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Gold Rises $40 As Markets Fall Sharply - Safe Haven "Tipping Point"?
From GoldCore
Gold Rises $40 As Markets Fall Sharply - Safe Haven "Tipping Point"?
Gold’s London AM fix this morning was USD, EUR, and GBP per ounce.
Yesterday's AM fix was USD 1,548.75, EUR 1,244.98, and GBP 995.41 per ounce.
Gold rose 0.38% or $6.00 in New York yesterday and closed at $1,564.80/oz. However the 0.38% gain does not convey the positive price action. This saw gold fall initially in unison with risk assets such as equities and commodities - including oil.

Gold in USD - 3 Day (Tick) - Bloomberg
Gold fell and tested support at $1,530/oz but then bounced very sharply and rose by nearly $40 from $1,532/oz to $1,570/oz. US stocks and commodities remained under heavy pressure and the benchmark S&P 500 ended down 1.43%.
Gold consolidated on yesterday’s gain in Asia and during European trading it is challenging resistance at $1,570/oz.Gold is set to incur its 4th month of losses which has not been seen in nearly 13 years. Interestingly while gold in dollar term is off 6% in May, the sharp fall in the euro means that gold has again risen in euro terms and is up 0.3% in euro terms in the month.
Meanwhile, stocks and commodities have had a torrid month with sharp falls seen and gold outperforming nearly all major equity indices.
Thus despite the continuing questioning of gold’s safe haven status by the less informed, gold was again a safe haven to investors in May – especially those in the Eurozone who are currently most in need of a safe haven.
Yesterday may have been a form of ‘tipping point’ for gold whereby it again starts to display its safe haven status as it did soon after the initial price falls at the time of the Lehman financial crisis.
The trading fundamentals look increasingly sound. The COT data is very bullish from a contrarian perspective with the net long position extremely low. Also, the large commercial traders are aggressively covering their gold and silver shorts which is always a good indication that the precious metals are close to bottoms.
Gene Arensberg of the Got Gold Report says that the COT data “suggests that dips for gold and silver should be exceedingly well bid just ahead. Indeed, the structure of the COT is about as bullish as we have seen it for silver futures.”
The supply demand fundamentals remain very sound with gold demand expected to exceed supply again this year, according to the World Gold Council who have said that gold has bottomed or close to bottoming.
Gold will extend annual gains for a 12th year as bullion is “near” a bottom and demand will keep exceeding mine output, according to the World Gold Council.
Mine production will grow 3% this year from last year’s 2,800 metric tons, while demand may be unchanged or slightly lower from a record 4,400 tons, said Marcus Grubb, managing director of the WGC in an Bloomberg interview in Tokyo.
Mine supplies will remain in a deficit “for a foreseeable future,” Grubb said.

Gold in USD - 2 Year (Daily)- Bloomberg
Bullion is “near to the bottom at current prices, indicating gold will move back up again,” he said. Recycling has risen to make up for the gap between demand and mine output, he said.
“Some of the drivers of the increase in demand are structured, central banks for example, the rise of Chinese demand and the wealth increase in Asia, including India and China as well as smaller economies,” he said.
Central banks have increased gold purchases on concern about the dollar, the euro and the sovereign debts, Grubb said. The banks’ net purchases last year were the most since 1964. In 2010, they turned to a net buyer for the first time in 15 years.
About 50 percent of annual demand comes from India and China alone, Grubb said. “China is clearly the No. 1 market in 2012,” he said. Average world mine production costs are estimated at $960 an ounce, he said.
China’s demand, which rose to a record 255.2 tons in the first quarter, may gain to between 900 tons and 1,000 tons this year, from 769.8 tons in 2011, Albert Cheng, Far East managing director at the group, said May 17. Indian usage may be between 800 tons to 900 tons, from 933.4 tons, he said.
With the supply and demand fundamentals remaining sound and the trading fundamentals looking better by the day, gold’s bottom may have been seen or will likely be seen very soon.

Cross Currency Table - Bloomberg
Ireland’s government is confident of victory in today’s eurozone fiscal pact referendum as secret official polling forecasts more than 60% of Irish voters will tick the Yes box.
Polling stations will close tonight after the only popular vote to be held in the 25 European Union countries that have signed up to a treaty that enshrines eurozone austerity rules into national law and cedes budgetary and economic power to the European Union.
After a quiet but bad-tempered campaign government and European Union officials are hoping that widespread Irish fears of tougher times ahead if voters say No will beat popular anger over austerity measures demanded in return for EU loans.
Campaigners against the eurozone treaty have accused the government of scare tactics, including claims that a No vote would lead to a Greek-style banking collapse, cause a tripling of the country's borrowing costs and plunge the country into national bankruptcy by 2014.
While a no vote is not expected, it is worth remembering that a no vote was not expected for the Lisbon or Nice treaties either and the Irish people voted no.
A no vote could create short term volatility in financial markets however the referendum’s outcome is of little significance to global markets as the Troika (ECB, EC and IMF) are likely to continue with their existing plans for Ireland no matter which way Ireland votes.
Ireland, like many European countries, needs to burn European and international bank bond holders if it is to have achieve financial and economic recovery. This is the real issue facing the Irish people and one which is not addressed in the Treaty.
Market watchers await China's Purchasing Manager's Index on Friday, while US Q1 GDP figures and a US employment report out today will give a clue as to the state of the two largest economies.
OTHER NEWS
(Bloomberg) -- Gold Limits Einhorn Loss, Draws in Investors
David Einhorn’s emphasis on gold is not only attracting investors to his hedge funds at Greenlight Capital Inc., but also limiting his losses this quarter even though the metal’s price has fallen.
The CHART OF THE DAY illustrates this year’s performance of Greenlight’s five largest publicly disclosed holdings at the end of March, which Einhorn mentioned two days ago in a letter to investors. The precious metal was among them.
Gold for immediate delivery was 6.3 percent lower for the quarter as of yesterday. Only one of the firm’s other four top holdings -- Apple Inc., the maker of iPhones and iPads -- fared better. Shares of the Cupertino, California-based company had a 3.4 percent loss.
The performance contrasted with the first quarter, when all four stocks exceeded Greenlight’s 6.8 percent return after fees and expenses and spot gold essentially matched the gain.
Seagate Technology Plc, a computer disk-drive maker run from Cupertino, set last quarter’s pace by surging 64 percent. Apple followed with a 48 percent gain. Arkema SA, a chemical maker based in Colombes, France, added 31 percent in dollars. General Motors Co., a Detroit-based automaker, rose 27 percent.
Greenlight’s assets rose 6 percent during the quarter, according to the letter, which said new investments in dollar- denominated gold funds accounted for “a high percentage of the capital we raised.” The New York-based firm sold $131.1 million of limited-partnership interests last month in two of the funds, according to U.S. regulatory filings.
(Bloomberg) -- Sterne Agee Sees Gold Hitting New Highs in 12-18 Months
Sterne Agee analyst Michael Dudas initiates precious metal stocks, sees gold hitting new highs in 12-18 mos.
?Says precious metal stocks attractive as current valuation discounts “much lower” realized prices
?Sees gold averaging $1,750-$1,800/oz in next 18 mos. (currently $1,555) w/ upside to $2,000
?Sees silver averaging mid-$30s (currently $27.72) w/ potential to hit new highs
(Bloomberg) -- Russian 4-Month Gold Output Dropped 0.9% on Decline at Kinross
Russian gold output from mining and other production fell 0.9 percent in January through April, according to the Gold Producers’ Union.
Gold mining dropped to 44.96 metric tons from 45.4 tons in the first four months of last year as production fell at Kinross Gold Corp.’s mine in the Chukotka region in Russia’s Far East, the union said today in an e-mailed statement.
(Bloomberg) -- India Gold Demand May Fall on Rupee, Slowing Economy: Rajesh
Demand for gold and jewelry in India, the world’s biggest bullion importer, may drop after the rupee fell to a record, boosting local prices, and amid slowing economic growth, said Rajesh Exports Ltd.
“When the economy slows down, demand for gold and jewelry will also come down,” Chairman Rajesh Mehta said today in a phone interview. “With prices shooting up and the economy slowing down, we may see a little slackness going forward.”
(Bloomberg) -- Turkey May Raise Gold Ratio in Banks Required Reserves to 30%
Turkey’s central bank may gradually increase the proportion of lira reserves lenders can keep in gold to as much as 30 percent from 20 percent, it said in its financial stability report in Ankara today.
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Stack it folks.
Quickly.
Gold will drop below $1,000 per. No place is safe.
Per what? Per New Dollar. Probably. With one NSD being equal to 10000 USD or such. The first time Gold sinks that far will probably after the next global war when the last 10 survivors on this planet have better things to do than playing "mine is longer than yours" measured in little pieces of paper.
Per the fact that most people don't own any. It's a rich mans game like a yacht, a fancy sports car or an expensive watch.
Common folk could care less. You will pay me for my blood, sweat and tears as I toil, because that in reality, is the only true currency. What you use as a medium to get me my pay is your choice. If you think I am working a whole year to acquire one of those shinny coins your as wacky as new home builders.
Gold is still in a bubble.
Curious the $1000/oz. price level is mentioned off-hand. One price level being defended with all possible means, including taxpayer monies, is the £1000/oz. price.
Price level fluctuations seem arbitrary in any other currency, but when you take a look at the price level in pounds, not dollars, the magical one-thousand pound price level, it all falls into place.
I'm not so sure if it has much to do with control of the price, or price manipulation, but instead really has much to do with defending the pound and generating means to buy gilts out of the market.
Now THAT would make some sense.
http://www.kitco.com/gold_currency/index.html?currency=GBP
$M1000 milliards, or 1000ths of an oz of gold. is that .00032g of gold. buy sounds like a small coin? maybe it could be used to paint something on a plastic note.
Despite of you getting spunked, I'd hire you to get me onto this lake of yours.
Ooops, accident.
But I really liked you.
Velly solly.
Looks like you lived up to your username with that last comment.
DOH!!!!!!!!!!!!!!!!!!!!!
We all knew the ball of twine was unraveling and that in order for the machine to resume publically acknowledged printing (I assume we understand that they have been working the "printing" problem from the inside, out of sight of the sleeping public.......right?) the playing field would need to be prepared. This included the Gold and Silver takedown as well as the PM Miner bloodbath. Those who remain are the strong hands.
Let the games begin.
Beware what you wish for. After all that gaming and us getting old and frail the thinning out of gold and the stretching of gold holders might commence.
I'm not wishing for anything. But I am a long term holder and thus I'm unaffected by daily/monthly, even yearly price movements.
I would prefer that fiscal sanity returned and my Gold and Silver dropped in price. I don't want to see crisis and strife. But I am not blind to the fact that others in power do......so I prepare.
I`m all with you CD.
And keep up that strive of making your point in just an aphorism.
Sorry to challenge you, I`m a long time fan of yours.
As a long time holder you should have bought all PM`s
to exchange to non-to-precious metals for a start, not for an end. And then, move over.
And for the rest of you...love you all, welcome to the
non to precious metallic discussion...
I find that PM fans are very divided. I have presented my views on this subject in a two part series.
http://www.zerohedge.com/contributed/golden-end-game-%E2%80%93-thought-experiment
We have seen this type of move various times over the past few years, and gold seems to front run equities. The big event will be when US long bonds start crashing with equities however gold rallies. That is the true tipping point.
That "Gold Rises $40" headline was almost like a DoS attack
on kitco...could not get any quotes for everlasting 30 seconds...
Wait for the DoS attacks on ATMs (coming to a bank near you soon). "Could not get any money" will continue for a few more days than just 30 seconds.
That "Gold Rises $40" headline was almost like a DoS attack
on kitco...could not get any quotes for everlasting 30 seconds...
Screw Kitco use this one.
http://www.learcapital.com/
Exact Price
I like this feature in kitco: http://www.kitco.com/kitco-gold-index.html
Bad news becoming the norm again. Gold ought to take off in the next couple of weeks if we do not get a break. Equities are going lower, deja vu (may '11) all over again.
Today is ur last chance to sell in May, Zuckers!
if anyone wants to see the true price of gold and silver look on ebay. the spot price means nothing.
its always much higher and more stable than the manipulated market.
Ebay is a good way to ... dispose of tarnished metal.
eBay is always higher because there are huge costs involved in selling. You have to pay the eBay vig on final value:
"11.0% of the initial $50.00, plus 6.0% of the next $50.01–$1,000.00, plus 2.0% of the remaining balance ($1,000.01–total cost to buyer)"
You also have to pay PayPal:
"PayPal fees mainly apply to sellers, who pay a 2.9% transaction fee on the total sale amount plus a $0.30 fee per transaction."
Then there's the whole issue about buying quantity (e.g., Tulving) and volume pricing.
This is just a long way of saying that eBay is no better a measure of POG than wetting a finger to gauge the wind. You'll get a general idea but no real specifics.
You just use ebay as your listing agent, you don't "sell" it through them. But, to do that you need to have an ebay account with an impeccable feedback history in place.
"an impeccable feedback history in place." and have the guts to sell ALL your collectibles, whether it be arts, antiques
or even antiquities and rare books. Less invaders can burn,
lest they burn you down to the ground, as in the other 30 year war (in Holland they called it 90-year) AND GET OVER IT.
The point about Ebay isn't the cost of selling. It's what people are willing to pay, and it's *always* over the paper price--sometimes by quite a bit.
A just-completed auction this morning on Ebay, for $10 in junk silver quarters, went for $226.95. According to Coinflation this morning, a dollar of junk silver is worth $20.10, so ten dollars in silver quarters would be...$201.
People are paying a more than 10 percent premium for this stuff on Ebay. That's what the market is--what people are willing to pay.
And right now, they're will to pay more than the supposed "spot" price.
Alea Iactaest
I refuse to do anything eBay related, bit a nephew does, and he starts all auctions on junk/rounds, at $0.99.
That cuts his costs of getting double plugged by the two whores.And he makes over 10% prem on all he sells.(after all costs incurred).
Gold has been sitting sideways for the past two weeks
The USD, however, has not. Think about it.
Don't worry about higher gold - someone will dump 10,000 contracts on the CRIMEX and the CFTC will take 4 years to investigate if at all.
“The tactic is always the same. The gold banks enter the COMEX and offer more gold for sale at the market than has been mined in the last five years. Immediately, the locals (pit traders) try to run in front and hit any bids they happen to have on their book or are out there in order to get the price down.
http://jessescrossroadscafe.blogspot.com/2012/04/gold-daily-and-silver-weekly-charts_05.html
"Central banks have increased gold purchases on concern about the dollar, the euro and the sovereign debts,"....not just them...but individuals too....slow and steady until the storm hits......then we will be one of the few survivors of the storm....like the Bubba Gump shrimp boat...run Forest RUN
Yeah, gold bitchez....the powers of central banking will crush you...Do you think it is a coincidence that it did not sustain the Eur1,266/oz level? Wait and see....It will fall to $1,380/oz, before it can go up again...And guess what: By the time it starts picking up, it will be taxed. And when you start selling it in the black market, it will be confiscated. Gold bitchez....
I bot some weed last night..........and nobody confiscated it. Does that mean I am in the wrong black market? Jus askiin?
Buy it in person. With cash.
"Gold’s London AM fix this morning was USD, EUR, and GBP per ounce.
Yesterday's AM fix was USD 1,548.75, EUR 1,244.98, and GBP 995.41 per ounce."
Uh - priceless? As in "For evertyhing else (USD, GBP, EUR) there is InflaCard"?
In the same manner that too much cheap money going to levered up retards allowed paper real estate to ruin intrinsic value of physical real estate, too much cheap money has allowed paper gold to ruin physical gold & PM in general as an asset class. Recent price action is just a technical bounce off of 1523 (12/29 low), helped along by reduced margin req. Any long term chart of gold looks broken and headed deeper into a bear market.
As much as I believe in holding some physical gold, its price in terms of paper money is wildly distorted beyond anything realistic, just as equities, bonds, and real estate is and has been. It is no longer representative of traditional PM values (like un-levered demand for physical) and is just one more asset class being run up and down by hedge fund douchebags chasing returns.
Well maybe - but the Central Planners have other ideas. I don't see gold doing much of anything until the elections are over - no way does Chalky Soetero want gold in the headlines as we push into summer and the fall; people could get ideas.
http://vegasxau.blogspot.com
Basel III has some really interesting definitions regarding Gold.
http://www.bis.org/publ/bcbs128b.pdf
Search the document for 'Gold' and you will find out what the folks that make the rules think Gold is.
Hint: Charlie Munger is an idiot.
Clint,
To wit:
3. (i)
Collateral
Eligible financial collateral
145.
The following collateral instruments are eligible for recognition in the simple approach:
35(a) Cash (as well as certificates of deposit or comparable instruments issued by the lending bank) on deposit with the bank which is incurring the counterparty exposure.43, 44
(b) Gold.
The central bankers' bank the BIS intends to encourage commercial banks to hold gold as Tier 1 capital by January 2013, up from Tier 3.
Agreed: Charlie Munger is an idiot, but a useful idiot for the paper pushers.
Gold! Get yer Gold here...
http://www.scribd.com/doc/88173490/My-Mugu
That's some pretty funny shit, I don't care who ya' are!
My favorite from Basel III:
"However, at national discretion, gold bullion held in own vaults or on an allocated basis to the extent backed by bullion liabilities can be treated as cash and therefore risk-weighted at 0%."
"wait wait wait, do you mean that gold is ... money?" (slaps forehead)
They came for my gold but left with my lead!
Gold bitchez....the powers of central banking will crush you...Do you think it is a coincidence that it did not sustain the Eur1,266/oz level? Wait and see....It will fall to $1,380/oz, before it can go up again...And guess what: By the time it starts picking up, we will tax it. And when you start selling it in the black market, we will confiscate you. Gold bitchez....you will swallow all, all the money we print. We will use the metal detectors at airports to spot you and once we do, you, your wives, kids and parents will be in the no-fly list. There is no way we will let you win this one....Sorry folks, I like roleplaying :)
I like gold but the dollar rally is not over, I doubt we've seen the bottom of gold yet. Go ahead and junk this but Marc Faber has talked about 1300 and I think he's right. I'll be buying at that price but not right now.
Ok. but the paper price at 1300 sounds good, can you get your hands on physical at 1300?
Good luck.
It looks like Gold is gonna test the $1600 level again. The $1550 has held three time already and yesterday it got rejected very hard.
http://www.youtube.com/watch?v=WvqtwTAnj5g
Gold Price Technical Analysis
The government could allow banks to start buying gold again and allowing it to be claimed as tier 1 capital instead of tier 3 capital (worth 40 percent less to market) as it is now. Of course "that would gold would be equal to say...debt for example.
9:56amET: SEE? SEE?? I told ya! Eur1,266 is the limit folks. We will not let you win this one. We will crush gold.
"Some of the drivers of the increase in demand are structured, central banks for example . . ."
Is there anything else creating "demand" for most of what the market has to offer?
Everything that was true yesterday is no longer true. :-)
They will tank it. Just wait. Ultimate power to the people? not.
Margin calls come in today also.. remember? Hello?
Gold = Equities
Gold and Equties correlate exactly, not in price but in direction.
Many margin calls will come in and so many will liquidate assets ( gold, silver, everything)! The collapse in prices across the board will be epic and 99% of people will shun stocks and investments.
Margin calls? No way! It's US manipulating the market. The 10am algo in action, as usual, trimming Eur10 to wipe out any dreams that this puppy will cross the 200-day mov avg of Eur1,266/oz.
Gold = 1/Equities
there, fixed it for ya
Wooo someone waited for the $1575 mark and sold big time....all paper though. Watch for a big buying binge coming up....
and the raid begins.....they turned on the computers....10 year treasuries.....GOLD....easy choice...
The single seller that just sold 4500 GC_F contracts at market to bring the price down $15 in 2 mins had nothing to do with JPM...for sure.
Gold up or down. Big deal. Even at $1500 I can make about $50 a gram refined. Scrap4treasure tells you how. The more of us the better.
http://www.mineweb.com/mineweb/view/mineweb/en/page103855?oid=152291&sn=Detail&pid=102055