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How Gold Performs During FOMC Weeks (Spoiler Alert: Not Good)

Tyler Durden's picture




 

What is more confidence-inspiring in the Fed's ability to manage the world and the continued dominance of the US Dollar as global reserve currency than a falling gold price... and when better to show that than FOMC meeting weeks... welcome to the centrally-planned world where the announcement of ongoing trillions in fiat dilution constantly crushes the price of undilutable money.


 

Source: Meridian Macro

 

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Wed, 03/19/2014 - 22:32 | 4570661 CashCowEquity
CashCowEquity's picture

Well fucking fuck fuck fuck....

Wed, 03/19/2014 - 22:38 | 4570691 Stuck on Zero
Stuck on Zero's picture

On queue.  Just a beautiful orchestration.

 

Wed, 03/19/2014 - 22:45 | 4570716 DoChenRollingBearing
DoChenRollingBearing's picture

If you have enough gold, or nearly enough, just slowly buy more and chill.  It`s all OK.

If you do NOT have gold, this is a good time to start buying.  Physical only.

Wed, 03/19/2014 - 22:47 | 4570727 flacon
flacon's picture

"*cumulative total for week before and after 6 prior FOMC meetings is basically flat (-$6)"

So does this mean that next week is going to be an UP week? 

Thu, 03/20/2014 - 02:19 | 4571322 National Blessing
National Blessing's picture

Stay away from gold.  Cash is king.  Deflation, deflation, deflation.  Bitches.

Thu, 03/20/2014 - 02:51 | 4571367 techstrategy
techstrategy's picture

Physical cash and physical gold is the new optimal diversified portfolio...  But, deflation will be in financial assets with respect to real and productive assets...  Get out of floast scam stocks ASAP.  They will implode once forced deleveraging starts...

Wed, 03/19/2014 - 23:09 | 4570812 Jungle Jim
Jungle Jim's picture

DoChenRollingBearing said: "If you have enough gold, or nearly enough, just slowly buy more and chill.  It`s all OK."


How much is enough? Or even nearly enough?

Wed, 03/19/2014 - 23:37 | 4570947 DoChenRollingBearing
DoChenRollingBearing's picture

Enough: 10 times annual current salary ($ value in both cases).  Nearly enough, at least 10 oz for each man, woman and child in your family.

The above would be about right.  Physical gold, backed with guns and 1000 + rounds of ammo for @ gun.

Have less than that?  Still need to buy, just like I do...

Thu, 03/20/2014 - 04:27 | 4571454 douglas
douglas's picture

The question is realy not ¨How much is enough?¨ but rather ¨How much do you want?¨ - the simple answe is: More!

Thu, 03/20/2014 - 08:45 | 4571762 TheGoldMyth
TheGoldMyth's picture

DoChenRollingBearing, it is also a good time to start buying 'physical' houses instead of the mortgage variety.

Central banks do it tough taking those out of circulation the way they do with gold to create an artificial scarcity.

Thanks!!

Thu, 03/20/2014 - 17:56 | 4574537 strannick
strannick's picture

They do. By keeping inventory vacant and not srlling. And by having the FED by their MBS through QE. These keep housing off the market, which keeps banks investment artificially high, instead of letting the market determine the low prices that should exist.

Wed, 03/19/2014 - 22:36 | 4570675 LetThemEatRand
LetThemEatRand's picture

So long as commodity markets are traded in futures and leverage of paper gold, nothing will change.  The U.S. military owned and operated by the bankers and oligarchs who own the Fed and MIC see to it that nothing will change.  

Wed, 03/19/2014 - 23:08 | 4570805 RaceToTheBottom
RaceToTheBottom's picture

When is that physical only exchange planned for Singapore coming up?

Thu, 03/20/2014 - 01:55 | 4571288 techstrategy
techstrategy's picture

The COMEX/futures are easy to abuse because they can use unlimited leverage to take the other side.  The right way to end the manipulation is to sell all bubble stox (I call them float scams) like AMZN, FB, TSLA, CMG, LNKD, etc and buy the GLD.  While everyone here likes to bash the GLD, there is a legal limit to the short position they can take.  The entire market cap is $35B and it is mainly in strong long hands now.  AMZN is at least $100B overvalued and has a market cap of $175B.  Using only AMZN, those tired of the games could call the bluff, selling a bubble stock that will lose 80% of its value in the future for claims on GLD.  More to the point, there are trillions of $ of potential float scams to sell.  For a TINY fraction of that amount, we can get true price discovery because they cannot go more than 100% short...  

This is how we get to price discovery and rapidly...

Thu, 03/20/2014 - 05:18 | 4571494 new game
new game's picture

i get the feel the market is going to find the right reason to sell.

everything will go down(except food and water), just a matter of how much.

pick your poison...flight to cash......

everything is leveraged to far-debt has approached 3x gdp in too many places.

Thu, 03/20/2014 - 10:16 | 4572108 Rubbish
Rubbish's picture

I don't think anyone can be right about what is going to happen. I will be right 50% of the time as I hold both FRN's & PM's mostly Gold in physical form equally.

 

NO DEBT is key to sleep well and a nine always by my side.

Thu, 03/20/2014 - 11:02 | 4572321 TheGoldMyth
TheGoldMyth's picture

"No debt is the key"

Thu, 03/20/2014 - 08:53 | 4571783 Agstacker
Agstacker's picture

Banning the trading of all commodity futures...sounds good to me :)

Wed, 03/19/2014 - 22:35 | 4570679 TeamDepends
TeamDepends's picture

How Gold Performs After COMEX Collapse (Spoiler Alert:  SWEET!)

Wed, 03/19/2014 - 22:43 | 4570706 LetThemEatRand
LetThemEatRand's picture

There is a reason that the U.S. spent more than the world combined on its military the last few decades.  And it ain't terrorists.  And there's a reason we all feel it is different this time.   Imagine having a ponzi scheme where if you're caught, you can aggressively and definitively blow up the police who catch you.

Wed, 03/19/2014 - 22:37 | 4570688 blindman
blindman's picture

it is almost like the money system / financial system
is designed to devalue and make irrelevant
the underlying everything.

Wed, 03/19/2014 - 22:56 | 4570755 DavidPierre
DavidPierre's picture
Collapse and Systemic Failure at All Levels Coming to U.S. -Dmitry Orlov

 

Orlov lived through the financial collapse of the Soviet Union in the early 1990’s, and he thinks the U.S. is on the same trajectory. 

Orlov contends, “The trajectory is defined by this sort of incompetent militarism where more and more money results in bigger and bigger military fiascos around the world and less and less of actual foreign policy that can be pursued or articulated.  

There are massive levels of corruption.  The amount of money that is being stolen by the U.S. Government and its various appropriations processes is now in the trillions of dollars a year.

http://usawatchdog.com/collapse-and-systemic-failure-at-all-levels-coming-to-us-dmitry-orlov/

Wed, 03/19/2014 - 23:19 | 4570845 blindman
blindman's picture

check this, at least the judicial system is
still working?
.
illegal immigrant sues rescuers that saved his life from flood
http://www.youtube.com/watch?v=sBV6uEjL-OQ
.
go figure. what a mess

Wed, 03/19/2014 - 23:39 | 4570953 blindman
blindman's picture

john mccain should see your link to the d.orlov interview.

Thu, 03/20/2014 - 00:01 | 4571024 blindman
blindman's picture

http://www.maxkeiser.com/2014/03/omfg-the-only-budget-2014-facts-you-nee...
OMFG!! The only Budget 2014 facts you need to know
Posted on March 19, 2014 by maxkeiser
.

Thu, 03/20/2014 - 07:58 | 4571656 blindman
blindman's picture

or it is a slow motion gold robbery. imagine
the banksters loitering about seemingly distracted
by a thousand other things but really manipulating
the prices of everything they stock for future use.
pawn shops and "we buy gold" on every park and main st..
even the barber and cobbler have "we buy gold signs
out front. hmmm...

Wed, 03/19/2014 - 22:38 | 4570693 royal
royal's picture

M-O-O-N...that spells manipulation. :)

Wed, 03/19/2014 - 22:38 | 4570695 Seize Mars
Seize Mars's picture

How Gold performs after a year of the grid being knocked out:

...better than expected!?

Wed, 03/19/2014 - 22:42 | 4570707 fonzannoon
fonzannoon's picture

I actually thought gold was worthless in a grid knockout scenario. we are back to caveman days.

Wed, 03/19/2014 - 22:52 | 4570746 FieldingMellish
FieldingMellish's picture

Gold... so attractive even a caveman would trade for it.

Wed, 03/19/2014 - 22:46 | 4570725 tickhound
tickhound's picture

This is more credible than the chinese gold for cash liquidation theory. Particularly since the gold price hasn't increased correspondent to their multi year buying spree.

Wed, 03/19/2014 - 22:47 | 4570729 fonzannoon
fonzannoon's picture

so this theory is more credible than the theory floated 15 mins ago?

Wed, 03/19/2014 - 22:52 | 4570744 tickhound
tickhound's picture

Assuming u mean the dash for trash article... if u mean THAT 15 minutes ago then yes.

And by credible I mean way more freaking likely.

Wed, 03/19/2014 - 22:50 | 4570735 DisArray
DisArray's picture

I could have used this article 3 days ago :(

Wed, 03/19/2014 - 23:22 | 4570859 blindman
blindman's picture

you are teaching yourself patience
and developing intestinal fortitude.
be happy

Thu, 03/20/2014 - 07:31 | 4571622 N2OJoe
N2OJoe's picture

Haha same here, DisArray.

Wed, 03/19/2014 - 22:50 | 4570738 RichardParker
RichardParker's picture

So basicly, wothless paper money (that is being diluted further) that is still accepted for purchase of gold now buys even more gold immediately after a FOMC meeting?

Wed, 03/19/2014 - 22:55 | 4570757 fonzannoon
fonzannoon's picture

well when you put it like that....well yes...that's correct.

Wed, 03/19/2014 - 23:33 | 4570922 Al Huxley
Al Huxley's picture

...assuming you're on the FED's friends list getting the free cash they're printing up.  For everybody else - tough shit, costs you more to fill your car and feed your family, your take home goes down, and there's no inflation.

Thu, 03/20/2014 - 01:47 | 4571281 techstrategy
techstrategy's picture

Better yet, worthless float scam stocks which are trading scams layered upon Bernanke Bus (AMZN's PE is no longer #NA, but it is still over 600) can and should be converted into gold.  As I said below, if all those on this board who are tired of the Fed/TBTF bank games simply sold float scams (AMZN, FB, TSLA, LNKD, CRM, CMG, etc) and used it to buy GLD, we could end the games.  GLD is not paper gold.  They CANNOT short an unlimited amount like futures.  The market cap is $35B compared to $170B in Scamazon and trillions in total float scams.  The gold manipulators are "all in" but we can call them for a few percent of the float scam $ or 20$ of AMZNopoly money.  Actually, a lot less than that in reality because most of the remaining GLD holders are strong longs.  It is the quickest path to ending the games and a VERY good use for converting bubble stocks to real assets (or accelerating the trajectory for those of us holding physical gold to finally see price discovery)...

Thu, 03/20/2014 - 06:12 | 4571535 TheGoldMyth
TheGoldMyth's picture

RichardParker.............
closest to being 'spot on' i have seen on ZH

Back in the old days, when the Gold Myth (GM) was born, the ditribution of this metal was diverse in the gold club of ancient times..

Now that this is not so, the main demand comes from central banks who print money to buy more as you point out so that the vast quantities that need to purchased in a depressed economy come mainly from the central banks. Once they purchase, the gold is technically out of circulation which helps to maintain scarcity to keep the price artificially higher.

It is a difficult job to maintain scarcity, so the central banks (That control governments through debt slavery) in the case of China ask for some help to maintain this scarcity from people with some spare cash to help in the task of buying gold. Hence, the Chinese government is asked by its controllers to issue the comand to buy gold amongst the people........ so that the central bank can use its fiat cash to buy other strategic assets whilst maintaining the prestige and illusion of gold scarcity in the minds of those affected by the 'gold bug virus' (GBV) Or generic 'Gold Fever...(GF)

It is an old disease that helps consolidate the dellusional self worth of bankers and the elite.

The reality is that if central banks stop purchasing this metal, the current gold price would fall like a few thousand tons of Lead. There would be gold on the streets.

The reality is that central banks shuffle this metal back and forth to each other as it still has some value for psychological purposes.

The reality is that whilst central banks print money, the real value fo anything you like is not quantifyable.

There is no such thing as a true measure/value of gold, whilst central banks print debt.

Gold is a symbol of being able to print debt in todays world of modern money mechanics.

Yardah yardah...rant rant... I will get my rant perfectly formulated one day. In the meantime, my basic logic seems irrefutable to me.

Central banks have, or are close to turning gold into Lead. Not exactly what they were hoping to achieve. :-)

Thanks!

Thu, 03/20/2014 - 07:18 | 4571603 SoilMyselfRotten
SoilMyselfRotten's picture

India sure bucks your premise as they have done all they can to discourage their people from buying gold.

Thu, 03/20/2014 - 08:33 | 4571712 TheGoldMyth
TheGoldMyth's picture

SoilMyselfRotten..Try Again....The same happens with bricks and mortar. The banks create scarcity (During default/poor economic conditions) by taking the bricks and mortar out of circulation. Obviously it is cheaper to store houses people cannot afford anymore in a vault full of paper certificates.
The same with gold. although it is easier to hide the fact that the gold does not exist in the case of paper certificates for gold
When you get yourself a loan, and all the gold bugs........you can live with it in the hope they do not print more debt that would debase your bricks and mortar/gold.......

Thu, 03/20/2014 - 08:37 | 4571735 TheGoldMyth
TheGoldMyth's picture

India is a case of EXTREME Gold Fever. Especially vanity that overtakes the desire to eat and care for ones personal health. Poor people there will rather go without than miss an opprtunity to pretend they live in a different caste through the act of purchasing a gold trinket or more. My theory includes pathological obscesion than transcends reason and and empty stomach.

Thu, 03/20/2014 - 10:02 | 4572041 SoilMyselfRotten
SoilMyselfRotten's picture

Gold is money, period. Many believe their fiat will be worth far less one day due to printing to oblivion by the CBs. You say fever, i say insurance.

Thu, 03/20/2014 - 10:06 | 4572060 TheGoldMyth
TheGoldMyth's picture

Bricks and mortar used to be money in many countries also.
You say gold, i say solar panels.

Thu, 03/20/2014 - 10:15 | 4572076 TheGoldMyth
TheGoldMyth's picture

Or you could invest in Antelopes. They are now rare due to scarcity as well. But like gold, trading small amounts of Antelope invites all kinds of fees and charges, unless you can buy a herd and not be taxed/fees/charges/rules that central banks and corporations are able to avoid. They don't get the same fees and problems during exchanges in Antelope transactions. You need to be a central bank or corporation first. Is my guess.

I have owned gold before and it is a headache. I got my money back due to a rise in the gold price at the time.

Unless you have lots of 'chilll-out drugs.

Thu, 03/20/2014 - 10:17 | 4572119 TheGoldMyth
TheGoldMyth's picture

The bullion dealer took a percentage to buy it back.

Thu, 03/20/2014 - 10:22 | 4572138 SoilMyselfRotten
SoilMyselfRotten's picture

Antelopes haven't been used as a medium of exchange for thousands of years nor will they in the future. Gold always has been and will in the future. Not buying the tulip/gold premise.

Thu, 03/20/2014 - 10:42 | 4572220 TheGoldMyth
TheGoldMyth's picture

It turns out there is a "tulip/gold" standard.

Thu, 03/20/2014 - 10:54 | 4572250 TheGoldMyth
TheGoldMyth's picture

SoilMyselfRotten...There are already several contemporary countries at present where tulip/gold could be used to replace existing paper fiat currency which would reduce the burden on gold as a store of perceived value. As i pointed out earlier. Vanity is often the key element in any currency, using the caste system in India as the example earlier..

That is because the currency is used as a symbol or replacement to the purchased product itself. The queen and bankers are extremely vain which is why they paint symbols they think look like themselves on the coins, notes, etc.

Thu, 03/20/2014 - 10:29 | 4572147 TheGoldMyth
TheGoldMyth's picture

Like gold, Antelopes are not very useful but can be eaten unlike gold. Also, owning many antelopes, like owning gold will attract attention fro the Antelope authorities that are controlled by those who work hard to keep Antelopes scarce to protect the intrinsic value of Antelope from becoming common and abundant that would surely drive down the Antelope price inviting possible margin calls and a collapse in the Antelope dollar from too many Antelope.

Thu, 03/20/2014 - 10:36 | 4572192 SoilMyselfRotten
SoilMyselfRotten's picture

Not being able to eat gold is a lame argument. At any time i can take my gold/silver to the LCS and they will give me money with which i can buy food, antelopes, tulips or whatever it is you think i can't buy. Ever try eating real estate? Nt so tasty.

Thu, 03/20/2014 - 11:17 | 4572409 TheGoldMyth
TheGoldMyth's picture

But it is useful and be used to cook something, in particular through the use of a kitchen section of some real estate.

My main point is to be able to trade. It is pointless to argue over what has or does not have value while a parasite steals the wealth by diluting the currency.

My argument against gold is not against gold. The basis of my argument is that if gold is to become a form of currency, then it would enhance the control the bankers who own vast amount through theft and make them even more powerful..

If there are any bankers here among us, i can hear them saying.....yes yes yes......lets use gold as a currency. we have heaps of it and it will suit us very well thank you.

To perform gold as a currency, first..........the stolen gold needs to be confiscated from the central banks who stole it using the fractional reserve banking system and so forth..

Wed, 03/19/2014 - 23:02 | 4570777 Big Brother
Big Brother's picture

So, short gold futures or buy puts on Gold Miners/corresponding mining ETFs one week before/after an FOMC meeting? -Noted.

As has been said many, many times here on ZH, "correlation does not imply causality".  I dare ask, what does the simple act of a fed chair[person] speaking have to do with gold going down?  I fail to recognize the causality.  Perhaps it's not actual traders who short during this short duration, but high-speed algorithms that key on certain words.  At least they can move in and out a of trade quickly.  As evidenced by the long-term trend, dating back to 2001, gold's downward movement in price relative to the dollar is a counter-trend trade.  Short it at your own risk. 

 

Wed, 03/19/2014 - 23:17 | 4570840 capitallosses
capitallosses's picture

Shorting may work great until the month when Yellin screams out "Oh Shit, we need to print, print, print."

Wed, 03/19/2014 - 23:46 | 4570979 Big Brother
Big Brother's picture

Yeah...  sounds about right- gotta have your finger on the trigger.

"Oh Shit, we need to print, print, print."

Yep- right after the "Belgians" (wink wink, bunny ears with fingers) say "Non plus".

Thu, 03/20/2014 - 00:11 | 4571062 Ulterior
Ulterior's picture

sold my paper gold in the begining of the week, thats why it dropped so much, sorry guys...

Thu, 03/20/2014 - 08:41 | 4571745 TheGoldMyth
TheGoldMyth's picture

Ulterior, that's a good thing....we have allready seen to what happens to paper bricks and mortar (Mortgages.).

Thu, 03/20/2014 - 00:58 | 4571182 techstrategy
techstrategy's picture

If all of us who hate the ongoing manipulation of gold simply buy the GLD in float scam terms (AMZNopoloy, TSLA, FB, etc) we can end the games and fast.  Unlike futures, there is a limit to the potential short interest of the GLD.  Sure, everyone is worried about whether the gold is there, but who really thinks the float scam stocks aren't going to lose between 80-100% of their respective value?  There are trillions of dollars of funny money (float jam stock valuations).  AMZN alone is easily $100B overvalued and the GLD is only $35B.  All it will take is for us to buy the GLD in float scam terms...  They can only short $35B of stock and we have trillions of funny money to work with.  Those that manipulate gold will have to be "all in" while we can call them with a fraction of the total FS$....

For reference, AMZN is up 400% since 2009 on almost 60% lower net income.  In contrast, GLD is up 40% despite 10 YR UST dropping from 4% to 3% and trillions in Fed and global CB printing...  So, buying GLD in AMZNopoly terms is equivalent to buying for <40% of its value as on 2009....  Preserve your wealth.  Don't just buy physical gold.  Call the bluff of those who've systematically stolen from all of us...

Thu, 03/20/2014 - 01:07 | 4571200 jtlien
jtlien's picture

This week is not over yet...

With gold delivery contracts at 100x leverage, it is my feeling that gold is really worth 100x current dollar price.

 

Thu, 03/20/2014 - 01:07 | 4571201 jtlien
jtlien's picture

This week is not over yet...

With gold delivery contracts at 100x leverage, it is my feeling that gold is really worth 100x current dollar price.

 

Thu, 03/20/2014 - 01:14 | 4571216 The wheels on t...
The wheels on the bus are going to fall off's picture

Keep faith in the gold, in the long term it will pay off, it is the best hedge against inflation, the world is at economic war and the worldwide debt is unsustainable.

Long term gain, short term pain.

Thu, 03/20/2014 - 01:31 | 4571248 joego1
joego1's picture

The lemmings will race to the "apparent" safety of various government paper first before they realize that PM's are actually the only genuine money at the table. The value of PM's at that point in time will be a step function.

Thu, 03/20/2014 - 08:24 | 4571705 TheGoldMyth
TheGoldMyth's picture

joego1..The lemmings raced to the safety of 'bricks and mortar' also....The paper that owns them then got lockced up to create scarcity. Same with gold. Simple

Thu, 03/20/2014 - 06:48 | 4571569 1stepcloser
1stepcloser's picture

I for one don't mind cheaper PMs.  I will continue to stack for the rest of my life and if the insurance is not needed in my lifetime, I will give the PMs to my kids. 

Thu, 03/20/2014 - 11:01 | 4571588 messymerry
messymerry's picture

Come on Tyler, do you really think we've been had that bad?  (sarc.)  Have you been talking to Alex Jones???  It's staggering to think that "they" would be this brazen.  Desperation drives the animal out of it's lair. 

Thanks for all you do.

;-D

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