Precious metals decline; writers search for excuse


Generally upbeat economic comments from Janet Yellen make for a convenient excuse for sizable declines in precious metals today, but then how do we explain lower yields at both ends of the interest rate curve? At 2.62% before Yellen sat down in front of Congress, the 10-year Treasury yield is now down to 2.59%, and the December 2015 Eurodollar contract - as good a proxy for worry over rate hikes as exists - has gained five basis points (higher price means lower chance of hike).

Maybe more at work could be chatter about a de-escalation of tensions over Ukraine.

In other news, the China Gold Association reports the country's total Q1 gold consumption at 322.99 metric tons, up 0.8% from a year ago. Consumption of gold bars, however, fell about 44% to 67.954 tons.

GLD -1.4%, SLV -1.3%

ETFs: GLD, SLV, AGQ, IAU, PHYS, USLV, SIVR, ZSL, SGOL, UGL, DGP, GLL, DZZ, UGLD, GLDI, SLVO, DSLV, DGL, DBS, DGZ, DGLD, AGOL, TBAR, USV, UBG, GYEN, GLDE, GEUR, GLDS, GLDL, GGBP

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Comments (18)
  • Brian58
    , contributor
    Comments (285) | Send Message
     
    Show me an accounting of COMEX and you will find your answer
    7 May 2014, 03:39 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (4773) | Send Message
     
    "Writers search for excuse."

     

    hahaha...

     

    Finishing up my next article where I explain where I think gold and silver prices will fall to for the first time. Will post it tomorrow. Sorry bulls, it's not pretty.
    7 May 2014, 04:02 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (4773) | Send Message
     
    Here is this writers latest musings (decided to finish article today).

     

    Why I See Lower Gold and Silver Prices Over the Next 3 to 4 Months http://bit.ly/LowerGol...
    7 May 2014, 05:18 PM Reply Like
  • user92718
    , contributor
    Comments (166) | Send Message
     
    Doug,
    did u mean for the last time?
    7 May 2014, 05:50 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (4773) | Send Message
     
    user, I meant my explanations for why it would fall further outside of my "market makers will take it there" analysis I have provided in the past.

     

    I can see why it's unclear but too late to change the wording. Thanks.

     

    But yes...for the last time! lol
    7 May 2014, 05:52 PM Reply Like
  • ddearborn
    , contributor
    Comments (180) | Send Message
     
    Hmmm

     

    Even a cursory examination of the COMEX and several other exchanges demonstrate obvious and repeated manipulation. This isn't rocket science just naked rampant and persistent corruption. How about an immediate (like tomorrow morning) live world wide news broadcast of a tour of all of the vaults
    (inside and out) at Fort Knox and the vaults of JP Morgan, the FED etc. and a concurrent physical counting and testing of all the alleged gold and silver reserves? How about an independent fraud investigation of the pricing action of the COMEX gold and silver exchanges over the last 5 years.........

     

    The reason gold and silver pricing is a fraud is simple--the FED CAN NOT FLOOD WORLD MARKETS WITH 10'S OF TRILLIONS OF DOLLARS WITHOU MASSIVE PRICE INCREASES IN GOLD AND SILVER WITHOUT MANIPULATION. Doing so violates any number of basic principles of economics, not to mention common sense. After all since these bums claim they have done nothing wrong and therefore nothing to hide--- WHY ARE WORKING SO HARD TO KEEP IT HIDDEN?
    7 May 2014, 05:16 PM Reply Like
  • Silver Rob
    , contributor
    Comments (30) | Send Message
     
    It's fungible.
    7 May 2014, 05:29 PM Reply Like
  • indianamark
    , contributor
    Comments (2197) | Send Message
     
    ddearborn

     

    But---but--- our friendly banker has never admitted wrong. Of course they have agreed to pay nearly 30 billion in fines and restitution. They must be really charitable guys.
    7 May 2014, 08:25 PM Reply Like
  • Brian58
    , contributor
    Comments (285) | Send Message
     
    They have to protect the might dollar
    8 May 2014, 09:32 AM Reply Like
  • turville
    , contributor
    Comments (70) | Send Message
     
    ddearborn - one must assume that you are long of gold in one shape or form by the way you rant and rave about manipulation and possible conspiracy theories. That's all one sees from longs and is quite frankly very boring.

     

    The only thing I would like to add is that I hope the ETF's continue to unwind. I have never liked ETF's in single commodity format. They have done a lot of damage to the underlying industry (mining and production of the physical). The industry has been pretty well served by the physical and futures markets (LBMA and the main futures exchanges - e.g. COMEX) and that structure is I believe perfectly satisfactory going forward.

     

    I agree that the Fed "printing press" probably needs a rest but the comment that "tens of trillions of dollars are being printed is far removed from the real number of just under ten trillion".

     

    I don't think there is any serious inflation around in the major developed world - people got very scared as a result of the GFC and the wallet is well and truly directed at paying down personal/family debt and certainly not increasing it. Only the wealthy can afford to splurge since they have more of it post the GFC than before. Companies are hopefully starting to spend some of the many trillions of hoarded cash that they have (increasing M & A). Problem is that technology dampens the need to hire in big numbers especially in manufacturing. The world in general probably deserves lower prices in the supermarkets etc - we have been screwed by the cartel supermarket chains long enough and they have been screwing the supply chain long enough as well. So inflation to be tame for ages.
    7 May 2014, 08:09 PM Reply Like
  • David at Imperial Beach
    , contributor
    Comments (4382) | Send Message
     
    (GLD) (IAU) and the other bullion ETFs have certainly not been any harder on the mining industry than central banks, bullion banks, the LBMA and the COMEX. These other institutions are where most of the corruption exists and most of the manipulation goes on. It could be argued that (GLD) alone allowed investors to wrest control of gold from these more corrupt institutions and bid gold up to a level commensurate with its current mining cost.
    7 May 2014, 11:48 PM Reply Like
  • kingofsilver
    , contributor
    Comments (79) | Send Message
     
    The other day I paid $4.02 for a gallon of gasoline. Just a few short years ago I paid $2.01 a gallon and you say there is no inflation. Huh!
    8 May 2014, 03:35 AM Reply Like
  • mynibiru
    , contributor
    Comments (2) | Send Message
     
    I love it ... everytime the price of gold goes up it is a "REAL RALLY" and whenever it falls it is some sinister manipulation by the "FEDS" the "BANKSTERS" OR some ALL POWERFULL UNKNOWN group "manipulating the price down". If these people actually believe this garbage , I feel sorry for them. I actually just saw a interview with "Mr. Gold Sinclair " who said gold was going to $50,000 an ounce . Why not $300,000 an ounce ? Apparently only people who buy gold are going to survive and the rest of the world will be eating worms. I actually believe people like "Mr.Gold" are the manipulators only telling people to BUY BUY BUY gold and never sell.
    7 May 2014, 09:26 PM Reply Like
  • David at Imperial Beach
    , contributor
    Comments (4382) | Send Message
     
    There's a good reason for suspicion that gold is being manipulated more on the downward side than the upward side. The central banks of the world generally want their currencies to be valued highly. If gold and silver and other commodities rise in price it is a telltale sign that their currencies are losing value. Thus, central banks (and other banks that are the primary beneficiaries of central bank policies) are highly motivated to try to manipulate commodity prices lower for as long as practical. But they can only do it for so long before it cuts off production enough that shortages occur. Once a shortage is obvious, there's no more keeping the price down. It will surge up no matter how much leverage the banks try to apply.

     

    Long term, "buy buy buy" gold is good advice. Holding fiat currencies will leave you poor if you do it for too long. It's best, of course, to buy gold when the price is near the cost of production, as it is now.

     

    Gold will go to $50,000 an ounce eventually. But first we will have to see $1500 an ounce gold, and then $2000, and then $5000 and then $10,000 etc. We will never see $800 an ounce gold again, and probably not $1000 an ounce gold because it now costs $1200 an ounce to mine the stuff sustainably. When gold hits $50,000 an ounce, it is likely to cost $45,000 an ounce to mine it, and a Big Mac will likely cost $200.
    8 May 2014, 12:11 AM Reply Like
  • alterami
    , contributor
    Comments (251) | Send Message
     
    mynibiru, more people would believe you if the government of this country hadn't "manipulated the price of gold down" for over 100 years....just a thought.
    8 May 2014, 12:12 AM Reply Like
  • MartinGale7
    , contributor
    Comments (207) | Send Message
     
    Gold certainly seems to be testing everyone's patience at the moment.

     

    My guess is that central banks of the world will continue creating money in the hope of propping up an already overextended credit bubble. Eventually it will get to the stage where further excess money can't find a home, even and near zero rates, and that some of that money will find its way into gold. Either that or people will start to become aware that despite headlines showing deflation concerns the cost of living is rising quite quickly.
    8 May 2014, 04:47 AM Reply Like
  • Silver Rob
    , contributor
    Comments (30) | Send Message
     
    Is anyone curious as to why Canada marked there one oz silver coin at 5 Dollars?
    24 Sep 2014, 01:12 AM Reply Like
  • CoinsK
    , contributor
    Comments (3683) | Send Message
     
    No ,they have had their Maple Leafs monetized at that for years. Even when Silver was $3.50 an Oz.
    24 Sep 2014, 07:33 AM Reply Like
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