Gold And Silver Plunge As EUR Reaches 15 Month Lows
It seems funds left redemptions until the last minute in the vain hope that everything will be fine in the European dis-Union as we see renewed selling pressure in EURUSD - taking out the January 2011 swing lows (as a mediocre Italian auction and failed Hungarian auction weigh heavily on the expectations for a 'solution' or firewall). Gold and Silver are also legging down hard (the latter now -9.5% from Christmas Eve) and the former loses $1550. Gold took out its September 2011 swing lows back to near six-month lows.
The USD is up around 1% since Christmas Eve's close with the EUR (and cable) underperforming and JPY outperforming (the only major cross that is stronger vs the USD). It also seems the AUD has a renewed corrrelation with the USD as we see Aussie bonds (the only 'safe' AAA govvie?) bid to record low yields.
Silver is the obvious (high beta) loser in this redemption/liquidation battle but Gold is 'decoupling' from copper here also. Interesting that Oil is stable just under $100 (and practically unch from Christmas Eve).
European sovereigns are all leaking wider with 10Y BTPs now almost 40bps wider than their tights yesterday, Portugal 10Y now 43bps wider than Christmas Eve's close and France 10Y also leaking badly (+15bps).
Elsewhere, ES is modestly higher from yesterday's day session close (as correlations with a weak Gold market are helping while every other risk asset driver is pointing negatively or flat). European corporate and financial credit spreads are notably wider (investment grade +7bps from yesterday's tights, Crossover +25bps, and senior financials +11bps) as European equities are now down nearly 1% from the Christmas Eve close.
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Oh well, Tme to buy more Physical
But gold is so pretty to look at, say it isn't so!!!
silverbugz losing even more of their life's savings after "generational buy with both fists" alerts issued by ZH pumper shills when the price was at 32
Not yet. GLD will bottom out at around 145-148. That is when you should buy buy buy gold (not GLD). I am just giving you the trigger level to buy as measured by GLD. I would never endorse an ETF.
Why buy gold like a trade? In the end, it will only matter how many oz you own.
Why pay $3.99/lb for chicken when next week it will be on sale for $2.00/lb? You get twice as much.
And if it never gets to your "trigger price," then where are you? And if you believe that buying at the "trigger price" is always the way to go, then you are constantly guessing where the bottom is. And you will miss some of those - either buying at an "above-bottom trigger" or never getting there and buying higher - in the end wasting a lot of energy trying to time something where you are apt to have roughly the same result by just staying in a scheduled buying pattern.
My WAC of gold is $892, including a 5 oz purchase this summer at $1,811 (including premium).
If you believe you are a good guesser, knock yourself out. But if you intend to hold the physical as an accumulation of real money/wealth store, and you're not planning to "trade" it back anytime soon, the difference you believe you can gain by timing won't matter much.
exactly... Weighted Average Cost!
If you have a regular income its sooo easy.
Just take 10% of it (or more) and convert it immediately. Why wait? Waiting for what exactly?
Its even easier if you have been an unrestrained consumer bitch for years... and finally wake up!
You can still live out your desire to buy things... this time physical shiny metals!!!
Buy the real money with your fake money!
Such a fake paradox world we live in.... we have to BUY THE REAL MONEY.... lol!
I still think China has a large role in this slide. Their housing bust is accelerating, and changes in their gold exchanges has made buying more difficult.
Plus, we are seeing some year end selling, which is normal.
The bet on the printers is still alive and well. Deflation would take everything down stocks, gold, etc... The bailouts will pump trillions into an already bloted system, which should be good for gold prices in every currency.
+1 and + 1
mayhem and margaris have it exactly right, at least for small physical gold investors. When I have money ($ fiats) come in, I take some of that and buy gold. I have been doing just that for decades, it has worked out very well for me. I have BTFD and BTFSpike. But each Spike (until now...) has been very transitory.
I agree that waiting on a target price is really a game for TRADERS, not for long-term savers choosing to hold physical gold.
At the very least, buy PM's monthly, or twice if you feel the urge.
My eyeball chart reading puts the long term trend line support for silver at $22-23. The question is what is fueling the drop in the euro now, just the low volume giving someone the oppotunity? I'm not seeing enough news to be driving this.
145 - 148 level? Is that the ETF price? If so i am watching it like a hawk!
gold longs getting torched
gold longs getting torched
Gold long traders getting torched. Fixed it fer ya.
With gold up a measley 8% for the year at this smack-down level, and up double digits for each of the the past few years, only long traders are torched.
wait for tomorrow. TPTB want to see a very low single digit performance in gold for 2011. Possibly carrying this goal over into the first 2 months of 2012. This could be the last rainfall for a long time.
Paper longs, speculators holding leveraged bets on what the price of gold (as opposed to actually holding gold) are getting torched, and doing a favor for anybody who actually buys and takes delivery of the physical metal. You think that holders of physical are actually selling (other than the retail cash-for-gold market)? I doubt it.
It is funny to see these troll posts every time gold dips. You really think a collapsing Euro and Pound are bad for gold or good for the dollar? Nothing has changed. Just buy the dips. Things are only getting worse.
There are still a lot of people that look at gold like they do CSCO or AAPL. Most folks don't bother to try to understand economics, monetary policy, or for that matter investments outside of what they can do with their ETrade account.
If Etrade has an office in the City of London you will have to start putting quotes around "their" Etrade account.
pods
"gold longs getting torched"
I am long gold and silver. Not torched, bought at $850 and $9.00 !
Got a long way to go, to be torched
How about your physical will never be worth 0$?
Though it likely someday will near infinity when measured in dollars.
It ain't over 'til it's over!
"Oh well, Time to buy more Physical."
Too bad "Nasdaq 5000" didn't come in a tangible version that you could take home in a box, eh?
Addicted to precious metal Hopium? ZSL can fix that fast!
ZSL is down from 1000. LOL.
You should buy puts on ZSL today. I am. That thing is mathematically designed to go down no matter what. And no, I am not explaining it on the internet again.
All of those 'ultra' inverse funds are just carnival games to help separate retailers who think they've found a magical way to take a short position in the market without actually short-selling, but never bother to learn the math that drives the leveraged funds. Just look at the performance of any of them (even the unleveraged ones suck).
The casino is rigged, but many people refuse to believe it.
Jesse's latest. Chart at bottom link.
======
29 December 2011
The End of Year Precious Metal Bullion Bear Raid - Another Form of Window Dressing?
Like many others who watch the markets I have wondered what might be prompting this obvious bear raid on the paper precious metals market over past four weeks.
It could be explained by any number of economic developments including the decline of the Euro, but that does not really explain the downward market action which has been sporadic and not associated with news, more so than fundamental.
One has to be a bit naive or disingenuous to ignore the blatant bombing of the market with large numbers of contracts for sale during thinly traded markets. This is the not the sort of trading that a profit seeking trader would do except under the duress of a margin call. Anyone who watches the tape, rather than waving their hands from the 50,000 feet level, can see it clearly.
From speaking with others, and based on my own thinking, I believe that what we are seeing is a type of end of year window dressing.
At the end of year an institution will mark positions to market. Granted, any number of institutions will have an off calendar fiscal year ending for example in October.
But many others observe the conventional calendar year ending in December as their fiscal year, among them JP Morgan and HSBC for example.
It is an obvious phenomenon that trading firms run up prices into key events to make their results look better if the market conditions permit it. And the trading desks run prices lower on some assets into key events such as option expirations.
But what about firms that have very large short positions including naked short positions with leverage? Would they have an incentive to push prices lower into key events of mark to market?
The answer is yes, particularly if markets are thin and sentiment has been battered by repeated bear raids and commentary from their friends in the financial press. They also often spread the word, one way or another, amongst big traders that tend to follow price momentum. And of course it does not hurt if a major source of bullish trading amongst small speculators has been taken down into bankruptcy [ed: former MF Global clients].
Is this why we are seeing this now? Few can know for sure, but if we see a sharp rally in January and resumption of the bull trend the answer is more probably 'yes.'
And if so, this is just another hidden price that is being paid by a nation that cannot bring itself to be free of a financial oligarchy and their corrupting influences.
Posted by Jesse
http://jessescrossroadscafe.blogspot.com/2011/12/end-of-year-precious-metal-bullion-bear.html
Post-holiday PM sale!
I love sales!
If the old lady can go out and get some bargains on post-Christmas sales of crap made in China, why am I not entitled to pick up some $900/ozt gold? Come on! Gimme my deserved sale prices.
My uneducated guess is that the Chinese set the floor at $1100 when they loaded up at that level previously. I can't imagine being able to source any physical at all if the paper price ever hits $900. I bet even Tulving would get cleaned out at that price point, especially given the counter-party risk disaster that is the Crimex.
APMEX is blanketing my inbox with sale flyers. Go figger.
Gold may reach sub $1200 and silver sub $15 in H1 2012.
most newer producers would be assed out at $15/oz.... bye bye annual increase in supply
unless you mean DOW 8,000 silver $15, then yeah... possible
Short term price movements have little to do with fundos. The fundamentals of oil has been strong since 2001. However, oil still reached $40 in H1 2009.
Fundamentals? They lie about peak oil. There is plenty of oil and countless new oil discoveries world wide. They probably lie about peak gold and silver as well. There are probably secret mines, secret technology to unearth the metals and vast amounts of gold and silver reserves in secret underground storage facilities.
Fundamentals only apply if you can trust that they are accurate. I'm a glutton for punishment and perhaps a little foolish so I'm trusting in the fundamentals of gold and silver but I'm also open to the possibility that I'm being played. ( think the De Beers diamond cartel)
I know one thing, I can't wait for this whole PM thing to runs it's course. We may see a gold standard, which will push the price up so that all of the institutions and banks can sell their gold to the governments at $10,000 but the rest of us will probably be forced to sell (or hide) what we have to the local federal reserve at 1/10 that price.
Yes, I'm feeling a bit pessimistic today.
"most newer producers would be assed out at $15/oz.... bye bye annual increase in supply"
................................
But, but, Johnny Bravo said it cost only $5 oz to get it out of the ground...
Where are you Johnny? Still in your mom's basement?
Indeed, and the otherwise common company that a recession would be, will be solved through adjustments of CPI calculations, hence GDP deflators, and faster increasing GDP hedonics components.
Are you wild-guessing, or do you have a rationale? The one scenario that would support such prices is an all-out monkey-hammering by Ben et al to drive physical out of weak hands in a final 'confiscation' before a currency collapse.
Apart from such a manipulation, the EUR/USD would have to reside in the stratosphere, which the FED can't tolerate in the ongoing currency war.
I just don't see it. The tension between not wanting real money to take off too soon and needing to keep the USD debased will continue this see-saw until someone admits something is broken.
I don't think the Fed wants to support EURUSD that much. The European debt crisis creates "safe haven" demand for US treasuries. Otherwise who is gonna finance the huge fiscal deficit of the US?
What level of the ponzi did you buy in at?
Do you think the USD "safe haven" status has any staying power? Why do you think Timmay is building up frequent flyer miles to have crepes and schnitzel with Merkozy?
I first bought silver back in 2005. I added some in H1 2011 and it's already under water but I will not sell it.
Don't believe the hype of the 'market price.' Your silver is not underwater. Nothing the bad guys want more than for you to think that it is. JPMorgan would love nothing more than for you and everyone else to believe Ag is a loser and cough it up to them.
The real price of silver and gold are being masked, and the smart ones - you and the bad guys - know it.
You are delusional. You silver people are completely friggin delusional. There really is no other explanation for such a ridiculous attitude.
Just snap the f out of it brother before you get yourself in too deep. Hearing you guys go on and on like price doesn't matter. This is just a damn shame.
Absolutely agree. It's really amazing.
Max Fischer, Civis Mundi
You are the delusional ones who believe the system is still honest. After MF Global, you should see this clearly. Instead, you stand in line to be slaughtered. Mass delusion indeed.
Never have I claimed that 'the system is honest'. I am claiming that hanging your wealth/retirement on the long term performance of silver alone is not a winning strategy.
Not only that but I am beginning to get the impression some of you guys are morons. No offense guys but come on.
Silver alone? No, it's never a good idea to put your savings in one asset. But the benefits of PM's as your retirement vehicle
If you have a better idea / suggestion I'm sure we would be all ears.
"Long term (10+ years) method of wealth retention"
- Amen & if this PM rally is over there will sure as fuck be another one w/ in the next 20 - 30 years...hows that 25% loss on the stock market (adjusted for inflation) over the past 10 years treating your retirement account?
Of all your rationale, this is my favorite:
Can't be confiscated except through killing you
WTF over?
My reasoning is that if they are going to go door to door taking gold and silver they will be going door to door stealing everything not nailed down (food, power, your women, etc). They will be robbing you at gunpoint at which point you might as well fight.
Well....the govt. pegs the value of gold at $42 bucks an ounce...
So when they decide to confiscate it, and mandate that people "turn it in"....they'll probably offer people a couple hundred bucks and claim they are generous with a 400% windfall
Those pesky gold certificates.
Sorry......$42.2222 (strange numbers....but not my numbers)
a calculator tells the story pretty easily:
http://fms.treas.gov/gold/current.html
There's also the stealth confiscation that being used as we speak. We, "real money" savers have already changed our fiat into into PMs. Now we don't have any more fiat to change -- to "BTFD". We've been conditioned to avoid fiat, so why would we have any more fiat than what's necessary for a few month's rent and groceries? Those few months have now been used up for the ones, like the pensioners, that live off their investments. Now we must cash in some of those PMs to eat and stay warm.
It was a brilliant (but evil) move what JPM did to our price discovery mechanism. Who'd thunk it -- that instead of their shorts busting JPM and the Comex, they busted the rest of us instead that held PMs, both the paper and the physical variety. If there's no price discovery mechanism, it becomes very difficult to cash in those PMs for a decent price. So we take less because we have to. They're not robbing us at gunpoint; they're robbing us with keyboards and political power. If one has absolute control of the markets and the sovereign fiat money system, it's not so hard to separate the proles from their wealth.
The market can remain irrational longer than we can remain solvent. Theft, extortion, bribery, and murder is now the accepted method of acquiring large amounts of wealth. Until this is no longer the case, we have a problem.
What's this We?
I shot off a cash missile earlier this month....but I've got a couple more to back my play and DCA
Become your own bank...."Stash n Stockpile Weapons of Stack Construction!"
You really don't understand how this story ends, do you?
yes i am hanging my long term retirement on silver. you got to have faith baby..............silver bugs never get any respect..........we are the kicked when we are down and laughed at when we are in the green. oh well..........please continue on........you can call me names if it makes you feel any better............but the die is set. i made my bet. and that's my story and i am sticking to it.........
YESSSSSSSSSSSSSSSSSSSSSSS!
Oh yeah, and f#&k the nay-sayers.
Funny....my last big purchase earlier this month finally pushed the DCA of my stack into the double digits.
Silver's done alright by me for 10 years now....
No offense....but I think it more than qualifies as a long term winning strategy
Right, because if you bought silver 10 years ago, you would have only septupled your investment even after the drop from $49.
Stax - don't confuse moron with intelligent fringe lunatic - I am truly insulted.
Stax Edwards
I am claiming that hanging your wealth/retirement on the long term performance of silver alone is not a winning strategy.
I agree 100%,never hang your hat on one item, but the ONLY Item to HANG it on, if you had to choose is GOLD
PERIOD
I have no PM physical. I'm an old fart, and each time I work up enuf courage to buy some, the sellers turn me off. Goldline made our local papers, in that they sold $31,000 of gold coins to a local widow, for $50,000. The guy hawking stuff in the tuxedo is amusing. None of them will allow purchase with an Amex credit card. Why? "Cause AMEX will help chase scoundrels. So, here I sit. I thought about it at $1800, then $1700, then $1600............
I thought about gold at $255 - bought at 280, 320, and 600.
I thought about silver at 2.80 - bought at 3.00 and 5.00
When did you buy at $ 3.00?
Around 1815
What is bullshit for $800 Trebek.
Anyone can just write that. I'll be the first to admit I was late to the start but I'm young so I'm not too worried about it. I know some guys who did buy the bulk of their purchases at $8 and at $10 and $12 and I admire them for having the discipline in a relatively flat market to buy the quantities they did. A few of them were worried it would go to $5... and $6... etc.
I bought in Nov. 2010 for the first time... and basically every month after w/ a % allocation of dry powder every month for dips like this. I bought the April/May dip... the September slaughter... and I'm about to back up the truck if this shit prints $22-$25 range. If it hits $25 I'm waiting but will probably cash in 1/3rd of my powder and continue to do so on down. I'd rather have a position opened at $25 then wait til it's at $35.
But as per usual... $1 of gold for every $2 of silver til the ratio (near 60) doesn't give me a boner.
Well if it drops to a level you are comfortable with, you can be assured that you will not be able to find any physical to be had.
if you are nervous about buying gold, then you are not buying it for the right reason, IMHO. The allure of huge gains is not what gold is for, even though it may happen. In reality, gold is a parallel form of wealth preservation. To look at it in terms of fiat does it a great injustice.
Learn to see it as an independent way to protect yourself.
If you are looking to get in low and sell high, that is why they make GLD, which should be looked at as nothing different from the rest of the offerings within the fiat system.
pods
AWW!!! Goldline, gold dealer to Hannity, Beck ,and the rest of the corporate whores. Rip off grandma ! Thats OK!.... Go establish a realationship with your local coin guy, have some fun and get some metal.
yabyum
Goldline, gold dealer to Hannity, Beck ,and the rest of the corporate whores. Rip off grandma ! Thats OK!...
Due Diligence dude........................
Hannity, and Beck never tell folks WHAT kind if Gold to buy.
Having had a couple of conversations with other Dealers LIKE Goldline, Granny got screwed, simply because she trusted a crook.
She was sold the older eurpoean coins, or Gold 20.00 Eagles,for CONFISCATION protection (which is a joke).
So she paid a huge premium for RARE , non confiscatible GOLD.
Granny should have had help,and not got screwed,by the slime sucking money grubbing liars.
AKA Goldline! Beck wiped his dick on Grandma. Fuck due diligence, these fucks are criminals.
Wouldnt you like to have some form of portable asset that cannot be devalued and is accepted across the world no matter what government attempts to do? Talk to some immigrants about what happens during a currency reset. Vietnamese, Russians, Eastern Europeans, Middle Easterners will be able to tell you exactly what does happen. (You lose every bit of wealth you have spent your life creating)
@Stax
You are ignorant. Currently Physical Silver price is pegged to a fiat paper ETF market price. This will not stand forever because the paper market is pure theater at this point.
Once Physical returns to actual supply and demand pricing, Physical Silver prices will elevate to the proper levels of ~ 15-16:1 that of Gold. As a side note; Gold is in the same boat with its pricing
Paper should not price Physical, this is the key. When the collapse can no longer be hidden by the crooks running this casino the rush to Physical Gold and Silver will be mind-blowing.
"Paper should not price Physical"? Are you suggesting that physical prices physical? As long as there's fiat currency, physical will be priced by paper. If physical is not available to the average prole, how can she use anything but her government's "full payment for all debts public and private" fiat to buy her groceries and pay her rent and taxes?
The end game appears to be to remove physical PMs from general circulation. When you're no longer able to buy any PMs from your local coin dealer -- it doesn't matter the reason -- they will effectively have disappeared from circulation. Destruction of the price discovery mechanism is a giant step in that direction. Buying up the physical after the price has been severely crushed, and when people need fiat to pay their bills, will remove more from circulation.
For gold and silver to be money, it must circulate.
I can certainly follow why you think this. I am all in sliver and gold - average price paid for gold is 800$, average for silver is 18 - and I have essentially no 401 or other investments. Here is my FEELING: I am not sophiticated enough to understand the equities markets- and have no possibility of gaining that expertise, say, in next ten years - so I can either trust advisors, or make the best safe bet I can. Here is what I see- over the past five years essentially EVERY aspect of finance seems to be worsening - interest rates at near zero, Japan totally on the ropes, China maybe also in a RE crash; Euro very unstable; Middle East MUCH more unstable; US in massive debt, with no sign of recovery. With my limited expertise, what would I imagine was going to grow over next 5-10 years? I am not skilled enough to SHORT things. The only CONSISTENT trend I see over past ten years is widespread money printing, and a fairly staedy climb in metals. Do I expect this to continue over the next 5-10 years? Yes, yes I do. It seems like the safest bet.
I also am looking for severely underpriced real estate in Vegas and Detroit. That's my plan, and ,like The Cowardly Lion - I just want somebody to "Talk me out of it". So, all I am offering is my reasoning, based on lack of expertise in markets- we all have to place our own bets. Maybe, this will offer a little insight into why we are doing what we are doing - and are only a little delusional - I have basically doubled my money in past decade, by doing this. Let's see how this works in 2015 and 2020.
EV:
JC, is your avatar an animal wearing a Nazi SS Brownshirt Uniform performing a Sieg Heil?
Please google "Pokemon Hitler".
"Otherwise who is gonna finance the huge fiscal deficit of the US? "
...............................
Treasury to Fed to PDs... Same old game... It's called printing money from thin air.
IMHO, the Fed will save some dry powder until the "safe haven" demand dries up.
Take the game to its end moves. The only thing the Fed will store up "dry powder" for is something of real (not printed) value. Printing money to cover up printed money is not a use of dry powder. Confiscating real money (PMs) through manipulated smack-downs or, potentially, direct acquisition from the populace, are the dry powder moves.
We have to look at the facts! We just bailed out Europe. We just printed more money. We have never stopped QE.
Its all smoke and mirrors. All this is bullish for gold yet it goes down! Its just the paper, and the paper will have to crash before settlement of the paper contracts with paper. Just hold tight and don’t forget that the end is near.
Yes, that's a very good question. With collapsing margins, closing stores, a fading China, who WILL finance the US deficit, but for Uncle Ben?
The scheme is genius though evil. Uncle Ben will finance it - through the wealth confiscation of the population as a whole for the benefit of a few members of the elite.
would a president ron paul stick the fed for the bag of worthless debts?
What he said!
You prediction is as valuable as that that says gold $2100/oz.
It looks to me that the price of gold to the value of the euro and since the euro may crash further, the price of gold is likely to fall too.
Why is the price of gold pegged to the euro? I don't know. I have to read anything that explains why. All I read is that gold goes down when DXY goes up but since DXY is mostly based on the value of the euro, it is very much similar to what I am saying.
What I'd like to read is what happens to DXY when the euro is gone? Does it go to zero?
I'm not sure I would word it that way, but the Eurozone does account for its bullion in an MTM fashion.
Thank you for that. FOFOA reminds of that fact occasionally, and treats it as something of great importance. I would add that the eurozone reserves are much more likely to exist than the US's (still unaudited) 8K tons.
http://en.wikipedia.org/wiki/Gold_reserve#Officially_reported_gold_holdings