Seeking Alpha

Precious metals reverse to turn sharply higher

Comments (31)
  • Gold is up 2% and 10 year yields are up 2% too.
    One more prove - there is no correlation between interest rates and gold prices.
    In the long term: gold prices, US bonds and currency depend on the investors faith in the US government.


    In the short term: gold prices, US bonds and currency are managed/manipulated by taper talk, forward guidance, QE etc.
    4 Dec 2013, 01:08 PM Reply Like
  • RE: "In the long term: gold prices, US bonds and currency depend on the investors faith in the US government."


    Seriously? Gold prices depend on the faith in the US Government? Surely you mean inversely...right?
    4 Dec 2013, 11:13 PM Reply Like
  • Please explain todays action then. Rates are up dollar is down and gold is down 1.5%.
    5 Dec 2013, 09:13 AM Reply Like
  • Or maybe gold has been hammered so badly recently that it was actually oversold for now. It was down almost another 1% this morning before it reversed course.
    4 Dec 2013, 01:38 PM Reply Like
  • As a gold collector, I like the sharp down days more than the upward reversals.


    I'd love it if gold prices could go back to the 1999 levels.


    That, unfortunately, is utterly impossible with the current regime in place.


    Maybe the Fed will stop QE, shrink the balance sheet as the constitution gains a balanced budget amendment.


    That is the only nightmare scenario for gold prices that I can see.
    4 Dec 2013, 01:59 PM Reply Like
  • Agreed, a deflationary depression would be bad for gold. Provided there is no revolution, of course.
    4 Dec 2013, 05:50 PM Reply Like
  • Deep,
    In de past the gold price has risen over time with inflation without any QE helping. Why should that be different now ?
    The gold price will keep on rising even when QE stops.
    4 Dec 2013, 02:12 PM Reply Like
  • I never wrote that gold will fall when QE stops.


    QE and shrinking the Fed balance sheet along with massive spending cuts (or massive tax increases) aren't the same thing.
    4 Dec 2013, 02:23 PM Reply Like
  • Deep,
    QE equals swelling the balance sheet, or how else do you see the monthly purchase by the Fed of $85bn worth of assets (both mortgages and Public Debt) ?


    As to a balanced budget, have no fear: never ever in history have our democracies run balanced budgets.


    Besides, within short the West will be completely obsolete to dictate the gold price. It is the East that you have to be aware of:
    4 Dec 2013, 02:37 PM Reply Like
  • Dude,


    Who are you arguing with because it isn't me!


    Please stop replying to me to counter arguments that I've never made.


    Thank you.
    4 Dec 2013, 02:42 PM Reply Like
  • Deep,
    All I wanted to do is comfort you by trying to dissipate your fear for nightmare scenarios.
    You said:


    "Maybe the Fed will stop QE, shrink the balance sheet as the constitution gains a balanced budget amendment.
    That is the only nightmare scenario for gold prices that I can see. "


    Remember ?


    Well, in the first case (QE ending) you need not suffer a nightmare because even without QE the gold price will steadily keep on rising.
    The second case (balanced budget amendment) you don't need to suffer nightmares either because that has never happened before so it sure won't happen in the future.


    Got it, dude ?
    4 Dec 2013, 02:53 PM Reply Like
  • Gold just doesn't "keep on rising".


    I was once $1825 per ounce.


    You can't understand gold and claim it will keep on rising in all scenarios.


    The government taking actions to correct previous bad monetary policy is bad for gold prices.


    Being a gold enthusiast doesn't mean blindly believing every possible scenario is good for gold.


    If you are going to respond to me at least do me the favor of reading some of my previous 5000 comments to understand where I am coming from.
    4 Dec 2013, 03:13 PM Reply Like
  • Deep,
    Don't get angry on me.
    I only wanted to redeem you from any possible nightmares.
    Forgive me if I wasn't clear enough.
    I will try to be as polite as possible in the future when discussing the gold price, so as to dissipate your nightmares.


    You wrote:
    "You can't understand gold and claim it will keep on rising in all scenarios."


    My answer:
    I perfectly understand gold and indeed I pretend it will keep on rising in all plausible scenarios. To prove that, I only have to show you the survey of gold's historical prices from 1833 to present :
    So, statistically there's 99,999% chance the gold price will keep in rising.
    That does not mean that I pretend the gold price will rise every single day. There will be ups, there will be lows, but over a period of, say, 2-3 years, the chance of a higher gold price is 90%.
    It all depends on one's time frame, which (life-)expectations one has whether one finds that an interesting investment opportunity..
    4 Dec 2013, 03:48 PM Reply Like
  • Hey that's great.


    Good for you.


    Have a great evening.
    4 Dec 2013, 08:58 PM Reply Like
  • Bonds are down due to stronger ADP; gold is up because of Dovish Fed comments from San Francisco.


    One or the other is wrong. Let's see tomorrow's GDP figures.
    4 Dec 2013, 02:44 PM Reply Like
  • Gold is up because JPM Chase is taking deliveries of December futures and the slight rise in price triggered a bunch of stops. If the price gets above $1250 /oz, gold will go vertical again as even more stops are triggered. If JPM Chase has in fact cornered the futures market, shorts will get squeezed.
    4 Dec 2013, 04:03 PM Reply Like
  • Where are they going to store that stash ? They just sold their warehouse, 1 Chase Manhattan Plaza.
    4 Dec 2013, 04:27 PM Reply Like
  • Switzerland, like everybody else.
    4 Dec 2013, 05:44 PM Reply Like
  • JPM also owns one of the largest gold vaults in London and has another one in Singapore.
    4 Dec 2013, 05:44 PM Reply Like
  • Germany would certainly hold it. But first they would take their own gold back !
    4 Dec 2013, 07:37 PM Reply Like
  • Agent - Can you please elaborate on how taking deliveries of futures causes price to go up? I understand the escalation part regarding stops being run but wanted to understand the delivery part.
    Also can u please elaborate on what u mean by JPM has cornered futures market? Are u saying they are long or short gold? Thanks.
    4 Dec 2013, 07:48 PM Reply Like
  • JPM was a net seller of gold futures during the first part of 2013, with banks like HSBC on the other end of the trades. It looks like JPM has now reversed their position to net long without any help from HSBC selling futures back to them. Dec 2013 marks the point where JPM has stopped selling futures to HSBC and has received delivery of actual gold. More demand, less supply... Price goes up.
    4 Dec 2013, 08:08 PM Reply Like
  • Agent - Thanks for the reply. Do u have a link regarding JPM going long? The gold price reversal today was really weird in face of strong ADP and rising treasury yield. But your point regarding JPM long may very much be the reason behind this. So was wondering if u could share the source.
    4 Dec 2013, 08:33 PM Reply Like
  • GATA cited a TF Metals report today as the original source and there was lots of coverage on Zero Hedge about the Dec 2013 delivery back in the summer.
    4 Dec 2013, 08:44 PM Reply Like
  • Plow in a little more.
    4 Dec 2013, 03:49 PM Reply Like
  • Today is a strange action in precious metals prices decoupled from interest rates and dollar strength. It might be a pre-cursor to what's coming. I read an analysis that the ECB monetary policy and rates settings is supposedly better correlated to gold prices than the policy in US even though gold is measured in USD as the primary currency. Sitting on hands and very curious what's going to unfold in the next few weeks. We might be looking at finally setting up a bottom in precious metals trying to slowly unfold and take place. Today's bounce was really strong and on huge volume. I wouldn't be suprise though if Comex Gold prices go back to retest the $1200, because it didn't quite get there yesterday and today, but it would make sense if it does go down and form a nice double-bottom basing pattern off a solid previous June low of about $1200. Interesting times nonetheless.
    4 Dec 2013, 03:50 PM Reply Like
  • yes, svbk. you make sense .
    5 Dec 2013, 03:57 AM Reply Like
  • I feel like I'm just hearing the collective bleats of a herd of sheeple.
    jumping up and down when they see some kind of "'market currents"
    headline blip about "Precious metals reverse sharply higher" up 20 bucks. with sparklers twinkling.
    what a bunch of baloney.
    It bounced back to the 1250 area. It did this same move a few days ago. and I saw no razzle dazzle headlines.


    Somebody wants sheeple to think we're gonna see a great rally now, so pile into the metals now everyone.
    I smell a little rat . a set up to sucker in more dumb money so they can fleece them at the next short attack.


    Do you think that gold cant be taken to 1200? that todays drop to 1210 was the best that sellers could do?
    that's like a world class marathon runner fainting 100 yards before the finish line.
    its like a pro bowler needing one more strike to make a perfect game. and he throws a gutter ball.


    The Grande sellers took gold from 1900 all the way down to 1180
    then they just took it again from 1440 (august top) back down to retest the june bottom....but here they are just above 1200 , but .... they just .... couldn't .... do it.
    wow. I sure do believe that one.


    I don't know , but sometimes, after watching price action all day every day, you just get a feeling that youre watching a funny kind of game going on. ..... don't know how else to describe it.
    5 Dec 2013, 03:55 AM Reply Like
  • I'm not a gambler, and I hate when investing feels like gambling at the rigged casino, but if The charts could be certain to follow the precise pattern it has maintained since 2011, and give traders just one more identical pattern wave structure piece, and these 90 % odds could be trusted....... I would watch gold rally to 1300....where I would sell a lot....and gold would -- right around there, Whipsaw hard down, in the next downwave to target 1150, or 1110,I don'tcare....where I would then buy back more gold at a better bargain.
    That's what I want for Christmas. and I woulda oughta do the same thing with silver.
    5 Dec 2013, 04:07 AM Reply Like
  • This year is really a hard one for precious metals. Usually, seasonally speaking gold & silver are strong in the winter months between Nov-Mar as well as technology which has done really well so far (nice rebound in AAPL, whereas GOOG & AMZN are off the charts to new all-time highs), but gold & silver have seriously lacked this year. I suspect that we're in the final phase of bearish wave 5, which could take us down to anywhere between $1100-1200 (no one should be concerned with the precise number because that's impossible to guess), but what's more important is the big picture patterns and cycle and it's definitely looking like the bottom is very near. It could be this month or within the next 3-6 months if "the boyz" can master another big short paper gold & silver bear wave down to about $1100 or so. Time will tell, but accumulate in portions instead of all in at once, because you thought this or that was the bottom and then there's nothing to worry about. I'm confident that physical will naturally overpower shor-term over-leveraged paper bear market manipulations if not blow up with a big bang, because no man-made force could keep this reverse bubble oversold condition in place forever, otherwise we would have bigger problems to worry about like the end of the world financial system and civilization as we know it if what not : ) in which case I believe owning some physical would come in handy as the eternal monetary means that have stood through centuries of time.
    5 Dec 2013, 10:37 AM Reply Like
  • well... just looking at the gold chart for the last 3 years, that 'winter seasonal strong rally' idea went out the window in 2011/2012/and now this year. so that notion is destroyed.
    Theyre working on destroying the 'gold bull market cycle' notion now by the looks of it. doing a fair job so far. I suppose it will take Big players to bring gold back to a more real reality, when the reset decision time comes. I have to believe there is some kind of Grand Plan being worked out, either thru global powers mutual cooperation, or a mix of cooperation and some occasional arm twisting..... otherwise the other means by which major global shifts take place is by total war and chaos . I have to believe the powers that be are not so insane or greedy or evil or stupid, that they would rather destroy the world than to start sharing the total global wealth more equally .
    6 Dec 2013, 04:53 AM Reply Like
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