Nomura Explains Why Gold Went Down, And Why It Is Going Back Up

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Mon, 10/03/2011 - 07:40 | 1732522 HoofHearted
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So, does it need to be said?

Gold, bitchez.

Mon, 10/03/2011 - 08:15 | 1732614 GetZeeGold
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Ok.....DAMMIT....can we just pick a direction and stick with it!

 

Mon, 10/03/2011 - 08:34 | 1732661 tmosley
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Ok, volatility will rise.  That's about the only direction you can be assured of in paper markets during a fiat currency collapse accompanied by mass fraud.

Mon, 10/03/2011 - 09:06 | 1732737 GetZeeGold
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Ok....so when does the mass fraud hit......cause I sure want to be ready for that.

 

Mon, 10/03/2011 - 08:22 | 1732631 cccmachine
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Always

Mon, 10/03/2011 - 08:51 | 1732706 Mister Ponzi
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Must be true when the name of the guy who wrote the article is "Amen"...

Mon, 10/03/2011 - 07:41 | 1732524 FoieGras
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I find it hilarious how 'experts' love to explain market moves with the benefit of hindsight. This is such a futile exercise.

Who cares *WHY* it dropped? Does it matter? Gold's in a bull market as far as the technicals are concerned. I am long a couple contracts and I got my stop around 1500, that's all I need to know.

Mon, 10/03/2011 - 08:19 | 1732622 GetZeeGold
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That's why we all watch CNBC.......they nail it everytime.

/SARC_THE_SIZE_OF_PLUTO

 

Mon, 10/03/2011 - 12:15 | 1733391 Mad Cow
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Yeah, history sucks, who needs it! /sarc

Mon, 10/03/2011 - 07:41 | 1732525 no2foreclosures
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Try gold has not been supported during European Central Banksters hours.

Trust me, the Asians aren't selling their gold.

Mon, 10/03/2011 - 07:57 | 1732557 Oh regional Indian
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I think the point is the lack of buying support in Asia these past couple of weeks. Same probably for silver too.

ORI

Mon, 10/03/2011 - 08:18 | 1732621 no2foreclosures
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Prices don't just go down because of a lack of buying, it takes active short selling, probably naked short selling, to make make gold prices go down $50-$100.  This article is a shitty cover story for the Central Bansters manipulating gold prices.

Mon, 10/03/2011 - 13:32 | 1733752 caconhma
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Ben and his fellows need to bring commodities and PM prices down (even for a short-time) to claim a deflationary threat and to start the next money printing spree.

This is no different from what they have done in 2008.

 

Mon, 10/03/2011 - 08:47 | 1732695 cynicalskeptic
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Asia saw a chance to let the price drop - and buy on sale.    They're not dumb.  Whiel the US is worrying about paper prices you can bet Aisa bought physical on the drop.  I wonder where the gold coming out of GLD went?   Presuming any real gold DIDget sold out of GLD........

Mon, 10/03/2011 - 07:41 | 1732526 hourglass86
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Nouriel Phucking Douchebag Roubini always tweets shit when theres a dip in gold. 

Mon, 10/03/2011 - 09:00 | 1732645 GetZeeGold
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Does he have a Nobel prize? I'm losing track of all the geniuses.

 

 

Mon, 10/03/2011 - 13:34 | 1733761 caconhma
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Does he have a Nobel prize? no, he is not Jewish.

Mon, 10/03/2011 - 15:25 | 1734116 akak
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True, Roubini is a fraud of an economist, and a shameless defender of the central bank-controlled financial and monetary status quo --- but he did stay at a Holiday Inn last night.

Besides, he has had the ultimate honor: having a breakfast cereal created in his image.
You know the one I mean ---- "Count Chocula".
Which is, perhaps unsurprisingly, full of sugar and short on fiber and any real nutrition.
You can find it on grocer's shelf, right next to the boxes of "Denninger Flake(s)" and "Special K(eynes) with Dead Theories".

Mon, 10/03/2011 - 07:42 | 1732528 eigenvalue
eigenvalue's picture

But if Greece defaulted, gold and silver could be taken down again as in 2008.

Mon, 10/03/2011 - 07:57 | 1732537 agent default
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Not necessarily, in 2008 we had a debt crisis not a currency crisis.  People needed liquidity and got it from wherever they could.

 A Greek default on the other hand, however well managed (which will not be) will create a huge confidence crisis in the Euro and the EU banking system, sending aftershocks throughout the world.  The survival of the Eurozone under such a situation looks increasingly unlikely.  People will probably flock to PMs as they are shocked by the risks behind central bank controlled currencies.  Not  the big institutional investors mind you, I am talking about ordinary people who have never held gold or silver before.  The demand for physical PMs will come from the bottom.  The exchange traded PM backed securities are a different story, and I think that there will be some sort of a separation between the two markets.  It will just be another floor of the banking/financial system coming down hard.

Mon, 10/03/2011 - 07:59 | 1732563 eigenvalue
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My guess is that gold and silver would be hammered again in the case a Greek default and turmoils in Europe. But when the European debt crisis ends and people start to focus on the US debt crisis, then gold and silver would soar.

Mon, 10/03/2011 - 08:40 | 1732670 Smiddywesson
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Yes.  Any event of such magnitude that it is guaranteed to be good for gold will draw the ire of the Fed, the ECB, and apparently, the Chinese central bank.  That means more manipulation and lower prices UNLESS you are willing to bet your money that this one event is of such magnitude that it breaks their ability to manipulate prices lower.  That's one Hell of a bet. 

I wouldn't take that bet, so I will step aside and see if Greece is too big for the manipulators.  Why?  Because if the manipulation machine breaks, there IS NO ceiling for PM prices.  I am not going to miss that move if I sit on the sidelines for a few days.

They can only cheat you if you are greedy.  Don't try to catch the whole wave when you are hunting a tsunami.

Mon, 10/03/2011 - 08:40 | 1732671 Pladizow
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For the same reason as gold is NOT in a bubble, is why it will be slaughtered in the event of a Greek default; i.e., not enough people/institutions own it.

In a panic the money will not immediately flow to PM's, but to the unworthy $.

Familiarity breeds complacency and people will go where they have always gone.

Gold is not yet a focal point.

When the dust has settled in Europe and the US once again becomes the center ring, then gold will enter phase 3.

Mon, 10/03/2011 - 09:11 | 1732750 glokk26L
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If it gets hammered down, that means its time to buy more.

Though there's a limit to buying metals that aren't lead.

I find that a good move is 2 bricks of .22 lr per week with assorted boxes of other calibers.

Meijer has .357 JSP 158 gr in my neck of the woods.... hope to try some in the Redhawk.  Should be a screamer!

Mon, 10/03/2011 - 07:53 | 1732544 GeneMarchbanks
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Greece defaulted a while ago, arithmetically speaking, so if you are still looking to the deranged Eurocrats for direction, may I suggest investing in a clue stick and smacking yourself with it.

Mon, 10/03/2011 - 07:54 | 1732549 GoldBricker
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I should hope that particular contingency would be priced in by now.

That said, there is always room for a short-term deflationary downdraft as gold longs (especially the paper kind) close their positions to free up funds to raise cash. I suspect that the game won't be over until physical decouples from paper (i.e., has its price quoted separately).

Mon, 10/03/2011 - 08:45 | 1732686 Alea Iactaest
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Like Brent and WTI.

Mon, 10/03/2011 - 12:40 | 1733511 FeralSerf
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It already has its price quoted separately in SGOL vs GLD.  There's about $30 difference in the price now.

Mon, 10/03/2011 - 08:04 | 1732581 Quinvarius
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First of all, look at the chart of gold vs the S&P in 2008.  Gold was already at all time highs when the S&P was at 666.  So good luck trying to time a dip based on your theory.

Second, we are talking about the death of paper currency this time around.  I am not fooled by a bunch of margin raises and clown action manipulation to move paper gold down during key bullish gold events, even while physical demand goes up.

One of the things that sealed German fate in Weimar was their ignorant attempts to sell gold into the market to stop their worthless paper from dumping.  So when the time came to put a stop to the currency death spiral, they had no gold left to create a new currency.  They ended up making a land based currency to save themselves, but that eventually died too because no foreigner could collect on the land.  Gold is the only way to build or save a currency.  Hopefully the central bankers are not so stupid that they are unable to learn from 10's of examples of currency deaths in the past hundred years.  Either they push gold up to a price where we can back our currency, as happened to the US in 1980, or they go to a gold standard.  If they keep pretending they can base paper money on unpayable debt and possibly give up their gold, there is no bottom in paper money. 

Mon, 10/03/2011 - 12:45 | 1733542 DrunkenMonkey
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Or 'they' raise interest rates to entice people into bonds and cash deposit accounts, no ?

Mon, 10/03/2011 - 17:28 | 1734701 Quinvarius
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Honestly, I can not see one example of where that ever worked.  People like to say Volcker did it.  But the dollar continued to plunge no matter what he did until it was 100% backed by the US gold supply.  IMO, the Volcker rate raises being a factor are a Keynesian central banker myth.  All Volcker did was hose the economy up.

Mon, 10/03/2011 - 08:44 | 1732684 AmCockerSpaniel
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He said "could", not would. So he said nothing. This "may" be a last post??

Mon, 10/03/2011 - 08:50 | 1732703 cynicalskeptic
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Didn't one of the Gulf states just trade Greece dollars for an option on their gold?,,,,,,,,,     Wouldn't that lock up their Gold so even in case of a default that wouldn't hit the open maarket?  Paper games can be played but when it comes to physical...  no fundamental changes....

Mon, 10/03/2011 - 07:48 | 1732532 DormRoom
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gold @ 1100 by New Years.

 

when correlation = 1, after further drops in all asset classes, gold & silver will collapse, like in '08.

Mon, 10/03/2011 - 07:53 | 1732543 eigenvalue
eigenvalue's picture

History doesn't repeat itself although it rhymes. I don't think gold can reach $1100 again.

Mon, 10/03/2011 - 07:57 | 1732559 GeneMarchbanks
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That's fine. If no one buys the dip @ 1400 1300 1200(which I highly doubt) I'll step in @ 1100 enough to sink a cruise ship. Here's a question: in that scenario, where are the European banks and BAC & MS?

Mon, 10/03/2011 - 08:07 | 1732593 GoldBricker
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Maybe they've got put options on each other that they can cash out.

Mon, 10/03/2011 - 08:08 | 1732588 GoldBricker
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So duh, sell it short now and watch the money roll in. You won't even need to finish college. It's obvious you're already way too smart to need that.

Mon, 10/03/2011 - 09:05 | 1732736 lunaticfringe
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Too funny.

Mon, 10/03/2011 - 08:09 | 1732598 Quinvarius
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Gold is already cheaper now than it was in 2008.  It is $550 an ounce in 2007-2008 money and $51 in 1980 money. 

Mon, 10/03/2011 - 08:23 | 1732632 Jendrzejczyk
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 Is there a link to that data or how it was calculated? Not trolling, just interested.

Mon, 10/03/2011 - 08:25 | 1732636 Michelle
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Based on that logic, which is what the inflationists will tell you, imagine how cheap gold was in 2001 at $250? What about silver at $3? Was the money supply not laarger then, too?

My point is that Gold and Silver don't trade on fundamentals otherwise their prices would almost alway be on an upward trajectory. This asset class is in a bubble and will pop like everything else. This time isn't different either.

Mon, 10/03/2011 - 08:46 | 1732690 tmosley
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Deflationsists don't understand that there can be bubbles in fiat currencies too, not to mention bonds.

This is why they have always, and will always continue to lose absolutely everything.

Mon, 10/03/2011 - 09:58 | 1732866 Snidley Whipsnae
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The world's biggest bubble now is in US Treasuries.

We continue to hear that US Ts are the worlds 'deepest and most liquid market'...but, no one, with the exception of a few savvy bond fund managers, stops to consider why this is.

US Ts are created with a key stroke on a computer.

US Ts are just another god damned piece of paper.

Anyone that prefers to hold computer generated electronic pieces of paper over physical gold is a fucking moron.

When the dust settles there will be only PMs left standing as true stores of value... Well, there will be some precious stones, art works, and productive ag land if one can afford the taxes (read about Roman farmers)...  

Mon, 10/03/2011 - 11:56 | 1733306 Smiddywesson
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All paper is a house of cards dependent upon the system.  When the system goes, it all collapses, revealing PMs as the only surviving liquid assets.  They were the only real liquid assets all along, it's just the house of cards concealed that fact.

Mon, 10/03/2011 - 08:18 | 1732623 doomz78
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If there is a collapse i would think 1400 is as low as she'll go.  Then the bull market will resume once they print the money to "save" us from the banking crisis. 

Mon, 10/03/2011 - 08:28 | 1732649 Quinvarius
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It takes 2 to ten years to translate a spike in currency supply to inflation based on my observations of other inflations.  I'd say we are still looking forwards to the TARP and multi trillion loan effect from the 2008 crisis.  Then after that we will still have the QE2 effect and now thr EFSF effect.  We are probably just now getting the Bush inflation effects.  When it really starts rolling, no layman will understand it because the cause will be so far behind us.

Mon, 10/03/2011 - 08:58 | 1732719 cynicalskeptic
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We're still in the low velocity induced deflation.  People are scared, keeping money in cash or T-Bills so it's not moving.  When people see how fast that money is losing purchasing power, THEN you see velocity take off as people look to swap their paper money for somethjing with tangible value.  As inflation increases, velocity increases since nobody wants to hold depreciating cash.... buying power drops mopre, people spend it faster, value drops more... vicious cycle   You saw it in Weimar, and places like Argentina and Brazil.  You spent money as fast as you got it because it would buy less tomorrow.  You bought anything you needed as soon as you got cash and spent any left over money on ANYTHING with tangible value.  Unfortunately your buying power doesn't keep up with the increase in prices so you get to the point where you don't have any 'extra' cash - and indeed don't have enough  to buy necessities.  

Better hope inflation doesn't hit the lift off ppoint to hyperinflation.  Things get nasty.

Mon, 10/03/2011 - 12:56 | 1733594 FeralSerf
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The Proles can't spend their cash, which is denominated in bankster ATM units rather than Ben Franklins now, if the banks fail or refuse to allow the transactions.  It really is different this time.  This time the people don't have any physical currency to speak of.  A shortage of physical currency will (and is) causing it to be hoarded.

There's a lot of cash outside the country, but DHS and their security is not going to allow the currency to be repatriated so it would be able to actually buy stuff like gold, farm land, and bullets.

Mon, 10/03/2011 - 07:48 | 1732533 DormRoom
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gold @ 1100 by New Years.

 

when correlation = 1, after further drops in all asset classes, gold & silver will collapse, like in '08.

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