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Gold Down Further 2% – Chorus of ‘Gold Bubble’ Callers Out in Force Again

Tyler Durden's picture




 

From GoldCore

Gold Down Further 2% – Chorus of ‘Gold Bubble’ Callers Out in Force Again

All major currencies have risen against gold again today as the vicious sell off seen on Tuesday and particularly yesterday continued in Asia overnight and in Europe. 

Gold is trading at USD 1,723.80, EUR 1,192.10, GBP 1,052.90, CHF 1,369.50 and 133,225 JPY per ounce.


Gold at $1,700/oz Remains $800 Below the Real High (Inflation Adjusted) from 1980

Gold’s London AM fix this morning was USD 1,716.50, EUR 1,191.10, GBP 1,049.59 per ounce (sharply lower from yesterday’s USD 1,850.00, EUR 1,279.30, GBP 1,119.58 per ounce).

The expected correction was due to the very over bought nature of the gold market in the short term.

The catalyst was the mini parabolic spike seen in August, profit taking and the 27% rise in margin requirements set by the Chicago Mercantile Exchange, which followed Shanghai, where margins were also raised on gold futures.

The correction is healthy as the sharp move upwards was making some investors and diversifiers nervous.


Gold in US Dollars – January 2009 to Today with 50, 100 and 144 Day Moving Averages

In time, this will likely be seen as another paper driven sell off on the COMEX as physical supply remains limited while demand remains robust, particularly from central banks and from China, India and much of Asia.

With gold now down nearly 10% or $200 from its recent ‘peak’ value buyers are getting positioned to buy on the dip. Some may wait until we see a day or two of higher closes and the adage to never catch a falling knife is apposite.

Dollar, euro and pound cost averaging remains prudent especially given the high level of uncertainty regarding the market in the short term. 


Gold in US Dollars – June 2009 to Today Showing Strong Trend Channel and Possible Fibonacci Retracement

Short term support may be seen at the psychological level of $1,700/oz but momentum traders and Wall Street players with concentrated short positions may press their advantage and manipulate prices to lower levels whereby they may close some of their short positions - pocketing a tidy short term profit.

Strong support can be seen between the 144 day moving average at $1,522/oz and the 100 day moving average at $1,571/oz. Interestingly $1,571/oz was previous resistance and therefore could now become support.

However, given the extent of global demand for physical bullion due to massive macroeconomic, systemic and monetary risk facing us today, there is the real possibility that gold’s correction is more shallow with the 50 day moving average of $1,630/oz providing support. 

The gold bears have jumped on the ‘gold bubble bandwagon’ again after a long period of silence.

The most vocal gold bears who are widely followed in the media and accorded guru status are Dennis Gartman and the celebrity economist, and uber Keynesian, Nouriel Roubini.

Both have made bearish calls regarding gold in recent years.

In so doing they have joined a chorus of so called financial and economic experts calling gold a bubble since gold rose above $850/oz in late 2007.

Gold was called a bubble by many in March 2008 (more than 3 years ago) when gold reached a nominal high of over $1,000/oz.

‘Gold bubble’ calls were made in December 2009 when gold reached a nominal high of $1,200/oz.

Further ‘gold bubble’ calls were heard more recently in November and December this year when gold reached $1,400/oz and then consolidated at these levels.

Roubini’s basis for calling gold a bubble is simplistic and somewhat incoherent but simply put he appears to believe that massive debt will create a deflationary depression which will lead to gold falling in value.

Previously Roubini had communicated on twitter that “Spam is a better hedge against inflation than gold: you can eat it and it lasts 1000 years. Gold is, as Keynes aptly said, a barbarous relic.”

However, it is difficult to ascertain his position as he has not backed it up with a research paper, an article or an interview. Rather he has chosen to tweet a series of somewhat conflicting and incoherent messages. 

One message suggested that those buying gold were lemmings and sheep.

Another showed a chart from an unnamed Reuters editor which purported to show ‘A Tale of Two Bubbles: attached a Gold vs Nasdaq Chart’.

The chart was a classic example of data mining and looked at only 5 years of data. From 1987 to 2000 the Nasdaq rose 18 fold in 13 years. 

Today at $1700/oz gold is up less than 7 times since the 20 year bear market lows of $250/oz seen 11 yrs ago in 1999.

More importantly, comparing like with like, gold rose 24 times from 1971 to 1980.

How can the crystal ball gazers be so certain that gold will  not replicate the performance of its last bull market?


Cross Currency Table 

Roubini also contradicted himself somewhat when he suggested in a tweet that gold bullion in a safe vault was a safe haven that would protect from “global financial crisis 2.0.”

He tweeted “In inflation tail risk virtual gold (ETF GLD) beats physical gold. But in global financial crisis 2.0 physical gold in safe vault beats GLD.”

It appears Mr Roubini is having his cake and eating it too. We await clarification of his opinion regarding gold and whether it merits an allocation in a diversified investment portfolio or as financial insurance against “global financial crisis 2.0.”

Dr Constantin Gurdgiev, a non executive member of GoldCore’s Investment Committee, has written a considered article overnight looking at gold’s correction and Nouriel and all the other gold bears should inform themselves by reading it.

For the latest news and commentary on financial markets and gold please follow us on Twitter.

SILVER 
Silver is trading at $39.49/oz, €27.40/oz and £24.13/oz. 

PLATINUM GROUP METALS 
Platinum is trading at $1,806.50/oz, palladium at $746/oz and rhodium at $1,800/oz. 

(Reuters)
Gaddafi will try to sell Libyan gold: ex-central banker

(Financial Times)
Gold drops $160 an ounce in two days

(Bloomberg)
Gold Bull Rally Still Intact After Plunge, SocGen’s Wilson Says

(Bloomberg)
Gold Drop Is ‘Warning,’ May Extend Slide to $1,700, Dincer Says

(Bloomberg)
Gold ‘Correction’ Overdue, Will Be Short-Lived, Commerzbank Says

COMMENTARY
(True Economics)
Dr Constantin Gurdgiev: Few Thoughts on Today's Gold Price Correction

(Marketwatch)
Peter Brimelow: Gold down, but bugs not out

(Forbes)  
Warren Buffett Is Wrong About Gold And Other Stuff

(King World News)
Robin Griffiths - Important Price Targets to Look For in Gold

(Seeking Alpha)
Comparing 2 Bubbles: Gold Vs. Nasdaq

(Forbes)
Nouriel Roubini Wrongly Compares Gold To Y2K Tech Bubble

(Got Gold Report)
Letter to Dennis Gartman about the Cortes Chart

(Barron’s)
Quantifying a Potential Gold Correction

 

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Thu, 08/25/2011 - 08:51 | 1598729 MarketTruth
MarketTruth's picture

Back up the truck guys n gals.... btfd!

Thu, 08/25/2011 - 08:57 | 1598752 Earl of Chiswick
Earl of Chiswick's picture

<--- R O U B I N I Rocks

<--- R O U B I N I Sucks

 

Thu, 08/25/2011 - 08:57 | 1598759 tmosley
tmosley's picture

Probably should have switched that order.

Just sayin'.

Thu, 08/25/2011 - 09:14 | 1598809 Earl of Chiswick
Earl of Chiswick's picture

Actually a great deal of thought went into the sequence (it's an inside baseball thing) done for the benefit of the great professor.

 

You need to understand his ego is so Huge that he will read a high number on the negative arrow as a disagreement with the statement that he sucks and may even click on it himself.  But we will all understand its true meaning, that the emperor has no clothes.

 

A side objective is to see if the Zero Hedge rating system can handle triple digits.

Thu, 08/25/2011 - 09:18 | 1598889 fuu
fuu's picture

Yes it can, someone recently went over 130.

Thu, 08/25/2011 - 10:50 | 1599511 eisley79
eisley79's picture

zerohedge is made with drupal, and their up down thing is just a mod for the commenting module, they didnt make it, but at least they arent using the default one any more....

Thu, 08/25/2011 - 10:16 | 1599280 Hearst
Hearst's picture

I hate the pride these top callers have.  Whether it's Roubini or Pretcher or Gartman, they never NEVER admit being wrong.  They twist their mistakes using double speak into half truths and the MSM gleefully have them all back on air to explain the new upmove in precious metals..Sickening.

 

When I think of my Gold and Silver holdings I like to think about them years out.  Where's Gold going to be in 2014 or 2016?  Does anyone who holds physical (besides the corrupt bullion banks and commentators) believe Gold and Silver will not be multiples of their current prices??  Of course not!  Having a long term outlook really calms the nerves.  Not to say I don't follow the prices daily, but I relax more about it.  Having sound money = a sound mind.

Thu, 08/25/2011 - 10:44 | 1599474 Bastiat
Bastiat's picture

They twist their mistakes using double speak into half truths

Clearly you don't have an EC Phd so you are not able to follow their exquisite and subtle reasoning.

Thu, 08/25/2011 - 10:54 | 1599535 eisley79
eisley79's picture

dont measure your metals in dollars, and you wont even care.  Measure it in itself, aka in ounces.  Whether you have on paper profits or on paper losses, is really irrelevant.  Unlike equities or bonds, the underlying entity in metals, cannot go bankrupt, or cease to exist.

They simply are, count the ounces, and sell them only to buy other real assets.  Like land, etc

Thu, 08/25/2011 - 08:56 | 1598754 HelluvaEngineer
HelluvaEngineer's picture

I'll buy more around 1600.  And Roubini still sucks.

Thu, 08/25/2011 - 09:01 | 1598767 theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

I doubt this will be a serious correction, and I doubt that the mass buying during spring and summer will be wiped out simply with the spec longs being scared off. I blew 20% of my powder yesterday, will probably buy more in a couple of hours if the price comes down a little, and will blow the rest next week. I don't think they'll knock any of the sentiment out of gold here really and the only way for it to go sub 1620 or so would be more margin requirment increases or shenanigans...just my two cents...

Thu, 08/25/2011 - 09:08 | 1598806 DosZap
DosZap's picture

the MAXILOPEZ,@ 09:01

Bro,

Get ready for this.

< and the only way for it to go sub 1620 or so would be more margin requirment increases or shenanigans...just my two cents...>

I see the same scenario coming they did on Silver.

Thu, 08/25/2011 - 09:12 | 1598836 theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

could be, but the margin requirements are now about the same as they are for silver are they not? so wouldn't another 10% or so really move this towards a physical market??

Love it to happen though; I'll keep about half of my powder dry for next week. The rest I blew yesterday and will probably blow in a few hours...

Thu, 08/25/2011 - 12:59 | 1600242 cynicalskeptic
cynicalskeptic's picture

Sorry, seems like 'a few hours' was too long a wait......  on the way up 

Thu, 08/25/2011 - 09:13 | 1598808 Thomas
Thomas's picture

Roubini should spend more time thinking and less time talking. You could plot the assets of a compounding money market versus Yak Dung in Lahsa and get a beautiful overlap if you are willing to use arbitrary origins and different axes (which is exactly what he did). 

I scanned all the gold stories on the CNBC videos. It is unimaginable to me that a secular bull market could be so reviled as gold. That blowhard Gartman--I hope you are reading this--was yacking (Yaking) about cab drivers and shoeshine boys buying gold. Bullshit. You are inventing that crap. I work with 30 very bright colleagues at a top-ten University chemistry department. (Some of you may know my name; anonymity ain't what it used to be.) These bright guys with my prodding are not yet buying gold. Everybody knows about gold, but they are not buying it.

I've been a gold bull since 1999 and I haven't sold a fucking ounce. (Do I sound pissed at the margin hikes and media campaign?)

Thomas

Thu, 08/25/2011 - 09:56 | 1599162 thesapein
thesapein's picture

Yes, you sound pissed. It's frustrating playing with zombies. Rather, it's frustrating expecting zombies to be something more. But if you just face reality and see that they are zombies and not real people, it helps. Nature likes the shotgun method, like shooting millions of sperm out so that just one might level up. You are literally one in a million. Maybe feel some sadness for them, but don't let them throw you off to die with them. Btw, are those bright people you mentioned really bright if they aren't listening to you?

Thu, 08/25/2011 - 14:36 | 1600889 Thomas
Thomas's picture

Savants.

Thu, 08/25/2011 - 12:04 | 1599904 Panafrican Funk...
Panafrican Funktron Robot's picture

The 16's aren't coming.  The buying opportunity is right now; anything below $1800 is going to be a bargain by Tuesday.  Their best opportunity to knock this below $1700 was this morning, didn't happen.  If we close today above $1700, it's off to the races.  Tomorrow will be pants-shittingly epic.

Thu, 08/25/2011 - 09:03 | 1598777 russki standart
russki standart's picture

Not yet. I would wait until Gold approached $1670, 50 MA within the next week or so. On the other hand, I am confident that Gold will trade well over $2500 per oz within 12 months given the amount of money that will be 'printed' to re-elect Obama. Futher, we are entering the 4th quarter, with Diwali, Christmas and various New years celebrations approaching. For those of us who are long bullion, and are trying to preserve capital, we need do nothing. This sell off is a blip.

FYI, I am not a gold bug. I look forward to the day when I can sell all of it and buy the top floor of the Trump Las Vegas, complete with sex slave girls and bathtubs of champagne. 

Thu, 08/25/2011 - 09:10 | 1598824 O_HAI
O_HAI's picture

Those "extras" come standard with the place, no?

Thu, 08/25/2011 - 08:52 | 1598732 Long-John-Silver
Long-John-Silver's picture

Gold Bitchez!

Thu, 08/25/2011 - 09:16 | 1598873 Dapper Dan
Dapper Dan's picture

 

Before we removed MacArthur from the Philippines in WWII we removed the gold and silver, and burned the fiats. We removed 10,800 pounds of gold!

Apparently it was more important to keep the gold from falling into the hands of the Japanese than removing Old "I'll shall return" from Corregidor, if gold is in a "bubble" it is a 4,000 year old bubble.

Story can be read here: http://corregidor.org/chs_trident/uss_trout.htm

 

There were 18,000 Treasury checks totaling $38,000,000 which had been received by the Philippine Treasury for payment and had not been sent to the United States for credit. In addition to these securities, there was on Corregidor a large amount of gold, silver, securities, and government documents as yet not been turned over to the Commissioner. These had served as the Philippine Commonwealth reserves and comprised over one-and-a-third million grams of gold and nearly sixteen and one-half million silver pesos. A rough summation of the valuables collected under the first War Powers Act was nearly $3,000,000 in American currency, $28,000,000 in Philippine currency and 10,800 pounds of gold. The paper currency was easily disposed of by burning after the serial numbers had been recorded and radioed to the United States

Because the gold was the most indestructible, it was important to get it out of the Philippines. As the opportunity for this seemed unlikely, it appeared inevitable that the gold would soon have to be sunk in the Bay and risk recovery by the Japanese. President Quezon and the High Commissioner were greatly concerned with the problem. If it could not be destroyed, or safely sunk in the bay, there was but one answer remaining -- evacuate the gold and silver by submarine.

 

Thu, 08/25/2011 - 08:52 | 1598733 alexwest
alexwest's picture

who gives a fuck about roubini..

best description    i saw about him was

"before crisis 2008 he was nobody and couldnt pay for taxi fare by reading 1 hour lecture"

 

i never saw  VIDEOS ON UTUBE 'ROUBINI WAS RIGHT'

alx

Thu, 08/25/2011 - 09:08 | 1598811 theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

I suppose pundits like him realised to get to the top of the class (as for back as elementary school) it was a better idea to say what the teacher wanted to hear than to say what was correct or made sence. Its worked well; they've built entire careeres around being delusioned and promoting delusion. However, when they look at the world do they understand what is happening??

Thu, 08/25/2011 - 08:53 | 1598738 cossack55
cossack55's picture

Can I eat it yet?

Thu, 08/25/2011 - 09:14 | 1598850 Thomas
Thomas's picture

We may all eat it eventually (but that was funny.)

Thu, 08/25/2011 - 09:27 | 1598970 Smiddywesson
Smiddywesson's picture

People trading paper gold feel like it went in the other end.

Thu, 08/25/2011 - 09:17 | 1598872 fockewulf190
fockewulf190's picture

If your waiting to be told then yes, go right ahead.  Don´t worry about the damage to your teeth, I´m sure your dentist will accept the toothmarked bauble as payment for any repairs.  Have fun digging through your own baby ruths.  That will be one expensive flush if you miss it.

Thu, 08/25/2011 - 09:37 | 1599048 tmosley
tmosley's picture

Feel free, but it will be much more filling later.

Thu, 08/25/2011 - 10:14 | 1599285 thesapein
thesapein's picture

This ongoing insider joking does remind me, remember that one quick method to test a gold coin, bite it to see if it's softer than your teeth. Nice thing about gold is that it's completely at home around us organics and plays nice in the body. It's actually perfect for use in medical devices that must go inside the body because it's non corrosive, non toxic, can be made into any shape, etc. Ask any cyborg. 

Thu, 08/25/2011 - 13:03 | 1600279 cynicalskeptic
cynicalskeptic's picture

No you can't eat it yey - nor will you ever be able to  BUT unlike those $100 trillion Zimbabwe banknotes, a pinch of gold dust WILL buy you enough food for a day

 

http://www.youtube.com/watch?v=7ubJp6rmUYM

 

The first comment on this video is:


All the westernized countries look at these poor people and pitys them, not at? all aware that this is coming their way very soon!

Thu, 08/25/2011 - 08:54 | 1598741 Sean7k
Sean7k's picture

Typical options expiration sell off. The last two days, the entire world production of gold was traded. Twice the production of silver. The CME is complicit. Excellent market entrance prior to Bernanke's "we aren't doing nothin' speech". 

Thu, 08/25/2011 - 08:57 | 1598761 eigenvalue
eigenvalue's picture

But in my humble opinion, if Bernanke should say "we aren't doing anything", gold and silver would be hammered again. No QE3 now is supposed to be bearish for PMs. 

Thu, 08/25/2011 - 12:10 | 1599924 Panafrican Funk...
Panafrican Funktron Robot's picture

QE3 = dollar debasement = bullish for gold.

No QE3 = stock market fail = bullish for gold.  

There is literally nothing he can announce that won't be bullish for gold.  Add on the crash in Europe happning currently, and we could see 2k gold as early as mid September.

Thu, 08/25/2011 - 09:01 | 1598771 TradingJoe
TradingJoe's picture

Exactley! Nothing but noise and blantant manipulation via margin hike increases, the leaked ones I mean, options expiration, and all ahead of Benjie's (I'll give you nothing this time) speach! Very Funny indeed!

Thu, 08/25/2011 - 09:10 | 1598791 SheepDog-One
SheepDog-One's picture

Hillarious the concern equity bulls have for those holding gold, as the truck theyre on pulls into the meat cutter house.

Wont hear much from the equity bulls/gold bubble callers when equities roll over and die soon.

Thu, 08/25/2011 - 09:17 | 1598875 Snidley Whipsnae
Snidley Whipsnae's picture

None of the fundamentals of crumbling fiat and crumbling world financial system have changed...

Once again the paper market is wagging the physical...

Buy physical and sit tight...

Weak hands or those wanting a short term profit paid in fiat are not likely to get back into gold at the lower price they expect... PMs that are sold are headed East and won't be coming back near the current price levels...

Are the central banks selling gold?

Thu, 08/25/2011 - 09:26 | 1598965 Absinthe Minded
Absinthe Minded's picture

The price may have dropped, but the premiums haven't. I like how they say gold dropped 5.6% on no news on WSJ this morning. Hiking margins 26% is no news? Fuck off Bernanke bugle blowers. Why don't they hike oil Margins by 25 or 30%? Then watch their asshole buddies at Exxon Mobil cry. No then the big boys at the CME (Chicago Manipulation Exchange) wouldn't get invited to the Turks and Caicos by their greasy oil buddies. By the way, I hope Ilene fucked up their playground down there.

Thu, 08/25/2011 - 09:06 | 1598797 russki standart
russki standart's picture

It is a temporary phenomenon, with weak holders sold out in favour of the strong. When the dollars resumes its decline, just watch as the rest of the world moves into Gold. By comparison the 1970's gold bubble will look like a bathtub fart.

Thu, 08/25/2011 - 09:30 | 1599001 Smiddywesson
Smiddywesson's picture

You are, no doubt, correct.  The only question in my mind is how far down they push it and how long it takes to recover.

Thu, 08/25/2011 - 08:56 | 1598747 Johnny Lawrence
Johnny Lawrence's picture

Just posted this in another thread...I do think it's quite peculiar how all the big brokerage firms increased their price targets on gold, only to then immediately see it smacked down.

From UBS' Dominic Schnider:

Don't panic

The sharp selloff in the gold price has raised concern among investors
about whether the metal had reached unsustainable price
levels and that more weakness lies ahead. The CME Group also announced
a 27% increase in maintenance margins to USD 7,000
for each 100-oz futures contract at Comex. While a dip to the lower
range of our 1- to 3-month trading range at USD 1,724/oz is
at hand, month-to-date the metal is still up more than 7%, and
yesterday’s decline should be seen in this context. This begs the
question of whether markets will sell down the gold to price levels
prior to the US credit-rating downgrade, which would bring the
metal down to USD 1,640/oz, our former trading range low. We
do not expect this to happen. US public finances are far from getting
better, especially with economic growth likely to slump. A firm
durable goods order report for July does not change this picture.
In addition, the structural problems in the Eurozone have yet to be
tackled seriously enough to prevent a disintegration of the euro in
the long run.

Recommendation

We advise investors to build up long positions in gold from a diversification
perspective. Our forecasts remain unchanged. For investors
who want to be positioned more conservatively, the rise in
option volatility toward 30% offers very attractive opportunities to
set strike levels at USD 1,640/oz. Selling volatility (put options) at this
level would bring a 9-10% annual yield over the next 1-3 months.

Thu, 08/25/2011 - 08:56 | 1598753 DaBernank
DaBernank's picture

OK, you all should clearly give me your physical gold and in exchange I'll give you GLD Sept 150 puts, it's a great deal, trust me, I'm doing you a favour. Just ask Doug Kass, Gartman, Roubini....

Thu, 08/25/2011 - 09:18 | 1598887 I Told YOU So
I Told YOU So's picture

I do have to mention that the 125 and 150 gld puts I suggested as a hedge against profits on the physical are WAY up in just 2  days. nothing wrong with "paper" gold if its used this way, paper money is still money and it can be exchanged for the real stuff..

Thu, 08/25/2011 - 09:46 | 1599110 DaBernank
DaBernank's picture

I agree, I've been cashing in on the silver volatility with trading leveraged ETFs, I just don't consider it "owning" silver.

Thu, 08/25/2011 - 08:56 | 1598755 THE DORK OF CORK
THE DORK OF CORK's picture

My last euro gold buy was in the Spring and was only a ounce + a month - I won't be getting my knickers in a twist until it drops another 200 Euros.

Thu, 08/25/2011 - 09:00 | 1598762 Construct
Construct's picture

.

Thu, 08/25/2011 - 09:00 | 1598766 PulauHantu29
PulauHantu29's picture

I am looking forward to a Dow of 700. Should be very impressive. When Gold was $1,910 Faber said he would start buying again if gold dropped $150...so if he is representative of private BiG money, I suspect there's alot of pension funds and private buyers grabbing as much gold as they can before it rises to $2,500.

Thu, 08/25/2011 - 09:01 | 1598768 Jim in MN
Jim in MN's picture

Since the average couple will need about a million dollars (real) to retire, the minimum prudent gold holding would be about $100,000 per household.

Better get on that, America.  Kind of a deal at the minute.

Thu, 08/25/2011 - 09:01 | 1598769 WallStreetClass...
WallStreetClassAction.com's picture

Well you CAN'T DENY that gold pricing nowadays has a healthy speculative component. What % of the overall price is hard to tell. But careful of people saying "gold can only go up".

Thu, 08/25/2011 - 09:05 | 1598786 DaBernank
DaBernank's picture

If you own gold for what I (and many others) consider to be the right reasons, the price really doesn't matter. If you are trading the volatility to make a quick paper profit, then people should heed your warning. In other words, if gold drops to $600 because unemployment is at 5% and interest rates are at a healthy 6% that's great, my physical gold is there as an insurance policy against bad times 20 or 30 years from now.

Thu, 08/25/2011 - 09:20 | 1598912 Thomas
Thomas's picture

That sounds good, but I will be ripping through crates of adult diapers if gold goes to $600.

Thu, 08/25/2011 - 09:21 | 1598917 WallStreetClass...
WallStreetClassAction.com's picture

Reminds me of "I bought this $90,000 house for $250,000 because the price doesn't really matter".

Thu, 08/25/2011 - 09:49 | 1599125 DaBernank
DaBernank's picture

If you really want to live there for the rest of your life and you have a mortgage you can afford, then no, the price of your house doesn't matter.

Thu, 08/25/2011 - 10:30 | 1599385 WallStreetClass...
WallStreetClassAction.com's picture

yes it does. because there are no guarantees in life, and overpaying for something that costs less is plain stupid.

Thu, 08/25/2011 - 12:41 | 1600109 DaBernank
DaBernank's picture

Don't buy a house then! You're right that there are no guarantees in life, save your death and perhaps taxes. Does someone overpay for the life insurance policy he paid into for years when it keeps his wife and kids safe and sound for the rest of their lives after he dies young? That's gold bullion, the insurance policy. Is gold "overpriced" now if it goes to $1600 for a few months and then goes on to $2500 and then $7000 and then in a few years $600? When were you "overpaying"?

Is this hypothetical house you speak of undervalued today or was it overvalued yesterday? How do you know in advance? What is your timeframe of ownership? Is it less or more of a problem when housing "prices" go up 20% per year or is it a problem when they revert to the mean?

Don't buy a house unless you can really afford it. If you can afford a 250k house and you like it, who cares about the "price" unless you were going to flip it? You made the decision, so the market readjusted, who cares? I rented until I knew that I wanted to own a particular property and would be in one place for more than a decade.

I currently own two properties, one is "worth" significantly more than I paid for it one is probably "worth" less than I paid for it. I do not give a shit what the daily price fluctuations of my properties are and if I did really care that much because I wanted to "sell tomorrow", I probably should just have rented, like 30% of American homeowners should have been doing for the last 15 years.

Don't get me wrong, housing needs to fall another 20% and we are destroying our economy to save some speculators in the housing market, so everybody who bought a house since 2003 basically "overpaid". Prices of things fluctuate especially when the currency is being debased by lunatic Keynesians.

Buy some physical gold if you don't have any.

Thu, 08/25/2011 - 13:05 | 1600293 thesapein
thesapein's picture

Death is NOT a garantee in life. You just assume that because you're surrounded by failure, sick and dying people who act as fodder and probably because you, too, are failing miserably. Any reasonably thinking creature would not make such an outragouse claim to having universal knowledge about individuals based on averages. As I've said before, if every sperm did the same, that one in a million never would've leveled up.

Thu, 08/25/2011 - 13:18 | 1600371 cynicalskeptic
cynicalskeptic's picture

When the popular message is "Do THIS!" you need to step back and do your own due diligence.  

When everyone was saying "You have to buy a house because prices are only going up!" we looked  and said:  "This can't last."  We saved and had the money to buy when nobody else could - or would - at the 30 year market bottom.  Got our house for  60% of original asking - the median price of a house in our area for a far from 'median' sized house and plot in a far from 'median' neighborhood.  A couple years later you couldn't touch a house 1/3 the size for the same price.  Much thanks to the Real Estate agent who said "In this market look two levels above what you think you can afford."  A few years later we refinanced to a lower rate at a shorter time period for a lower payment (an 8+% mortgage and 20% down was the price of buying at the time - one of the reasons nobody else was doing so).  

When others were stuck in the 'starter' houses they bought before or after we did, we weere already IN the house you 'move up' to and paying a lower monthly mortgage.  Still there and even after the market dump, it's worth 3-4 times what we paid.   Only down side is that taxes keep going up with the value (no matter how much of that increased value is due to inflation).  But it's a short commute (another HUGE and all too rare benefit) and in a locale that will always be in high demand.

Sometimes you just have to be patient and wait.  Sometimes (quite often actually) all the 'experts' are wrong (or trying to fleece you).

Thu, 08/25/2011 - 09:05 | 1598789 theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

exactly, and thats exactly what people are not saying - exept on zero hedge. when the public is saying that and when the "we buy gold for $$$" signs are reversed to "we sell gold for $$$" then will be the time to sell and buy land, real estate, stocks, businesses etc etc

but at the moment, in the mid term and long term, gold can indeed only go up...

Thu, 08/25/2011 - 09:37 | 1599049 Smiddywesson
Smiddywesson's picture

but at the moment, in the mid term and long term, gold can indeed only go up...

No, you forgot the President's plan that he won't share with us until September.  It will repair the world's economies and erase all the unpayable debt of nation states and central banks.  He is putting us on a Lucky Charms standard.

Go long green clovers.

Thu, 08/25/2011 - 09:07 | 1598799 snowball777
snowball777's picture

Well you CAN'T DENY that the dollar nowadays has an unhealthy fundamental component. What % of the overall level is hard to tell. But careful of people saying "gold is in a bubble".

Thu, 08/25/2011 - 09:13 | 1598840 DaBernank
DaBernank's picture

+1ozt

Thu, 08/25/2011 - 09:22 | 1598931 WallStreetClass...
WallStreetClassAction.com's picture

Another sign of speculation is rampant "groupthink". Lol

Thu, 08/25/2011 - 09:39 | 1599060 Smiddywesson
Smiddywesson's picture

Groupthink works both ways.  Most of the groupthink about gold was that it was a bubble.  The naysayers vastly outnumbered the believers.

This is just a game.

Thu, 08/25/2011 - 13:13 | 1600332 thesapein
thesapein's picture

The biggest group is the one that thinks gold has no value and believes stuff like beauty is in the eye of the beholder. "I'm beautiful on the inside"! says the zombie! Right, keep telling yourself that. Life is but a dream, too.

Thu, 08/25/2011 - 09:54 | 1599147 whaletail
whaletail's picture

There are exponentially more people in in the dollar groupthink camp than the gold groupthink camp. Because those are the two camps you need to compare if you want to compare apples to apples.  Because both dollars and gold are money. 

Now, this is where you respond "gold isn't money".

Thu, 08/25/2011 - 10:32 | 1599397 WallStreetClass...
WallStreetClassAction.com's picture

Hell, anything is money. Pussy is money, for instance. So what? Are you stockpiling pussy?

Thu, 08/25/2011 - 10:45 | 1599483 whaletail
whaletail's picture

If enough people agree that something is money, then yes, you are correct. But central banks aren't stockpiling pussy (well, DSK ALLEGEDLY tried). They're stockpiling gold. They're divesting themselves of treasuries. There are calls by major exporting nations to ditch the dollar as a reserve currency.

But there are still many more people in the dollar groupthink camp who make arguments like this. You think that because things were always one way, they can never be another. Why is gold at all-time nominal highs while the stock market is nowhere near its 2008 lows? Not even adjusting for inflation, why is that? What's wrong with this picture? 

Aside, pussy is probably a fair comparison for the dollar.  The counterparty risk is HUGE.

Thu, 08/25/2011 - 15:15 | 1601077 Debugas
Debugas's picture

Money is a claim on human labor.

Basically money is a virtual concept that exists in the minds of the members of the society.

Money is a contract between an individual and a society. In this contract society promises to perform some work for the individual in exchange for the money the individual gives to the members of the society.

Many different things can represent (bear the contract) money and gold is one form of it.

Thu, 08/25/2011 - 11:56 | 1599865 Calculated_Risk
Calculated_Risk's picture

Now, this is where you respond "gold isn't money".

 

and "you can't eat it!"

and "it has no intrinsic value!"

and it's yellow like pee!

 

Thu, 08/25/2011 - 09:02 | 1598772 SheepDog-One
SheepDog-One's picture

While people look at gold minute to minute price thru an electronic microscope, the obvious bigger overall story is missed- no QE.

Thu, 08/25/2011 - 09:28 | 1598984 Chicken_Little
Chicken_Little's picture

Baa and arf doogie. Stealth QE announced Friday by Uncle Ben by a new strange name other than QE-3. The money printing continues and sometime in 2012, this whole thing comes down. The sky falls.

 

Thu, 08/25/2011 - 09:02 | 1598773 Silverhog
Silverhog's picture

Interesting, no flood of physical getting listed on fleabay. Matter of fact, it's dropped. Just another paper shit storm.

Thu, 08/25/2011 - 09:30 | 1599000 TJ00
TJ00's picture

2 bullion dealers I buy from are out of stock here in the UK,  minimum 3 week wait until they get a new shipment, I don't know about elsewhere but physical supply seems to be pretty tight here.

Thu, 08/25/2011 - 09:03 | 1598775 Silver Dreamer
Silver Dreamer's picture

Who cares if gold and other PM's are in a bubble or not.  What matters is that they will still be worth something when fiat's bubble bursts.

Thu, 08/25/2011 - 09:15 | 1598858 DosZap
DosZap's picture

Silver Dreamer, @09:38

GOLD is NOT in a Bubble.........the USD DEBT is the Mother of all Bubbles.

Thu, 08/25/2011 - 10:17 | 1599300 Silver Dreamer
Silver Dreamer's picture

Uhm, that was my exact point.  8-P

Thu, 08/25/2011 - 09:04 | 1598779 TzaristBondHolder
TzaristBondHolder's picture

Gaddafi will try to sell Libyan gold: ex-central banker  http://reut.rs/nUTBwu

 

Do you believe this?  Yes, he carried it in his bags on a golf buggy

Thu, 08/25/2011 - 09:07 | 1598803 The Shootist
The Shootist's picture

It was always about the gold.

Thu, 08/25/2011 - 09:23 | 1598936 Snidley Whipsnae
Snidley Whipsnae's picture

The Lybian gold has not been found and according to a recent Jim Rickards interview...

"the Lybian gold may never be found"

Thu, 08/25/2011 - 09:26 | 1598960 DosZap
DosZap's picture

Snidley,

 

"the Lybian gold may never be found"

 

Bank it dude...........................if I were Gadaffi, I would leave it in a sand dune for the rest of time.

My $ say's he's got it, WAY out of Lybia.

Thu, 08/25/2011 - 09:58 | 1599178 whaletail
whaletail's picture

He had months to get it out of the country and pay off accomplices (who will surely keep The Precious safe, for their own good) who will give him safe haven. 

Thu, 08/25/2011 - 13:24 | 1600403 cynicalskeptic
cynicalskeptic's picture

He may have spent a good deal of it.  Gaddaffi was paying lots of people from elsewhere to be his privtae army' and funding projects all over Africa to buy friends and influence people.

 

http://abcnews.go.com/International/libya-benghazi-doctor-gadhafi-foreig...

 

And his Amazonian guard (and Ukranian 'nurse') can't be cheap.

http://www.zimbio.com/Muammar+Gaddafi/articles/xtXE8DmqoIy/Amazonian+Gua...

http://www.dailymail.co.uk/news/article-1361376/Libya-Colonel-Gaddafis-v...

Thu, 08/25/2011 - 10:31 | 1599390 theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

Beutiful if true...

how they going to pay chavez now??

Thu, 08/25/2011 - 09:04 | 1598780 billwilson
billwilson's picture

Buy at the close today. Once we are past futures expiration she soars right back up. It's all about manipulation.

Thu, 08/25/2011 - 09:04 | 1598783 LoneStarHog
LoneStarHog's picture

Another SHIT piece around Options Expiry by GoldCore.  It NEVER fails...month after month...these CLOWNS come forward and NEVER associate the DECLINE at Options Expiry with MaxPain Points and the ILLEGAL MANIPULATION by the bullion banks.

Tyler, why the hell don't you start posting the work of GATA instead of this SHIT!

Thu, 08/25/2011 - 13:27 | 1600422 cynicalskeptic
cynicalskeptic's picture

In prison, the big guy doing life - the one with all the tattoos who spends all day in the rec yard lifting twice his body weight -  doesn't TELL you you're gonna get 'special attention' on shower day but you KNOW it's coming.....

 

Thu, 08/25/2011 - 09:05 | 1598785 TradingJoe
TradingJoe's picture

Great opportunity to get physical! Short term, mid term yada yada yada, if you don't own it when it matters you and all around you are going to be FUCKED!

Thu, 08/25/2011 - 09:07 | 1598802 SheepDog-One
SheepDog-One's picture

Gold is nice to have for way later after Mad Max, but make sure you stop by the gun store today too.

Thu, 08/25/2011 - 09:44 | 1599098 Smiddywesson
Smiddywesson's picture

LOL, I broke my tricked out Saiga-12 and was on the phone to my gun smith within an hour to order a replacement part. 

 

Thu, 08/25/2011 - 10:00 | 1599201 narapoiddyslexia
narapoiddyslexia's picture

Just curious, but what're you going to do with your squirrel gun when the other guys can drill you between the eyes from 500 yards away with a round that left the muzzle at 3000 ft per sec?

Thu, 08/25/2011 - 13:27 | 1600421 Creepy Lurker
Creepy Lurker's picture

If the military were to actually come after you, you'd be dead. So yeah, a squirrel gun is useless for that. OTOH, it's useful for feeding yourself and warding off most zombies.

I used to worry about weapons until I had that realization. A squirrel gun, a shot gun, and a couple handguns is what's needful. Beyond that, well, there's nothing wrong with having a hobby.

Thu, 08/25/2011 - 13:33 | 1600469 thesapein
thesapein's picture

Sheet gets that bad, like you guys are talking, I'm gonna start going for other people's guns. That sniper, hey, nice gun...  Getting guns will be so easy.

I hear the old west during the old gold rush in cali was lawless and peaceful, not like in the movies. You do know Mad Max is a fictional story?

Thu, 08/25/2011 - 13:49 | 1600559 Creepy Lurker
Creepy Lurker's picture

Yeah, I no longer worry much about the Mad Max scenario. I doubt I'd survive it anyways. I concentrate on the Argentina scenario. High inflation, high crime rates, high unemployment, absentee government except at tax time.

Thu, 08/25/2011 - 16:30 | 1601462 Diogenes
Diogenes's picture

You didn't hear that from anybody that lived there. Mark Twain lived in Virginia City during the silver boom and pocket mined for gold in California in the 1860s. He stated that in one boom town he lived in, the first 26 graves in the graveyard were of murdered men. And that no one was considered a big shot until he had "killed his man".

Thu, 08/25/2011 - 10:11 | 1599261 cynicalskeptic
cynicalskeptic's picture

A wide assortment of ammo for barter is a wise idea....  along with alcohol.....lol

My father was on occupation duty in Germany post WWII.... the same cartons of stale cigarettes were traded back and forth for years.

Thu, 08/25/2011 - 13:27 | 1600419 thesapein
thesapein's picture

Unless you want to make a lazer gun. Gold is good for that. Maybe a nanosuit!

Thu, 08/25/2011 - 09:05 | 1598790 swanpoint
swanpoint's picture

They are the "Bubble Bitchez"

Thu, 08/25/2011 - 09:06 | 1598796 gwar5
gwar5's picture

I'm kinda glad, it needed a breather and I wanted to pick up more PMs. I was afraid it had gone Apollo for good. The Dow is still at March 2009 lows priced in gold. There's no soveriegn debt remedies on the horizon that keeps gold from being remonetized.

 

And now Keynesians are trying to weaponize Twitter for their propaganda, if that's not a sign of the Apocolypse I don't know what is. 

 

 

 

Thu, 08/25/2011 - 09:09 | 1598817 snowball777
snowball777's picture

Is that like a really slow apocalypse?

 

Thu, 08/25/2011 - 16:33 | 1601477 Diogenes
Diogenes's picture

Acapulcolypso, a dance you do after too much tequila.

Thu, 08/25/2011 - 09:09 | 1598816 thunderchief
thunderchief's picture

In the long run, if you can stand it, and I'm talking months not years, this will be a healthy washout, just as the knockdown in silver in late April.  Same thing, different metal.  The gold speculators are just getting their medicine this time.  The big difference is how many countries are in the game.  Physical accummulation should accellerate at the National level.  All this means is we are that much closer to a purely physical market, just as silver is becoming.  I say they keep raising margin rates to the full amount for delivery.

Thu, 08/25/2011 - 09:10 | 1598826 HungrySeagull
HungrySeagull's picture

Back up the truck.

Thu, 08/25/2011 - 09:28 | 1598981 Snidley Whipsnae
Snidley Whipsnae's picture

tchief... right on... All the margin hike really accomplished is windfall profits for the Wall St thieves and a huge physical buying opportunity for China, India, Europe and the Mid East...

Short sighted butt heads are shipping PMs abroad, just as our manufacturing base was shipped abroad... the gutting of America continues with the help of pols and bankers...

Thu, 08/25/2011 - 09:10 | 1598821 Yellow Tang
Yellow Tang's picture

Have 10k to drop on PMs, been waiting for this correction for a few weeks.  Would like to see $1600 but I have a feeling it will touch 1700 and continue the climb.  Question for ZH'ers....6oz of gold or 3oz plus 100oz of silver?

Thu, 08/25/2011 - 09:30 | 1598996 Snidley Whipsnae
Snidley Whipsnae's picture

It's your money... you make the call... good luck...

and... I doubt we will see 1600 again measured in dollars...

Thu, 08/25/2011 - 11:24 | 1599716 sgorem
sgorem's picture

yes..............

Thu, 08/25/2011 - 12:24 | 1600003 Panafrican Funk...
Panafrican Funktron Robot's picture

I'm a fan of 1/10 oz gold coins if you're looking for smaller denominations.  Main thing, wealthy entities don't hold silver.

Thu, 08/25/2011 - 13:32 | 1600458 cynicalskeptic
cynicalskeptic's picture

Can argue both ways.....  silver is in shorter supply and has real world uses - it IS underpriced but bulky.  Gold is more portable but draws more attention.  In Weimar and throughout history when you had real panics, people traded silver for gold because it was easier to carry.  I suspect a good strategy is to convert some silver to gold when the ratio drops but hold onto some silver for a greater appreciation potential.   In paper, GDXJ seems to be a good mix of gld and silver miners and it pays a nice dividend. CEF is a good proxy for holding.

Thu, 08/25/2011 - 09:10 | 1598823 lieutenantjohnchard
lieutenantjohnchard's picture

as shiny drops i'll be buying. the best is yet to come.

Thu, 08/25/2011 - 09:11 | 1598828 The Deleuzian
The Deleuzian's picture

We've seen this 'ad infinitum'.. I used to get a mixed feeling when traders/investors in the PM arena blabbed about how they wanted, wished, & begged for takedowns to loadup.  I formally apologize!!!

There are no mixed feelings @ present.  Take full advantage of this one!! 

 

Thu, 08/25/2011 - 09:12 | 1598838 jcrows
jcrows's picture

confiscation through tax, margin and manipulation

Thu, 08/25/2011 - 09:13 | 1598843 Oh regional Indian
Oh regional Indian's picture

Nothing un-expected here, most wise one's here were talking about increasing volatility during last year's and especially this years swings. The swings are only going to become bigger. 

Vivek

Thu, 08/25/2011 - 09:14 | 1598845 SheepDog-One
SheepDog-One's picture

Wow nice jobs report...should go well with tomorrows 'No QE' Bernank speech. 

Well theyve duct taped the markets crashed glider wings a bit, straightened the broken tail, applied a bit of bubblegum here and there...we're at altitude, time to drop the market tether line and see how this baby glides huh?

Thu, 08/25/2011 - 09:16 | 1598848 WoodMizer
WoodMizer's picture

I would love watch a debate between Max Kieser and Roubini.

Max would show the real value of Roubini's academic education.

Appeals to authority don't work , when the public despises your work.

Thu, 08/25/2011 - 09:30 | 1598999 RealFinney
RealFinney's picture

Roubini couldn't win a debate with Mr T.

Thu, 08/25/2011 - 09:15 | 1598856 OuaisBla
OuaisBla's picture

Gold down overnight... but not Silver.

Simple: Silver is traded like and hedge for Gold. They are now shorting Gold and get a long position in Silver as an Hedge.

I saw a post recently of a trader who went long Platinium and Short Gold. But it must be working with Silver too IMO.

That means 1700 a consolidation spot for Gold, and 1550 a strong support is they can play it there.

 

Still a down trend for both, Gold and Silver. But Gold will fall more than Silver IMO. Silver had it first from 50 to 35, preceding Gold a few months.

Interesting no?

Thu, 08/25/2011 - 09:16 | 1598866 monopoly
monopoly's picture

Gold a bubble. Tired of talking about it.

Will buy 1/2 added physical today, and 1/2 more physical gold after Bernank pukes all over himself Friday. And do I care if gold drops another 150 or so. Of course not. This is not for trading. That is why I have miners in my cash, NO MARGIN account.

This is a gift as I have whined that my stash was not where I wanted it to be.

 

And Buffet buys BAC. lololol

Thu, 08/25/2011 - 09:19 | 1598900 Smiddywesson
Smiddywesson's picture

All I can use is logic.

We all know the logical arguments for gold.  They are numerous, but the most important ones are:

  1. It's a ten year trend
  2. The central banks and nation states are busted
  3. The system can't be fixed, so TPTB are either going to switch us to a new system or go down with the ship
  4. TPTB are kicking the can and taking only one long term action, buying gold.  They are not fixing the system, they are buying gold.  Unless you think they have collectivly decided, all over the world, at the same time, to go down with the ship, they are buying gold for the new system.

Trader's trade.  If you are trading paper gold, you should have protected yourself by now.  You can't trade physical, so you should content yourself with the FACT, that all market manipulations fail in the long run, but first the manipulators get paid.

They have been extremely successful in this attack, so my guess is they will keep their powder dry for future assaults on gold.  If I were them, I wouldn't use up another margin hike because I wouldn't have to, and each successive margin hike yields diminishing returns. 

Thu, 08/25/2011 - 09:25 | 1598951 scratch_and_sniff
scratch_and_sniff's picture

"the gold markets laugh at my parabolas". Sorry dog, had to remind you about that, its ok you dont need to say how daft you look, i already know.

Thu, 08/25/2011 - 09:20 | 1598906 PaperBear
PaperBear's picture

it is the 50 year long credit bubble that is deflating which central banks around the world are frantically pumping new currency in to prop up a fully toxic system.

Mike Maloney on August 16th posted a great 1h29m presentation entitled 'Debt Collapse - $20,000 gold' which I encourage everyone to watch.

Thu, 08/25/2011 - 09:21 | 1598925 waldocktrades
waldocktrades's picture

Gold was certainly due for a sell off, just as the equity markets were due for a bounce. Commercial traders, via the Commitment of Traders reports, sheared the sheepish public.....AGAIN!

http://blog.commodityandderivativeadv.com/2011/08/25/commercial-traders-...

Thu, 08/25/2011 - 09:27 | 1598968 Dr. Gonzo
Dr. Gonzo's picture

The gold/oil/platinum ratio was extremely high but know way of knowing if this was the "big one" so I didn't want to take profits on my Sprott Fund even if it was against my better judement. (20% in 1 month is a rare bird in gold) The Venezuela thing could have been the last straw. Who could know? In the end it's not going to be the price in fiat that matters but how much weight and purity you have in your pockets. Last physical oz I bought was at $1300 spot. My ears are starting to perk up. If this doesn't turn out to be a hiccup then I will just buy more physical in the bloodbath...with confidence.

Thu, 08/25/2011 - 09:29 | 1598988 The Deleuzian
The Deleuzian's picture

This friday's Jackson Hole  speech will be the NULL SET FROM HELL!!!!

The Fed is becoming a calculation/hedge @ best!!!

US equity markets all week are uber strong/leading up to tomorrow...

Reason?  more QE is the chosen rhetoric

When QE whatever is not hinted @, let the fall/coordinated cushion commence.  "We don't need it!!/look @ the new economic indicators/they're turning up!! Yadi/yadi/yadi.........The Fed/congress et al

pundits will try to persaude the Plebs all is sound etc...  The US population is a banjo waiting/wanting to be strung

 

Thu, 08/25/2011 - 09:32 | 1599007 DosZap
DosZap's picture

Silver is not BUDGING, I find this very strange(since Gld dumped that much, Slvr usually beats it down).........it's been in/around ,sitting at $39.50/$40.00 for 3 days.

I was hoping for a chance at the $34.50/$35.00 level....appears no to be.

Thu, 08/25/2011 - 09:59 | 1599190 GubbermintWorker
GubbermintWorker's picture

No, silver has retraced to just under its 20 day moving average, just as gold has done.

Thu, 08/25/2011 - 10:27 | 1599363 cynicalskeptic
cynicalskeptic's picture

Mining stocks and their proxies like SLW GDX GDXJ holding up far bettrer than the metals.........  hmmm.   That's bullish long term to me.

I suspect that there's not enough ammo to wage a full front assault today.  They've been throwing everything at Gold, short selling the metal - but don't have the cash left to short the mining stocks.  In recent smackdowns there was also an assault on the miners - lots of open market sells to set the tone for the day and late day sells to push closing price down.  Forty five minutes into market open most are down less than the DJIA and SLW is up.

Nobody seemed to notice that the big run up at the beginning of the month happened when the debt cap crisis was on and government suspended their market intervention efforts because they didn't have the cash.....  that tells me that this war is being waged with free government money.  

Gold seems to be holding above 1700 and silver above 39........   not bad all things considered.  I suspect you're seeing a staged retreat.  Every new low is higher than the past.   But don't feel bad for the bankers.  They're making a ton of money - though they may be running a bit low on actual stocks of metal.

Someone speculated that Biden cut a deal with China not to buy this dip - to let the price drop a bit and help prop upo the $US - it's in China's interest not to have a rout on the dollar - they haven't been able to convert all their paper $US holdings into tangible goods like Australian mining companies.   Jackson Hole may be one giant Kabuki play......can't wait for the show and it IS all about the show now..... MOPE - management of perspective economics.... repeat after me "All is well... All is well...."

Thu, 08/25/2011 - 09:56 | 1599164 Quinvarius
Quinvarius's picture

The people trapped in the paper money bubble sure like to throw rocks at stone fortifications.  Gold is no where near a bubble. 

Margin raises only pull liquidity out of the whole system.  It is not a coincidence stocks started the plunge on the May 1 commodities margin attacks.  It won't be any different this time.  In the end, stocks will suffer more because they are overpriced.  Gold is having its usual OPEX raid plus spec short attack.  But gold will be the big winner, the same as it was in the 2008 crisis.  Gold was at all time highs when the stocks were at their lows.

Thu, 08/25/2011 - 10:05 | 1599225 whaletail
whaletail's picture

"But gold will be the big winner, the same as it was in the 2008 crisis.  Gold was at all time highs when the stocks were at their lows."

True. And consider that when gold crossed 1900 last week, the major indicies were off their 1year highs, but nowhere near the lows of 2008. If gold is truly a fear trade, why aren't stocks falling off a cliff?  The economic data says stocks should be. Worldwide debt just confirms gold. Someone is very wrong here, and it isn't the gold camp.

Forza Roma 

Thu, 08/25/2011 - 10:00 | 1599197 GubbermintWorker
GubbermintWorker's picture

I have both gold and spam!

 

And lead.

Thu, 08/25/2011 - 10:02 | 1599209 Lone Mad Minute...
Lone Mad Minute Medic's picture

Death cross on the Dow. I'm seeing dead fish floating belly up all over the surface now. Hillbilly hand fishing gettin easier.

Thu, 08/25/2011 - 10:18 | 1599301 JohnG
JohnG's picture

To Mary Shapiro:

PROSECUTE DENNIS GARTMAN FOR INSIDER TRADING IN GOLD.  HE CLEARLY HAD ADVANCE NOTICE OF THE RECENT MANIPULATION AND MARGIN INCREASE.

Sincerely,

A very concerned investor.

Thu, 08/25/2011 - 10:31 | 1599395 DrFever
DrFever's picture

I find it amusing sometimes that when people speak of ideas or positions that are not in keeping with one's own views that those individuals need to be attacked.

How come Roubini is quoted and supported when he makes calls about the economic environment that support the double dip and slow down ideas that are often bantied about by die hard gold bugs yet when he makes (or anyone else for that matter) a statement about gold that doesn't fit with the gold bug agenda he gets villified.

People calling a gold bubble are no different than those calling for $5,000 oz gold and $200 oz silver.  Really ... there is no difference other than that the opinions differ.

For anyone to make any informed decision one needs to be able to look at both sides of the coin.

You are naive to think that gold wasn't ahead of itself over $1900 an ounce having just completed a $400.00 move.  Those moves are the moves that trap poor retail investors into thinking that this is the big move up but those moves usually mean the current move up has ended and pause is needed.

There is nothing wrong with healthy consolidation of prices.  Gold is coming back into its channel now and long term should do fine.  But to wake up and seek a $3,000 gold price immediately one day is foolish nonsensical talk.

Gold bears and bobble top callers will always be around.  So too will the extreme tin foil hat crowd that calls for $3,000 gold in short order.

Trade the numbers.  The consolodation periods offer great opportunity to make money as do the moves upward.  Trade the paper and buy the physical but never chase momo.

Dan

http://thefundamentalview.blogspot.com/

Thu, 08/25/2011 - 10:34 | 1599411 NEOSERF
NEOSERF's picture

If they are willing to kill off all speculation in this semi-important alternative doomsday currency, just a matter of time before they do the exact same thing to oil...will bring it back down to $60

Thu, 08/25/2011 - 10:37 | 1599425 Lucius Corneliu...
Lucius Cornelius Sulla's picture

I bought some at $350.  I'll buy more at $750.

Thu, 08/25/2011 - 10:43 | 1599465 GubbermintWorker
GubbermintWorker's picture

I hope you'll be satisfied with just having some :-)

Thu, 08/25/2011 - 10:54 | 1599532 chinaboy
chinaboy's picture

I enjoy reading your posts. Thanks  goldcore.

In China, China Agriculture and three other banks were reported to hold 3 billion Yuan gold short position. they were considered gold shorts. However, one senior bank exec stated that they held short position because their gold business clients are overwhelmingly long. They have to hedge. They would see it that their hedge happened to work.

 

Chinese commentators also indicated bull trend is not broken. They are telling people to load up around support levels. 

 

Thu, 08/25/2011 - 10:54 | 1599533 chinaboy
chinaboy's picture

I enjoy reading your posts. Thanks  goldcore.

In China, China Agriculture and three other banks were reported to hold 3 billion Yuan gold short position. they were considered gold shorts. However, one senior bank exec stated that they held short position because their gold business clients are overwhelmingly long. They have to hedge. They would see it that their hedge happened to work.

 

Chinese commentators also indicated bull trend is not broken. They are telling people to load up around support levels. 

 

Thu, 08/25/2011 - 10:59 | 1599561 Badabing
Badabing's picture
From threadAs Chavez Pulls Venezuela's Gold From JP Morgan, Is The Great Scramble For Physical Starting?” 8/17/11

 

 

I think it's more like...

1. CME raises margins on gold 40%     <- My bad, it was 27% CME 21% Shanghai

2. gold drops a considerable amount    <- Considerable!

3. GLD gets milked by JPM an AP      <- so far 31 tons and more to come.

4. Chaves gets his gold

5. Puke indicator reveals a bottom

6. We buy on a major dip

 

So far my post from the 17th stands

Thu, 08/25/2011 - 11:01 | 1599572 eaglefalcon
eaglefalcon's picture

Anxiously waiting for the Bernank's speech at Jackasshole.  When gold goes to $3,000, I'll reward myself with an i-phone, an i-pad and an air-book (with a total price tag of $3,000).  Have faith in the Bernank (who is to me a santa claus or hanukah harry figure), his chopper and his printer will never disappoint. The pullback on PMs is transitory.  Boy I want these gadgets desperately

Thu, 08/25/2011 - 11:24 | 1599715 eri
eri's picture

Nouriel Roubini, in October 2009 said: "All the gold bugs who say gold is going to go to $1,500, $2,000, they're just speaking nonsense".

 

Roubini is an idiot and a clown

 

 

Thu, 08/25/2011 - 11:27 | 1599733 Elmer Fudd
Elmer Fudd's picture

Some sale.  Sure I see teaser prices once in a while, but usually by the time the coin dealer shops open on the west coast, the really good prices are gone. 

Thu, 08/25/2011 - 11:29 | 1599742 jjsilver
jjsilver's picture

people who say gold is in a bubble have no clue, the criminal cartel  let gold rise more than usual in order to sell call options and then just before expiration slam the price down.

Thu, 08/25/2011 - 11:33 | 1599766 sgorem
sgorem's picture

trade whatever devalued green pieces of us government iou's you possess for the undervalued, indestructible golden relic tomorrow as the bernanke buffoon spouts his script for the "saving of the fiat world". what a joke these last few years have been, and will continue to be........sad, but true.........

Thu, 08/25/2011 - 11:34 | 1599767 Manzilla
Manzilla's picture

Tyler,

Could you post a bberg of the GC over the past 4 days and the volume diff?

Thu, 08/25/2011 - 11:50 | 1599850 Fred C Dobbs
Fred C Dobbs's picture

Roubini left off you can drink Spam if stuck in a desert.  Another value of Spam over gold.  

Thu, 08/25/2011 - 12:40 | 1599977 Flakmeister
Flakmeister's picture

Well, the GLD options I have closed over the past week just got turned in 500 silver Leafs:  $20,990

And I just reloaded with Mar 12 160 GLD calls....

Edit: paid 18.50 a contract... not quite the bottom but close enough...

Thu, 08/25/2011 - 12:25 | 1600006 MrBoompi
MrBoompi's picture

These types of situations are advantageous for people who want to buy real gold and silver.  We don't have to be a in a hurry to do anything except wait until we feel the price has bottomed out.

Thu, 08/25/2011 - 12:38 | 1600092 Panafrican Funk...
Panafrican Funktron Robot's picture

LOL, back up above $1750 already.  Hope everyone caught the dip.

Thu, 08/25/2011 - 13:11 | 1600323 theotheri
theotheri's picture

It's pretty simple.  Gold should increase ise US $ relative to the increase in the total US money supply.  Attached is a chart of it showing how ridiculously overvalued gold really is today. 

 

http://www.howprofit.com/wp-content/uploads/2011/05/US-M3-VS-Gold-1970-2...

 

Based on the chart it would appear that gold is ripe for a fall below $1000/oz. 

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