gold getting killed!!!!!!!!!!!

[verdo]

Re: gold getting killed!!!!!!!!!!!

Soon it will be time to buy gold again. I am waiting for the "trade sideways" phase for a few weeks or months before I will buy back in with more physical.

To be honest, i did expect the US dollar to be doing better when this event happened. The US dollar index is down (just a little) at the moment, and the Canadian dollar has shot up against it a little. I expected the Canadian dollar to do well, but the USD dollar to do a lot better, hence the reason why i opened that US account. This tells me that despite everything that has happened, there still could be more downside to this, which is why I may hold out for a while like you

[Raz]

Re: gold getting killed!!!!!!!!!!!

Soon it will be time to buy gold again. I am waiting for the "trade sideways" phase for a few weeks or months before I will buy back in with more physical.

That's very wise. High commissions and [relatively] lower liquidity than GTU or CEF make it harder to downsize positions in physical without using futures.

[GRG55]

Re: gold getting killed!!!!!!!!!!!

To be honest, i did expect the US dollar to be doing better when this event happened. The US dollar index is down (just a little) at the moment, and the Canadian dollar has shot up against it a little. I expected the Canadian dollar to do well, but the USD dollar to do a lot better, hence the reason why i opened that US account. This tells me that despite everything that has happened, there still could be more downside to this, which is why I may hold out for a while like you

Rather unusual for the Loonie to be rising against the US$ when commodities are getting smashed...

[BadJuju]

Re: gold getting killed!!!!!!!!!!!

I just hope that it continues to fall or plateaus until I have the money to buy in again.

[verdo]

Re: gold getting killed!!!!!!!!!!!

Rather unusual for the Loonie to be rising against the US$ when commodities are getting smashed...

Now that I'm looking at it again, it seems to be correcting itself. When i had looked at it today, it was right at the bottom of a sharp drop, after it had finished rising this morning. Now it seems to be correcting itself.

[cobben]

Re: gold getting killed!!!!!!!!!!!

However, I would not like to see it go down much below that 275 level . . . that to me would indicate something really wicked this way comes.

Gold in SEK holding around 280:-/g, no real worries, yet.

"disorderly" ?? tsk tsk, aren't we being sensitve here.
Only question is, will there be a V-bottom, a L-bottom, or a no-bottom . . . (as in a process to recover gold from seawater is being patented)

What Happened The Last Time We Saw Gold Drop Like This?

The rapidity of gold's drop is impressive, concerning, and disorderly. We have seen two other such instances of disorderly 'hurried' selling in the last five years. In July 2008, gold quickly dropped 21% - seemingly pre-empting the Lehman debacle and the collapse of the western banking system. In September 2011, gold fell 20% in a short period - as Europe's risks exploded and stocks slumped prompting a globally co-ordinated central bank intervention the likes of which we have not seen before. Given the almost-record-breaking drop in gold in the last few days, we wonder what is coming?


Gold's VIX Term Structure 'Most Inverted' Since Lehman


The difference between the one-month volatility and one-year volatility is almost 10 vols - the highest level of inversion (short-term risk higher than long-term) since Lehman. It seems the market is extremely fearful of further volatility in the short-term but less concerned longer-term. What is also worrisome is that the last two times that Gold's VIX was this much higher than the S&P's VIX was June 2006 (when the first hedge funds started to implode from Subprime) and Sept 2008 (Lehman). It appears that gold volatility is signalling counterparty risk concerns once again.

[FrankL]

Re: gold getting killed!!!!!!!!!!!

So we're all wondering what's the big thing coming? (except those who can read EJ's select forum I presume).

Japan's central bank losing control after all?
A 'system bank' being allowed to fail in order to justify yet another major round of reflationary policies?
A European sovereign being allowed to default?

Even though I'm sure there are plenty of holders of physical that won't be scared into selling, there probably is an at least equally large amount of owners, mostly investors, that will have unwound their positions. There's some serious 'shaking out weak hands' at play here (assuming the rise of gold against fiat will continue as usual afterwards).

[FrankL]

Re: gold getting killed!!!!!!!!!!!

please remove, double post

[verdo]

Re: gold getting killed!!!!!!!!!!!

So we're all wondering what's the big thing coming? (except those who can read EJ's select forum I presume).

Japan's central bank losing control after all?
A 'system bank' being allowed to fail in order to justify yet another major round of reflationary policies?
A European sovereign being allowed to default?

Even though I'm sure there are plenty of holders of physical that won't be scared into selling, there probably is an at least equally large amount of owners, mostly investors, that will have unwound their positions. There's some serious 'shaking out weak hands' at play here (assuming the rise of gold against fiat will continue as usual afterwards).

Frank I'm personally not sure what the pin to this bubble will be specifically, but what I have been expecting is another 2008-style deflationary head-fake where the US dollar shoots up as it often does in these scenarios, and gold corrects. Stocks aren't down hard enough though, which makes me feel like we haven't see the bottom yet. You just don't want to get scared at this time and treat it as a gift. In 2008, gold had a huge correction, but it still managed to end the year higher. This shows that when gold corrects, you better act on it fast

[coolhand]

Re: gold getting killed!!!!!!!!!!!

Gold in SEK holding around 280:-/g, no real worries, yet.

"disorderly" ?? tsk tsk, aren't we being sensitve here.
Only question is, will there be a V-bottom, a L-bottom, or a no-bottom . . . (as in a process to recover gold from seawater is being patented)

What Happened The Last Time We Saw Gold Drop Like This?

The rapidity of gold's drop is impressive, concerning, and disorderly. We have seen two other such instances of disorderly 'hurried' selling in the last five years. In July 2008, gold quickly dropped 21% - seemingly pre-empting the Lehman debacle and the collapse of the western banking system. In September 2011, gold fell 20% in a short period - as Europe's risks exploded and stocks slumped prompting a globally co-ordinated central bank intervention the likes of which we have not seen before. Given the almost-record-breaking drop in gold in the last few days, we wonder what is coming?


Gold's VIX Term Structure 'Most Inverted' Since Lehman


The difference between the one-month volatility and one-year volatility is almost 10 vols - the highest level of inversion (short-term risk higher than long-term) since Lehman. It seems the market is extremely fearful of further volatility in the short-term but less concerned longer-term. What is also worrisome is that the last two times that Gold's VIX was this much higher than the S&P's VIX was June 2006 (when the first hedge funds started to implode from Subprime) and Sept 2008 (Lehman). It appears that gold volatility is signalling counterparty risk concerns once again.

So if someone big is worried about counterparty risk, and there is no counterparty risk anywhere b/c the Fed is backstopping all counterparties in the US & EU, then which counterparty are people getting nervous about?

If the US dollar was going to lose reserve status, I would expect paper gold to crash, no?

And no one is commenting that last week, Cyprus received $9B in loans from the ECB (presumably low-interest rate loans) - in return, they sold 10 tons of gold for $520m, or at least that's how it was reported.

But let's look at this transaction like we just landed from Mars - $9B in low rate loans to Cyprus, 10 tons of gold to ECB. That implies a valuation of $28,125/oz of gold...at the very least at a collateral value on very low rate loans.

I think most gold owners would be happy to lend their gold to the ECB at $28,125/oz for 1% paper, no?

I find it fascinating that paper gold prices tanked right when this deal came out...I think there may be more than meets the eye. At $28,125/oz, the EU can just lend its gold to the ECB & the EU debt crisis will be solved...the US oughta take them up on the offer...

[charliebrown]

Re: gold getting killed!!!!!!!!!!!

If one is a disciple of gold=oil ( i am), then we are very close to fair value for gold. If the magic gold / oil ratio is 15, then we are within about $30 oz of this ratio.
I am keeping a modified permanent portfolio running, and Friday I started buying gold to move my allocation back to my desired weighting. Today I bought some more. apmex still has plenty of physical left so this is not a sell paper buy physical moment. I bought phys. Dirty, nasty, kol looks like a buy, so I picked up some of that today.

I have a target of 1270 on the S&P based upon valuation metrics. If this is the deflationary head fake, then bring it on! I have lots of greenbacks to go shopping with.

DBO at 24.00 looks interesting.


I remember the JPM crush silver head fake in 2010??? Where silver tumbled from 20 - 14 and back three months. This smells like another one.

[NCR85]

Re: gold getting killed!!!!!!!!!!!

What Happened The Last Time We Saw Gold Drop Like This?

The rapidity of gold's drop is impressive, concerning, and disorderly. We have seen two other such instances of disorderly 'hurried' selling in the last five years. In July 2008, gold quickly dropped 21% - seemingly pre-empting the Lehman debacle and the collapse of the western banking system. In September 2011, gold fell 20% in a short period - as Europe's risks exploded and stocks slumped prompting a globally co-ordinated central bank intervention the likes of which we have not seen before. Given the almost-record-breaking drop in gold in the last few days, we wonder what is coming?

This one deserves a bumb, in my opinion.

EJ's commentary on this makes sense to me, although it can be hard to see how a generally bearish scenario (= good for gold) unfolds without demand slumps that send oil prices lower (= bad for gold). I found it confusing for example that bad news from China had such a strong negative impact on gold, because it such bearish news. I guess it all comes down to that inflation/deflation issue again in the end.

[verdo]

Re: gold getting killed!!!!!!!!!!!

Well that was quite the smackdown today. I definitely think that it was clearly the precursor to something big. What worries me is that stocks are still really high. If they come down like they did in 2008, wouldn't that bring with it even more downside to gold? Time will tell. Right now though, if I see silver hit $21.anything I'll be pushing the buy button.

[icm63]

Re: gold getting killed!!!!!!!!!!!

The biggest fear in the world is a derivative explosion, and some one cant pay up. A derivative explosion is at high risk when assets crash.

Yes margin calls could pull gold down.

But in the end you would want to own gold if there is a LEHMAN x10.

NOTHING GOES UP IN A STRAIGHT LINE. Buy gold on the way down until you are blue in the face.

Disclosure:Buying more gold soon.

[coolhand]

Re: gold getting killed!!!!!!!!!!!

The biggest fear in the world is a derivative explosion, and some one cant pay up. A derivative explosion is at high risk when assets crash.

Yes margin calls could pull gold down.

But in the end you would want to own gold if there is a LEHMAN x10.

NOTHING GOES UP IN A STRAIGHT LINE. Buy gold on the way down until you are blue in the face.

Disclosure:Buying more gold soon.

Yes, but physical only. What is not commonly appreciated is that the price of gold on COMEX is a derivative itself...the fact that it has crashed is not the bullish dollar sign that most in the media are discussing.

In fact, if the USD were to run into trouble, one would expect the price of COMEX gold to crash through the floor while physical supplies tightened, as "big money" traded paper for gold at prices they know are well below the ultimate reset needed to balance Central Bank balance sheets...