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For The First Time, Gold Returns Surpass Stocks Since March 2009 Lows

Tyler Durden's picture




 

Behold - the S&P priced in gold. The current print is below the March 2009 low which simply means that as of today the return for gold since the March 2009 lows is now higher than stocks. Expect this line to keep going lower now that everyone realizes the Fed has no other choices than to print, print, print, further destroying the incremental value of fiat and further cementing the value of non-dilutable instruments like gold.

 

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Mon, 08/08/2011 - 10:13 | 1536882 vast-dom
vast-dom's picture

When will FEd announce?

Mon, 08/08/2011 - 10:15 | 1536888 Quintus
Quintus's picture

FOMC tomorrow.

Mon, 08/08/2011 - 10:19 | 1536919 Pladizow
Pladizow's picture

Lets hope Sinclair's # of $1764/oz is hit and then we can see Armstrong's and Field's #'s - One ounce will buy the Dow!

 

Mon, 08/08/2011 - 12:06 | 1537513 Snidley Whipsnae
Snidley Whipsnae's picture

The Big Soverign and individual buyers in SE Asia, India, Mid East, don't have a clue about Jim Sinclair's 1764 number. Gold will blow through that number like all the others. But Jim can then take credit... as he should. He has spent a lot of years promoting gold and he has my respect and admiration for his dilligence and hard work.

But 1764? Just another number. The Fed/Treas are going to back the shorts and try to stop gold from making the dollar look worse than it already looks. If gold goes ballistic it will be dangerous for those holding it. We need a relatively slow increase in gold vs fiat, not a big spike up. Shorts will fail eventually but no one knows when that will be.

Good luck to us.

Mon, 08/08/2011 - 10:53 | 1537115 vast-dom
vast-dom's picture

Quintus: you believe Bernank announces QE3 BEFORE Jackons Bunghole?

Mon, 08/08/2011 - 10:13 | 1536883 d00daa
d00daa's picture

but but but... where are all the stories on crude getting pole-axed???  foie gras demands to know!!  lololololololololol

Mon, 08/08/2011 - 10:13 | 1536884 baby_BLYTHE
baby_BLYTHE's picture

yep, just as predicted by ZH.

Best advice ever was to sit out the fraud and stay in gold.

Mon, 08/08/2011 - 10:16 | 1536913 kito
kito's picture

green arrow up

Mon, 08/08/2011 - 10:23 | 1536953 Pegasus Muse
Pegasus Muse's picture

Tyler, Where's our daily dose of GoldCore?  I like their stuff.

Mon, 08/08/2011 - 10:30 | 1536988 Quintus
Quintus's picture

About 10 posts back.

Mon, 08/08/2011 - 10:14 | 1536891 PaperBugsBurn
PaperBugsBurn's picture

 

 

PAPER BUSG BURN!!!

 

ILLUMINATI TOILET PAPER BURNS!!

Mon, 08/08/2011 - 10:22 | 1536947 living on the edge
living on the edge's picture

They already have their positions in gold. They know the shit storm cometh.

Mon, 08/08/2011 - 10:15 | 1536899 GIANTKILR
GIANTKILR's picture

What's up with silver? They usually travel up and down hand in hand.

Mon, 08/08/2011 - 10:17 | 1536924 AmazingLarry
AmazingLarry's picture

Flee to safety. In this case, Dunkin Donuts. 

Mon, 08/08/2011 - 10:18 | 1536927 Spitzer
Spitzer's picture

Gold is superior to silver. Gold stocks are doing better then silver stocks too.

XAU and HUI are in the green.

Mon, 08/08/2011 - 10:47 | 1537076 Spitzer
Spitzer's picture

We will compare notes in 10 or 15 years. Silver is a unique metal but central banks don't but it.

Mon, 08/08/2011 - 10:22 | 1536950 Thomas Jefferson
Thomas Jefferson's picture

45% margin requirements.

Mon, 08/08/2011 - 10:16 | 1536903 HelluvaEngineer
HelluvaEngineer's picture

Will GDXJ ever take off, or at least quit getting dumped at the bell every morning?

Mon, 08/08/2011 - 10:33 | 1537014 chartcruzer
chartcruzer's picture

interesting that the miners are lagging the metals right now in relative performance.   this will correct.

daily relative analysis

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3225058&cmd=show[s240729620]&disp=P

intraday relative analysis

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3225058&cmd=show[s240823803]&disp=P

 

Mon, 08/08/2011 - 10:48 | 1537086 Spitzer
Spitzer's picture

At least they have a bid. In 2008, miners crashed like finanical stocks.

Mon, 08/08/2011 - 10:16 | 1536906 greased up deaf guy
greased up deaf guy's picture

viva la tradition!

Mon, 08/08/2011 - 10:40 | 1537044 bonderøven-farm ass
bonderøven-farm ass's picture

viva la revoluzione...!

Mon, 08/08/2011 - 10:16 | 1536911 eigenvalue
eigenvalue's picture

But its brother silver has got punched to sub $40 again. :(

Mon, 08/08/2011 - 10:17 | 1536918 Debt Rolling
Debt Rolling's picture

Where did momo-fader go???

Mon, 08/08/2011 - 10:22 | 1536928 slackrabbit
slackrabbit's picture

Ben can print in 15 minutes.

my guess we find out tmorrow who was first him or the EUCB

Mon, 08/08/2011 - 10:19 | 1536936 sunnydays
sunnydays's picture

The commodity charts were put in a video, it really shows how gold and silver have outperformed all other investments.  S&P are towards the bottom of the year chart at a -2.2 decrease in value, gold is at the top with silver at the very top.

 

http://www.youtube.com/watch?v=Kmgk4gXH04s

Mon, 08/08/2011 - 10:35 | 1537028 chartcruzer
Mon, 08/08/2011 - 10:20 | 1536940 BurningFuld
BurningFuld's picture

Gold just took out 1200.00 Euros!

Mon, 08/08/2011 - 10:20 | 1536941 Yen Cross
Yen Cross's picture

  thar SHE BLOWS!  The eur went thermo nuclear, and found a cliff via eur/aud!   The carry trade is getting more rational by the minute!  I like my charts!

Mon, 08/08/2011 - 11:02 | 1537185 snowball777
snowball777's picture

http://www.youtube.com/watch?v=DMi_o6ki2_0

"When the going gets tough

and the stomach acids flow

cold wind of conformity

is nipping at your nose

some trendy new atrocity

has brought you to your knees (Cramer?)

come with us,

we'll sail the seas of cheese!"

Hope you're having a great day, Yen!

Mon, 08/08/2011 - 10:20 | 1536942 Doyle Hargraves
Doyle Hargraves's picture

Bill Bonner says this all ends when one ounce of gold equals one share of Dow. Bill is right...plan accordingly!

Mon, 08/08/2011 - 10:24 | 1536957 bania
bania's picture

When you gonna drop Magnum on us, Ben? 

Mon, 08/08/2011 - 10:30 | 1536989 Bullionaire
Bullionaire's picture

Approaching 1 week with the JPM:$SILVER ratio negative.

 

Suck on THAT, Blythe.

 

 

Mon, 08/08/2011 - 10:31 | 1536997 Central Wanker
Central Wanker's picture

Hope you bought gold last week or earlier. The biggest gold retailer in Finland and Sweden stopped selling physical gold today.

Mon, 08/08/2011 - 10:34 | 1537023 Sophist Economicus
Sophist Economicus's picture

But, but, but, Prechter and fellow deflationists said this is a correlated 'all down together' market....

 

hee hee

Mon, 08/08/2011 - 10:43 | 1537025 Debt Rolling
Debt Rolling's picture

Just keep in mind that the nominal increases in gold and the "new world record historical highs" do not mean much, and can tempt weak-minded people to "take their profits". 

Very few people notice when the CHF gains 80% against the USD, but they all shout "bubble!" when gold does the same performance against the USD. It's always very funny to watch. 

It's because 99% of the people consider gold as an asset, something vaguely valuable or a speculative vehicle, when it is in fact the only currency in Homo Sapiens world not backed by legal contracts, government management and fractional banking. 

I'm not selling at $1,700 and won't sell at $5,000 either. Above >$10,000 I may consider it, but it will depend on a lot of factors, such as: "Is the global debt clearing finished?" "Is there really blood in the streets, or not yet?" "Has inflation serious chances to be put into control now?"

In the meantime, I rarely watch the daily XAU ticker, just like I rarely watch how much one gram of gold costs in the currency of Belarus. What's the point of pricing something in the currency of a failing empire? It's obvious that the downward spiral won't stop until this empire is dead, flatline, not while it is still breathing. 

Mon, 08/08/2011 - 12:17 | 1537568 Snidley Whipsnae
Snidley Whipsnae's picture

Excellent observations DR...

Even if all Westerners decide to sell their gold in the coming months the price of gold will continue to be buoyed by strong hands in the Eastern Hemisphere.

Hang on to your gold ... if you sell it's heading East and it won't be coming back soon. This is practical, common sense advice. Not investment advice.

Mon, 08/08/2011 - 10:38 | 1537037 GoldMeUp
GoldMeUp's picture

Gold me up!

Mon, 08/08/2011 - 10:45 | 1537067 THE DORK OF CORK
THE DORK OF CORK's picture

The dollar is becoming a synethetic greenback , with Gold becoming the harbour of smart debt money with less smart money starting to flowing into it now - its a fascinating battle.

The only way Dollars can win now is if it goes back to its core Greenback roots rebuilding Americas real economy- nearly interest free money by default now................

Mon, 08/08/2011 - 12:30 | 1537670 Snidley Whipsnae
Snidley Whipsnae's picture

Yes... but to halt the fall of the dollar a 'Volker type' interest rate hike might still work. The hike would have to be well above the real rate of inflation.

Of course such a move would destroy what is left of the Main St economy, equties, and the gov itself would have to default on treasury debt for it would be in excess of tax revenue...Of course there could be a selective repudiation of treasuries and the Fed could continue to monetize new treasury issuance... After all, Ben is an experimental kind of person...lol

Bit of a sticky wicket?

Mon, 08/08/2011 - 17:33 | 1539525 THE DORK OF CORK
THE DORK OF CORK's picture

I disagree  - Volker destroyed the industrial base to "save the dollar" - exporting industry and reimporting goods with a overvalued dollar - destroying the skills base.

Mon, 08/08/2011 - 10:48 | 1537083 Bastiat
Bastiat's picture

I wonder if JPM still has copper cornered?  LOL!  Copper - 3%

Mon, 08/08/2011 - 11:03 | 1537192 Bastiat
Bastiat's picture

I sense a great disturbance in the farce.

Mon, 08/08/2011 - 11:15 | 1537257 Ponzi Unit
Ponzi Unit's picture

1700 gold and silver prints 38.50?

 

This is ridiculous.

Mon, 08/08/2011 - 11:25 | 1537299 The Alsatian
The Alsatian's picture

We're now in the grey zone between official re-recognition that Au is money by the CB's and that time when investors recognize that both Au and Ag are money. Considering the equity and bond action today Ag holdings are getting sold to meet currency demands...BTFD, this can't last long.

Mon, 08/08/2011 - 11:18 | 1537267 Shock and Aweful
Shock and Aweful's picture

Can someone explain why Silver is not hitting new highs on this...(is this going to continue to be a flight to safety into only Gold...and of course U.S. Debt?

I would thing (that is where I go wrong I guess) that people would be dumping things like gov't IOU"s and rusing into tangible, physical assets....but...no.....these idiots want MORE Treasuries!! MORE MORE MORE.

This right here is a perfect explanation of why the worlds financial markets are screwed beyond repair....instead of running away from paper promises to pay - by the biggest debtor in the history of the world...people want to buy MORE of their IOU's....HUH? 

In what SANE way does that make any bit of sense?

I understand that Silver can be very volitle...but christ almighty....it is at least tangible...and cannot be watered-down and "quantitativly eased" into worhlessness....right?

What do you have when you buy a Treasury ?  Nothing more than a promise from Jeethner and/or the Bernank to pay you back - (withlittle or no interest)....hell...that can't be worth too much can it?

 

So, does anyone have any REAL insight into why the Silver spot price continues to drop or stay stagnent?   I am not gonna sell any of my physical...no matter where the price goes...but would like to be able to make some sense of this for my own understanding.................................

 

ANYONE?

 

 

Mon, 08/08/2011 - 11:51 | 1537448 speculator
speculator's picture

Well, silver has always been more of a "risk asset" than gold, and industrial uses take a much larger fraction of production. BTW, it fell to 25 cents in the depression, even though a dollar contained 0.77 oz of silver.

Also, there was a massive parabolic spike in silver this spring on hugely bullish sentiment readings. After a move like that and the inevitable crash, it takes a while for the market to recover. So many people who were going to buy silver bought it then, pulling forward investment demand and then leaving the latecomers burned. 

Mon, 08/08/2011 - 11:22 | 1537287 Henry Hub
Henry Hub's picture

What's going on? I sold all my gold on Friday because Dennis Gartman said that gold had topped... and he's a guru! Sure he's called gold at a top at every minor correction but he's a guru. I am so disillusioned.

Mon, 08/08/2011 - 11:34 | 1537333 Henry Hub
Henry Hub's picture

Actually I'm just kidding. I'm keeping my gold to $10,000. Dennis Gartman is a bozo.

Mon, 08/08/2011 - 12:04 | 1537511 au_bayitch
au_bayitch's picture

@HH     Characterizing him as a ‘bozo’ is not being accurate. Pennis Gartmans’ Au calls does not only show his incompetence on not only gold but markets in general. Why CNBC allows talking heads like him on their programming is a poor reflection on professional financial advisors.  Minus methman and a couple others, zerohedgers in general are better than Pennis Gartman in the PM area. And I’m positive that a few here are better in the equities area.  If CNBC is listening, hire a zerohedger. Or at least donate some FRNs for the advice.

Mon, 08/08/2011 - 11:47 | 1537430 speculator
speculator's picture

And gold producers are doing better than gold explorers. Makes sense in this "de-risking" market, and because the explorers rocketed so much higher last year. XAU:Gold is getting really low again, approaching late '08 levels, even with the miners near all-time highs. If they keep tanking with the rest of the market and gold so much as holds 1400, there could be some really nice value plays. Not the kind of thing you typically associate with miners, but cash flow yields could get pretty sweet, even better as energy costs come down. 

This is a mining stock screener I built for finding value relative to resources, cash flow and earnings: http://miningalmanac.com/filters/ 

Some of the cheapest right now look like African Barrick, Timmins, Remelius, even Newmont actually. I'm not bullish yet though... too big a bear on stocks in general!

Mon, 08/08/2011 - 12:24 | 1537630 Snidley Whipsnae
Snidley Whipsnae's picture

Excellent post/comments Spec!

Mon, 08/08/2011 - 11:52 | 1537452 css1971
css1971's picture

No dip to buy.

 

Bugger.

 

 

Mon, 08/08/2011 - 11:56 | 1537471 Badabing
Badabing's picture

Gold is used for international settlements by central banks via the BIS. All central banks have gold reserves and at this moment in time are buyers.
If the price of gold drops it creates a feeding frenzy. It is a catch22.
Silver on the other hand is a very small market and easily manipulated. It's also the poor mans gold TPTB say fuck the poor man.

Mon, 08/08/2011 - 15:00 | 1538472 faustian bargain
faustian bargain's picture

Meanwhile, gold has reached the platinum level.

Wed, 09/14/2011 - 05:12 | 1667536 chinawholesaler
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