Gold Falls Again on Options Expiry –Supported by Global Debt Crisis & Iranian Oil Jitters

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Tue, 11/22/2011 - 08:32 | 1901877 Carlyle Groupie
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Bring it. I need to plan a trip to Canada to get some more!

International Christmas shopping.

Tue, 11/22/2011 - 08:47 | 1901907 sabra1
sabra1's picture

while you're in canada, check out our fine selection of non-bubbled real estate!

Tue, 11/22/2011 - 08:56 | 1901931 paarsons
paarsons's picture

Gold never does well in a deflationary environment.

To the gold bugs.  Be careful.

If someone--like Gingrich--gets in and has the balls to support another Paul Volker, you'll lose your shirts.

The FED Window can't stay at zero forever.

Don't kill the messenger.


Tue, 11/22/2011 - 09:03 | 1901948 Nate H
Nate H's picture

gold has almost always done well in inflationary environments, at least back to mid 1800s in USA.  This time could be different, but read some history/data before making such claims.

Tue, 11/22/2011 - 09:14 | 1901986 grey7beard
grey7beard's picture

>> done well in inflationary

Excrept he said deflationary. 

Tue, 11/22/2011 - 09:24 | 1902010 Pladizow
Pladizow's picture

When guaging an assets performance, especcially in a deflation, it is important to view it against its alternatives.

And as all assets suffer in a deflationary environment, he who loses the least, wins.

Gold will suffer the least and has historically outperformed other asset classes in a deflation.

What I'm not sure of is how it fairs against cash?

But who says there will be deflation?

Tue, 11/22/2011 - 09:32 | 1902040 The Monkey
The Monkey's picture

Umm. Actually, the dollar and long term treasuries will not suffer at all.

Tue, 11/22/2011 - 11:44 | 1902583 BigJim
BigJim's picture

Cash doesn't do too well if they virtually confiscate it by bringing out a new currency.

Property/shares/savings can and probably will be confiscated through 'wealth' taxes.

Physical gold & silver make a compelling case in a world run by thieves.

Tue, 11/22/2011 - 13:26 | 1903002 Doña K
Doña K's picture

Here are the facts this time arround.

In a deflationary environment cash is king. Provided that cash is in a currency which is stable. Since this is not happening anytime soon, see below:

  1. Foodstuff and related assets with little or no taxation
  2. Gold as a wealth preservation and medium of exchange for large purchases
  3. Silver as a medium of exchange for hard to get items and medium size purchases.
  4. Cash du jour as a medium of exchange for small everyday purchases


Tue, 11/22/2011 - 09:05 | 1901954 Quintus
Quintus's picture

"Gold never does well in a deflationary environment."


Clearly the gold price was officially fixed during the Great Depression, but if you look at the closest thing people could buy at the time (Mining Stocks) they shot hundreds of percent higher.

Tue, 11/22/2011 - 09:06 | 1901956 goldfreak
goldfreak's picture

another troll?


Tue, 11/22/2011 - 09:15 | 1901987 Quintus
Quintus's picture

Either that or someone with not too much going on upstairs.  In an environment where a 2% rise in Treasury yields would bankrupt the US, he thinks someone is going to do a Volker and raise rates to double digits?  Yeah.  That'll happen.

Tue, 11/22/2011 - 09:10 | 1901974 BW
BW's picture

Gingrich what?

Tue, 11/22/2011 - 09:24 | 1902011 Smiddywesson
Smiddywesson's picture

Gold never does well in a deflationary environment.

1.  I hear that's not true, but even if it were, deflations make a currency stronger, not weaker but we are clearly in a debasement and default environment.  That completely invalidates the inflation/deflation argument, sort of like arguing about the ship's course while the engine room is on fire.  The course we are on is irrelevant, the USD will be destroyed before you arrive at deflation land.

If someone--like Gingrich--gets in and has the balls to support another Paul Volker, you'll lose your shirts.

2.  The risk of financial responsibility taking over is zero.  Gingrich isn't as much of a conservative as you seem to think.  He is criticizing the Wall Street protests without one word about the Fed.  You won't see any responsible actions from either party.

The FED Window can't stay at zero forever.

3.  True, they can't raise interest rates, but they are saying they will stay at zero forever.  What does that tell you about where we are going?  Refer back to point #1.

Tue, 11/22/2011 - 10:40 | 1902312 Rick Masters
Rick Masters's picture

Great stuff...+infinity

Tue, 11/22/2011 - 11:45 | 1902585 Threeggg
Threeggg's picture

4. The nature of CDS when triggered through deflation will create hyperinflation, because the money to cover the defaults does not even "exist"..............yet.

Tue, 11/22/2011 - 09:53 | 1902129 Rip van Wrinkle
Rip van Wrinkle's picture

Someone with balls in Washington?????


Get a life!!

Tue, 11/22/2011 - 10:13 | 1902212 bernorange
bernorange's picture

Fed can't raise interest rates like Volcker did.  The interest on the debt would explode.  They are trapped.

If Ron Paul gets in and supports Jim Grant and HR 1098, sound money has a decent chance. 

Tue, 11/22/2011 - 13:16 | 1902926 Temporalist
Temporalist's picture

But then gold and silver won't be taxed and made as competing currency, legal tender they likely would go even higher.

Tue, 11/22/2011 - 10:35 | 1902242 Bansters-in-my-...
Bansters-in-my- feces's picture

 @ Paarsons  ...Just wondering why all the care and concern to warn the GoldBugs.

Are you the motherly type ?

Or a Banker.

or#3 a fucking idiot.

or#4 all of the above.


Tue, 11/22/2011 - 10:40 | 1902311 fuu
fuu's picture

A re-purposed Celente forum pimp.

Tue, 11/22/2011 - 11:17 | 1902458 fonestar
fonestar's picture

I guess consistent smack-downs at the open and after trading hours constitute deflation these days?

Tue, 11/22/2011 - 08:53 | 1901925 HedgeAccordingly
HedgeAccordingly's picture

speaking of x-mass -

Tue, 11/22/2011 - 08:34 | 1901881 SilverIsKing
SilverIsKing's picture

"This most recent sell off may again be completely coincidental but the CFTC might want to keep an eye on such unusual trends in the precious metal markets in order to ensure fair and free markets and protect the interests of all investors."


Tue, 11/22/2011 - 08:44 | 1901902 sumo
sumo's picture

Oh yes *choking on my coffee*, the CFTC is wery wery interested in any wascally behavior. CFTC will investigate, wight after it finishes investigating the silver market *wink* ... Weal Soon Now ... staff shortages *cough*, you know how it is ...

Don't you worry, Mr and Mrs Investor, your money is safe and securely held. Just not by you.

Tue, 11/22/2011 - 08:59 | 1901933 LongBallsShortBrains
LongBallsShortBrains's picture

I considered junking you for not finishing with

" Be vewy vewy quiet, I'm hunting manipuwators ".

Ah fuck it. Green arrows for you. It's almost Christmas.

Tue, 11/22/2011 - 09:47 | 1902093 Manthong
Manthong's picture

If you give the CFTC the benefit of the doubt that they are not criminally complicit, this might be a good way to look at them..

Oh.. and I said IF.


Tue, 11/22/2011 - 10:01 | 1902165 StychoKiller
StychoKiller's picture

Awfully easy to ignore things when you're being paid to ignore them...

Tue, 11/22/2011 - 08:38 | 1901892 johny2
johny2's picture

caught beetwen US debt crises, Euro debt crises, Japans debt crises, Middle east crises and Asias population crises, I would suggest it is time to buy some physical PM and hope it doesn't get irradiated.

Tue, 11/22/2011 - 08:59 | 1901936 The Monkey
The Monkey's picture

When everybody is on the same side of the trade... Gold took on the proportions of a mania and I won't be surprised if / when the long-term channel breaks to the downside. Same for sillver (but probably worse).

Tue, 11/22/2011 - 09:14 | 1901985 johny2
johny2's picture

When you mention everybody being on the same side of the trade, I think of all these people who believe in FRN. 

Tue, 11/22/2011 - 09:16 | 1901992 fonzanoon
fonzanoon's picture

Maybe...just maybe for 5 minutes a few people stuck their toe in the water with silver and it got bit off in April. No one owns silver. It may go down.  But no one owns it. Obviously people on here do. But not the public.

Tue, 11/22/2011 - 09:23 | 1902008 The Monkey
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Hehe. I remember some sad story the WSJ ran (when silver was topped out of corse). Some lady living in a trailer park said she had traded all her retirement cash for physical silver. "I've never been so sure of something in my life.".

Tue, 11/22/2011 - 09:31 | 1902037 fonzanoon
fonzanoon's picture

She was early

Tue, 11/22/2011 - 12:15 | 1902683 BigJim
BigJim's picture

"Hehe"? At an old woman losing 40% of her savings?

What an asshole you are.... even if her loss is temporary.

Tue, 11/22/2011 - 13:20 | 1902960 Temporalist
Temporalist's picture

Just because the story came out during the recent top doesn't mean she purchased at the peak.  She could have bought at $15, $20, $30 and still be quite fine.

Tue, 11/22/2011 - 09:31 | 1902036 Smiddywesson
Smiddywesson's picture

I won't be surprised if / when the long-term channel breaks to the downside. Same for sillver (but probably worse).

Sure, if we weren't physically pinned to ZIRP by unsustainable debt, and an asteroid of derivatives as large as the moon were not speeding towards us, and all of the world's monetary and financial system wasn't chained together waiting for the weakest ship to pull all the others under, I could agree with that, sure.

Tue, 11/22/2011 - 09:38 | 1902061 The Monkey
The Monkey's picture

Good luck brother. I didn't make 3700% compounded returns over the past 8 years lined up on the same side as the rest of the world.

Tue, 11/22/2011 - 09:42 | 1902079 fonzanoon
fonzanoon's picture

If that is the case you must be getting killed shorting treasuries like I am. It is tough to wait it out but it will work out. It takes balls to take the other side of the trade. Easier to own a bond fund like the rest of the world.

Tue, 11/22/2011 - 09:50 | 1902114 The Monkey
The Monkey's picture

Long treasuries have been the ultimate contrary trade this year. Bill Gross was even shorting them when the sky was falling in April. No sense closing a position before it finishes it's run.

Tue, 11/22/2011 - 09:56 | 1902141 fonzanoon
fonzanoon's picture

For a few traders maybe it has been contrary. Bill Gross was agnostic and then maybe slightly negative for 2 days. Jim Rogers presumably got hammered.  For the trillions of dollars in retirement plans, annuities and even brokerage accounts they are all massively invested in bond funds. My point is people actulally own treasuries. Nobody owns precious metals. Central Banks and Paulson.

Tue, 11/22/2011 - 10:02 | 1902172 The Monkey
The Monkey's picture

Long term treasuries have been just about the best investment out there for years. They have always been a contrary trade (except for pension and life insurance). All these years we were told to ladder bonds to diversify interest rate risk.

Tue, 11/22/2011 - 10:07 | 1902189 fonzanoon
fonzanoon's picture

I totally agree with you about it being a fantastic trade. It has been a home run. I just disagree that it has been contrarian. Everytime someone gets nervous they switch to a bond fund. Gold gets talked about a lot. No one actually owns it. It's just a fact.

Tue, 11/22/2011 - 10:04 | 1902178 devo
devo's picture

Somewhere between 2 and 5% of people own gold. Hardly the "same side as the rest of the world."

Tue, 11/22/2011 - 13:26 | 1903008 Temporalist
Temporalist's picture

It's more like 1% at most 2% but still off the 4% that it was as an investment class back just 30 years ago until the 90s when people started preferring bubbles like dotcoms then housing and now the ultimate bubble govt. debt and fiat all because "analysts" and "professionals" direct people's money there now in 401ks and pensions and annuities...people don't even think (invest) for themselves they let someone else do it for them and the managers of their assets don't go into gold because they get no kickbacks for it.

Tue, 11/22/2011 - 08:38 | 1901893 Kina
Kina's picture

Investors have complained to the CFTC about violations of law in the gold and silver markets..

Complaining to the CFTC about the banking cartel's gold and silver manipulation is like complaining to the Mafia about extortion.


CFTC's sole purpose is to help the banking cartel rape America. And they have done a good job.


Tue, 11/22/2011 - 08:43 | 1901898 Kina
Kina's picture

Investors have complained to the CFTC about violations of law in the gold and silver markets..

Complaining to the CFTC about the banking cartel's gold and silver manipulation is like complaining to the Mafia about extortion.


CFTC's sole purpose is to help the banking cartel rape America. And they have done a good job.


Tue, 11/22/2011 - 08:44 | 1901899 Bazinga
Bazinga's picture

If you are a believer in gold/silver, use options expiry to increase your positions. Options Expiry=DIP!

Tue, 11/22/2011 - 09:25 | 1902014 The Monkey
The Monkey's picture

"Believer" is the key word.

Tue, 11/22/2011 - 17:24 | 1904214 akak
akak's picture

Several thousand years of monetary history, and hundreds of examples of both profligate governments and debt-loving central banksters destroying the value of their fiat currencies and the savings of their citizens, can indeed lead one to some well-founded "belief" in gold and silver.  But have fun playing in the corrupt and rigged casino that is Wall Street and sovereign debt --- for as long as it continues to last.

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