Gold down $93 and silver down almost $3. What's going on?

Dink

No one can afford to buy any.

Maybe more money and a quicker turn around in oil.

when house prices are falling, there's likely some deflation going on, at least in that part of the economy?

Look at a historical price graph over the last 30 or 40 years.

Now looking at that why would anyone think that this price run up would be any different?

Commodities do what they do, not only that you have to pay attention to what forces might be influencing their prices.

Just so happens China was actively involved in stockpiling, many have speculated that if China were to dump on the market that it would cause such a hit to the American economy that it could be devastating.

China is working with the new Russia to undermine US currency in order to establish a new monetary platform, one they control.

Wreaking havoc with the gold and silver market furthers that agenda significantly. China is a cash rich country unlike the debt ridden US.

A drop in the gold and silver market could easily trigger a massive selling by panicked investors who for some reason were under the illusion that prices will only go up.

Right now the smart money is on prices to go down in the futures markets. Look at the contract price for futures, it is high because that is the direction traders think it will go.

Anybody here understand the impact a massive drop in metals will have on the stock market?

Everything has it's ebbs and tides. Do your best to buy low and sell high. Much of my surplus silver has been turned into lead and brass.

You recall that part of their advertising that says "it's easy to sell?"

Well...

A couple of sites showing current melt values..

http://www.ngccoin.com/priceguide/Coin-Melt-Values.aspx

http://www.coinflation.com/coin_calculators.html

Do you mean sold it and bought lead and brass? Good move

I sold 30 100oz bars of silver when silver was at $14 an ounce, that's just a year and a half or so ago. Friends were giving me crap about shoulda kept it for higher, but I never look back at a sell point I choose, I'd rather double my money than try to triple or quadruple it and end up in the negative column. I invested in silver mining stocks that went bananas, made far more than I ever could have keeping it in silver.

Metals don't "make" you anything until you cash in, keeping them and thinking about and counting what you've made is an exercise in delusion.

The next time I put money in gold and silver it will be sitting in a low the likes of which nobody thinks we will ever see. I'll sell it once again way before anyone thinks it should be sold having doubled my money.

That's liberal thinkin for ya.

Went from about $4.50 to nearly $48 in less than 10 years and you're wondering about a $2-3 change?

Here�s why gold dropped 5% today.

Some may have seen the discussion about the downside risk of gold. Basically, most gold in the market is held by investors who bought it as a safe-haven during the peak of uncertainty in the world economy. Besides the over 13,000 closing yesterday, today the Fed revised upward several economic numbers that makes investors feel they can make more money in stocks, so some are starting to sell off their gold.

Historically, March is a good month for the stock market, so apart from some economic bad news (war with Iran) the trend to move out of gold could continue. As gold prices drop more and more investors will get out to avoid taking a loss, but in doing so, they'll force gold prices to drop even faster. Given its history, once gold is off its bubble price it could be down for a long time. That's the downside risk.

Like I said before I'm investing in TIPS through an index fund. The risk is that inflation will go lower and with low yields the price could drop. But then I see this in the article I linked to.

Fed officials last month were keeping open the option of a third round of bond purchases in case the economy weakens or inflation falls.

I think I'll buy some more.

Gold and silver are speculative commodities. As long as they make up no more than 5% of your investment portfolio you can't get hurt.

As I've said many times I believe in diversification, no load mutual funds, getting rich slowly, and that it is better to live rich than die rich.

No, I'd worry about a $40 change. It will start with a tremble and end with an avalanche.

Nobody who is in commodities could ever think that it won't come down at some point. Just an awareness of world reserves, how much is used, and world events determines it. Those who stockpile it for that day when TSHTF are insignificant.

It's a silly argument, history will repeat itself and prices will go down, the only questionable thing is how much?

How many people are going to buy gold and silver at their current prices? And those who do are in for short term gains, not long term. This is a shaky place to be on gold or silver, and how many people are going to cash it out while the cashing is good? That is what makes high prices plummet, the market just plain gets flooded with people who decide it's time to cash out.

Again look at futures prices, this is where the smart money is, and it isn't on higher prices.

Again, it really worries me what China will do with the stock piles it has aggressively accrued. The kind of reserves they have applied has two effects, it drives the price up as they deplete market reserves, and they definitely have the motivation to sell vast quantities at a profit and undermine the US market.

You can't intelligently invest in anything without being aware of what affects the prices of it. Awhile back it made sense to invest in it as long as you are seeing China sucking up enough that it's driving prices up, but you have to be aware that there may be an agenda that is going to drop the bottom out.

Perhaps China just wants a big financial club they can hold over the US to keep us from placing tariffs on Chinese goods. They can say try it and we will drop the bottom out of your economy, think that sounds far fetched? Makes them pretty impervious to trade balance moves.

Before trading in commodities, it is a good idea to read "What I Learned Losing a Million Dollars".

Gold and Silver are commodities for sure... buy right and hold on to them, they'll appreciate (Silver has historically out-performed silver year in, year out. - HINT).

If you're a short term speculator, you can certainly get hurt. I'd never put money into metals that I needed in less than 6mos (minimum) as a rule.

As was stated, folks are jumping ship and going to the stock market which is expected to hit 14000.

BTW, silver briefly hit $26 in December, has bounced up a couple times, so this sell-off isn't exactly unexpected.

I sold-off Friday...

243WSSM,

Here's another thought for what China (and Russia) are doing and going to do with their gold.

They are buying oil from Iran with it to get around the sanctions that the U.S. and the E.U. have in place.

China's monetary situation is such that they also want to have gold in hand for the future when their currency is in the toilet...

Ed

Gold & silver will never level out at their highest prices. Those who buy at the top get hurt when they go down...and they always do. Don't buy either unless you can afford to lose your money because it's strictly speculation. They don't return any interest or dividends. You only earn, or lose, the difference in price.

Exactly, most of my silver was bought at 4-5 bucks an ounce. Started selling at $17 and just ran out the last BU surplus I had (about 60 ounces) for a Kimber 84L and a Sako Finnlight. I will buy in again, but it will have to drop way down to do so. Wonder what NIB guns will cost if barry gets elected again?

Another thought, many put this stuff away for what they think will be a SHTF situation. However, there will be items much more equitable in these situations over say a 100 ounce bar. Having a 1000 BIC lighters set back could be mighty useful trade fodder, as will liqueur (even the cheap crap). Of course food, but things you can trade for food and are useful will be needed more than gold and silver IMO.

I know what you mean, just thought it was funny

I sold my 100 oz bar on good Friday....45.50

I agree, when you chase momentum is when you get burned.

If I was strong in gold or silver I'd be selling now.

That's good... when I bought/sold silver and gold for a living I wouldn't pay spot for 100 oz bars because they're not as re-salable as smaller bars. I advise people not to buy anything larger than 10 oz bars.

Bernanke was speaking before Congress today. It usually has big jumps one way or the other when he speaks before Congress. People take what he says one way or the other, and then react by buying or selling gold and silver.

Exactly, but then you have guys like my Dad that Gold could hit $3000 an ounce and he would be waiting to see $4000. What goes up will come down.

It was a gift from my Parents about 20 years ago, I asked my Dad what he paid for it, I believe he said about 5.50 an ounce.

Bubbles burst.

Stock market, real estate, commodities.

There's always a bubble somewhere. smart money buys low, and sells during the bubbles.

The small investor is probably the worse at buying on fear (creating a bubble), and selling on fear (when the sector is crashing).

Something to be said for being "contrarian" in investment strategies, but that is hard for small investors to stomach. The big-time, old-money investors are way ahead of the curve.

Neither does cash, which, like gold and silver is MONEY. You can make interest on your gold and silver if you lend it out at interest, the same way that you can your cash.

In the current market NO Treasury paper, if you take into account inflation and after tax ROI, is giving a return. One advantage that PHYSICAL gold and silver have over any paper is lack of counterparty risk, which in this world of banks and governments routinely breaking contract law as it suits them, is a very important advantage. Think that your paper investments and government paper are safe? I give you MF Global, GM and Chrysler bonds, and Greek bonds, just to name the most recent.

Everyone on this site, and on any other site, financial or otherwise, who has called a top in the price and ongoing bull market in precious metals has been proven wrong EVERY time, and will be again. With the $hitstorm that is getting ready to break over the Greek default, the one harbor in that storm will be precious metals. It will be the "last man standing".

Keep your paper, I'll stick to real money.

Not one post in this thread is anywhere close to correct on gold and silver.

You are ALL wrong, and have been since $248 and $4.50.

And you will all still be wrong all the way to the top of the gold and silver market.

Thanks for the chuckle...

Tony

OOPS....I posted at the same time as Mike...he isn't wrong.

You would ALL be better served changing the way you think about gold....at this point in time, it is NOT a commodity, but is in fact a currency.

Until you realize that fact, you won't get it.

Tony

Yup.

I notice when the Eight Ball in the WH speaks markets go screwy as well. Usually DOWM!!!!

Your dad is spot on. Buy, don't sell, the dips. There's no reasonable scenario whereby gold doesn't keep going up.

Gold and silver aren't in a bubble. Federal Reserve Notes are in a huge bubble, however, and when that bubble bursts you won't be able to lay your hands on gold or silver for any price in Federal Reserve Notes.

Bernanke is what was going on. You can transpose the EUR/USD price quote directly on top of the AG/USD candlestick charts. Good old Ben, pumped up the economy by raising the 2011 GDP from 1.7% to 3%. He gave no key words to indicate a QE3 but didn't say NO either. The markets and banks don't like that. They like "free money" from the Fed in which they buy T bonds and are reluctant to lend. The US dollar gained 1.25 cents against the EU. A penny + doesn't seem much but when you are talking trillions, its pretty significant. So when the US dollar can show a "safe haven" status, gold and silver usually drop. Even some shut down their oil contracts and it dropped the price also. It was a great day to use as a buying opportunity. PM's were on sale which may continue as drops like this can spur "margin calls" for those holding contracts. The "sale" could continue!

When the Fed stops increasing the money supply,...when manufacturing cranks up enough to start growing the economy,...when the budget is balanced,..then maybe it will be time to think about getting out of precious metals.

None of that is going to happen, however.

The manipulations will continue to make monetary matters ebb and flow,..but manipulations don't alter the fundamentals.

Yes. As long as Obama and the Fed continue to use Keynesian economic theory to get us out of the recession, the dollar will continue to buy less. How much less? The inflation calculator says that what a $1 bought in 1965 now buys 15 cents. Bernanke is creating dollars out of paper to spur economic growth. All it is doing is helping to build an inflation bubble in which the Fed most likely will have no clue when to turn off the spigot. "Core Inflation" is still quoted as 2%. However they DO NOT take into account food and energy costs. Why? Because they are too volatile says the CBO. A potential QE3 is still in the cards if REAL economic growth starts to look bad for Obama. There is a little event occurring on November 6, 2012.

It's the unreasonable scenario's that bite you in the ass.

I see gold at 1300 by 3Q.

Even if the "price" of gold goes down, and the deflationist camp is correct, the beauty of PHYSICAL metals is that they have no counterparty risk, and are therefore incapable of default. They also tend to keep their purchasing power intact in either inflationary or deflationary conditions. A barrel of oil in 1971 was .072 oz of gold. Now, it's .065 oz of gold. That means that either gold is overvalued, or oil is undervalued. IMO, a correlation that close after 40 years is immaterial, especially when comparing the price of oil in FRN$. 1971 oil $3.60, 2012 oil $106. 1971 gold $42. 2012 gold $1700.

Which is the best numeraire, and holds it's purchasing power? Hint, it ain't the paper product that is printed at will and with no apparent limits.

Rest assured that the economy and its data will be altered and adjusted so as to ensure a second term for Team "O".

I have had this same thought.

Last week I seen a interview with one the oil traders and the guy said "remember oil can go down as fast as it goes up". In all the years I have watched oil I have never seen a trader say anything like that. I am wondering what will happen to oil/gas prices come August and September.

Dink

But if I remember correctly private ownership of gold was illegal in 1971, from 1933-1974, and also back in 1917 when .gov confiscated it for "patriotic" reasons and issued gold certificates in lieu. What's to stop .gov from doing that again in an economic emergency? Gold hoarders would be up a creek then.

If that's a concern of yours, go with silver instead.

If TSHTF gold and silver will have very little value. Guns, Ammo, food and fuel will be the most valuable.

There's a whole pile of contrary history your theory slams up against. Even those Jews who managed to sneak their gold and silver coins into the Polish ghettos lived well while the Germans were attempting to starve them. Somehow there were always canned goods, wine, and fresh produce to be had for someone with gold and silver coins with which to buy them, while those without gold and silver ate rats when they could find them. In the months before the fall of South Vietnam, merchants stopped accepting paper money, but would still accept gold and silver for their goods and produce. That pattern has repeated itself countless times throughout history.

Yes it was, and yes they did. The compliance rate in 1933 was around 20-25%. On 31Dec75 President Ford rescinded the PEO that the great thief Roosevelt had imposed upon the people, allowing them to own physical bullion once again.

Numismatic gold, and jewelry had been allowed under the PEO. Gold was traded worldwide, and other Western countries allowed their citizens to hold gold, and many Americans did as well, especially if they had overseas connexions.

The London Gold Pool, which was the the Bank of England acting in concert with the Federal Reserve, fought for ten years to keep the price of bullion at $35/oz, as agreed under the Bretton Woods Agreement of 1944. They were unsuccessful. Nixon defaulted on US debt obligations required under treaty in August of 1971. This kicked off the first bull market in gold.

When Ford rescinded the PEO in 1975/76, he added American participation in what was a bull market in which only Westerner's-meaning primarily America and Western Europe-participated. That bull ended in 1980. It ended because Paul Volcker, Chairman of the Federal Reserve, raised interest rates 200 basis points above the current REAL rate of inflation. This made interest rates positive once again, killed inflation over the next few years, caused a major recession, and removed the reason to hold gold. He was able to do that because America was a creditor nation, and had a manufacturing economy that led the world.

That is no longer the case, and since 1971 we have lost both of those attributes. We are now the world's largest debtor nation, and have switched from manufacturing to services, and "financial engineering" and inflation are our major exports. The move that Volcker made is no longer possible because of the size of the debt.

In the government's search for revenue because of this excessive debt and the overwhelming level of "entitlements" that they have taken on, they will search for all sources of revenue that they can find, and they will print money and create as many Treasury obligations as they can to keep the Ponzi rolling.

What that means is that they will be more likely to confiscate 401k's and IRA's, or force both of those entities to have a large percentage of government paper. Since these are all .gov sponsored "retirement" funds, they are subject to rule changes and policy reversals. If I were you, I would be much more concerned with my so called "private" retirement fund being confiscated by revenue hungry .gov than I would my gold.

Gold and silver are outside the system, meaning that if you hold the physical metal, it is untraceable by .gov, easily hidden and transported, and can be used as money anywhere in the world. This is in addition to holding its purchasing power over paper money, and having no counterparty risk of default.

Having seen the government violate property rights and contract law at will over the last 10 years, I think that if given the choice, I would choose something that was physically in my hand over something that some politician or central banker promised would be worth something in 5, 10, or 30 years. History is on my side on this, and against politicians and bankers.

The choice is yours. Choose wisely.

Yes, and after the SHTF ends, as it always does, real means of facilitating trade will be required, and I can guarantee that paper won't be accepted as such. See Continental Dollars or Confederate Dollars as two examples. Gold and silver are MONEY, always have been and always will be. Paper is a scam dreamed up by bankers and politicians to steal from the people.

A great post, Mike.

DINK,

Here's the real reason that gold and silver were taken down today.

Trader Dan's Market Views

Market Insights and News
Wednesday, February 29, 2012
Bernanke tries talking down Commodities


Today was Fed Chairman Bernanke's chance to testisfy before the Congress' Financial Services Committee. Here is a quick synopsis of his comments as I see them.

"The economy is getting better based on what we can see of the employment numbers but it is not growing at a fast enough clip to justify any immediate change in our accomodative monetary policy. The uptick in hiring has been helped by this policy and any change to it at the present time is not warranted. Real Estate is still a concern. Us fiscal condition is dire and faces a serious challenge at the end of this year. Inflation is not a concern although temporary rises in energy prices bear monitoring".

There you basically have it.

Based on this testimony, gold and silver were murdered. The supposed reason? - We are told that traders were expecting QE3 to be imminent and were disappointed because the usually dovish Bernanke did not sound quite as dovish as before. Thus the metals were hammered mercilessly lower.

Excuse me - but as a trader who watches these markets each and every day for more hours than I would prefer anymore, I have not seen any analyst explain the reason for the heretofore rally in the metals as traders EXPECTING AN IMMINENT QE3 program to launch.

The reason for the rally has been expectations by the market that Central Banks would keep the liquidity spighots open for the foreseeable future (near zero interest rate policy coupled with QE out of Europe and the UK) and thus create an environment in which there was little opportunity cost for buying the metals. This has been generating RISK TRADES in which traders/investors buy both stocks and commodities and generally sell off the Dollar, which was particularly pronounced after a rush back into the Euro once traders were convinced that the immediate fallout from the Greece debacle was past.

Comments this morning trying to explain the sell off in gold mentioned the failure of the metal to make it through the $1800 level and downside stops as the culprit but ironically they are deathly quiet in regards to silver, which only yesterday had staged a MASSIVE UPSIDE BREAKOUT on strong volume out of a congestion zone. Yet today we saw a nearly 8% wipe out in silver which completey erased yesterday's breakout and then some.

My thinking AT THE MOMENT is that Bernanke and company were watching the commodity complex begin to accelerate higher once again as a result of their free money policy and began getting extremely nervous particularly as energy prices were rocketing higher. This is an election year and one thing that the boss cannot stand for is having to deal with that pesky issue of unhappy drivers bitching and complaining about the outrageous cost of filling their gas tanks especially since he and his crew are doing as much as they can to shut down drilling on public lands and offshore.

If one basically states that the economy is doing better - not out of the woods yet but better - and all the hedgies are leveraged to the gills because the FED GAVE THEM THE GREEN LIGHT TO DO EXACTLY THAT when it first announced that it would keep this near zero interest rate policy out to the end of 2014, then it is a simple matter of throwing a bit of uncertainty in that regards to generate a bout of selling. Toss in the same permabears as always capping at the highs of the day and the algorithms did the rest of the work as the stops were picked off.

In the meantime today's wild move in silver was a daytrader's/scalper's heaven. As said before, there are no worse traders on the planet than the hedge funds. Those guys could not trade their way out of a wet paper bag if their lives depended upon it.

In watching both of these metals, it does seem that we are now getting a bit of stabilizing in here around midday.

Gold and silver shares as usual are going nowhere. They made it just to the bottom of the critical resistance zone that I noted on the chart yesterday at the gap region 555-560 before going Kerplunk.

Interestingly enough, the long bond is down a full point right now as I write this. I am keeping an extremely close eye on this market. As stated yesterday, I refuse to believe ANY talk about an improving economy as long as the bond market does not start a solid downtrending move.
Posted by Trader Dan at 9:16 AM

Don't lose faith boys...the headline today was that the debt would be monetized further. This is good for gold, good for the markets, and bad for everyone and everything else.

The dollar is being further depreciated, it makes gold worth more and the markets a better buy for those with foreign dollars. You might note that the market, under a very damaged dollar, will be good for the HNIC.

I hope you're in cash, you'll take it in the arse.

I'm not saying this is a good thing, just providing current info.

Silver will prove to me more volatile than gold , erosion of the dollar will be good for silver prices. Industrial demand for silver is high. Comodities are always at risk. Im into my physical silver holdings for the long run and bought cheap years ago.

You stick with your theories I'll stick with what will keep me alive.

only down $100 today, in the near future it's probable that we'll see up and down days of multiples of $100


fasten your seat belts ladies and gents, the ride's about to get bumpy!


how'd you like to have had gold on margin this morning? yeeehaaaww! you'd feel like Dr. Strangelove character riding that bomb down in the sky!


you have to love this life we're given, place your bets, take your chances.

if you think gold is headed down....sell it

if you think the stock market indices are headed down....sell them


if you think the US$ is going down.......trade it for something that will hold value or short it if you have big balls and a big bank


if you think S is gonna HTF......best to have some food, guns and ammo, along with water, medicines, liquor, tobacco and candy!


if you think contestant # 8 is gonna win American Idol.....god help you

I have both.

Ah yes, Trader Dan had a good overview in the Harvey Organ blog site. Bernanke the "magician", not unlike "O" is manipulating the economic sentiment as best he can. Wallstreeters and the bankers love QE's as easy money can always cure the need for the next "fix". At some point the ponzi scheme will become unsustainable and we'll all act like Greeks! The only chance to end this is to remove the entire Team O from power. While it won't be a panacea, we will at least have a chance to move the economy forward with real growth.

Honestly, there is no realistic chance of averting disaster at this point. It's been in the works far too long, and we're far too deep into it, for any effective intervention at this point. As Mike says, the best outcome is to have someone in office who's not on board with the program to morph American into a police state hell hole when it finally happens. Most of the Republican candidates are as much on board with that programs as the Democrats.

BINGO! Glad to see there are a few here that understand why metals move the way they do.

The radical downward move is typical of a bull market, and constitutes a buying opportunity, i.e., a sale on metals. In a typical bull market, upward moves are gradual, while downward moves are sudden. A bear market is characterized by the opposite tendency. The explanation is that lots of folks are in the metals as a speculation, and on any bad news will dump it for profits, but these are like fleas on the elephant that is the bull market which is driven by deep fundamentals having to do with widespread reliance on Keynesian monetary and economic policy.

PS This wasn't directed at Stetson.

Hawk, you're teaching Granny how to suck eggs. I think Stetson is very familiar with the ins and outs (ups and downs?) of the metals market. Just sayin'.

Didn't mean to give the impression I was responding to his post. His was just the last post I read when I clicked reply.

Roger that.

Precious metals are assets (tangible ones at that) not commodities. Commodities are what Fiat currency promoters are using as their hypnotic suggestion. The reason why prices are high is because the dollar is weak, when the dollar becomes strong, precious metals will drop once again. I don't picture the dollar becoming strong like post WW2 ever again.

Tangible assets require protection. A safe, a guard, a good hiding spot in the back yard. Guns and ammo (hillbilly precious metals) are tangible assets also, sometimes necessary to protect those other items. All of the above...