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What’s Next For Gold? Bear Vs. Bull Debate
How should investors approach sub-$1,300 gold? VisualCapitalist's analysts each take a side and answer five questions:
1) How does the interest rate impact gold?
2) What is the inflation impact on gold?
3) What is the international impact on gold?
4) What is the short-term outlook for gold?
5) What is the long-term outlook for gold?
to visualize the Bull and the Bear case.
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Gold just is -- rest is bull shit!
What Kind of Fools Are Buying Gold?On the whole, the world's central banks are now net buyers of gold, and have been for some time, after being net sellers for over twenty years.
Russia is one example.
Why do you think they are buying it? They don't understand money?
They don't know what they, and some of their associated central banks, are planning to do to recapitalize the deteriorating global financial system and dollar reserve trade regime?
Did they forget to watch CNBC to find out what they really ought to be doing?
I hear that J P Morgan has stealthily gone net long gold now after beating down the price. Would having the biggest banks go long gold and then letting it be revalued higher be one way to recapitalize them? It seems as though recapitalizing them through insider information is the mode du jour.
Silly idea huh? Well that is what the did in 1933. They took the gold out of official circulation, and out of the hands of the people, and then revalued it significantly higher, and used it to recapitalize the remaining banks after purging the insolvent banks during a bank holiday.
The only ones who seem to be saying that gold is not a good investment are the Anglo-American banking cartel and their enablers and supporters. They wish to maintain the confidence, and the buying of their paper which they are selling. But who knows what they are doing for themselves in private.
Such strange times. Such deception and disappointment. One can only wonder.
Not for nothing, the Russian Central Bank really began to accumulate gold following the visit by President Putin economic consultant Andrey Bykov to GATA's August 2005 Gold Rush 21 conference in Dawson City.Nothing in the playbook has changed
Given the recurring slamdowns initiated by the Cartel, one may surmise that the endgame is to drive the metals to zero. The technical bears are enjoying the irrational exuberance that goes with shorting new lows in a distorted market. Even that monumental pinhead Nouriel Roubini seems to be basking in his glory with an I-told-you-so bearish target of $1000 for gold. So does all of this mean that the Cartel is not positioning itself to go long?
My opinion is that this is all part of the long term plan. If we accept that the sharp moves higher for gold and silver in 2011 were an engineered fakeout to suck in as many specs on the long side as possible before the washout, why then does this massive oversold move in the metals not indicate exactly the same kind of reversal is on deck today?
I know the Cartel has an agenda to suppress the metals as part of the overall strategy to manipulate everything and make a ton of money for the banks doing so. But we also know that the further into extreme territory these interventions go, the more unstable they become. It has been widely reported that demand for physical bullion worldwide has gone right off the charts. We are also seeing reports now of mines going offline, and new mine development projects being shelved. Both of these trends are driven by the artificially low gold (and silver) prices created by the Cartel.
For those, like Roubini, who argue that we are looking at a repeat of the 1980 blowoff in the metals, fundamentals tell us a different story. In 1980 there were huge stockpiles of gold and silver on hand, and speculators were leveraged to the hilt on the long side. Today, we see mine supply is trending lower, registered inventories of bullion are in sharp decline with reported shortages, and specs are heavily short. The fundamentals tell us a recovery is drawing near.
As a related footnote, most of those in the gold-bearish camp are also on record that the US economy is improving. If one can believe that kind of nonsense then I suppose it seems very realistic that gold is headed for new lows.
My opinion has always been that there is a shrewd strategy in play to achieve the objectives for the Cartel while respecting the fundamental reality of the market. The most basic rule of course is that the banks always win, and the rest of us get screwed. This story plays out over and over again because the banks have the clout to run the table higher and lower at the time of their choice, and of course therefore they position themselves accordingly before the hammer drops.
For example, there was a distinct reversal in the BKX about 2 weeks before the FOMC changed the rules on how the banks were allowed to value their assets. The insiders closed out shorts were and went long before the rest of the market got the news, and the same players that were making money on the way down were then able to make a big pile of cash on the way up in the reversal for the banking sector back in 2009.
Note that the short interest for the mining stocks increased sharply in 2011 immediately before the metals rolled over. This too was interpreted as a sign that investors anticipated the metals would decline. If so, it represents the first time in history that investors called the top of a bull market. In contrast, in 1980 the mining stocks continued trending higher after the metals had peaked. What in fact happened in 2011 is the Cartel was happily shorting the hell out of the sector ahead of their move to crush the metals.
So here we are today, with yet another Monday morning massacre underway and the metals and mining stocks are getting hammered. People assume that the Cartel has no plans to go long. I beg to differ. And this is not a CHANGE in the plan. It IS the plan, and has been all along. They run the metals up and go massively short ahead of the top. They run the metals down and go long at the bottom.
With each selloff that we have seen this year, the COT has documented that short interest has increased among the specs, and the commercial short interest among the Cartel players has decreased. This is like a license to print money. In order to close a large short position without driving a small market higher, one must find new sellers to buy from. How much better can this be accomplished than by creating massive selloffs in the midst of a wildly bearish sentiment level? Why should this behaviour come across as evidence that the Cartel plans to destroy the entire market? Who kills a golden goose?
There is only so much juice that can be squeezed from a lemon. And when all of the players get positioned on one side of a boat the potential for a sudden, violent move in the opposite direction is almost a certainty. This is not rocket science. For the metals, the moves tend to be even more violent. We are on the verge of a massive rebound for gold and silver, and one that will likely drag the severely damaged mining stocks higher. I know how disheartening it has become to see the complete devastation across the board for entire sector. This is part of the plan and the rebound will be epic.
I have never believed that the Cartel is stupid. These people are very good at what they do, and they have been handed a free ride to manipulate the market at will, with all the power and clout to push the entire market to extremes. I think the long term agenda to suppress the metals is still in force, but the short term move to make a boatload of money and allow the next liftoff is also a factor. The shorts will be exposed and become the rocket fuel that powers this next uptrend as they become forced buyers to close positions. The Cartel will then gradually sell off its long position and reposition short, to begin capping the sector again at a much higher price range.
http://www.lemetropolecafe.com
Said that in 7 words - see above
Patience will be the key to riches in owning gold:
"Nick Barisheff's new book: $10,000 Gold":
http://tinyurl.com/l3xne6t
"The Malartic Gold Mine":
http://tinyurl.com/kyg4ovx
and by the new accounting rules, we should be able to book that profit upfront !!!
Yes DCRB ???
Hulk! I have the time to wait... Hope all is well for you!
Same here, its 2007/2008 all over again. Doing well and I hope you are too !!!
Physical premiums are rising again even though the paper prices are dropping. Gold buy backs are up $5/oz in the past week. Gold premiums on the sell side have held steady but the supply is getting tight so expect a small bump in premiums on main line products if the price goes any lower this week.
Silver premiums have gone up on ASE's by $.40-$.50/oz in the last week. Rounds and big bars are up $.10-$.30/oz as well. The 100oz bars have not recovered from the April price collapse, so expect to see both 10oz and 100oz bar premiums increase in the next week. Delays are three weeks and climbing on a lot of silver items.
Physical demand is still way above normal at the retail level and the wholesale level. Since the April price drop, we have had large customers in Dubai ordering from us (in San Diego) because they can get product at our wholesale prices. The premiums in Dubai have gone up so much due to the demand that they will order from companies outside of Dubai just to secure product (mostly kilo gold bars but many Krugs, AGE's and Maples as well).
Keep the faith, be strong and "Pack em, stack em and rack em" and only sell some when Krugman screams "Buy Gold".
Mark Lonneker
President
Libertycpm.com
"Said that in 7 words - see above"
I can name that tune in 2 words...
...wait for it...
Debt failure.
Well, I think I can name that tune in ... 1 word
Fraud.
i sense the message is pretty clear without uttering any word.................
How should I approach sub-$1300 dollar Gold?
That's easy. Buy soon and buy often. We've got to be getting near the cost of production if you average the entire sector. Even if it spikes lower..... miners are going to be going tits up at some point as a result.
Supply squeeeeeezzzzzeeee MF'rs.
"How should I approach sub-$1300 dollar Gold?"
With cash!
Sorry, but since when does gold follow fundamentals???
You had best get on your knees and pray it starts. The alternative is too dark for word. As in August 30, 1939 dark....
A Crucial Gold Support area is now Being Tested
CORRECTION: "A Crucial PAPER Gold Support area is now being tested." Oy vey! Be still, my heart!
We've waited for weeks to see a final, decisive paper slam. BRING IT. COME ON. LET'S GO. YAWN.
What's next for gold? It gets bought en masse by ravenous Indians and Chinese and a few barbaric Westerners. What's next for paper gold? Probably more downside until the market falls apart.
Sorry but gold will fall in the short term, along with all other assets. It will be a dash for cash, even though cash is trash. Long term gold wins.
Repeat after me...
Gold is not an inflation hedge, it is insurance against monetary collapse.
Gold is not an inflation hedge, it is insurance against monetary collapse.
Gold is not an inflation hedge, it is insurance against monetary collapse.
Gold is not an inflation hedge, it is insurance against monetary collapse.
Gold is not an inflation hedge, it is insurance against monetary collapse.
Gold is not an inflation hedge, it is insurance against monetary collapse.
Gold is not an inflation hedge, it is insurance against monetary collapse.
Gold is not an inflation hedge, it is insurance against monetary collapse.
Repeat after me
Gold is an inflation hedge, insurance against monetary collapse, and because in a deflationary collapse, the fed will print like a mother fucker, its good for that too !!!
TBills are better for your ordinary, garden-variety inflation. I would lump hyperinflation in with monetary collapse.
Lol
Just
Lol
T bills go in the red because of inflation.
With no buyer of last resort to flip to ....... yup.
Nope. Rolling Tbills are a better hedge. The data backs this up since Nixon closed the gold window. Of course, the days of honest inflation measures are far behind us anyhow. Inflation was with us through the 80s and 90s as gold fell. It was only in the systemic crisis years from 1976 to 1980 that gold really moved. The last 12 years gold has risen not because of inflation which has been mild if not totally truthful but because of fears of future monetary and systemic collapse. the inflation traders sold it in 2008 and are selling it now but they owned it for the wrong reasons.
I was attributing the current trajectory as a response to the lack of adequate collateral and liquidations to meet margin calls.
Not so?
If so, we have had over 6 months of margin calls since that is when the momentum dried up. Only a completely reckless fool would play with margin in these casino markets, especially in PMs.
"Only a completely reckless fool would play with margin in these casino markets, especially in PMs."
Or a bullion bank with an unlimited line of back door financing and pics of Chilton in a cocktail dress.
Indeed, but they would not be worried about margin calls, would they? ... And, btw, thanks for the image of Chilton in a cocktail dress, now I won't be able to get to sleep...
lol np.
They wouldn't per se, but they certainly would love to control the movement of the needle to book profit on both the up and down swings.
Plus, the players that don't have the ability to make a phone call for a fresh delivery of Benjamins, would certainly be in such a position.
Yeah but they are reckless fools so fuck 'em.
Oh, I agree. I wasn't defending their idiocy at playing in the casino. Quite the contrary. I was simply interested in a bit of dialogue regarding the possible causes of the current price movements in PMs.
I ran for the exits over a year ago in the paper realm, except for funds that I was unable to remove from my retirement accounts.
Why does everyone believe that long term gold wins? Did we not have about 15 years with gold between $250 and $450? Same manipulation today...
Did you buy it back then, or did you think it was overpriced?
Fold on gold after the world fiat monetary ponzi implodes.
We have not dealt with deflation yet. A wall of paper holds it back. When the wall crumbles all assets will be decimated at a very high velocity and that includes gold.
Just look around your house, besides the food and water in your kitchen, what other things do you think its worth money? not your TV, not your chairs, not your tables....etc. if you have antique arts or guns, they might worth something, then there is gold! lol When SHTF, food water and firearms will have tons of value then there is gold again! :)
Big, meaningless picutures - tiny text and little info. Made my eyes hurt. The markets are all rigged anyhow - making this whole exercise rather pointless.
I gave it a 1.
That's a really cool chart/poster etc.
Alright I'm making the call. First up, all safe havens have been blown to sh*t and will continue to suffer. Stock markets are in trouble, US is underwritten by the Fed, we know that - crony capo's just get the flows the rest suffer until the UST market blows up. Meantime emerging markets are dead. If the Shanghai collapses and it will, becuase of the integrity of China's businesses, loans, debt, credit, finance is so bad it's beyond words. Their commie goverment could shutdown their markets. Easy. Halt the Shanghai exchange and liquidate debt en masse. They do this, China, India, South America, all of Asia will flood into gold.
Gold will be the doomsday trade, not inflation trade. Deflation is going to hit hard. Then collapse = Gld is bid.
Time for that Rollover clip again...
Can't find the clip
Just in from Faber though: http://blogs.marketwatch.com/thetell/2013/06/24/marc-faber-gold-a-possib...
Nasty.
Silver is the place to be now with the GSR at 65
Premiums finally collapsed last week.
@Silverismoney
Think I've told you before, you're backing the wrong horse. Gold's going to be defensive for a while - inferred from silver. You and the other silver bulls need to get some fresh perspective. Perspective on the GSR and big cycle stuff. Here's a link. Pay to view but reasonable cost.
Read it and weep: http://eideticresearch.com/special-reports---fee-based.html
Dude, I want to fart in your general direction but I don't know which cheek to lift. Did you really just say "you're wrong, pay to find out why"? LOL - send me money and I'll tell you why that was an epic douche move.
3 galaxies away is a safe place to be.
Is that where the little red guy in your avatar picture lives?
"A bullish case for gold" brought to you by a consortium of independent observers who just happen to profit from you buying gold.
Simple answer: Bear case, good. Bull case, bad.
Gold at 1800 was the short of the new century.
Even the Gold Bugs are decidedly bearish (at least in the short term). Hmmmm. This is a first to hear on ZH. Sounds like a bitch of a rally coming soon - and this coming from someone who has been short the miners until last week. This just reminds me too much of when the Euro was tanking in 2012. The Euro had fallen to 120 and everyone was bearish on it. No one could think of one bullish reason to own it. When everyone finally gave up and all the chartists said all support was broken, magically it turned North and buttfucked every short seller who followed the sane thought that the Euro is a joke currency.
I hear footsteps and they are not horse hooves - they are the pitter patter of little lemmings about ready to go airborne. I smell a rally that will make no sense but may go for a while.
The week has to close out first, I think. Apparently there's a lot of gold due to be delivered out of the Comex this month, I keep reading that JPM needs to deliver 490,000 oz and they only have 418,000 in their vaults. If that's true, it will be interesting to see how they wriggle out of this one.
They'll declare force majeur, and pay out in cash.
If it hits the MSM, the talking heads will all be marvelling how "nobody saw it coming". This will be followed by a huge spike in demand for US treasuries, as everyone flees for the "safety" of the US dollar. The price of gold would drop against the backdrop of a rising US dollar.
Not what I want to happen, but it is what I expect.
BTW, why even bother closing the shorts on miners, when so many of them haven't even tested the support at 0 yet?
"...the sane thought that the Euro is a joke currency..." ?
why? Because nearly half a billion "jokers" use it every day?
Anyway, about gold: all JPM needs to do is to is to "shake the baby", i.e. make it too volatile for institutionals and so preserve the USD complex. The East will continue buying, the West will continue selling, regardless
when the printing press collapse
I am happy with the Gold Bull arguments. But I like insight. None of the Gold Bulls explained its 'dip' from 1900. The bears say it is going to keep going down but don't give good reason why. The bulls explain the paper shorts and the physical premium. But is anyone out there offering real insight?
How long can paper shorts continue? Why would they stop? What problems appear if they don't stop? Of those who said gold was going down back when it hit 1900, strip out the perma-bears, were there any people giving good reasons? Did anyone explain, "Oh, now that gold has hit 1900, TPTB are going to paper short this down to 1300 because ..." or something similar? Is anyone saying, "TPTB can paper short this to $XXX and then y will happen because ..."
Maybe you can't predict the future, but surely you can predict a few points where decisions will be forced.
"The car is accelerating towards the brick wall. It will collide in t seconds. Unless someone takes their foot off the brakes. Or they swerve. Or someone bashes a hole in the wall. In which case, at time t1, you'll see someone racing out of the hardware shop with a sledge hammer , or at time t2 the driver will turn the steering wheel and at time t3 will collide with the bushes, or ..."
Am I too dumb to understand or is no-one explaining this stuff?
Or can it really only be explained through a live feed from an NSA tap on TPTB phones?
When you feel like the only one that is not understanding what is going on, then likely it is your understanding of the situation that is wrong.
The shorts will continue until faith in the USD dies off. Until then, keep buying physical.
Some factors at play IMHO
First control of gold in the public perception.
Gold must not be seen as a run- to asset in times of crisis, hence gold is gamed to keep it behaving somewhat like a commodity.
People should be herded into ETFs which are then much easier to liquidate ESP when they have other margin requirements such as long bets on stocks that are going bad and need financing?
paper gold is dying as longer term buyers manage counter-party risk by changing into physical.
One possibility is that these 3 factors put combined downward pressure on the "price" while physical keeps walking out the door.
Unless something changes ie severe backwardation/ delivery failure. The current trend could continue for some time, ironically providing a terrific opportunity along the way.
But who really knows, just make your own call whatever that is and do it.
how about much more simple explanation ? - Gold was in a bubble and is returning to its average
Um - how about this? Gold ETFs, like all derivatives, are fraudulent. The end.
IMO
My bullish feelings toward gold, and silver are based on these being traded well in excess of actual inventories. This was proven to me, by an experience that I had with my bank, and a silver certificate that I purchased.
I think the comex is in a bubble, becasue it is traded mainly by margin accounts. This being said, the physical price has kept close to comex price, because people have, for the most part, been able to take delivery of the metal. However, once the warehouse goes dry, it will no longer affect the price.
I also think that precious metals will back currencies again, sometime in the next 5 years. Until then, I expect high volatility, and major price swings. It is getting more, and more apparent however that buying at the lowest price is not as important as buying at the lowest price that you can actually physically obtain the metal.
But this is just speculation, there are a million possibilities / scenarios.
As you read this article count the unnecessary 'that's. Alot of them, good indication of the intelligence of the writer.
If you are going to be a critic of intelligence based upon grammar; you should have been aware that "ALOT" is not actually a word. It is, "A lot".
ouch!
Gold can still go a little lower but I see a big opportunity here like in 2008. I am looking at goldmines and gold cfd to profit from the coming lift in the goldprice.
There are really only 2 points of view: 1) the usual contrarian, that gold will rise from its present trajectory and go much higher and 2) the vision of Another, FOA and FOFOA that gold will undergo a phase shift and assume a new role as a wealth asset at a much higher price after a collapse of the paper gold market. So far the course outlined by FOFOA last December is the one we are on. Gold is crashing.
When you finally realize that gold will not rise from the ashes you should check out his now over 400 well reasoned essays.
Many of us are doing well in the inverse gold ETFs as we expected this constant route of gold. We are all physical gold advocates and that is probably enough but...how do you feel about what is happening? I feel great! If you are sulking about the evil manipulators give it up.
I suggest reading Legs for a start.
Before Tsunami hits, sea level actually drops. Central bankers are preparing for some big events not the one they claimed on TV "economy already recovered".
Gold is at a very interesting point here. It is sitting squarely on the 38.2 Fibonacci retracement of the whole bull market from the low in 2001 to the high in 2011.
It is also right on support of a simple trend line, connecting the lows since the Bull market began. A critical support level.
Price has been crawling along this level for the past 4 days if this level holds with a big up day then the bottom may be in, if not under 1,100 beckons.
June is usually the worst month for Gold, so a up bounce from here would seem likley.
Whats next for Gold?
I'll be getting another Krug....thats what is next.
Do you trust the US government, Japan, or ECB to make depositors whole? If you answer no, you buy PMs. That's just fucking logic. It's that simple. The rest is a sideshow. The trick is staying solvent until gravity takes over. That is what really keeps me up at night.
I'm not leveraged, but daily expenses are rising. How long can they keep the illusion going? Answer that correctly and we will all kiss your feet.
Sgt., they can keep the illusion going as long as the majority buys into it. ( Forget my feet)
I own physical gold for these reasons:
An insurance policy against idiot politicians, mad printers, and counterparty risk.
I own physical silver for these reasons:
As above, plus its increasing usefulness in energy and medicine.
Paper money is for basic bills or buying certain shares, nothing more.
Std. analysis is all BS. Club Fed will do what benefits them (and their owners) the most. Specifically...
They'll trash the price till the minors roll over and get snapped up by Primary Dealers, and no bullion is available for the masses, because they get first dibs at silly prices.
Just like they get first dibs on ammo and we get jack. $85 B/mo makes them the Mother of all Preppers (ammo, silver & gold).
I just say: to miss the forest for the trees.
The only thing to watch reg. Gold is Crude oil.
The price of crude is way too high to sustain "economic growth" under the current economic model. Since the relatively cheap oil is in severe decline, the price will keep rising. Otherwise the marginal barrel is shut-in and shortages will occur.
It's all about crude, folks. Why is that so f...ing difficult to understand? keep your physical Gold! Very soon (within the next few months), crude oil will no longer be affordable to Mainstreet and Gold will go to the moon and with that all paper debt will collapse.
Please check this most important chart reg. crude oil:
http://www.economic-undertow.com/wp-content/uploads/2013/06/Triangle-of-Doom-060213.png
a while back I read on here today was a potentially positive day for gold, options expiry or something. I dont know what it means but i got my fingers Xd
Gold is real.
Silver is real.
Platinum is real.
And fiat is fake.
They can manipulate, but they can't fool me.
sweet............Au is down & will continue its decent. for those who doubt, see earlier posts BEFORE the move down!
I've never seen, or smelled bear shit, but I've seen, and smelled bull-shit, and I can't imagine that they're much different.
There seems to be plenty of both on this poster.
I will sure buy gold again but not yet. Maybe at 1100. Gold seems to be in the middle of a deflationary rout.
I mean you don't have to be a bagholder.
I do not mind being the bagholder when
The bag is filled with silver and gold coins.
Bring it on