Seeking Alpha

Gold continues slide

  • Another down day for gold takes has the metal at least momentarily falling below $1,300 per ounce. It's currently -0.8% and right at the $1,300 level.
  • Gold nearly touched $1,400 per ounce amid Ukraine tensions in overnight trading at the start of last week. The situation there seemingly settled, the hawkish FOMC decision and Yellen press conference on Wednesday dealt another blow to the metal.
  • GLD remains higher by 7.5% YTD.
  • ETFs: GLD, IAU, PHYS, SGOL, UGL, DGP, GLL, DZZ, UGLD, DGL, GLDI, DGZ, AGOL, DGLD, TBAR, UBG, GYEN, GLDE, GEUR, GGBP
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Comments (24)
  • boatman
    , contributor
    Comments (650) | Send Message
     
    we are going to see 1050 before something lets go..........war or economic.

     

    it will be time to double down.
    26 Mar 2014, 04:07 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (9720) | Send Message
     
    Gold could test $1,150 by Labor Day.

     

    Long Physical Gold.
    26 Mar 2014, 04:09 PM Reply Like
  • T-time
    , contributor
    Comments (520) | Send Message
     
    I do not agree with either comment. If this were the case it would have happened late last year and how do you explain the 20% increase in GLD and gold stocks (some even higher) YTD BEFORE the Ukraine dispute? Why is it not 1050 to 1150 now? According to fundamentals from gold bears - it should be no higher than 700! Cash is king at the moment, right? Gold should be through the floor - but yet it holds up, even increases YTD and testing 1400...??

     

    Could it be that there is strong demand somewhere?? Hmmmm....

     

    Now is the time to buy my friends. US prints money out of thin air and China adamently and fiercly stockpiling gold (wonder why they would do that? hmmm....) and the US banks keep telling us that this currency is rock solid!!

     

    As long as US remains the reserve currency - I guess we don't really owe that 17 trillion dollars.... but what happens when the value falls and trust is broken (already lost one tripple A rating) and the YUAN becomes the reserve currency of choice? (Then suddenly we will owe 17 trillion dollars)... My point is you can't get away with such manipulation forever. Lots speak of precious metal price manipulation, but another argument is the currency that is manipulated. These efforts are working hard to squeeze gold, but without much true success and when the energy runs out (soon!), gold has no where to go but up - and we don't need a "war or economic" to get there - we are already there....!
    26 Mar 2014, 04:45 PM Reply Like
  • David at Imperial Beach
    , contributor
    Comments (4375) | Send Message
     
    I agree. Let's try Yellen's "higher interest rate 6 months after taper" thesis on for size and see how it fits, shall we? It will devastate the stock market, assuming that it doesn't crash in the tapering itself because it will kick earnings in the gut. It will devastate the bond market because it will devalue all currently held low yielding bonds. It will devastate the federal budget. With a $17 Trillion with a T debt, the federal government really can't afford even a percentage point or two rise in interest rates. So do you really think it's going to happen without a major push from inflation to send it there? I don't see why anybody in their right mind would think so. And if we've got inflation to deal with, that's bullish for gold right there.

     

    Now let's try on Goldman Sachs' $1000 per ounce gold price and see how that fits. That will cause the miners to shut down most of the larger and newer mines that suddenly become unprofitable. New gold starts flowing at a mere trickle into the market and the price skyrockets as a result. All of the bullion banks' careful manipulation goes out the window. Is that what they really want? I don't think so! What the central banks and bullion banks and anybody TBTF really wants is a nice orderly 2% official inflation rate that gradually and presumably unnoticeably devalues all debt, and interest rates below the unofficial inflation rate. Well that's bullish for gold too!
    26 Mar 2014, 06:20 PM Reply Like
  • ltsgt1
    , contributor
    Comments (1523) | Send Message
     
    "but what happens when the value falls and trust is broken (already lost one tripple A rating) and the YUAN becomes the reserve currency of choice?"

     

    I'm pretty sure the Chinese don't want the burden of being the reserve currency. However, they and the rest of the world are sick and tired of our money printing antic. I think what they really want is Special Drawing Rights which require the credibility of the IMF, Chinese productive capability and Russian political influences and energy.

     

    I believe the EU is sick and tired of the dollar reserve status too and desires to establish SDR. However, there is still a lot of mistrust between the Russian and the EU. The current conflict in Ukraine doesn't help the matter one bit.

     

    Come to think of it, maybe Ukraine is a wedge planted by the US to make the possibility of SDR less likely.
    26 Mar 2014, 07:35 PM Reply Like
  • Molycorp52
    , contributor
    Comments (17) | Send Message
     
    Why would china not want to be the reserve currency? isn`t that why there trying to back the yuan with gold?
    26 Mar 2014, 11:27 PM Reply Like
  • submarine
    , contributor
    Comments (557) | Send Message
     
    "credibility of the IMF" Huh??
    27 Mar 2014, 09:47 AM Reply Like
  • ltsgt1
    , contributor
    Comments (1523) | Send Message
     
    Molycorp52,

     

    I believe China is stockpiling gold for the inevitable global fiat reset. The last thing they want is the reserve status which will eventually kill their factories and export. Personally, I think billions of Chinese with the buying/spending power of the US will drain the global resources in a nano second. It's not going to happen.

     

    A friend in Iceland told me that they were poor before the financial engineered boom. They are broke and poor again after the country went bust. However, Iceland now has many roads and infrastructures which they didn't have before the boom.

     

    I think the Chinese know that if the dollar collapsed, no other currencies can escape the following fiat carnage in this super interconnected global economy. That is why they are building ghost cities and buying up as much gold and resources as fast as they possibly can.
    27 Mar 2014, 11:55 AM Reply Like
  • ltsgt1
    , contributor
    Comments (1523) | Send Message
     
    submarine,

     

    Credibility is not exactly the word I'm looking for. What I really want to transpire is that Russian and Chinese central banks cannot orchestrate the great escape from the dollar alone. They need the IMF, the old banking cartel, to hold their hands.

     

    If the European faction of the IMF cooperated with the BRICS, the dollar is done. Come to think of it, if the Saudi join them, we are finished and that means a very likely WW III. I think that possibility and our still formidable military is what is holding back that cackle of hyenas.
    27 Mar 2014, 12:06 PM Reply Like
  • filipo
    , contributor
    Comments (4024) | Send Message
     
    ltsg,
    The Chinese have repeatedly said that what they want is a basket of currencies with gold forming part to replace the USD as a reference currency.
    There are scholars in the West who favor this idea.
    A reference currency for the people behind that currency is a curse and a blessing. It's a curse because it overvalues the said currency and hence hinders export from that nation and it's a blessing because it enables the citizens of that nation to live a life of leasure without having to work hard.
    However, the Chinese have their own problems -huge leveraging that is popping, to name but one- so I don't think this takeover will happen very soon.
    Europe wil never cooperate with the BRICS to back another reference currency than the USD. There will be trade between Europe and the BRICS, yes, but Europe will never question the very existence of the USD as a reference currency. There would be a revolution needed to implement that.
    27 Mar 2014, 04:38 PM Reply Like
  • ltsgt1
    , contributor
    Comments (1523) | Send Message
     
    filipo,

     

    Here is an interesting article about a thought of a dual system: "in which the Anglo-Americans and their allied states decide to go in one direction, maintaining their hegemony around the dollar and the euro, and the rest of the world going in another. It would be inherently unstable, and throw the global credit and forex markets into a somewhat chaotic state. But then again, who could have predicted the folly of a loosely associated set of nations adopting a single currency without the rigor of monetary transfers and fiscal union with which to balance the system."

     

    http://bit.ly/1iHd5Yb
    28 Mar 2014, 08:44 AM Reply Like
  • filipo
    , contributor
    Comments (4024) | Send Message
     
    ltsg,
    April 15 next certainly will not give way to a game changing decision.
    The BRIC's are simply not ready to perform whatever they have in mind and the US economy (GDP) is still way too strong to have this shift right now.
    Don't forget that although we only have a 1.9% growth and a "muddling through" economy, that "muddling through" is several times more powerful than that of all the BRIC's combined.
    China, India, Brazil and Russia show relatively good numbers thanks to their exports and domestic multiple expansion. Take those away and nothing lasts.
    It'll take at least another 50 years before the BRIC's will equal the US and Europe on GDP level.
    29 Mar 2014, 10:02 AM Reply Like
  • filipo
    , contributor
    Comments (4024) | Send Message
     
    Let's wait 'n see where we'll stand at year's end.
    26 Mar 2014, 05:40 PM Reply Like
  • Brian58
    , contributor
    Comments (190) | Send Message
     
    The FED has to keep the anti-dollar down. Once Gold approached $1400 (a major technical reversal point), JPM and GS got the phone calls to do whatever it took to bring it down. Both China and Russia will not be buying US Treasuries, and will most likely dump their positions. FED will need to find a buyer to keep the scheme going. If Russia starts accepting gold and not dollars for payment, it's gonna fly.
    26 Mar 2014, 06:00 PM Reply Like
  • solarcircle
    , contributor
    Comments (313) | Send Message
     
    ltsgt1 are you kidding? the dollar reserve status is in no way a burden. It allows the government to print endlessly and ship the dollars off shore. It is the reason that U.S. citizens enjoy their high standard of living. When the dollar loses reserve status watch out below.
    26 Mar 2014, 08:20 PM Reply Like
  • ltsgt1
    , contributor
    Comments (1523) | Send Message
     
    Solar circle,

     

    The burden is "Triffin Dilemma".
    26 Mar 2014, 10:38 PM Reply Like
  • JW1KSC
    , contributor
    Comments (3) | Send Message
     
    And who knows what Snowden will reveal next, and all the other little fires around the globe.

     

    If they don't offer him some kind of deal soon, like a ticker tape parade, for the hero, who knows what he might reveal, that might damage the dollars status further or drastically.

     

    Shoot, the PetroDollar is on life support, everyone is switching and trading in each other's currencies. If they don't need dollars to trade Oil, they don't need US Tresuaries. Treasuaries get dumped and all those $$$$$$$$ come Home. I'm not saying a remake of Zimbabwa !
    Zimbabwa ll - Uncle Sam Now Understands

     

    Now think New Oil Cartels , Russia is a given, with the corruption within that mess galore.

     

    If some damn person would move so we could get 1 pipeline built, so we could get our oil to the Gulf, it would be nice. Do you think we can ever get anything done in this Country in the future with the DC Croniy crowd clowning around?

     

    Just be ready for the day it happens, your checking & savings Accts. Will vanish like flash paper. That's the bad news..... The good news is all debts will vanish. Your home free and clear with that and the Au & Ag you have??? And perhaps some survival gas, food, water and Guns just in case, you'll be all set for the rest of the 21st Century.

     

    Yes if it were just all laid out.. Nothing ever works out as planned. But you can always start planning now.

     

    Don't forget Folks, China will be announcing their Gold Hording, sorry!!!!!
    Gold Holdings this year, last time was 2009 with about 1000 tons! Shoot, they probably took in that much last month.. Where do you think that 500 tons went when it left the GLD?

     

    Did I say this year, what I heard once was April.
    Don't sound the alarm yet.. Do your own Due Dillegence

     

    JW@KSC
    26 Mar 2014, 09:24 PM Reply Like
  • submarine
    , contributor
    Comments (557) | Send Message
     
    Long GLD, buying more <$115.
    26 Mar 2014, 11:23 PM Reply Like
  • MisterJ
    , contributor
    Comments (880) | Send Message
     
    Nothing but delusional gold bulls and goldbugs here, the way to triple digits is predestined from here. I wonder at what level a sense of reality will kick in for them, not likely above $750 from what is shown in the comments here. Mucho pain ahead for you guys. I'll take the gains.
    27 Mar 2014, 12:53 AM Reply Like
  • submarine
    , contributor
    Comments (557) | Send Message
     
    "predestined"?? Wow.
    27 Mar 2014, 09:47 AM Reply Like
  • jeff lauder
    , contributor
    Comments (176) | Send Message
     
    I'm with Avi Gilburt on this one. Make all the excuses for owning gold you want. Fact is it trades like crap in the face of international strife and easy money. This pig going lower.
    27 Mar 2014, 06:37 AM Reply Like
  • Ray_Rich
    , contributor
    Comments (56) | Send Message
     
    Message from Canada today;
    BMO slashes 5-year fixed mortgage rate to 2.99%

     

    For sure the economy is not really getting much better up here... I am assuming it is the same to my south!
    27 Mar 2014, 09:18 AM Reply Like
  • T-time
    , contributor
    Comments (520) | Send Message
     
    Jeff lauder - you can say it trades like crap at the moment - and you are right. But looking back 5000 years and "easy money" comes and goes but gold continues to increase in value. In 2008, when folks lost half their retirement (easy money?) a gold coin nearly doubled in value from 2008 to 2011. I know personally people who kept working because thier retirement was paper money - if it had all been gold bars they would have easily retired - and then some! The gold value has come back some since peak highs, of course (just like the markets do) but it is still over the 800 dollar range from January 2008! Not to mention, nothing is more "liquid" than gold so not sure it is a bad trade in that respect.

     

    It just depends on your perception - if your vision is shorter sighted and focused more on the present (not meaning to sound negative) versus a longer term vision, this makes the difference in how one might percieve gold. Fact is, historically, currencies have come and gone - gold is 'forever'.... right or wrong this fact remains and is undisputable...
    27 Mar 2014, 03:01 PM Reply Like
  • solarcircle
    , contributor
    Comments (313) | Send Message
     
    JW1KSC, why would you want to get oil to the gulf or anywhere else? Much better for the economy and the environment to switch over to green energy - solar, wind, tidal etc. Ocean acidification from C02 is killing life at the bottom of the food chain and will destroy all coral reefs in less than 40 years. The writing is on the wall - burning oil is destroying the environment so that is a negative for the economy - haven't you noticed the drought in California and therefore rising food prices (food up 19% this year)
    27 Mar 2014, 03:34 PM Reply Like
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