As China Buys, Sellers Push Gold Down To 4 Month Lows

Tyler Durden's picture


Gold just lost the $1600 handle for the first time since January 5th and is suffering its biggest one-day loss in over two months as Europe's meltdown is driving broad liquidations. Are hungry Chinese central bankers more than happy to soak up the precious metal at a discount from levered longs liquidating into the European fiasco?


Chart: Bloomberg

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Tue, 05/08/2012 - 10:21 | 2406412 GOSPLAN HERO
GOSPLAN HERO's picture


Tue, 05/08/2012 - 10:24 | 2406430 SHEEPFUKKER

stack da smack.  I'm sure China will be more than happy to do the same.  

Tue, 05/08/2012 - 10:25 | 2406438 SilverTree
SilverTree's picture

The Ultimate Exit Strategy

Tue, 05/08/2012 - 10:28 | 2406462 MillionDollarBonus_
MillionDollarBonus_'s picture

I warned about this repeatedly, but my warnings were met with verbal abuse and dismissal from the doomer goldbugs. The real safe-haven is the US dollar and US treasuries. Gold is selling off ferociously while the ten year is now at a phenomenal 1.84%! All I can do is smile.

Tue, 05/08/2012 - 10:29 | 2406468 Short Memories
Short Memories's picture

how low, can you go?

Tue, 05/08/2012 - 10:31 | 2406477 SilverTree
SilverTree's picture

MDB, your "/sarc off" button is still broke I see.

Tue, 05/08/2012 - 11:41 | 2406810 akak
akak's picture

But his "stup" (not "/stup") button is alive and kicking.

Tue, 05/08/2012 - 10:33 | 2406479 TWSceptic
TWSceptic's picture

Don't sell the skin till you have caught the bear.

Tue, 05/08/2012 - 12:06 | 2406917 mt paul
mt paul's picture

some times you eat the bear

some times the bear eats you 


Tue, 05/08/2012 - 22:07 | 2408782 EINSILVERGUY

Its not bear  its  baar!  Some times the Baar eats you

Tue, 05/08/2012 - 10:39 | 2406527 Bastiat009
Bastiat009's picture

Treasurys look much safer than gold today. That's a fact. Whether it makes sense is up for debate. Whether it lasts is up for debate (well not really). But yes, so far in 2012, UST looks much much safer than gold. 

Tue, 05/08/2012 - 10:42 | 2406546 mayhem_korner
mayhem_korner's picture





Tue, 05/08/2012 - 11:03 | 2406633 Paul Atreides
Paul Atreides's picture

With the Federal Reserve buying 60%+ of all and 80%+ of long term treasuries with funny money and the mathematical impossibility of the US actually making good on it's debt amounts to a very large risk there.

Gold has no risk... it is and will always be gold.

Tue, 05/08/2012 - 12:02 | 2406892 lasvegaspersona
lasvegaspersona's picture

Paul a

not only is the Fed buying Treasuries one must also suspect that every time we see a vertical line straight down on the Kitco graph of gold, that it is the Fed or some agent massively selling paper. This graph clearly shows an agent not out to make money but by all rational explanations put downward pressure on the gold price. Last week we saw a 1.2 billion dollar sale take place over a nano second. No other explanation makes sense to me other than someone is trying to drive gold lower. For this we physical gold advocates should be grateful...I suppose...

Tue, 05/08/2012 - 11:13 | 2406682 Marginal Call
Marginal Call's picture

You've got till maybe August to buy gold.  That's just before we're going to hit the debt ceiling again and the gov officially devalues the US dollar.  Gold always goes up with the debt ceiling.

Tue, 05/08/2012 - 11:30 | 2406759 maneco
maneco's picture

The Titanic looked very safe next to a dinghy too!

Tue, 05/08/2012 - 11:47 | 2406835 SAT 800
SAT 800's picture

Exactly. Only "foolish" people would prefer to be in a Dinghy. At least for awhile. Well, I covered myself in glory; I posted on here yesterday that I thought they wouldn't have a downwave in metals today; oh so wrong. wrong. wrong. wrong. Sorry, sorry, sorry. but don't worry, I'm suffering. My Sept. Silver contract is 7600$ out of the money and I'm still holding on to it. Either I'm really stupid, or this dinghy will look pretty good when the "great Ship" starts tilting. Meanwhile the Play continues---.

Tue, 05/08/2012 - 11:56 | 2406875 SAT 800
SAT 800's picture

No, Treasuries don't look safer. The prices are more stable; less volatile. That is not "safe"; it is less volatile. The Titanic looked very safe even when it was 11degrees down at the bows and stopped and taking on 4000 gallons of sea water a minute, it looked safe by your perception; because it wasn't bobbing up and down; there's a little more to "Safe" then bobbing up and down or not. Safe involves a prediction of the future; it doesn't make any sense to say X looks safer "so far in 2012"; when the question of safe is; "what are the probabilities that this will maintain its purchasing power for the next 2 years, or three years"; there's always a time line for "safe"; it's not a "now" concept.

Tue, 05/08/2012 - 13:58 | 2407413 Acet
Acet's picture

The safest you can ever be from triping and falling down to your death is when you're already in free fall.

Tue, 05/08/2012 - 10:45 | 2406563 Peter Pan
Peter Pan's picture

Keep holding those dollars and treasuries because when you start to shit bricks you will need something to wipe your backside and silly grin with.

In the meantime enjoy the fruits of manipulation and try asking your congressman if there really is any gold in Fort Knox.

Tue, 05/08/2012 - 10:48 | 2406568 trembo slice
trembo slice's picture

there is literally no hope for you MDB.  I will give you credit for repeatedly calling this -- but I wouldn't be too proud of myself for one quarter of price action.  This is a marathon not a sprint.  Check this prediction in 10 years and see who comes out on top.

Tue, 05/08/2012 - 11:06 | 2406647 GCT
GCT's picture

MDB it is raining outside and I am now laughing.  I have made alot more in PM's this last year then you made in the markets and tresuries my friend.  Whatever am I to do with crappy gold I bought at 300 an ounce!  Well of couse I still have not parted with it!

How did you do in 2008 MDB?

Tue, 05/08/2012 - 11:46 | 2406833 ATM
ATM's picture

You are talking about trading and not building a physical position. When the bubble bursts you will be shit out of luck but you will have plenty of former paper profits to recall fondly! And it's the memories that tide us over......

Tue, 05/08/2012 - 10:29 | 2406463 Pladizow
Pladizow's picture

Gold: The Uncivilized Tradition!


Tue, 05/08/2012 - 10:37 | 2406510 Floordawg
Floordawg's picture

ZULU-HOTEL, repeating transmission...


Tue, 05/08/2012 - 10:37 | 2406525 fuu
fuu's picture

Roger roger.

Tue, 05/08/2012 - 13:09 | 2407169 Gringo Viejo
Gringo Viejo's picture

Today, Iran has begun accepting the Renimbi in exchange for oil. This smash down in the metals is too clever by half. Do I hear the $ whistling through the graveyard?

Tue, 05/08/2012 - 10:22 | 2406414 GeneMarchbanks
GeneMarchbanks's picture

"Sellers", is that what the kids call them these days?

Tue, 05/08/2012 - 10:37 | 2406513 Comay Mierda
Comay Mierda's picture

whats the paper to physical ratio now? maybe 100 to 1?  when the world begins calling for delivery on contracts during the upcoming hyperinflationary crises, the spike in physical gold price will be ABSOLUTELY EPIC

Tue, 05/08/2012 - 12:12 | 2406935 lasvegaspersona
lasvegaspersona's picture


for a different take read FOFOA's latest piece, Inflation or Hyperinflation. It is one of his best peices and shows a different take than the one you see. Gold spikes not due to a flurry of individuals suddenly seeing the light but by those with massive holding withdrawing from this broken market. The results may be surprising. 

the article shows the finale of our 'exorbitant privilege' that has now lasted 40 years...we float on a pile of money that suddenly will be seen to be what it is...when central banks no longer offer it a home, but we keep offering it in ever greater quantities to the rest of the world for our governments needs ...well what happens then?

Tue, 05/08/2012 - 10:46 | 2406547 agent default
agent default's picture

You know how those who don't have it and sell it to those who don't want it, and don't have the money to buy it?

It's the opposite today.


Tue, 05/08/2012 - 10:22 | 2406422 sudzee
sudzee's picture

Seems like the hit on PM's has a lot to do with Ron Paul getting some exposure in MSM.

Tue, 05/08/2012 - 10:23 | 2406425 maneco
maneco's picture

Maybe people are becoming more civilized! 

Tue, 05/08/2012 - 10:22 | 2406426 PaperBear
PaperBear's picture

Sellers of paper gold ? More like lemmings jumping off a cliff.

Tue, 05/08/2012 - 10:26 | 2406439 PaperBear
PaperBear's picture

Silver from $37/oz to $29/oz - a move of 22%. What an absolute joke but something bad must be fast approaching that is bad for the dollar. Like all the dollar ditching going on.

Tue, 05/08/2012 - 10:28 | 2406441 carbonmutant
carbonmutant's picture

Buying all those Euros hasn't been working out too well for them...

Don't want to buy more Dollars...

What's left... Barbarous relics?

Tue, 05/08/2012 - 10:26 | 2406446 q99x2
q99x2's picture

There is more gold than shale oil just in the US. BTFD.

Tue, 05/08/2012 - 12:35 | 2407033 XitSam
XitSam's picture

What? More gold ounces than shale oil?  More gold priced in FRNs than shale oil? 

Tue, 05/08/2012 - 10:27 | 2406447 Vint Slugs
Vint Slugs's picture

Showing us that Buffet and Munger are right.  Don't be too hasty, buying opportunity below 1300 gold and 20 silver.

Tue, 05/08/2012 - 10:28 | 2406464 junkyardjack
junkyardjack's picture

People will be sewing it into their clothing for lack of a better use...

Tue, 05/08/2012 - 10:40 | 2406538 fuu
Tue, 05/08/2012 - 10:46 | 2406565 5880
5880's picture

I told you gold looked sick

these fng's kill me

Tue, 05/08/2012 - 11:26 | 2406744 fuu
fuu's picture

You were bound to be right at some point if you repeated it often enough. Good jorb!

Tue, 05/08/2012 - 11:55 | 2406864 5880
5880's picture


I've been saying it for 8 weeks.

That's not a broken clock unless your attention span is immature.

oh wait, there's my answer

Tue, 05/08/2012 - 11:26 | 2406702 TWSceptic
TWSceptic's picture

1300 is unlikely, I doubt it will go much below 1500. But in a rigged market anything is possible.


Marc Faber said strong support at 1485...

Sat, 05/12/2012 - 04:10 | 2419562 MeelionDollerBogus
MeelionDollerBogus's picture

Actually in a rigged market NOT anything is possible. 2 cardinal rules:

#1 the price volatility can not be allowed which breaks the long-term goal of the manipulators

#2 the price volatility can not be so small to permit benefit to those who are opposed to the manipulators

From this & a lot of data I have determined with a fair reliability

condition #3 repeating patterns of multi-month and multi-year market-activity happen due to repeated use of the same goals which lead to the same implementation of the same market-rigging agents

Sat, 05/12/2012 - 04:08 | 2419561 MeelionDollerBogus
MeelionDollerBogus's picture

Gold can't slip below 1544. It has less than 5% chance of getting that low. More likely gold is heading up to 1612 in the next 4 weeks and only higher after that. June target is 1750 to 1800.

Keep waiting for gold to hit 1300, 900, 500 and you'll never buy any.

Silver will not move more than 3x in the decline with gold. Silver can't hit $20. The math is the bottom on silver at 26.95.

log(gold_later / gold_now) / log (silver_later / silver_now) = 3.0 maximum, putting silver at 26.9598 minimum (I rounded down) with gold at 1544 minimum.

2012 apr 25 gold 277 week ROC | goldpricemodel

2012 05 03 gold silver 2012 performance comparison | goldpricemodel

Tue, 05/08/2012 - 10:27 | 2406450 falak pema
falak pema's picture

Just goes to show there is much loose gold around, all those teeth the nazis pulled out are now surfacing into the market! 

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