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Gold Falls 2% in Minutes In Asian Trade – Global Currency Wars Resume and Markets Digest German Decision
From GoldCore
Gold Falls 2% in Minutes in Asian Trade – Global Currency Wars Resume and Markets Digest German Decision
Gold is trading at USD 1,843.60, EUR 1,314.10 , GBP 1,155.30, CHF 1,584.10 and JPY 142,390 per ounce. Gold closed marginally lower in all currencies yesterday except for the Swiss franc which fell nearly 7% against gold and other fiat currencies.
Gold’s London AM fix this morning was USD 1,844.00, EUR 1,311.99, GBP 1153.44 per ounce. Gold fixed lower in all currencies (USD 1,891.00, EUR 1,330.75, GBP 1172.86 per ounce).
Cross Currency Table
The German constitutional court rejected the challenge against the Eurozone ‘bail outs’ but said that the ruling shouldn’t be seen as “blanket” approval for future bail outs. Going forward Angela Merkel and the German government must seek approval from the Parliament’s budget committee for new guarantees it assumes under the European Financial Stability Facility.
Gold closed in New York at $1,870.70/oz yesterday and then traded sideways prior to sharp selling in Asian trading saw gold fall 2.3% or nearly $50 in minutes ($1,871/oz at 0514 GMT to a low of $1,827/oz at 0523 GMT). The price fall was odd as there was no breaking news or ostensible reasons for the sell off and other markets were unchanged at the time.
Speculation was that the falls were technical in nature after stop losses were triggered.
Gold in US Dollars Spot – 1 Day (Tick)
However, Asian traders spoke of some 4,000 lots of gold being ‘dumped’ on the COMEX and of a “large sell order”.
This would suggest that the sellers may not have been profit motivated and official selling may have been involved.
After the Swiss franc intervention and currency debasement yesterday, market participants are wary of further official government and central bank intervention. With further gains for the Swiss franc artificially capped (at least in the short term), it would be naïve to exclude the possibility of intervention in the gold market and a continuing strategic capping of the price.
“The start of full-on currency wars has started in earnest,” said Maurice Pomery, chief executive at Strategic Alpha, quoted in the front page of the Financial Times today. “After currency wars come trade wars and as we see the exporting world pressured as the developed world contracts, tensions will rise.”
Central banks, from the SNB to the Bank of Japan, are openly intervening in the currency markets and devaluing their currencies and therefore may be surreptitiously intervening in the gold market.
The safe haven Swiss franc is now pegged to the not so safe haven euro and Japanese money printing is leading to question marks over the safe haven status of the yen. Therefore, risk averse money is likely to flow into gold.
Gold is an internationally traded currency that is not controlled by any one government and therefore cannot be debased, unlike fiat currencies. A way to control gold (at least in the short term) is by market manipulation and capping or lowering the price at key strategic and psychological moments in order to prevent enthusiasm and the public from seeking out the safe haven.
Reuters reports this morning that analysts believe that “expectations that other central banks may step in to intervene in the currency market” may have contributed to the “restraint” in the gold market overnight.
Given the fact that global currency wars have intensified and will likely escalate in the coming weeks, we should be mindful of peculiar and volatile short term movements that give false signals.
All interventions and market manipulation can be successful in the short term but as ever the real fundamentals of supply and demand will dictate the price of all goods, services, assets and currencies in the long term.
Investors and store of wealth buyers should continue to buy the dip.
For the latest news and commentary on financial markets and gold please follow us on Twitter
NEWS
(Reuters) -- PRECIOUS-Gold drops as stocks rally; debt crisis lends support
http://www.reuters.com/article/2011/09/07/markets-precious-idUSL5E7K712S20110907
(Reuters) -- PRECIOUS-Spot gold tumbles 2 pct, tracks US gold in technical selling
http://af.reuters.com/article/metalsNews/idAFL3E7K703G20110907
(Bloomberg) -- Gold Drops for Second Day as Equity Rebound Trims Haven Investment Demand
http://www.bloomberg.com/news/2011-09-06/gold-may-decline-for-a-second-day-after-rally-to-record-encourages-sales.html
(Reuters) -- Libyan convoy with gold, cash crossed to Niger-NTC spox
http://af.reuters.com/article/energyOilNews/idAFLDE78509020110906
(SouthAfrica.info) -- South African gold production declines
http://www.southafrica.info/news/business/1038896.htm
COMMENTARY
(The Telegraph) – Evans-Pritchard: German austerity drive risks Euro-slump
http://www.telegraph.co.uk/finance/financialcrisis/8745695/German-austerity-drive-risks-Euro-slump.html
(The Telegraph) -- Switzerland abandons floating exchange rate in dramatic 'currency war' twist
http://www.telegraph.co.uk/finance/currency/8745686/Switzerland-abandons-floating-exchange-rate-in-dramatic-currency-war-twist.html
(King World News) -- Marc Faber - This Will End in Disaster & You Must Own Gold
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/9/7_Marc_Faber_-_This_Will_End_in_Disaster_%26_You_Must_Own_Gold.html
(The Telegraph) -- Libya: Mystery of Gaddafi and the gold-laden convoy crossing the desert to Niger
http://www.telegraph.co.uk/news/worldnews/africaandindianocean/libya/8745665/Libya-Mystery-of-Gaddafi-and-the-gold-laden-convoy-crossing-the-desert-to-Niger.html
(King World News) -- Andrew Maguire - LBMA Shorts Will be Forced to Take Losses
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/9/6_Andrew_Maguire_-_LBMA_Shorts_Will_be_Forced_to_Take_Losses.html
(Zero Hedge) -- "The European Financial System Is Finished" In Quotes
http://www.zerohedge.com/news/european-financial-system-finished-quotes
(CNBC) -- Another Reason to Buy Gold: Franc Losing Safety Status
http://www.cnbc.com/id/44410858
(MarketWatch) -- Euro crisis helps gold shine
http://www.marketwatch.com/story/euro-crisis-helps-gold-shine-2011-09-07
(MarketWatch) -- Gold’s rally will continue
http://www.marketwatch.com/story/golds-rally-will-continue-2011-09-07?reflink=MW_news_stmp
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When is the time to exit the PM's
1) Herd mentality takes over and everybody ( troll alike) believes PM's will go up forever.. "this time is different"
2) Fast-$ starts the buybuybuy/sellsellsell on the junior-miners Wednesday's are for the juniors in Nevada only!! Thursday is 'Yukon-day' Friday is mexican silver miners and the army's they had to hire to protect them
3) The dow/gold ratio is around 1 or less
4) General consumer price levels are high enough, most are openly talking about it
5) Physical gold coins will be next to impossible to purchase (the 1/10 oz ones will have 100% premium
6) The political class (House of Rep's mostly/2 year terms) have become revolving door because they keep getting voted out at the frustration of people who still vote
7) There's more coin shops in the phone book than last year
Just off the top of......
Theotheri....
Fuck off and die,you sack of shit.
and PS...
why don't you use Theotherbrain...
That one don't seem to be working right.?
Your angry is your enemy Banster, not I.
BUY!!! BUY!!!! BUY!!! BUY!!!
The "pukefest" continues for gold. 1500 here we come!
God I hope you're right.. I only bought a little of the phys @ $1500...
I was too busy buying the juniors.....
Ifeel your pain David squared..
Not having any of the shinny stuff would piss me off too...
Feeling stupid listening to all the economic hacks this whole time, then suddenly realizing I'd been duped!!
Dupe!!!!!!!!!
I disagree with you David. The gold monkeys and their master Tyler Hedge Hog will ponzi it up past $2000, it will probably start to catch more mainstream headlines (as opposed to P2 now), there might be another mini-burst and then.....the bottom drops out.
Think of the poor souls bereft of physical silver and gold, naked to the financial elements, staring up into the eye of our Cat 5 hyperinflationary/deflationary DEPRESSION, waiting for God knows what.
SUCKERS, (and pitifully so).
BTFD!!
$2000 is a nice round number and it when it falls it will be headlines the world over.
There will be battles between the longs and shorts (including the tptb, jpm, etc. ) before we break $2000 and this is some of it.
Look for raids on low volumes.
Consider building on your physical on the dips and trading momentum the etf on the runs up and down.
Have any of you gold monkeys actually tried to sell your physical gold? I am curious what the spread is based on the spot price.
My guess is you get the airport currency conversion rate of 10% to the house.
now, now children-
It only makes you unhappy when you hold anger in your heart. We must learn to love our oppressors as they do these things out of their philanthropic love for all of us. <smoochie-smoochie>
I for one totally forgive any thievery, collusion, and deliberate debasement of my own or my grandchildren's financial future at their hands.I hope they screw us as hard as they can, that we may be blessed.
Put down the pitch forks,
Love is all you need.
My very unprofessional opinion is that gold will do some interesting stuff once it closes solidly above $1900 which seems to smack it back down to earth rather handily. Then we have $2000 which will provide some resistance and huge volatility as well.
I can see these levels holding for awhile if the game of "extend and pretend" holds up in Europe.
Amazing how many dickhead trolls pop up on a down day for gold. Witness "theotheri" and "daviddavid." Pathetic douchebags, invariably unemployed, and doubtful to have even an Etrade account.
Seems like you're starting to see a decoupling in prices between paper markets, physical and producers. Even with a push down in metals and a run up in stocks (based on WHAT ?) smart bets on Gold and Silver for the long term are still on.
Premiums on physical have been inching up.
The price of gold may be down big time on COMEX but GDX GDXJ SIL SLW and other plays on producers are UP at close today. The miners are still woefully underpriced - in part I suspect from determined beat downs. You see lots of volume just before close on many to push prices lower on these. But maybe there's not enough cash to cover all the naked short selling on COMEX AND the metal proxies at the same time - or maybe they're hoping the focus will be on the price of gold alone.
The big run up in gold happened when the Debt Ceiling crisis was in full splat - and the gov announced they were no longer funding 'market interventions' - maybe there IS a limit on the money they can throw at this 'problem'. It does seem like we're now in a 'controlled retreat' mode - where it's clear that the war is lost and the focus is now on preventing a full out rout. It's all about keeping a complete melt-down from occurring, complete financial collapse and riots in the streets... a play for time. Gold is going up (or rather paper fiat is going down) in the long run no matter what. Be happy it's NOT a parabolic rise - for in that scenarion things will get VERY messy, VERY fast.