, 04/16/2013 - 15:28 | 3457639 Watts_D_Matter
Watts_D_Matter's picture

Lance, you are contradicting yourself a did tell a TV audience within the past 6 months that you believe investors should own gold...and here is the video clip to prove it....starts around the 9 min mark...AND you said to buy the gold ETF!  I did not hear you say....Gold peaked and you should get out....


Nothing like driving while looking in the rear view mirror ay Lance?

Tue, 04/16/2013 - 16:32 | 3458003 Rubicon
Rubicon's picture

Ding Dong!

Tue, 04/16/2013 - 15:32 | 3457657 gwar5
gwar5's picture

Yeah... so fuck this guy and his Monday morning quarterbacking with those old charts and comparisons. This ain't yo momma's 1984. Everything is controlled now. Even the bigshot mainstream people are admitting it now.  We are living in Western countries that are staggering around like the old Soviet Union and Ottoman Empires did right before they collapsed and fell apart.


The little people who survived and prospered were/are always the ones who know what is going on and acquire assets that can be universally accepted and useful. Gold is always at the top of the list in uncertain times.

Tue, 04/16/2013 - 15:35 | 3457664 lunaticfringe
lunaticfringe's picture

I hate pieces that start off with an "I told you so" meme.

There are only two reasons for that. A big ego (1) that thinks it gains credibility (2) if it can convince you that it is some type of Gold Nostradamus. 

Reversion to the mean. Hardly rocket science. You are a master of the obvious.

Tue, 04/16/2013 - 15:36 | 3457679 Stuck on Zero
Stuck on Zero's picture

If your neighboring supermarket offered Coke at 20% off people would flock to buy it.  We should think of gold the same way.  It's now on sale.


Tue, 04/16/2013 - 15:39 | 3457697 Bearwagon
Bearwagon's picture

Except the fact, that you would get your coke physical, no matter what.

Tue, 04/16/2013 - 16:47 | 3458072 auric1234
auric1234's picture

Failing that, you'd settle for diet coke.


Tue, 04/16/2013 - 15:57 | 3457820 DebtSlaveZombie
DebtSlaveZombie's picture

Not if overall market sentiment was to start drinking water due to the price of coke.  Thats the problem.  No one wants to buy when they think they can get it cheaper.  And when anything free falls like gold/silver have, you have outsiders waiting until capitulation.  We havent reached capitulation yet.  That hits at 1150.  It will be a slow bleed until then.  You'll know when we have hit the capitulation phase....because the DOW/S&P will be part of it.  Then, gold/silver will start going up again during the equity market sell-off.  At 950 an ounce it will be a great buy.  But not until then.

Tue, 04/16/2013 - 16:02 | 3457848 BanjoDoug
BanjoDoug's picture

There are several examples from HK & India where the paper price & physical "delivery" price are spreading far apart.   Today the paper price really means nothing.    It is just the manipulated price that never has to delivery on the physical.

Tue, 04/16/2013 - 17:43 | 3458269 Fedaykinx
Fedaykinx's picture

shit you ain't got to go to india to see that.

Tue, 04/16/2013 - 19:47 | 3458687 Trampy
Trampy's picture

sure it's on sale, but mebbe the sale could intensify. 

some are waiting for it to get even cheaper.  It's easier to pick a bottom than a top because prices hardly ever stay below cost of production.

when silver was at $27/ozt i found a nice kilo bar for $900, didn't buy it, and now they're hard to find unless you know someone.

Tue, 04/16/2013 - 15:37 | 3457683 The Abstraction...
The Abstraction of Justice's picture

I think the likes of G.Celente are wrong for being dismissive of 'Conspiracy Theories' as if somehow the opposite of theory is fact. Well, I prefer to side with the likes of Newton and Gallileo rather than the Papal cosmology that was edicted 'fact' at the time. Theory has no pretences that is nothing more than structured guess work. If structured guess work is good enough to create the field of molecular biology, it is good enough for me.

Tue, 04/16/2013 - 15:43 | 3457694 johny2
johny2's picture

this is the tuesday humour? The markets have fuck all to do with the charts, and even less to do with the real world. What we have seen last few days is the giveaway sales, and I am sure russian and chinese version of "thank you" are being said as the physical stocks are bought ( and silver will run out much sooner )

Tue, 04/16/2013 - 15:58 | 3457818 Anasteus
Anasteus's picture

We have charts and they have gold.

Tue, 04/16/2013 - 16:09 | 3457902 johny2
johny2's picture

it makes sense that people like Bernanke who have spend all their lives pushing paper around the offices would appreciate paper most. or digital version, as that requires even less movement.

Tue, 04/16/2013 - 15:45 | 3457727 Billy Shears
Billy Shears's picture

Can the markets be telling us something and manipulated at the same time?

Tue, 04/16/2013 - 19:39 | 3458654 Trampy
Trampy's picture

"The medium is the message."

Tue, 04/16/2013 - 15:53 | 3457779 KansasCrude
KansasCrude's picture

"With earnings season in full swing my suspicion is that even with earnings hurdles moved substantially lower in recent weeks it may not be enough to offset the softening global economy.  Of course, then again, maybe this is what gold, commodities and interest rates are really telling us."

My suspicion is the markets are being manipulated to the downside to try and minimize inflation and monetary Armeggedon.  My knowledge is the inventories on PM's Natty Gas, and Oil are declining percipitously because  of demand and because profits are inferior to NIL.  I am sick of the proverbial BS that a, soft economy should have and will further reduce prices and thus profits.  The market pricing at these levels will continue to reduce supply in excess of demand slippage.  Unless perhaps the catostraphic scenario unwinds.  That narrow minds like this continue to shovel this tripe when money can and is being wished into existance in quantum quantities begs the question why do I even bother to scan this tripe other than to feed my continued disbelief in the ignorance of the financial press.  "Reversion to the mean" Give me a freaking break, say dumbass what if you use monetary supply as your measurement metric.  What does the mean look like then.  I say ignorance with all due defference to willing deceptions on their part.  Trying to continually jam the square peg of manipulated markets into the round hole of statistical regressions is laughable to say the least.  Someone wake the poor bastard up.

Tue, 04/16/2013 - 15:59 | 3457825 BanjoDoug
BanjoDoug's picture

This article by Lance is totally B.S.    It is full of meaningless information, & does not address the short selling of magnitude porportions, OR THE DIVERGENCE between paper & physical gold prices......   PLZ ZH,  put publish something worthwhile,   & dump Lance.

Tue, 04/16/2013 - 16:02 | 3457834 GVB
GVB's picture

I see this "crash" as a gift. A substantial amount of small derivative players, speculating on the physical gold just got slapped in the face. I LIKE THAT. At a certain point in time, I'm sure gold price will surge again to a realistic level. COMEX is slowly being disconnected from physical gold and it's happening as we speak. Franctional reserve lending (and -banking) is coming DOWN. It should have happened earlier. I'd love to see how this story unfolds in the next weeks. GRTZ from a 100% indebted BELGIUM ;-)

PS; I own physical

Tue, 04/16/2013 - 16:20 | 3457944 Debugas
Debugas's picture

realistic level is between $1000 and $1200

Tue, 04/16/2013 - 16:23 | 3457957 GVB
GVB's picture

Let's see what happens when suddenly physical delivery cannot take place. 1000-1200? Way too low. Now taking a snapshot of this thread. ROFL

Tue, 04/16/2013 - 16:59 | 3458123 aerojet
aerojet's picture

Not that realistic.  What was the pre-bubble price?  Like $700?  Figure $800, then.


Tue, 04/16/2013 - 16:10 | 3457908 augmister
augmister's picture

Many are trying to catch the falling chain saw and smiling.   I will wait patiently until I see the whites in the eyes.  More markdown/slapdown ahead.

Tue, 04/16/2013 - 16:34 | 3458017 StarTedStackin'
StarTedStackin&#039;'s picture

I agree with you on moar smackdown, the FED hates competition from other 'currencies'.



First BitCoin, now PMs

Tue, 04/16/2013 - 16:49 | 3458085 auric1234
auric1234's picture

Sounds like you don't need gold, only paper gold.

Good luck with it. Even if you make a paper "profit", you might not be able to exchange it for real gold by then.


Tue, 04/16/2013 - 16:50 | 3458086 KansasCrude
KansasCrude's picture

Harvey thinks we have a long sovereign in tow for May silver deliveries.  One that seems impervious to the markdowns by the banksters China perhaps? Other smart Central Bank?  IMO if they continue to stand tall for delivery due to the LBMA/SLV being out of inventory then we either get a control signal failure of the Crimex and huge price appreciation or we get to watch the Morgue dancing on the jaws of death.  My hope!  with +60,000 contracts still open for May who knows, what if just half stand. Thats a 150 million oz.  and thats NO WAY the Crimex Crooks can come up with that much silver.  I am giving this a 50/50 chance. Some interesting developments in the background say its more than China in the May long crowd now standing. The ahole in the corner is JPM and here's hoping they  get pecked to death.  I think they see this coming and are desperate to evade it hence another primary reason for the takedown.  But the takedown  list is getting really long and growning longer by the day with reasons why we got the selloff.  Only thing we know for sure is the inventory situation becomes more critical by the day and the desperation matches.  IMO anything but scale in buying at these levels is poorly decisioned.  Waiting for the absolute bottom is precarious

Tue, 04/16/2013 - 18:48 | 3458462 dogbreath
dogbreath's picture

"My hope! with +60,000 contracts still open for May who knows, what if just half stand. Thats a 150 million oz. and thats NO WAY the Crimex Crooks can come up with that much silver. I am giving this a 50/50 chance."         Excellent point.  


Reminds me that there is usually a squeeze into options expiry.  Suggests that the squeeze will continue because it has to but " what if " like you say there is a huge demand for delivery.  ABN-Ambro say sorry  no gold here.  I can't imagine how a true Comex or LMBA default will look.     

Tue, 04/16/2013 - 16:19 | 3457949 Confundido
Confundido's picture

Lance would be correct, if it was not for the fact that money printing also went exponential...In other words, if Lance's theory was correct, the Deutsche Mark in the 1920s should have also reversed to the mean, and prices should have corrected to the downside. The same applies to the other dead currencies....

Tue, 04/16/2013 - 16:24 | 3457971 Smiley
Smiley's picture

I LOVE how everybody is an "expert" AFTER the fact...

Tue, 04/16/2013 - 16:51 | 3458090 auric1234
auric1234's picture

Many are "experts" in future prediction too. It's either going up or down, so whatever prediction you make you've got 50% chance of earning some reputation. And if you screw up, nobody will remember.


Tue, 04/16/2013 - 16:31 | 3457999 sudzee
sudzee's picture

All the charts in the world don't compare to a collapse at a major mine in the US. Rio Tintos' Bingham Canyon mine wall collapsed on April 10. Expected gold production as 500,000 oz. Silver production equalled 16% of US supply. Gold sold  forward just 10 times is 5,000,000 ounces or 150 ton. The number of tonnes of paper silver  based on 16% of total US supply must have been ginormous.

The big boys were just savin their butts.


Tue, 04/16/2013 - 16:33 | 3458010 StarTedStackin'
StarTedStackin&#039;'s picture

So it's just a conspiracy theory that the fed did it?



Who else has 500 tons of gold they can sell all at once.........that's 12% of the world's yearly output

Tue, 04/16/2013 - 16:53 | 3458098 aerojet
aerojet's picture

Facepalm.  Not everything is a conspiracy.  People who were levered up got taken out and had to sell other assets to cover the losses.  If enough people do this, the markets sell off, and the robots freak out and sell off, and you get a crash.  It doesn't require fucking Goldfinger with some devious fucking plot!

Tue, 04/16/2013 - 16:35 | 3458015 shuckster
shuckster's picture

Its a gold crunch - the CB's and big investors cornered the market using the excess liquidity available to them via ZIRP and QEX

Tue, 04/16/2013 - 16:51 | 3458095 aerojet
aerojet's picture

That doesn't make any sense.  They didn't corner the market, they used that excess liquidity to overwhelm all markets and caused a giant bubble.  I don't think they're making out on the downside unless they could stick someone with the other side of a short trade.  But I don't think there's enough retail out there left to pin it to.

Tue, 04/16/2013 - 16:50 | 3458088 aerojet
aerojet's picture

Gold went down because over-leveraged investors got margin calls.  Their selling to cover kicked off a shitstorm.  It's an over-leveraged world, that's all there is.  And when over-leveraged people get into trouble, the crash is not far behind because the whole world is so far out of whack when it comes to leverage.  Behold, the deflation tsunami.  At least we didn't (yet) have another Bear Stearns because of it. 

Tue, 04/16/2013 - 17:15 | 3458170 GVB
GVB's picture

I could not agree more. I think you clearly point out the core problem of GLD as a COMEX traded commodity: over-leveraging and speculation. This brings us also to fractional reserve lending (of gold). Bullion banks and CB's now see that their ponzi scheme is coming to an end. 7 years for Germany to get their gold back? 'Nuff said. I really think people must not underestimate the direct consequences of this.

  • Either people got really scared and just cash out their positions. Good thing. They would only speculate anyway
  • Either people were forced to sell, due to stop loss leveld being hit. Too bad. You shouldn't be speculating on the price of gold
  • Either people now insist on physical delivery, as they mistrust COMEX world. Can it be delivered??
  • If you want gold, you just buy the physical and SIT on it;

These institutions just ignited the spark that might bring their ponzi scheme to a end. These guys got scared they will - unwillingly- be put in a position to deliver significant amounts of gold that they just cannot deliver. In my opinion, that's what's happening.



Tue, 04/16/2013 - 17:16 | 3458174 dr.charlemagne
dr.charlemagne's picture


Tue, 04/16/2013 - 16:52 | 3458096 Canucklehead
Canucklehead's picture

So if I understand the premise of this story, the gold market was poised to fall.  All it needed was someone with one Billion dollars in capital.  With that one Billion dollars, they levered it up 20 times and sold the market short within a couple hours.  I wonder what the interest rate is for the margin they are using?

Tue, 04/16/2013 - 16:56 | 3458118 Ghordius
Ghordius's picture

let me see... where do megabanks like the Squid and the Morgue go whenever they need leverage for a nice raid on gold? how about... "here, boyz, take as much as you want and it's free, as long as you do a good job"?

Tue, 04/16/2013 - 16:58 | 3458121 rich_wicks
rich_wicks's picture

I read this:

The economy, along with housing, has been supported by massive interventions by the Federal Reserve, artificially low interest rates and fiscal policies to stabilize the economy.  Without these supports there would be no economic growth at all.   However, even with all of those supports, economic strength is struggling currently.

And this

The "gold bugs" are yelling that it is a conspiracy theory by the Fed ...  Unfortunately, both arguments, while great for headlines, are wrong.

Conclusion - faulty ability to think on the part of the author.

Tue, 04/16/2013 - 16:59 | 3458126 Quinvarius
Quinvarius's picture

As soon as you whip out a chart with gold, you lose.  Gold has 2 speeds:  Equality with the money and credit supply.  Intervention.

Tue, 04/16/2013 - 17:05 | 3458147 Scipionz
Scipionz's picture

BTFD = no reason to cry, time to buy and average down.

Tue, 04/16/2013 - 17:42 | 3458243 dumpster
dumpster's picture

yappers all of them ... they know squat .. and prove it with this kind of mindless commentary about paper //even the 700 tons thrown on the market in two days


 put that in your worthless pipe and smoke

Tue, 04/16/2013 - 17:39 | 3458260 dark pools of soros
dark pools of soros's picture

He speaks of the devil, suggesting to ever sell your gold...true gold bugs know to just buy and die with it

Tue, 04/16/2013 - 17:52 | 3458303 alentia
alentia's picture

Does it make sense to assume, gold will only rise when general markets will be no longer available to speculate and everyone will be worried to protect what they have.

Is this what has to occur for gold to rise to bubble?

USD and/or EUR crash, Stock Market Crash, Real Estate Crash, Gov. Bonds Crash, Banks Crash - nothing of latter is crashing yet?

Tue, 04/16/2013 - 17:58 | 3458325 GVB
GVB's picture

I think the answer to your question got posted just a few hours ago on Here's the quote


The COMEX will default in the next week or several weeks and people will be “settled” with Dollars, no more metal will be delivered!  So, knowing that “game over” has arrived, they are dumping a massive volume of  paper contracts with impunity to push the metals prices as low as possible before the “default”.  This way the “shorts” do not have to and will not be “covered” when “supply” cannot be obtained because of “an act of God”.  They will be settled in cash (at a profit no less) because these “unforeseen” disruptions in supply.  “Who could have seen it coming?” will be the mantra.  I would suspect that banking stress and “bail ins” will also become prevalent globally.  The pricing structure” will now push any and all physical sellers away from the markets and the “door” to safety is effectively being shut.  Either you own metal or you don’t.
After the closure of the COMEX and LBMA doors there will be no availability and “price” will be meaningless.  Your ability to protect yourself is right now for all intents and purposes being eliminated.

Tue, 04/16/2013 - 21:23 | 3459060 AlphaHunter001
AlphaHunter001's picture

"This way the “shorts” do not have to and will not be “covered”"


You clearly have never traded a day in your life. You cover by 'buying' back the item sold short. For every dollar short it will turn around and be bought back.


Shorting 101 - when you short you are, if not closed prior to delivery period, actually SUPPLYING the market with the good sold short. If you short silver for April delivery, you are entering a contract to bring that unit of silver to market.

However, by buying the contract back, this closes the position. The net effect is zero.

If you sell me your car for delivery next month, you are supply me (the market) with your car.

If there really is a shortage of physical, the price would be skyrocketing up, since a short would only have 1 resort, to buy back the paper and close the position. This sell-off is proof that there is FAR more physical supply in the world right now.

This selling pressure is by people who are long gold and are dumping it, closing their long positions.

And yes, I was short gold at 1650 and just covered, thank you very much... made money on the way and on the way down!   ;)

You really should not be posting information that is so far from realty that it's a joke. This is the problem with the internet, any uneducated and ignorant person can pretend they know what they're talking about.

Tue, 04/16/2013 - 20:56 | 3458961 Izznogood
Izznogood's picture

34 week moving average my ass ...


If you cannot directly influence an outcome by manipulating meaningful variables, then any prediction of the future based on past events must necessarily be guesswork. Also, if it really were possible to make any kind of accurate predictions based on technical analysis one would expect that by now (after so many years of "practice" - just as philosophers who still ponder the meaning of life) that someone would have found the formula and would be making stable profits all the time. Since that is obvisously not the case even for the most skilled and professional I believe that technical analysis of the price of gold to predict future price levels is bogus and that it leaves us with the 50/50 chance of getting it right by guesswork. 


It is all about beliefs. Do you believe in the monetary and financial system? Do you believe that people will continue to consider gold a storage of value? Do you believe that extracting gold will be cheaper or more expensive in the future? Do you believe that demand will increase or decrease with a growing global population? Do you believe that supply will hold up with demand? The combination of answers to those questions and a few more should determine wether you hold gold or not.


Being a trader in gold is just like playing the lottery and it is a zero sum game of winners and losers. The only ones that always win, are the ones facilitating the trades.

Tue, 04/16/2013 - 21:51 | 3459127 Jackagain
Jackagain's picture

These charts are for paper gold BTW....

Tue, 04/16/2013 - 22:19 | 3459207 Againstthelie
Againstthelie's picture

Ignorance is a bliss. Embarassing that such an outstanding article is ridiculed here.

Do NOT follow this link or you will be banned from the site!