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Crude Enters Bear Market As Gold Posts Longest Winning Streak In 7 Months

Tyler Durden's picture




 

WTI Crude oil has now entered a bear market, down over 20% from its June highs (and energy stocks are not off the lows) edging closer and closer to 28 month lows. Meanwhile, gold prices have risen for 4 days in a row - the longest winning streak in 7 months...

 

 

Oil in a bear market...

 

With Brent-WTI back at 3-year lows..

 

And gold is up 4 dasys in a row - the last time it did this was February and it continued to rise to 2014 highs...

 

Charts: Bloomberg

 

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Thu, 10/09/2014 - 14:53 | 5309948 ShrNfr
ShrNfr's picture

When things do not go up, they frequently go down.

Thu, 10/09/2014 - 15:00 | 5309989 Pool Shark
Pool Shark's picture

 

 

 

Kinda sad when 4 up-days in a row is the best performance in 7 months...

Thu, 10/09/2014 - 15:21 | 5310111 Greenskeeper_Carl
Greenskeeper_Carl's picture

what i dont get is if gold is up 1.5%, why is GDXJ down 5%, and SIL is down 6%?

Thu, 10/09/2014 - 15:36 | 5310179 summerof71
summerof71's picture

People love to hammer the miners. Better to just stack the phys.

Thu, 10/09/2014 - 15:57 | 5310284 Long-John-Silver
Long-John-Silver's picture

Because Paper Gold is not really Physical Gold.

Thu, 10/09/2014 - 16:04 | 5310321 pitz
pitz's picture

Miners are not 'paper gold'. 

Thu, 10/09/2014 - 16:06 | 5310330 The Duke of New...
The Duke of New York A No.1's picture

Ya .... most Miners are even worse (more risky) than holding paper Gold.

Thu, 10/09/2014 - 16:17 | 5310400 Squid Viscous
Squid Viscous's picture

when is the next Fed minutes, meeting, statement, or something? anything? even a dovish queef out of Yellen? please!

Thu, 10/09/2014 - 16:43 | 5310559 aPlayer
aPlayer's picture

Volatility seems to be good at least for FX brokers like this one which hit record volume in September.

Fri, 10/10/2014 - 00:08 | 5312619 Squid-puppets a...
Squid-puppets a-go-go's picture

im certain Greenskeeper Carl is well aware that paper gold is not phyz gold.  His is a faie question, though - lower oil means lower production costs for the miners, and if this is accompanied by a rise in gold, its madness that the miners stawx tank

Thu, 10/09/2014 - 16:17 | 5310412 Squid Viscous
Squid Viscous's picture

it's a giant FU from Goldman, JPM etc... thought you were gonna get lucky today>? 

Thu, 10/09/2014 - 16:37 | 5310521 Greenskeeper_Carl
Greenskeeper_Carl's picture

Nah, i didnt think i was gonna get lucky. I know miners arent real physical and its just paper and all that stuff. Ive gotten my ass kicked on them, but they will shine one day. Gold may very well drop further, dragging miners down with them too. They are a small part of my account. A pretty good chunk is in SPXS right now, and I have also lost money there. They can't jawbone this market higher forever, this time is never different, and by every real measure we are basically in a depression. Reality will win eventually

Thu, 10/09/2014 - 17:04 | 5310716 oak
oak's picture

usually, $cdnx leads gdxj. the following charts indicate that gdxj will be probably going down further.

http://stockcharts.com/h-sc/ui?s=GDXJ&p=D&yr=0&mn=8&dy=0&id=p22113609234

Thu, 10/09/2014 - 18:18 | 5311127 Herodotus
Herodotus's picture

The Fed is selling gold and silver stocks with a vengence to give everyone second thoughts about putting any money into the miners after their big runup yesterday.

Fri, 10/10/2014 - 00:12 | 5312627 Squid-puppets a...
Squid-puppets a-go-go's picture

http://investmentresearchdynamics.com/the-u-s-governments-war-on-gold-it...

very credible explanation about the timing of the feds war on gold

Thu, 10/09/2014 - 15:21 | 5310113 TruthInSunshine
TruthInSunshine's picture

Pulling out every possible trick in the magic box to punish Vlad.

I'm not stating oil was or was not overvalued/undervalued based on various factors (though I'd opine it was dramatically overpriced based on both the current level of real demand as well as the likely demand trend given a very sickly global economy), but the manipulation of oil markets has taken on a geopolitical priority as a result of the new Cold War brewing with Russia vis-a-vis Ukraine, Syria, etc.

Thu, 10/09/2014 - 15:25 | 5310126 bbq on whitehou...
bbq on whitehouse lawn's picture

Wasn't there a twilight zone about how useless gold would be in the future. I don't think anyone in the west cares about gold anymore they have the magic money fairys at the Fed.
Clap your hands for Tinkerbell.

Thu, 10/09/2014 - 15:50 | 5310250 EINSILVERGUY
EINSILVERGUY's picture

Yep. It was called "The Rip Van Winkle Caper"

Thu, 10/09/2014 - 15:57 | 5310287 bbq on whitehou...
bbq on whitehouse lawn's picture

Thank you. Now i know what i will watch tonight.

Thu, 10/09/2014 - 17:11 | 5310764 83_vf_1100_c
83_vf_1100_c's picture

  It is not a happy ending story for us stackers.

  Back in real life, I am still waiting for some joy from my metals purchases. I am content for now to fondle it and dream of happier days.

Thu, 10/09/2014 - 14:53 | 5309949 Hohum
Hohum's picture

Buh bye, Halcon Resources!

Thu, 10/09/2014 - 14:59 | 5309950 nope-1004
nope-1004's picture

Sorry Vlad.  You don't like CIA and Rothschild control and won't do what we say, then we manipulate oil futures down. Oh.... and MT elections coming.  Kill two birds with one stone.

 

Thu, 10/09/2014 - 15:16 | 5310081 A82EBA
A82EBA's picture

that is genius, i only hope brics move quicker with gold backing etc

Fri, 10/10/2014 - 00:13 | 5312633 Squid-puppets a...
Squid-puppets a-go-go's picture

theyre gonna have to get their shit together if they wanna cash in when china flips the switch

Thu, 10/09/2014 - 15:23 | 5310120 SheepDog-One
SheepDog-One's picture

Or as Ricky would say 'Get 2 birds stoned at once!'

Thu, 10/09/2014 - 14:54 | 5309954 Pareto
Pareto's picture

Unless and until CB's go batshit crazy, gold remains flat to down in this "deflationary" environment....in my opinion.

Thu, 10/09/2014 - 15:01 | 5309994 Winston Churchill
Winston Churchill's picture

Agreed.

I will buy more at $1100 only because I lost my other PMs in an accident.

Margin calls will force it lower prolly.

Thu, 10/09/2014 - 15:06 | 5310022 Pool Shark
Pool Shark's picture

 

 

If you look at history; gold does better during deflations:

http://globaleconomicanalysis.blogspot.com/2007/02/is-gold-inflation-hedge.html

It's not what the 'price' is; it's the purchasing power...

 

Thu, 10/09/2014 - 15:09 | 5310047 Pareto
Pareto's picture

i agree pool, but if asset prices are falling in terms of currency, gold will fall commensurately.  I mean to say - if currency debotchment DOES NOT occur, then gold remains flat to down is all.

Thu, 10/09/2014 - 15:19 | 5310083 Pool Shark
Pool Shark's picture

 

 

Correct. But most such falls are temporary (though 'temporary' may mean several years).

In the long run, expect gold to maintain, if not increase, its purchasing power.

The interesting thing about the article by Mish I linked to, is that he penned it in 2007 - just before we had the great deflation/recession.

Remember what happened to gold and bonds over the next 4 years?

I suspect history will soon be humming a catchy little tune that kinda rhymes with the one from back then...

 

[That's exactly why I've been (repeatedly) saying it is now October, 2007....]

 

 

Thu, 10/09/2014 - 16:21 | 5310432 Pareto
Pareto's picture

I totally agree pool.  Gold's value (purchasing power for shit that is real), holds pretty constant over time, all else equal.  If, however, currency prices for "stuff" falls then so too will gold because it is a competing store of value - but - will rise in an inflationary environment.  there are other things of course, that affect the price of gold of course - production costs etc., but I am simply stating the obvious - its a currency hedge.  fuck with the currency - gold rises.  steward your currency with interest rates greater than the rate of inflation - gold falls.

Thu, 10/09/2014 - 19:22 | 5311421 Son of Loki
Son of Loki's picture

Where's HH? I want to ask him if the drop in oil price will hurt the Houston economy. I lived there in the past and remember when the downtwon was pretty crappy during a recession and very low oil price. I see now Houston is Big Boom Town (in fact, a very nice place)  but wonder at what price (if any) does contraction there begin?

I read they also have a booming hospital/medical community so they may not be so dependent on oil anymore.

 

[anyone else from the Big H?]

Thu, 10/09/2014 - 15:24 | 5310127 gjp
gjp's picture

They went batshit crazy six years ago.

Thu, 10/09/2014 - 14:55 | 5309957 Jim in MN
Jim in MN's picture

Somebody call somebody.  This will not stand.

Thu, 10/09/2014 - 14:55 | 5309960 Spungo
Spungo's picture

4 days is the longest streak in 7 months? lol

Thu, 10/09/2014 - 14:59 | 5309982 tocointhephrase
tocointhephrase's picture

Just goes to show the extent of the manipulation! 

$ilver 8itchez

Thu, 10/09/2014 - 15:30 | 5310154 bbq on whitehou...
bbq on whitehouse lawn's picture

Just goes to show people need dollars and other government decree more so then a soft metal that dosn't rust or tarnish.
As long as what you need is a decree of crazy old men you will value that decree over anything else.

Thu, 10/09/2014 - 15:01 | 5309974 Dr. Engali
Dr. Engali's picture

About those Bakken oil fields , looks they are going to need some subsidies. Quick, call your piad off congress critter and tell them to call a vote.

Thu, 10/09/2014 - 15:04 | 5310005 cougar_w
cougar_w's picture

Don't worry they'll get whatever they need including National Guard units to protect them from the angry mob.

Thu, 10/09/2014 - 16:03 | 5310317 bbq on whitehou...
bbq on whitehouse lawn's picture

Never believe that. Ever because it simply not true. TPTB are weak crazy old men who can't even keep the lies streight anymore. Don't you worry about them, it is they who must worry about everyone else, so let them do the worrying. Not you.

Thu, 10/09/2014 - 14:58 | 5309978 FieldingMellish
FieldingMellish's picture

... and yet the miners get hammered.

Thu, 10/09/2014 - 15:06 | 5310030 tocointhephrase
tocointhephrase's picture

CDE getting crushed. Not selling!

Thu, 10/09/2014 - 15:24 | 5310131 debtor of last ...
debtor of last resort's picture

Yeah. Paper metals are still in a downtrend.

Thu, 10/09/2014 - 15:00 | 5309980 ebworthen
ebworthen's picture

WTI crude crashing with all the Geo-political clashes is a bellwether.

Not to mention the flight to safety in bonds. 

Will FNMA/FMCC be bought outright by the FED?

What QE dream can Yellen imagine?  Student Loan Default Swaps?

Interesting times...

Thu, 10/09/2014 - 14:59 | 5309983 AGuy
AGuy's picture

We're Sitting on 10 Billion Barrels of Oil! OK, Two

http://www.bloomberg.com/news/2014-10-09/ceos-tout-reserves-of-oil-gas-r...

"Lee Tillman, chief executive officer of Marathon Oil Corp., told investors last month that the company was sitting on the equivalent of 4.3 billion barrels in its U.S. shale acreage. That number was 5.5 times higher than the one Marathon reported to federal regulators."

 

 

Thu, 10/09/2014 - 15:05 | 5310018 cougar_w
cougar_w's picture

He forgot the /sarc tag?

Thu, 10/09/2014 - 15:23 | 5310124 Son of Captain Nemo
Son of Captain Nemo's picture

He forgot the /sarc tag?

Aong with the nonexistant pipeline infrastructure and cost of production to sell to an EU that is already in "sink" mode to the bottom! 

Russia of course has that infrastructure in place and the oil they sell ain't "shale"!

Fixed it!

Thu, 10/09/2014 - 15:00 | 5309988 Son of Captain Nemo
Son of Captain Nemo's picture

Context on the oil price right now.

Lining this up with the frequent visit(s) by the Assistant Secretary of State "witch on a broom" and we're getting closer every day to an all out war!

 

Thu, 10/09/2014 - 15:02 | 5309996 Bell's 2 hearted
Bell's 2 hearted's picture

fuel efficient new vehicle sales NEEDS high gas prices (yeah, i know ... refinery product different than crude) to thrive

Thu, 10/09/2014 - 15:02 | 5309999 jubber
jubber's picture

Silver now LOD

Thu, 10/09/2014 - 15:02 | 5310001 Magnum
Magnum's picture

Gold and Oil typically move in the same direction, as I was told many years ago by a prominent gold jeweler.  Gold at $1200 should be seen as a bargain.

Thu, 10/09/2014 - 15:30 | 5310158 debtor of last ...
debtor of last resort's picture

Gold at $2000 is a bargain. The only difference with $1200 is that you can buy more at $1200

Metals insurance only pays out when ISDA burns and miners are being nationalized. In physical form that is.

You will enter barter town with shaky hands. But that's always better than stay outside, in the cold.

Thu, 10/09/2014 - 15:03 | 5310004 besnook
besnook's picture

gold is the disaster trade. in this case it is the ebola vix. seems there are a lot of people beginning to freak out a bit.

Thu, 10/09/2014 - 15:07 | 5310031 Seasmoke
Seasmoke's picture

Damn 4 day winning streak ??? When did Gold become the Tampa Bay Bucaneers. 

Thu, 10/09/2014 - 15:07 | 5310038 Spungo
Spungo's picture

I play this song every time the market gets double fucked:

https://www.youtube.com/watch?v=q9xNhcvZ6UI

Thu, 10/09/2014 - 15:08 | 5310042 IMACOINNUT
IMACOINNUT's picture

we need a longer and deeper downturn to forge a divisive break from the paper.

only then will there be a move to freegold and more opportunity for evil hoarders

btfd. 

Thu, 10/09/2014 - 15:13 | 5310068 mastersnark
mastersnark's picture

I thought we were trading blood for oil? I'm still spending way over $3 a gallon for gas, so was Mark Ruffalo lying or have we not killed enough Americans?

Thu, 10/09/2014 - 15:14 | 5310073 Kaiser Sousa
Kaiser Sousa's picture

and for the grand finale...
i give u the Globex drop in Silver after trading sideways all fucking day ....

http://www.kitco.com/charts/livesilver.html

yeah right....

Thu, 10/09/2014 - 15:38 | 5310187 bbq on whitehou...
bbq on whitehouse lawn's picture

Interesting, i thought the temp had to get near or at zero and made cold fusion impractical unless in space. If this holds i have a lot of rethinking to do.

Thu, 10/09/2014 - 17:31 | 5310882 Overflow-admin
Overflow-admin's picture

How dare you have only two upvotes?

ZH GET UP AND READ THIS!

Thu, 10/09/2014 - 15:20 | 5310106 SheepDog-One
SheepDog-One's picture

The way things are going, Gartmann will probably announce tomorrow he's going all in on gold and it will drop -$500 over nite.

Thu, 10/09/2014 - 15:40 | 5310200 bbq on whitehou...
bbq on whitehouse lawn's picture

This made me smile, i was thinking Gartmann told someone he was doing the opposite thats why gold went up.

Thu, 10/09/2014 - 15:23 | 5310121 xcehn
xcehn's picture

As the smart money exits stawks, leaving only the dumb money to languish before vaporising completely in due course. Shiny prospects for gold ahead.

Thu, 10/09/2014 - 15:27 | 5310139 CRYBABY
CRYBABY's picture

that long winning streak in gold made you about 35 bucks from low to recent high ;-)....(I own gold before I get beat up on here)

Thu, 10/09/2014 - 15:46 | 5310232 bbq on whitehou...
bbq on whitehouse lawn's picture

If i was to own a 2011 gold buffalo it would not have gone anyware near the purchasing price. But that 35 dollars is only for that etf or other electronic form of payment.

Thu, 10/09/2014 - 15:29 | 5310156 irongator
irongator's picture

Time for some naked shorts!

Thu, 10/09/2014 - 15:33 | 5310167 crazybob369
crazybob369's picture

Meanwhile, gold and silver stocks have dropped by over 6% today, more than giving up all of yesterday's gains. Guess higher gold prices must be bad for gold miners.

Thu, 10/09/2014 - 15:49 | 5310245 bbq on whitehou...
bbq on whitehouse lawn's picture

If your selling gold at below production cost because a man in black told you to what do you think that price would mean for that company. Documents don't sweat because you put a loaded gun to them.

Thu, 10/09/2014 - 16:44 | 5310566 crazybob369
crazybob369's picture

You are correct of course, but I believe it's much more subtle than that. If you don't go along, you might just find that your mining permits have suddenly acquired an invalid status. Heard a rumor that a silver company attempted to withhold silver from the market, and suddenly their permits for a new silver mine in Nevada mysteriously disappeared.

Thu, 10/09/2014 - 15:37 | 5310181 headhunt
headhunt's picture

Putin Punishment.

Russia's income is too dependent on energy sources which makes it easier to target and punish Putin, too many eggs in one basket. Putin needs diversification if he is to survive politically. In the end cash (gold) is always king and there are many in mother Russia who are being hurt by Putin's bravado.

Thu, 10/09/2014 - 15:52 | 5310267 bbq on whitehou...
bbq on whitehouse lawn's picture

I disagree Putin could care less, he is selling to China at set prices. China may not like it so much but then they have a lot of T-bills to sell and need to sell into riseing prices rather then falling ones.

Its easy to sell when prices go up not so easy to sell into a falling market.

Fri, 10/10/2014 - 11:48 | 5314367 headhunt
headhunt's picture

There is no such contract as a 'set price', the amount paid changes depending on the market difference.

China would never have a no cap contract, they would tell Russia to stuff it and buy elsewhere.

Plenty of competition.

Thu, 10/09/2014 - 15:38 | 5310186 The worst trader
The worst trader's picture

But the miners are still getting hammered?

Thu, 10/09/2014 - 17:10 | 5310756 limacon
limacon's picture

 

Systemic effects :

http://andreswhy.blogspot.com/2014/10/should-you-buy-gold.html

http://andreswhy.blogspot.com/2008/12/financial-crisis-dec-01-2008-petro...

 

The optimal survival strategy is to buy a vertically integrated , landed estate .(Latifundia)

A proven strategy over millennia .

See http://andreswhy.blogspot.com/2012/03/monasteries.html

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