Seeking Alpha

Precious metals see a bout of major buying, with gold (GLD +1.5%) jumping about $25/ounce in the...

Precious metals see a bout of major buying, with gold (GLD +1.5%) jumping about $25/ounce in the past few minutes, and silver (SLV +4.8%) soaring nearly a $1. Bearish for some time, Mark Dow reminds gold has been going down for 2 years, but the decline has only recently made the headlines. Gold's post-QE run was built on a number of misconceptions which have all cracked. The longs (silver too) are trapped and the bear market isn't close to over.
 
Comments (39)
  • DAG1996
    , contributor
    Comments (3064) | Send Message
     
    So is today just a bounce to sell SLV or might the rebound continue a bit longer? Curious what any metals bugs think.
    28 Jun 2013, 10:53 AM Reply Like
  • Visitgoth
    , contributor
    Comments (71) | Send Message
     
    i've never understood how anyone made money betting that prices will fall.
    28 Jun 2013, 10:54 AM Reply Like
  • larocag
    , contributor
    Comments (1467) | Send Message
     
    "The longs (silver too) are trapped and the bear market isn't close to over" The guy writing the news knows the future. I am like the only guy that doesn;t know what is going to happen next.
    28 Jun 2013, 10:59 AM Reply Like
  • The_Hammer
    , contributor
    Comments (3809) | Send Message
     
    charts patterns paint totally different views with price movements.
    28 Jun 2013, 11:00 AM Reply Like
  • mikeyaffe
    , contributor
    Comments (56) | Send Message
     
    I wonder if the author could explain why the US with one of the largest gold reserves doesn't sell it and put it to productive use repairing roads and bridges. Everyone knows it's nothing but a barbaric relic.
    28 Jun 2013, 11:03 AM Reply Like
  • evan.prospect
    , contributor
    Comments (687) | Send Message
     
    Haha, great point. I've always said if it was so worthless, why do we bury it underground in the bomb proof and heavily fortified / guarded Fort Knox? Must be just for show, right?!?
    28 Jun 2013, 01:48 PM Reply Like
  • The_Hammer
    , contributor
    Comments (3809) | Send Message
     
    gee why did Germany want to repatriate their gold back from the US? I know that "lunatic" from Venezuela got his gold back fast, BUT Germany wanting their gold sent back home? Now they have to wait 7 years?
    28 Jun 2013, 11:06 AM Reply Like
  • The_Hammer
    , contributor
    Comments (3809) | Send Message
     
    Hello anyone explain why a major country (Germany) wants its GOLD BACK? They only have like over 3,000 tonnes and one of the biggest gold hoards in the world. It has no intrinsic value, It is a relic, you can't e-print it up....
    Only the "Lunatics" get theirs back in months as opposed to years.
    28 Jun 2013, 11:43 AM Reply Like
  • Jason Burack
    , contributor
    Comments (1721) | Send Message
     
    Germany was also only allowed to get back 300 tons out of the 3,000 plus tons and they get back that small amount over 7 years. Simple answer why it will take so many years when it should take weeks. The Fed has been selling a lot of physical gold into the market for years to try and manage the price. Sprott wrote an article about this examining years of US trade data. The spot price of silver is now WAY below all in production cost. A lot of supply can come offline quickly. There is no above ground stock pile of silver like for gold except for SLV.
    28 Jun 2013, 02:22 PM Reply Like
  • minecanary
    , contributor
    Comments (411) | Send Message
     
    Dow sounds like another of the mainstream shills trying to crush the metals as an alternative to fiat. Physical demand is soaring, countries are banning bullion sales to slow the pace, and capacity is coming offline to further tighten supplies. On the conspiracy side, the US can't return Germany's gold for 7 years???, JPM can't fill the futures orders it's sold on the COMEX, and most of the price declines have been via mass dumping of naked shorts sales during thin trading. I would say it's the shorts that are about to get trapped as the emperor is looking a little under clothed.
    28 Jun 2013, 11:08 AM Reply Like
  • Papa Jupiter
    , contributor
    Comments (12) | Send Message
     
    $25 rise in one hour---a good sign that the metals may be recovering OR this may be just a breather before lower lows. I give this moment a 50/50 view. Stay out of short and long positions for the short term.
    28 Jun 2013, 11:09 AM Reply Like
  • WMARKW
    , contributor
    Comments (10250) | Send Message
     
    (DUST) down $40 bucks from $166 in two days.
    28 Jun 2013, 12:58 PM Reply Like
  • clarkjdjr01
    , contributor
    Comments (12) | Send Message
     
    Back up the truck.
    28 Jun 2013, 04:11 PM Reply Like
  • larocag
    , contributor
    Comments (1467) | Send Message
     
    The price of gold is going down because Obama wants it to go down. The big spike in gold prices the last couple of years was a big stealth tax on conservatives. I bet the DNC has a huge short position in gold and this is all part of Obama's master plan to pump money from right to left.
    28 Jun 2013, 11:16 AM Reply Like
  • WMARKW
    , contributor
    Comments (10250) | Send Message
     
    larocag.....now there's a new story I hadn't thought about. Interesting idea.
    28 Jun 2013, 12:59 PM Reply Like
  • overviewer
    , contributor
    Comments (9) | Send Message
     
    I am one of those "trapped longs" owning call options on SLV going out to January of 2014. I would feel safe except for the fact that my strike price is 29 and SLV is currently at 18.7! I thought (I guess naively) that the insane and unprecedented buying by the Fed and spending by Obama is so inflationary that, eventually, the dollar has to drop and gold and silver have to rise. So I bought long term calls and watched as SLV got pummeled almost on a daily basis. You keep giving your opinions and insights out there and I will keep reading them (gratefully). TheOverviewerdotcom.
    28 Jun 2013, 11:25 AM Reply Like
  • RickCoville
    , contributor
    Comments (23) | Send Message
     
    Curiously, I have the same options: strike and date identical. January is still a long way off, and silver can be very explosive when it moves. The markets are living in fantasy-land right now, but you know that can't last, right? All it will take is one little spark: Europe (bank failure), Syria (Israel attacks Hezbollah), 10 yr bond yield jumps (already moving north), etc. etc. Hang in there and have faith.
    28 Jun 2013, 11:41 AM Reply Like
  • overviewer
    , contributor
    Comments (9) | Send Message
     
    Small world! I have averaged down on those options 6 times and each time I did, I was rewarded with an IMMEDIATE DROP in the SLV price the next day!!! My average is now $.70. The Lord usually does not support me in my investments. I hope this time is different!
    28 Jun 2013, 12:05 PM Reply Like
  • BigMuscleWoman
    , contributor
    Comments (3) | Send Message
     
    I'm in the same boat, with the same thing. A Fed member said today they will be increasing QE, just like Peter Schiff said. Goldman Sacs is heavily shorting because, 1) they have to acquire the gold to repay Germany, and 2) because they can. Hang in there, they will eventually cover their shorts and the price will skyrocket.
    28 Jun 2013, 12:31 PM Reply Like
  • clarkjdjr01
    , contributor
    Comments (12) | Send Message
     
    Hang on. Your redemption is coming.
    28 Jun 2013, 04:14 PM Reply Like
  • clarkjdjr01
    , contributor
    Comments (12) | Send Message
     
    Black swan drones are flying high in the sun. They will land when we least expect it.
    28 Jun 2013, 04:16 PM Reply Like
  • The_Hammer
    , contributor
    Comments (3809) | Send Message
     
    do not get to excited with sudden burst. Technically the metals are severely broken and these sharks will start trying to pound down any rally in the short term. Buy major dips physical
    28 Jun 2013, 11:26 AM Reply Like
  • jaylauriano
    , contributor
    Comments (7) | Send Message
     
    There's some type of market manipulation going on. When silver was around 22 an ounce silver Eagles were selling at a 5-dollar premium. Now they continue to fly off the shelves. When silver was much higher the premium was a little over a couple bucks.

     

    Something's going on. The demand remains high while the price has fallen. I won't pretend to know what's going on as I was one of the naive dopes who tied the gov't's debasing of our currency to rising prices of silver at best, stable prices of silver at worst.

     

    Now the silver market reeks of pure speculation.

     

    I still like the long-term outlook for the shiny white stuff, though.
    28 Jun 2013, 11:43 AM Reply Like
  • The_Hammer
    , contributor
    Comments (3809) | Send Message
     
    20% premiums way to rich for me. Check around can get generic bars on deal for like 5-6% over spot.
    The premiums were smaller but the price was 30-35 on spot. The spot is 19.35 now much lower and below many many primary miners all in costs. Open eyes. Corp mining staffs (which were bloated in the first place) are being chopped 30-40% and many operations are shuttering while money to fund smaller miners dried up.
    Demand for physical is high and most appear to be cash deals. The physical markets are not huge and lots of paper cash around to deploy. The peasants are slowly waking up

     

    WAIT A MINUTE?
    "The demand remains high while the price has fallen."
    Things of value drop in price and demand rises. makes sense. No?
    28 Jun 2013, 11:54 AM Reply Like
  • GotLife
    , contributor
    Comments (1214) | Send Message
     
    Could it be that the "premium" charged is based on the brokers cost structure rather than market demand? Would make sense that when price and/or volume decline, broker needs to charge more per unit than during "high volume/rising price" markets in order to cover fixed costs.
    28 Jun 2013, 12:01 PM Reply Like
  • clarkjdjr01
    , contributor
    Comments (12) | Send Message
     
    Makes no sense. Yes!
    28 Jun 2013, 04:22 PM Reply Like
  • hummerh25
    , contributor
    Comments (96) | Send Message
     
    $25. Dead cat or over sold. $1000. Not to far off.
    28 Jun 2013, 12:23 PM Reply Like
  • HAPPIESTHIHOSILVER
    , contributor
    Comments (80) | Send Message
     
    please selll selll sellll so when u r forced to cover shorts the silver will continue to trek higher. thank you for your cooperation.
    28 Jun 2013, 12:26 PM Reply Like
  • WRC_168
    , contributor
    Comments (85) | Send Message
     
    I'm not so optimistic after the MF Global case, whereby I've learned that many short selling Hedge Funds buggers are downright dishonest leech. When the short squeeze does happens, I'm afraid they will default again. I'm sticking with physical.
    28 Jun 2013, 09:37 PM Reply Like
  • 24floor
    , contributor
    Comment (1) | Send Message
     
    I'm long on metals. When inflationary concerns will start appearing guess what people will be on demand?
    28 Jun 2013, 12:27 PM Reply Like
  • Skipperdoo
    , contributor
    Comment (1) | Send Message
     
    Overviewer, you need more than one ingredient for inflation to happen. The most important ingredients that is missing is increasing consumer demand and increasing salaries in the workforce. All of QE3 is occurring on a balance sheet and not reaching the economy. Everyone talks about the U.S. printing press and the dollar becoming worthless. Try this test over the weekend. Take a couple of hundred dollars out of an ATM. Look at the dates on the $20 bills, I will bet you will be hard pressed to find a bill newer than 2010. If all this money was printed and flooded our markets then why can you find a $20 bill with the 2011 or 2012 date.
    28 Jun 2013, 12:29 PM Reply Like
  • John Leszar
    , contributor
    Comments (57) | Send Message
     
    Oh my,
    The "printing press" is not actually a printing press. It is an expression of when the Federal Reserve injects liquidity into the economy through various means. And they are doing it BIG Time through Quantitative Easing. The Fed is creating something out of nothing because they buy things with money they don't have.Their "balance sheet" is smoke and mirrors!
    Also, if you don't believe there is inflation, you must not have gone grocery shopping lately.
    28 Jun 2013, 03:03 PM Reply Like
  • vmollomo
    , contributor
    Comments (2) | Send Message
     
    Money is mostly ones and zeros driving this boolean machine we call the banking and investment system. These days the newly printed supply based on QE, is going to the banks or staying in the vaults of the Fed waiting to be released. Much of it is really not in circulation as we know it yet. The newly printed fiat is also being used to buy up our own bonds, given China and other countries seem to have slowed down their interest in doing so due to QE. The clever way the US will pay its debt to the Chinese over time is with cheaper dollars and this is another reason the printing presses are ragging. If I owe you a dollar and am able to print 10 dollars, then I really paid you 10 cents...

     

    This Im afraid is the politically smart way to run the country and with our spineless government officials unwilling to role up their sleeves and do a days work, QE will be around for a long time. Bernanke may have taken the training wheels off the bike but if unemployment continues to rise along with the cost of living and interest rates, the printing presses will be smoking again.

     

    Think gold won't go up, fine invest in food, me i'm hedged and drinking no ones cool aid...by the way do me a favor, if you find that person with the crystal ball,l point him/her out to me i got a bridge in Brooklyn I want to sell...
    28 Jun 2013, 05:13 PM Reply Like
  • dwestall2
    , contributor
    Comments (4) | Send Message
     
    Silver cash cost to produce is about $17/oz while total cost is around $26/oz. Mines that can, will hold onto their silver on hopes of higher prices. Those with little cash will mothball their mines. Either way supply is about to take a major hit while physical demand stays high.
    Gold is below cash cost and actual cost as well. How long can they hold on until all mines shut down? China is the big beneficiary of these reduced prices. This cits the time frame for when they can back their currency with gold and kill the dollar!
    28 Jun 2013, 12:30 PM Reply Like
  • The_Hammer
    , contributor
    Comments (3809) | Send Message
     
    http://bit.ly/13e0SVA

     

    http://bit.ly/12tbYzM
    28 Jun 2013, 12:54 PM Reply Like
  • Jason Burack
    , contributor
    Comments (1721) | Send Message
     
    Mark Dow is also a big government, pro welfare/warfare state and Pro Fed Wall St robot. He believes 100% in Keynesian economics and believes all the government's statistics.
    28 Jun 2013, 02:17 PM Reply Like
  • solarcircle
    , contributor
    Comments (283) | Send Message
     
    http://bit.ly/1293krg#
    28 Jun 2013, 02:36 PM Reply Like
  • WMARKW
    , contributor
    Comments (10250) | Send Message
     
    What ....are you following me now, or just lurking on the "gold" stories.
    28 Jun 2013, 05:15 PM Reply Like
  • komodov
    , contributor
    Comments (4) | Send Message
     
    Experts continued to warn about the housing bubble. Prices continued upward until the eventual collapse. Housing prices dropped more than 50% in many areas. Experts not long ago started warning about the gold bubble. History is repeating itself. Those who continue to ignore the bubble will wish they had paid attention 6 months from now.
    28 Jun 2013, 07:26 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector

Next headline on your portfolio:

|