Gold Tanks to Lowest Point in Two Years: Here’s What You Need to Know
For those who don't know, a while back Governor Perry asked the Federal govt. to return Texas' gold, which the feds have for "safe" keeping. Texas doesn't trust them. (Ha! And this is just more evidence that they can't be trusted!) Apparently the decision is to be made in a matter of days. And in reference to the fish, Rahm Emanuel, who used to be Obama's right hand something-or-other once sent an opponent a dead fish wrapped up in newspaper. Anyway, the market is rigged. If anything, it is a good time to BUY! and NOT SELL. Who
wants worthless paper dollars anyway???
Apr. 15, 2013 10:00amBecket Adams
The price of gold on Monday fell below $1,400 an ounce, its lowest point since March 2011:
Yahoo! Finance. (Screen grab).
This is an official two-year low for gold.
“Gold has fallen sharply over recent trading sessions from over $1,600 10 days ago and there is talk in the markets that a number of institutions are cashing in following a reduction in gold price predictions from leading investment banks, including Goldman Sachs. Earlier, it fell to $1,398.80, its first foray below $1,400 since March, 2011,” the Associated Press notes.
So what’s the deal?
“Interesting that Gold crash came 4 days before hearings on Texas depository. It’s like Bernanke sent Perry a fish wrapped in a newspaper,” economist Jim Rickards tweeted.
“The action is gold/silver is another example of gov’t confiscation. MFGlobal, Cyprus, Gold/Silver. This is what a currency war looks like,” TV host Max Keiser also said in a tweet.
Is gold’s nearly 12-year bull run as a precious commodity coming to an end?
“Many reasons have been put forward to explain the sudden change of course, including speculation that Cyprus may sell a chunk of its reserves to finance its part of its financial rescue,” the AP explains.
“Though that may not materialize, it was enough to prompt some investors to think that a gold-selling strategy may be used elsewhere in the troubled eurozone.”
Many analysts, most especially the “gold bugs,” believe the Federal Reserve is directly responsible for the recent ascent (and now the descent) of gold:
“Investing in gold is a rejection of government money and finance. Money flowing into gold-related assets represents a belief that rocks (however shiny they are) are a better place to invest than human endeavors (like stocks),” he notes, adding that the events following 9/11 “shook our faith in humanity” and drove people into the arms of gold.
“Since [stocks vs. gold bottomed in 2011], the fever has begun to break,” he writes. “Washington is fractious, but not like it was in 2011. Housing, which was central to America’s national malaise, has begun to turn around for real.”
“So ultimately, the decline of gold and the rise of stocks is a big trend that everyone should cheer.”
And whether you find yourself agreeing with Weisenthal or Rickards, just know this: Gold isn’t finished just yet.
“[M]any investors remain committed to gold – most notably John Paulson, who made billions betting against the US housing market ahead of the financial crisis,” FT notes.
“They argue that the expansionary policies of central banks in the US, Japan and the UK will ultimately herald an era of much higher inflation that should lift gold prices significantly,” the report adds.
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Featured image AP photo. This post has been updated.
Yahoo! Finance. (Screen grab).“Gold has fallen sharply over recent trading sessions from over $1,600 10 days ago and there is talk in the markets that a number of institutions are cashing in following a reduction in gold price predictions from leading investment banks, including Goldman Sachs. Earlier, it fell to $1,398.80, its first foray below $1,400 since March, 2011,” the Associated Press notes.
So what’s the deal?
“Interesting that Gold crash came 4 days before hearings on Texas depository. It’s like Bernanke sent Perry a fish wrapped in a newspaper,” economist Jim Rickards tweeted.
“The action is gold/silver is another example of gov’t confiscation. MFGlobal, Cyprus, Gold/Silver. This is what a currency war looks like,” TV host Max Keiser also said in a tweet.
Is gold’s nearly 12-year bull run as a precious commodity coming to an end?
“Many reasons have been put forward to explain the sudden change of course, including speculation that Cyprus may sell a chunk of its reserves to finance its part of its financial rescue,” the AP explains.
“Though that may not materialize, it was enough to prompt some investors to think that a gold-selling strategy may be used elsewhere in the troubled eurozone.”
Many analysts, most especially the “gold bugs,” believe the Federal Reserve is directly responsible for the recent ascent (and now the descent) of gold:
Another reason put forward is that the Federal Reserve will outline a strategy to withdraw its monetary stimulus later this year despite recent mixed signals out of the U.S. economy, the world’s largest.Gold prices tumbling would seem to contradict earlier calls from bearish analysts [via Financial Times]:
<a href="http://ad.doubleclick.One of the reasons why the price of gold has been so well-bid in recent years is a direct result of the Fed’s policy — the new dollars created under so-called quantitative easing have found themselves recycled in financial markets and many of them have gone to the perceived haven of gold.net/jump/prnd/prn-theblaze; prntype=web;prngenre= conservative_talk;prnpage= finance;pos=bottom;sz=300x250; u=prntype*web!prngenre* conservative_talk!prnpage* finance!pos*bottom!sz*300x250; ord=123456789?" target="_blank" ><img src="http://ad.doubleclick. net/ad/prnd/prn-theblaze; prntype=web;prngenre= conservative_talk;prnpage= finance;pos=bottom;sz=300x250; u=prntype*web!prngenre* conservative_talk!prnpage* finance!pos*bottom!sz*300x250; ord=123456789?" border="0" alt="" /></a>
The collapse in prices has been foreshadowed by a string of bearish calls by analysts. In February Credit Suisse predicted the market had already peaked; Société Générale said the “end of the gold era” was nigh; and last week Goldman Sachs recommended investors short the metal.However, to some, the drop in the price of gold isn’t a bad thing (or a conspiracy). Au contraire! According to Business Insider’sJoe Weisenthal, he of “Hey, the March jobs report was ‘GREAT’” fame, everyone should be “thrilled” about the decline in gold.
“Investing in gold is a rejection of government money and finance. Money flowing into gold-related assets represents a belief that rocks (however shiny they are) are a better place to invest than human endeavors (like stocks),” he notes, adding that the events following 9/11 “shook our faith in humanity” and drove people into the arms of gold.
“Since [stocks vs. gold bottomed in 2011], the fever has begun to break,” he writes. “Washington is fractious, but not like it was in 2011. Housing, which was central to America’s national malaise, has begun to turn around for real.”
“So ultimately, the decline of gold and the rise of stocks is a big trend that everyone should cheer.”
“[M]any investors remain committed to gold – most notably John Paulson, who made billions betting against the US housing market ahead of the financial crisis,” FT notes.
“They argue that the expansionary policies of central banks in the US, Japan and the UK will ultimately herald an era of much higher inflation that should lift gold prices significantly,” the report adds.
Follow Becket Adams (@BecketAdams) on Twitter
Featured image AP photo. This post has been updated.
4 comments:
Just goes to show you these gold and silver gurus like Bix Weir, Jim Sinclair, David Morgan, Bill Murphy know nothing. They've been hyping gold and silver to the moon for the past couple of years. Gold will fall past $1000 in the coming weeks and silver in the low teens. Just watch!
Forget about a gold backed currency of any kind. Basel III does not include it as a currency. All central banks are dumping it. The U.S. dollar is on the rise while everything else is cratering. There will be no collapse of the U.S. economy. Doom is off and your dinar are worthless. Just check out Kitco. The dollar is up over 20 points while everything else is bottoming out. The IRS, Fed Reserve and corporate government are here to stay. Forget about a disconnect between gold and silver paper prices and the physical stuff. Time to bring the cows home.
Au contraire anonymous 12:52: The market IS rigged. Drive the (published) value down and those in fear will sell, THEN when the succers are no longer participating and the illuminatti hold most of the physical gold (and silver...the fix stops and they end up with all or most of the real value....
The markets are all rigged and manipulated. Does anyone out there actually believe that the "banksters" are prepared to lose it all? The man behind the curtain puts in the algorithms and the markets dance to the tune of the "money lenders". Time to bring the fattened cows home and "hang 'em high".
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