$$$$Any Speculation Why Gold & Silver Is Dropping?$$$$

Well, here is the story of the crooks from the recent gold/silver crash:

On Friday in the morning hours, someone shorted 3.4 million ounces (100 tons)of June Futures. This brought the spot price of gold down to the $1540 support level. When gold goes below this level (bull market support level) algorithmic trades start to kick in. This started a massive selloff in the paper markets. On Monday this spread to the Asian markets and American markets later. This was followed by 300 tons later on Friday. It seems to have been coming from Merrill Lynch (their floor team).

So, no actual gold was exchanging hands - It was all Naked Shorts with the intention of bringing the price down. My question is WHY do it now??? Yeah, the bond markets look ready to pop and currencies all over are in trouble. Lesser of two evils? No, pure evil.

Andrew McGuire (whistle blower) blew the whistle on JPMorgan a couple of years ago, regarding their manipulation of the silver markets. He told the CFTC and even told them the specific date JPMorgan would crash the market to cover their huge short position. It happened exactly as he said, date was spot on, confirming what he had told the Commodity Futures Trade Commission! They did nothing about it!

Now, the same whilstle blower on April 12th came out and said the Federal Reserves agents were the ones hitting the markets with 500 tons of naked shorts. He was right again and it looks like the Fed is involved. They are trying to keep the lid on precious metals, trying to make people think the dollar is ok, when it is doing terrible.

Yeah, the economy is good and markets are strong... criminals. We are close to something happening people. These bankers are really getting aggressive lately. Right after the Cyprus thing happened no less.

Albert

Great podcast on this - [www.corbettreport.com]

Albert, it appears you've been a little too cooped-up this past winter and need to get out into the fresh air. I see the doomsday purveyors have recruited some new converts, and some of them swing detectors. Certainly these corrections in the paper gold markets happen every day in the general stock, bond, and commodity markets. We hardly notice.

Where were all the conspiracy theorists when gold was enjoying its unprecedented rise? The dollar was in trouble when we saw gold experience double digit gains. Now the apocalypse is near when we see a correction. Can't have it both ways...

[m.theglobeandmail.com]

There is an interesting psychological 'basis' inherent in modern pessimism that seems in vogue of late. Detectorist's seem overly prone to sit on their porch waiting for the UN troops in blue hats to come and take away their rights. Maybe it's our age? Maybe change is happening too fast for us? I left my local detectorist's club when they hosted a guy selling bug-out kits out of the back of his Humvee. For more of this kind of thinking please visit the Finds:Views forum. I here the Guvner is having a sale this week on dehydrated water...

Go-rebels - Don't make some factual observations in doomsday prophecies. Do you understand that the Cypress bank needs 10 Billion, I mean 23 BILLION Euros (and rising) and that they took money from their depositors to cover the loan, need to sell 400 million worth of gold, have daily withdrawl limits of 300 Euros on depositors, etc. This is not doomsday prophecy. It is factual observation. The Cypress bank problem is not unique. Spain, Italy, Greece and Portugal are in VERY bad shape and they are all tied to the powerhouse Germany. The US Banks are in VERY bad shape. And yet they loaned over 2.3 Trillion dollars to the ECB last year, which was hardly mentioned anywhere, yet it happened. That helped Europes banks from starting to fail last year. If you dig you can find this.

Consider this, the same people printing the USD are buying the bonds (promisary notes on USD) because other countries in the world are no longer doing so. Do you understand what this means? I really don't think you do. Think about this, it is HUGE.

I was a professional stock trader for years and made a ton of money at it (long gone now ) and I have a better understanding of finance than most people, but by no means am I an expert. I'm only saying this to add a little credence to what I'm saying. I see what is obvious. At the same time there are ways for the banks to continue but it will only stall the inevitable. Did you know about the financial problems of Fannie Mae and Freddie Mac before it happened? I was shorting those stocks YEARS before their collapse and I couldn't understand how they lasted so long, so their are ways to prolong the inevitable. But when they go boom, they go boom.

Don't give me purely ychological reasons for pessimism. I am giving you facts. Both are involved, but you can't only look at the psychological ones. The banks actually shorted paper gold in the form of 100's of TONS to get the price to crash in the last few weeks. You really don't understand this, probably because the news says the stock market is up, unemployment isn't that bad, etc. This is really happening and is manipulation, but in their eyes the lesser of two evils. But still evil.

I'm not a pessimist, nor am I an optimist. With the markets and economy I am an observationalist. And what I see is alarming, measurable, verifiable and consquentially predictable.

Albert

So when the stock market craps the bed as HFT and algos go full force and dump like no tomorrow, people will think their stop loss orders will be adhered to. Nope. Their stops will be totally run trhough and they will be left holding the bag. And this time it will be much worse than the last.

Mutual funds clear at the end of the day, so you are screwed watching those things melt and then you HOPE you can sell at some reasonable price.

But when this happens, it won't be labeled a 'conspiracy theory'. Just the 'normal' way the stock market goes, since it's now being fueled by 85B per month (or more) QE, and computer algorithms.

When gold SLOWLY went up this last decade, it was clandestine. No big hurrah, no big fan fare...until some people started to notice the 10 year return and began to jump in. They bought at the peak and now scream things are rigged (which they are).

So it is not a conspiracy theory at all, but actual facts as to how this smash occurred, and for what reason. Was it planned ? Maybe. If you think reasonably, if things are really not what they seem, divert. It is in the news that China has agreed with Australia and France to trade more in their currency. More countries are trading in gold and less in dollars. So the Western central planners are getting nervous. What is the best way to prop up the dollar and make it seem like it is still the king and safe haven....smash what is the opposite of it. Gold.

Gotta remember paper gold is not the same as physical gold...only the price at this point. This will soon diverge and be re-set. Maybe not tomorrow, but at some point soon. It's starting to happen, but since the futures market still dictates price, that is all we have at this point. When the COMEX dries up and there is the REAL first non-delivery due to no supply, then things will break apart. Right now they are holding it together with bubble gum and bailing wire.

Albert, Shoveler, Therover, and a few others have a great handle on whats happening. For those of you that do follow charts, If you look back at 1976,In the middle of the last gold bull market, the price of gold got smacked big time. Dropping 45%. During the next 3.5 years, gold went up 800%. Many analysts feel we are at the same period now , with gold getting smashed, as we were in 1976. Observe the cycles and the past. Learn from them. 3.5 years from now would put us at the 17th year in this bull market. Could gold be 800% higher at the end of this bull run? Most of the bull markets last about 17 years.
Now if the central banks are already running out of gold at this stage, where they have to pull all kinds of tricks, to acquire gold from the little people, what happens when the panic starts, and there is no gold available in the coming months or years ? A moonshot. Thats what I see coming up here. You either believe it , or you don't. Some people can see the future better than others..... but keep an open mind here.. Keep reading and learning.

Just to put the short in perspective that happened last week - The ECB (European Central Bank) has told participating nations that yearly gold sales are not to exceed 400 Tons collectively! [www.gold.org] This is for obvious reasons. Gold is a store of value and if nations started just selling their reserves it would be akin to crashing the market. Now, in a couple of days it looks like a bank sold 400 or 500 tons of naked shorts! This is beyond imaginable. And well said Rover, it helps to put the puzzle together. And this puzzle is not a complicated one. They are really trying to give the illusion that everything is ok.

Possum - It is worth noting that the USD was taken off the gold standard in 1971. This was clearly done to increase liquidity. You can't be the world currency if you are backed by an illiquid asset. I'm not sure about the past decline you speak of. I'm sure there are some articles out there and I bet someone here has a good idea of what happened.

But, you can't really think of gold as having purely a "bull run". It is inherently tied to the dollar. If the dollar experiences inflation, then it requires more dollars to buy the same amount of gold (all things being equal - e.g. demand, global picture, etc.)
This is just basic math. So, when you see the dollar getting close to hyperinflation right now, there is no chance that a "bull run" would end. Rather, it will just be beginning. If you look at the price of gold in dollars of the past (meaning adjusting for inflation), the price of gold now should be around $5,000 - $10,000 an ounce now and silver around $300 an ounce [news.goldseek.com] . They CAN'T let that happen, that would be like putting up a forcosure sign on America!

Just a note, inflation is not completely linear to the money supply, as the money is not going into our hands. It goes to large institutions and then they in large part decide. But if you just look at the general money supply numbers, it is not a stretch to say gold should be multiple thousands of dollars per ounce, as stated above.

Albert

All the while Congress decides its okay to reinstate insider trading. Hmmmm

[www.techdirt.com]

you guys have some real good insights - if someone can't cover a physical call on their short gold contract - won't that cause a buying panic - raising the price and blowing out all the shorts?

Not sure if I said it here, but it's interesting that Goldman SUCKS's short cover is at $1400.

Gold has been sniffing $1400 but never getting there or past it. I hope the Asian market at some point blows up and gold hits $1500 in the after market, totally screwing GS as physical buyers come in and take above $1600 when the US market opens, making a 24 hour, $200+ move.

Boy do I wish.

tenndirt and Rover - It doesn't matter what price gold goes to as far as covering the short goes. Banks print money, at least the Fed does, no matter the price that gold does end up going to, they will just print their way out of it and cover their short. But Tenndirt, you might be on to something - The problem would be that in covering they are now helping the price to go up, just as how shorting made the price go down (I would imagine). This is what I don't understand, the shorting drops the price, but when they cover their short I don't see prices going up? They must have a buyer working at other banks and it must be done so as not to make noise??? The Fed has to be involved in this somehow. If an individual was doing such a large manipulative move, they would be thrown in jail as it is clear market manipulation. But I can see they are trying not to create a panic with the dollar and so drop the price of gold and silver. I mean this has been a key part of the strong dollar policy, keeping the price of gold and silver down, so as to make the USD appear much stronger than it is. In essence, breaking a historical connection between the USD and Gold/Silver.

What is interesting is that a friend of mine ordered silver coins yesterday. The prices of the coins has not gone down at all since the drop in digital price. It is literally like their are two markets.
When you look on Ebay or precious metal sites, their is often a large disparity between the "digital market" price and what you pay.

Albert

Albert....some dealers/sellers are juicing the premiums to make up their difference to make a profit. Shoot, my LCS informed me Morgan Dollars are above spot due to the premium.


Crazy stuff right now. Probably going to get me a Buffalo gold tomorrow. Just picked up some generic bars after work...1 ozer's.

Who besides the purveyors of govrnment debt would raise margin requirements after massive LOSSES on a commodity and why , but to force out the longs.

A”default” can occur if too many longs stand for delivery. This very well could happen and the likelihood has risen in just the last 2 trading days as open interest has increased rather than decreased. If 10% of the longs stood for delivery in Silver, the inventory would be wiped out. The fact that the “drop” in price was CAUSED by new shorts opening positions rather than longs scurrying away tends support the case that the long position is a resolute buyer with deep, VERY DEEP pockets. If they hold in and meet the margin calls created by the price drop AND higher (18+%) margin requirements as of yesterday, the shorts and the exchange itself have a very big problem on their hands as the availability to deliver on the open interest just does not exist.
If open interest does not decline after the drop in price and this latest margin hike (and maybe more to come) the odds of longs standing in a big way for delivery increases exponentially.

[www.silverdoctors.com]

From Glenn Beck's The Blaze: [www.theblaze.com]

In Australia, for example, the “volume of business that we’re putting through is way in excess of double what we did last week,” Australia’s Treasurer Nigel Moffatt told Businessweek by phone yesterday. “There’s been people running through the gate.”. “There’s been significant sales made as people see this as great value,” he added. “Gold owners are very reactive to significant market movements.”

Better get on-board while you can...

What we have also seen come into play with the high gold prices..... CASH FOR GOLD cropping up everywhere. Lots of common people cashing in gold out of the safe thats been there for years. What happens when these places dry up? You would think it would bring the value down.... but it seems to have fueled it..... or maybe its just a drop in the bucket.

Dew

Intelligent Pro's/Con's.

quote

Gold Miners Lose $169 Billion as Price Slump Adds ETF Pain
By Soraya Permatasari, David Stringer and Liezel Hill


April 18, 2013


Gold producers, ignored as global stocks rebounded in the past two years and investors turned to exchange-traded funds that track bullion, face closing mines or shutting themselves down after the metal’s worst slump in three decades this week made 15 percent of miners unprofitable.

Barrick Gold Corp. (ABX) and Newmont Mining Corp., the world’s two largest producers, are among companies in the FTSE Gold Mines Index (FTMIGMI) that have collectively lost about $169 billion in market value since bullion peaked in 2011. Gold equities are trading at the lowest level relative to gold in at least 20 years after the metal’s 13 percent plunge so far in April.

Gold’s drop to a closing price of $1,361.10 an ounce on April 15 brings it closer to the global average production cost of about $1,200 an ounce, according to Nomura Holdings Inc. That puts producers such as Canada’s Semafo Inc. and Golden Star Resources Ltd. at risk of mine closures or “financial distress” if prices fall to that level, according to Macquarie Group Ltd. Tanzania, Africa’s fourth-largest gold-producer, said a sustained slump may shut mines there.

“Any company that hasn’t been focused on efficiencies and costs for the last three to four years is going to fail in this market,” said Gavin Thomas, chief executive officer of Sydney- based gold miner Kingsgate Consolidated Ltd.

Gold’s 9.3 percent plunge on April 15, the biggest one-day drop in New York since March 1980, couldn’t have come at a worse time for gold companies.

Rising Costs
Despite 12 consecutive years of rising gold prices, shareholders have lost faith in the gold-mining industry, which has seen soaring production costs and made money-losing acquisitions. Investors have instead flocked to exchange-traded funds, or ETFs, such as the SPDR Gold Trust, which are backed by bullion and track the price of the metal.

The FTSE gold index, which tracks 27 of the largest producers, has plunged 58 percent to yesterday since bullion hit a record on Sept. 6, 2011. Over the same period, the MSCI All Country World Index (MXWD), which tracks 2,431 global stocks, climbed 22 percent.

“Gold companies have underperformed the gold price for more than the past 20 years, quite simply because they make as little money today for shareholders as they did at $300 an ounce,” Brenton Saunders, who helps manage about $600 million at Taurus Funds Management Pty., said from Sydney.

‘Way Back’
Starved of fresh capital, smaller mining companies that carry out exploration and development were already being squeezed before this week’s price crash. There are too many companies in need of financing and there will be production stoppages as some of them cut expenses, said John Ing, CEO of Toronto-based brokerage Maison Placements Canada Inc.

“If the price stays where it is, you will see a slew of closures of smaller, non-producing companies and the majors pull way back on any new projects,” said Ken Hoffman, a Princeton, New Jersey-based analyst at Bloomberg Industries.

Companies relying on a single asset and those in Africa, already struggling with deteriorating geopolitical risk over the past year, will find it more difficult to convince banks to fund projects, Tyler Broda, a gold analyst at Nomura in London, said by phone from London on April 16. Tanzania, where Barrick and South Africa’s AngloGold Ashanti Ltd. operate, is concerned that continued price weakness will discourage investment and lead to mine closures, Ally Samaje, acting minerals commissioner, said April 16.

Mine Review
At current prices, “probably 15 percent of global gold miners from our calculations would be under water at the moment,” Broda said. He predicts gold could fall to as low as $1,000 an ounce this year. Gold rose 0.3 percent to $1,386.50 an ounce at 9:35 a.m. in New York.

“Golden Star, like other gold producers, is assessing the effect of the fall in the gold price on our budget and production plan,” CEO Sam Coetzer said in an e-mail. “We are also reviewing the discretionary capital component of our capital plan for 2013.”

Semafo, which mines in West Africa, may close its Samira Hill mine in Niger, Macquarie analysts said in an April 16 note. Sofia St. Laurent, a spokeswoman for Semafo, didn’t immediately respond to phone calls and an e-mail seeking comment.

[www.businessweek.com]

cont................

Still can't break and hold above 1400. This is confirming my suspicions.

Up over $1400 today therover. Nations are doing the same thing we little people are doing. They are trying to find something to put there last dollar in that they believe has value. Many of us do that with our homes.... we can touch it and have a belief its always worth more than we paid and people will want it. We got shocked there didnt we. We still have the barter system...... we are all just looking for that THING that will get out more THINGS...... going back to basics... gold.

Dew

Yup....let's see if they knock it back under 1400 in our market.

Exerpt from king world news
Greyerz: “I will tell you some very important reasons why investors should not worry about the recent turbulence in the gold market. First of all it was a smash in paper gold. If you look at our company, as just one example, we did not have one single seller in the last few weeks.
So during this takedown in gold and silver there wasn’t one single seller, only buyers....
KWN has reported that all over the world people are buying more physical gold and silver than ever. We are hearing about retail buyers queuing up everywhere around the world.
The Perth Mint has had to increase production in order to meet demand. On the 17th of April, just two days ago, the US Mint sold two tons of gold. That’s in one day. The total in so far in April is 4.6 tons of gold sold. That’s more than the whole of both months of February and March.
If we turn to the Swiss refiners, Eric, the premium over spot for physical gold is rocketing. Swiss refiners are unable to keep up with the demand for immediate delivery. They are working flat out, including the weekend, and still can’t keep up.
The Swiss refiners are seeing global demand coming in from everywhere, especially from the Middle-East and the Far-East. So, again, this proves that the artificial manipulation of paper gold has nothing to do with the physical market.
The true gold market is only physical, and it’s been that way for 5,000 years. Paper gold will eventually reach its intrinsic value, which is zero, that is guaranteed. In the next few years the spread between physical gold will continue expanding until the market realizes that the issuers of paper gold cannot deliver. At that point paper gold will go to zero, and physical gold will go to unimaginable levels.”

Albert, there is a poor correlation between the value of the USD (or Euro) to the price of gold (or silver). The market for the speculative (paper) pricing of gold is akin to the market in Credit Default Swaps for that matter. It's all a speculative bet. You don't own physical property when you make money on the mortgage market; you don't have to worry about putting a roof on the house you just 'earned' after a day of successful trading Swaps. You earned money in a speculative bet, however well researched, but it is a bet nonetheless. I don't believe the Fed cares one way or another; the gold game is too small compared to the bigger markets.

eBay is a good venue to judge the real, physical market. Recent sales have been in the $1400-1425 range. A 32.15 ounce bar recently sold at $1310/oz. If you've recently bought gold as an investment, you're in the red today.

Owning physical gold may make you feel better for purely emotional reasons, but don't tell me it's a good investment. There are many, many wiser choices.

I believe it will go back up, way up.

It's been a good/great investment over the last 10 years. There are much poorer choices as well. Imagine the poor saps who bought into the Apple hype of it going to 1000, and getting in at the 650-700 range. But Apple has been a good investment over the last 10 years too. There are other stocks that have been flat for the last 10 years. If you invested in the S and P index for the last 5 years, you are back to even. Bonds over the course of the last 10 years have not done as well as gold and in my opinion they have been on the same risk plane in terms of overall return for that time frame....you just don't get income with gold. And if a person is in a fixed income scenario and needs the extra money coming in every month, a bond portfolio as well as high quality dividend stocks are the way to play it.

All depends on a persons scenario and their view of things.

Gold over the long run is a safe investment. It is not an investment vehicle that one uses to try to get rich. People who buy physical gold do it because there is no counter party risk, it is tangible, it is a hedge against the dollar, it preserves purchasing power, and they can store it away at home. And it is a GLOBAL investment. How many people in China and India are invested in the stock market ?

There are thousands of investment vehicles out there. Any one of them can be said to be a wise choice if measured over a certain period of time. Even penny stocks.

There is only ONE investment that has stood the test of time when measured against fiat currency....GOLD. All fiat currencies at some point go to zero. Proven fact over history. The BS is that the dollar can't because it is the world reserve currency. Take a look around....seems there are other entities who want to take that moniker away from the dollar. People who buy physical gold are taking that into consideration at this juncture. I know I have put that into the equation, along with a high probability of doubling down on QE as well as a big ( 25-30%) stock market correction. If that begins, the rotation may be back into gold at a fast pace. I also buy gold to diversify. I already have other investment vehicles so I am not heavily into it....YET !!! HA !

Everyone who invests has to have their own view of things. Just because a person thinks the dollar will collapse and there will be a debt bubble, does not mean they are a conspiracy theory nut. If so, one can say the same thing about a person who thinks tech stock XYZ is going to triple in 2 weeks because they heard it on a web site.

By the way...I see they kept a pretty good ceiling on it today.

Of course there are worse investments: bad stocks, bullets, shag carpeting. But that was never the point of Jimmy's original question. And that is where we differ for all the reasons already given. Most here have given valid statements why physical gold has a higher intrinsic value vs. fiat paper money. Yet that fiat paper money now buys more shiny metal today compared to last month, or last year, or two years ago. The dollar may crash in my lifetime but I'm betting against it. There are too many special interests who will do anything to keep the dollar strong. Personally, I'd rather invest in the stock market as a measure of the real economy. But again I digress from Jimmy's original question.

A good read here: [pawelmorski.com]

Now it's time to detect and find some gold...

I don't know where you have been, but if you have bought .22lr a year ago, you would be retiring right now if you did it right.

Go-reb....a Fed inflated stock market should not be used to measure the real eCONomy.

Yes we did digress and think about this. What do you think a magic wand that can find gold/silver/copper will be worth in the future ? I ain't selling any more detectors !!!!!

Funny how you want to detect and find gold, as opposed to stock certificates ( just busting em !).

Back to the original question...

GOLD REBOUND

Gold, which has posted its biggest falls in over 30 years since last Friday, was last trading at $1,372.85, up around 0.4 percent, having risen as much as 1.1 percent during the day.  "You'd expect to see a bounce after that kind of a move," said Citigroup metals strategist David Wilson, who expects gold to stay under pressure.  "The reason investors have been walking away from gold is that the fear of inflation driven by the expansion in central bank balance sheets is simply not there."  Other industrial commodities such as copper and oil, while supported by the easy Fed and BOJ monetary policies, were weighed down by the worries about future demand levels, with global growth seen sluggish.

[www.reuters.com]

[www.youtube.com]

All investment vehicles have their cycles of good times and bad times. From 1949 to about 1966, being invested in the stock market was the place to be. From 1966 to about 1980 the best place to be invested was in gold/silver /commodities. From 1980 to 2000, the best area to be in was the stock market. From 2000 to present, Commodities are the place. See the cycle changes? If you switch investments every 15-20 years, and ride the bull markets, your portfolio will grow tremendiously in your life time. If you stay just in the stock market your whole life, you will see your investment stagnant for a long stretch of time. Same with gold/silver. If you bought gold/silver in the 1970s and held it til now , you would have missed the roaring stock market bull from 1980 to 2000. For example, investing $2000 in silver in the mid 70s, selling around 1980, buying into the stock market, then selling that around the year 2000, jumping back into gold /silver, that $2000 you started with in the 70s would have grown to over $500,000 today.
I talk to alot of folks in my work who are complaining that their investments since 2000 haven't grown much. It turns out they are still in the stock market , which has basically gone sideways the last 13 years. Now if they had pulled out of the stock market in 2000, and bought gold, ( the next bull market) they would be up 500% since 2000. However, few financial advisors recommment pulling your money out of their investment firm, because they will lose commissions. Follow the cycles for a prosperous retirement. That ebook I mentioned many posts back, explains riding the cycles. ((((Low -risk bull market investing)))))) Can you imagine how many detectors $100,000 would buy? LOL.

Possum,

You make a very interesting point, as how it relates to diversification vs changing asset classes. I know this is off topic, but it does raise a question when it comes to making the most out of ones money.

Being diversified balances out a persons portfolio, but it also tempers down the total return. It also lowers risk tremendously as you can't lose your shirt all at once.

If you have the courage to ride trends and cycles, and can get in and out at close to bottoms and tops, you can make a heck of a lot of money putting all your eggs in one basket and switching when trends dictate. But you have to start with the right basket ! Problem is, a lot of people don't have the smarts to start off with the right basket, at the bottom of a cycle. Also, most people don't have the capital, the guts and the LUCK ( yup, gotta still have a bit of that) to hit those tops and bottoms.

I think the issue is, and this goes back to the point of the post and why things are happening the way they are, is that the markets are not what they seem. It has been proven, by LIBOR and other related stories, that the market is rigged and manipulated. Leverage, naked shorts, derivatives, etc. continually whack it out. Plus it has the Fed fueling it. Those traits skew the fair market system and they muddy the waters when it comes to both fundamentals and technical analysis. The natural corrections and pullbacks are not occurring normally and the bubbles keep getting re-inflated. They are trying to re-inflate the housing market again. A normal, healthy housing market goes hand in hand with growing employment and wage increases. THAT AIN'T HAPPENING ! All there is are low interest rates. Heck, the banks aren't even lending money they way the Fed wants them to.

Going to check that e-book out as I like getting different perspectives on things like this. I did read the book The Great Super Cycle and going to dust that one off my shelf and read it again.

I am going to try to mine for some clad tomorrow. Haven't been out in a while.