What Does Gold Know That All Other Asset Classes Don't?

Tyler Durden's picture


Presented with little comment as it appears Gold (and Treasuries) are not as ebuliently following the 'Hilsenrathian' path of most ignorance  to NEW QE - as GDP beats, stocks near multi-year highs, and housing recovering on its own just does not seem like the recipe for extreme Bernanke action.

Paradoxically, it would seem any extreme monetary action from the Fed now would mean they absolutely do not trust the macro data that is being spewed to the market every day and surely is the signal that things are a lot worse than anyone thinks.


The USD is weaker, stocks are stronger; but Treasury yields are revrtingh higher and Gold is at the day's lows...



Charts: Bloomberg

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Fri, 07/27/2012 - 10:44 | 2656493 hedgeless_horseman
hedgeless_horseman's picture



Gold calling Bernanke's bluff?  What's the pot at?

Fri, 07/27/2012 - 10:46 | 2656509 Deo vindice
Deo vindice's picture

Gold doesn't "know" anything. It just naturally consistently does what it has always done, which is to be a safe store of wealth through all the natural and manipulated changes of this world.

Fri, 07/27/2012 - 10:50 | 2656515 BaBaBouy
BaBaBouy's picture

GOLD is one of the Last Honest Financial Assets available...

We are now Riding On the GOLD $50K Train...

Fri, 07/27/2012 - 10:53 | 2656531 Biggvs
Biggvs's picture

10-yr yield rising, gold underperforming (in the chart above). Doesn't sound like imminent printing to me. Where is the frontrunning of Fed purchases? What is Hilsenrath up to? Jawboning Europe? More Fed swap lines coming?

Fri, 07/27/2012 - 11:02 | 2656566 gmrpeabody
gmrpeabody's picture

"ebuliently following the 'Hilsenrathian' path of most ignorance.."

Ebuliently....? Tyler, you may sit at the front of the class if you wish.

Fri, 07/27/2012 - 11:10 | 2656604 malikai
malikai's picture

There's definitely a rat somewhere. Both of my crude, all FX, and index models are solid locks right now, only gold and eurusd are on the other side of the moon, for now. And it looks like gold and eurusd are beginning to converge again.

Unless something significant fundamentally has changed in the last couple days, only affecting gold and the eurusd cross, look out below folks.

Fri, 07/27/2012 - 11:14 | 2656618 ACP
ACP's picture

The cocksmokers are just running the stops (with our money) in all the indices.

Fri, 07/27/2012 - 11:40 | 2656710 Jack Napier
Jack Napier's picture

We ought to all know by now that the market moves on insider information before we ever get wind of why. This is just more rumor mill. There is no anticipating the next QE. It will happen before we get a chance to react, and it's not going to happen for as long as cheap talk does the job.

Fri, 07/27/2012 - 11:50 | 2656792 flacon
flacon's picture

I have no idea why, but people are piling in on VXX calls.... curious that... :)

Fri, 07/27/2012 - 11:56 | 2656826 Turd Ferguson
Turd Ferguson's picture

C'mon, Tyler, this is bullshit. You know better than this.

Gold is week today because The Gold Cartel is attempting to take it back under 1600 before the close. They may still succeed.

Fuck em either way. They're doomed in the end. 

Fri, 07/27/2012 - 12:27 | 2656980 flacon
flacon's picture

Turd, don't forget that Bernanke, when asked what tools he has left, said that his only remaining tool was "his voice" (paraphrased). (and by the way, Draghi and Bernanke are the same in that regard). Are they going to print to oblivion next week? Perhaps, but perhaps not. Nobody knows, but given that Ben said that his voice is his only tool left... I don't think they will QE next week.... But in the end you are right... there is still the final tool - debt monitization en masse. But is NOW the time? 

Fri, 07/27/2012 - 13:19 | 2657241 The Luftwaffe
The Luftwaffe's picture

Exactly, the Cartel has been whacking gold and silver all day. They are no longer even trying to hide their now almost daily interventions. I smell desperation and looming comex defaults, but we will need to wait a bit longer for that show to begin.

Fri, 07/27/2012 - 16:01 | 2657926 LongBalls
LongBalls's picture

Just remember. It does not matter what the price of gold does. HANG ON TO IT. Are we returning to a gold standaard? Not the people. But the Central Banks are. Don't let price manipulation move your conviction. THIS IS A FACT. SEEK THE TRUTH AND YOU SHALL FIND.

Fri, 07/27/2012 - 11:07 | 2656595 markar
markar's picture

treasury yields went up during QE. Look at the charts.

Fri, 07/27/2012 - 11:16 | 2656629 1000pips
1000pips's picture

Gold is overpriced.  Better watch out.  Their about to run this market through the roof!

Fri, 07/27/2012 - 11:48 | 2656784 flacon
flacon's picture

What is the PRICE of gold measured in? What is price anyway?

Fri, 07/27/2012 - 12:24 | 2656978 silvermaister
silvermaister's picture

It is truee BUY SILVER !!!

Fri, 07/27/2012 - 12:54 | 2657135 lasvegaspersona
lasvegaspersona's picture

I find it difficult to believe anyone who does not know the three their, there, they're ers.

Sat, 07/28/2012 - 02:27 | 2658650 1000pips
1000pips's picture

u must teach english?  gold has gone No Where for the last 10 months...it's not a religion, it's a metal.  Only good for trading daily now.

Fri, 07/27/2012 - 11:12 | 2656611 Anne Ominous
Anne Ominous's picture


Fri, 07/27/2012 - 10:42 | 2656495 Paul Atreides
Paul Atreides's picture

You didn't build that chart

Fri, 07/27/2012 - 10:45 | 2656503 SilverTree
SilverTree's picture

The PPT & ESF did.

Fri, 07/27/2012 - 10:57 | 2656553 Dr. Richard Head
Dr. Richard Head's picture

If one did not succeed in their business on their own, can we blame the failures of companies on the government too?  Works both ways if the Obama theory is true, no?

Fri, 07/27/2012 - 11:40 | 2656739 PiratePawpaw
PiratePawpaw's picture

"If you build a better mousetrap, the world will beat a path to your doorstep"


Obama Translation: "Because the world beat a path to your doorstep, You built a better mousetrap"

Methinks Obama is Bass-ackwards.

Fri, 07/27/2012 - 13:13 | 2657222 TheAntiBen
TheAntiBen's picture

"You didn't dig that gold.  Shoot, you didn't even make that gold worth more money.  The government [uh, uh] the government made your gold worth more when I printed more money.  And now... And now, [audience cheers]... That's right, and now it's your turn to give some of 'dat gold back, to pay your fair share back, back to the government for helping you [uh make [uh] your-gold-worth-more-money..." [Obama - future speech.]

Fri, 07/27/2012 - 10:45 | 2656504 Dr. Engali
Dr. Engali's picture

Gold knows it's being suppressed.

Fri, 07/27/2012 - 10:55 | 2656541 EscapeKey
EscapeKey's picture

The Fed only manipulates the FX markets, sovereign bond markets, asset based securities markets, and have equity market "protection" mechanisms in place to PROTECT YOU - see, it's for YOUR OWN GOOD!

All talk of them manipulating precious metals is CLEARLY CONSPIRACY THEORY, and you label yourself as a TINFOIL HAT WEARING LUNATIC by even suggesting it!

Fri, 07/27/2012 - 11:02 | 2656568 Dr. Engali
Dr. Engali's picture

Gold lined tin foil hat...thank you very much.

Fri, 07/27/2012 - 11:13 | 2656614 malikai
malikai's picture

I may be mistaken, but weren't the Apollo spacecraft lined with gold foil?


Fri, 07/27/2012 - 11:08 | 2656586 Ghordius
Ghordius's picture

+1 protection at no price! -> progress!

Fri, 07/27/2012 - 11:26 | 2656673 Al Huxley
Al Huxley's picture

Imagine - the very thought tha gold price could be manipulated!  Sure, it turns out they did manipulate LIBOR, but I believe that was all shown to be altruistically motivated, just to 'protect the system', and I believe there was some issue around concealed and under-reported losses by JPM related to some CIO or other, but I'm pretty sure that was just oversight, and anyway they're going to get it back so it's all good.  And granted there's been some confusion around the whole mark-to-market concept in the financial industry and their 'assets' but other than these little tiny discrepancies (oh, and a few odd 'flash-crashes' from the whole HFT thing) the financial industry, governmenta and central banks have been paragons of virtue and honesty.  So given the evidence, I don't see how ANYBODY could suspect that gold is manipulated. I mean, why bother manipulating gold, what could possibly be in it for the FED, the Central banks, the FIs, etc...?

Fri, 07/27/2012 - 13:00 | 2657165 lasvegaspersona
lasvegaspersona's picture

Al Hux

Last week fofoa spent some time discussing the way the very exixtence of a paper gold market supresses the gold price. Good read even if you are not a full, "all in" freegolder. As long as the paper market exist we will have gold that is not at its full economic potential. Eventually, once we have a physical only market gold will resume its role of wealth preservation over time. We will see then that it has always done so. The gold in European castles and in the bowels of the BIS will still just sit there....being gold...

Fri, 07/27/2012 - 11:29 | 2656687 FeralSerf
FeralSerf's picture

Volcker must be a tinfoil hat wearing lunatic too.

"That day the U.S. announced that the dollar would be devalued by 10 percent. By switching the yen to a floating exchange rate, the Japanese currency appreciated, and a sufficient realignment in exchange rates was realized. Joint intervention in gold sales to prevent a steep rise in the price of gold, however, was not undertaken. That was a mistake." -- Paul Volcker, Nikkei Weekly 2004

Fri, 07/27/2012 - 10:46 | 2656507 fonzannoon
fonzannoon's picture

Either gold is just getting hammered down just for fun or it knows the truth. QE ain't coming.

Fri, 07/27/2012 - 10:49 | 2656518 LULZBank
LULZBank's picture

Where does the Gold's fundamentals fit in?

Fri, 07/27/2012 - 11:56 | 2656803 Ghordius
Ghordius's picture

gold's fundamentals? easy: it's the greatest and oldest of all ponzi schemes, since it's introduction in what was called Asia Minor (modern Turkey) by a King called Midas, son of Gordius (careful there, lots of myths aroud this) that just found out that meteoritic iron was too valuable for tools and weapons to be wasted as money. He stood on top of a very good gold mine (this makes him a classic liar) and propagated that he would exchange gold against iron at a fixed term (the first monetary market maker). So he was able to leverage his valuable iron (that wasn't mined - the technology was not yet there) with gold. The first (leveraged) Central Banker. Of course, being the first ponzi scheme, chances are very, very good that it will be the last to fall.

by the way, this had several consequences, including the modifications to the economy of Sparta (that continued to use iron even after you could mine it, making is quite worthless) and the first currency war between Asia and Europe, when Athens started to use it's silver mines.

in short: gold has no fundamentals, it's just money since quite a while...


Fri, 07/27/2012 - 12:55 | 2657139 Likstane
Likstane's picture

nice random boldface

Fri, 07/27/2012 - 13:10 | 2657207 Jim in MN
Jim in MN's picture

That would be a great user name: Random Boldface.

Sat, 07/28/2012 - 05:07 | 2658699 Ghordius
Ghordius's picture

eh? don't get it. random thoughts? Rand O.M. Boldface

Fri, 07/27/2012 - 11:36 | 2656726 HD
HD's picture

This is why my chest hurts. You can no longer trust any metric. Does gold know there is no QE? Is gold being openly manipulated down in front of QE? You can't base decisions on price action at all - it only about a constant state of "what if"...

The central planners may have beaten me here - if Ben announces an open ended QE, I'm out. Won't be able to short or go long - only algos will play in a tighter and tighter range until...

Fri, 07/27/2012 - 11:48 | 2656772 Jack Napier
Jack Napier's picture

Why even bother with metrics? We all know the end game. If everybody on this site would stop humping derivatives all day, paper chasing ever devaluing currency and giving play money to the manipulators, and instead buy physical gold and silver this charade would be over already. Stackers FTW.

Fri, 07/27/2012 - 11:42 | 2656749 PiratePawpaw
PiratePawpaw's picture

I just asked my gold...

It said "Patience Grasshopper"

Fri, 07/27/2012 - 11:44 | 2656762 scatterbrains
scatterbrains's picture

Gold knows the truth. They don't dare print 3 months ahead of the elections and trigger new all time highs in gasoline prices just as folks are jumping in their cars heading to the ballot boxes.. not going to happen.

Fri, 07/27/2012 - 11:53 | 2656802 Jack Napier
Jack Napier's picture


Fri, 07/27/2012 - 12:12 | 2656905 Moe Howard
Moe Howard's picture

I concur.

Fri, 07/27/2012 - 10:47 | 2656512 SmoothCoolSmoke
SmoothCoolSmoke's picture

BS pump continues. Must. Get. To. Olympics. (so MA and Pa Fourohonekay will be distracted for a month)

Fri, 07/27/2012 - 10:48 | 2656513 akak
akak's picture

And this blinkered, ultra-short-term analysis means exactly .... what?

Is RobotLemming now submitting articles on ZH?

Fri, 07/27/2012 - 10:50 | 2656517 SWCroaker
SWCroaker's picture

Next "round" *must* have some sort of surprise factor.   Simple print of money, and given to....????..... banks again?  Holders of junk Treasuries???   ... simply isn't worth the effort.   Must have SHOCK leading to AWE.


Perhaps something coordinated, between most of the major CBs?  A pan-western stabilization "fund" that provides low-interest loans to members in need (EU countries, US states, systemically significant pension funds and entitilement plans?) for decades to come?  Something that moves closer to a CFR-ish collective world financial body?


Interesting to see whether the non-club members, non-Western countries, will sit idly by; or what behind the scenes price was/is being paid for their complacency.

Fri, 07/27/2012 - 10:52 | 2656528 Dr. Engali
Dr. Engali's picture

You mean a world currency. Not yet, not till it all falls apart.

Fri, 07/27/2012 - 10:50 | 2656521 LULZBank
LULZBank's picture

Whatever Gold is doing, its not doing it enough.

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