Seeking Alpha

Gold plunges 2.2% in biggest daily drop of 2014, miners sink

Comments (34)
  • techy46
    , contributor
    Comments (6055) | Send Message
     
    Lets see how the inflation and world political picture evolves for the rest of 2014 before we toss out gold. The democrats are going to get beheaded in the mid term elections and we could see a black swan event in the Middle East at anytime.
    14 Jul, 11:40 AM Reply Like
  • dancing duke
    , contributor
    Comments (47) | Send Message
     
    Beheaded I do not think so.Where did you find such words of wisdom?
    14 Jul, 10:52 PM Reply Like
  • Jhalgren
    , contributor
    Comments (109) | Send Message
     
    Barclays analysis must be questioned in lieu of a huge potential for an outbreak of oil wars in the Middle East and elsewhere--there's oil exploration off the shores of the Ukraine that, of course, Russia is coveting! So it seems there's been some profit taking in gold since it has performed well in recent weeks--this truth seems much more plausible than other thought streams.
    14 Jul, 11:44 AM Reply Like
  • bd4uandu
    , contributor
    Comments (1829) | Send Message
     
    You knew it was coming.
    14 Jul, 11:49 AM Reply Like
  • Jimjiminy
    , contributor
    Comments (29) | Send Message
     
    That's why I've kept a reasonable cash reserve, to stock up on a few more mining stocks during short-term pullbacks.

     

    Currently considering expanding my position in AG, and adding ANV to my portfolio.

     

    Happy investing : )
    14 Jul, 11:58 AM Reply Like
  • caribsurfking
    , contributor
    Comments (37) | Send Message
     
    You mean trading, hahaha!
    14 Jul, 02:43 PM Reply Like
  • Philip Marlowe
    , contributor
    Comments (1020) | Send Message
     
    They are right that there is no long term demand. Gold started falling during the night (for the US) because it was crashing in China. Demand in Asia is evaporating. The only people buying gold now are short term traders hoping for some kind of conflict in the middle east and the Ukraine. Even if the conflict appears, these guys will sell soon because they are short term traders.
    14 Jul, 11:54 AM Reply Like
  • Energysystems
    , contributor
    Comments (1074) | Send Message
     
    The paper is being traded, the physical is being hoarded.
    14 Jul, 12:33 PM Reply Like
  • rubber duck
    , contributor
    Comments (194) | Send Message
     
    It didn't crash until the EU open. Global physical demand still on pace to beat 2013.
    14 Jul, 12:36 PM Reply Like
  • David at Imperial Beach
    , contributor
    Comments (4107) | Send Message
     
    You are misinformed. Gold demand is not "evaporating" in Asia. Gold did not "crash" in China. It fell by 1.36% which is a smaller percentage than in western markets this morning.
    14 Jul, 01:17 PM Reply Like
  • Philip Marlowe
    , contributor
    Comments (1020) | Send Message
     
    Western markets are reacting to the fall in China. Everyone is relying on China to soak up gold supply, so falls in Singapore will trigger bigger falls in the west.
    14 Jul, 01:29 PM Reply Like
  • Jimjiminy
    , contributor
    Comments (29) | Send Message
     
    "Everyone is relying on China to soak up gold supply" : well they've got a very big sponge ($3 tn in foreign reserves - as well as the proven demand of 1 billion private consumers), and they've been putting it to work quite consistently so far. I think they're going to mop the floor with the Western banking system.
    14 Jul, 03:10 PM Reply Like
  • E.D. Hart
    , contributor
    Comments (938) | Send Message
     
    No long term demand except those that are losing faith in hegemony of US debt based petro-dollar and 2.5 billion Asians. Agree that Westerners hate it.
    14 Jul, 06:48 PM Reply Like
  • Paul Mosgovoy
    , contributor
    Comments (113) | Send Message
     
    More information on the potential staying power of this down-move can be found here:

     

    http://seekingalpha.co...
    14 Jul, 12:30 PM Reply Like
  • Ralph New Orleans
    , contributor
    Comment (1) | Send Message
     
    "...if one looked at what the professionals were doing."
    How does one look at and see what the professionals are doing with Gold?
    14 Jul, 05:20 PM Reply Like
  • Paul Mosgovoy
    , contributor
    Comments (113) | Send Message
     
    Ralph,

     

    Futures contract positions indicate who is buying/selling. Commitment of Traders (NYSE:COT) reports.

     

    http://1.usa.gov/ZTDg16

     

    At this point in time (today notwithstanding), the professional traders are heavily short (expecting a decline) in both metals.

     

    Paul
    14 Jul, 11:11 PM Reply Like
  • Vooter
    , contributor
    Comments (245) | Send Message
     
    Are they naked short?
    15 Jul, 04:49 PM Reply Like
  • Paul Mosgovoy
    , contributor
    Comments (113) | Send Message
     
    Vooter,

     

    If an employee is part of a hedge desk operation at one of the various gold-miners, they have access to 100-oz. of gold (if they need it) to offer up if the futures contract goes to settlement and delivery.

     

    If they are part of an investment house/trading firm that is selling futures, they most likely do not have the physical product to deliver and will close out the trade (or roll-over) prior to settlement.

     

    Paul
    15 Jul, 08:45 PM Reply Like
  • rubber duck
    , contributor
    Comments (194) | Send Message
     
    Someone unloaded $1.37 billion in futures at an illiquid time, obviously not concerned about getting the best price. Only a matter of time before more gold conspiracy theorists will be proven right.
    14 Jul, 12:34 PM Reply Like
  • David at Imperial Beach
    , contributor
    Comments (4107) | Send Message
     
    I note that gold stayed above $1300 per ounce even after the drop. Thus, it merely fell to the low end of its current trading range.
    14 Jul, 01:11 PM Reply Like
  • wondergoals
    , contributor
    Comments (2) | Send Message
     
    In your dreams Mr Marlowe. Huge and growing private demand in China as well as government buying, and in India only contained (temporarily) by import duty (under pressure from US). Impossibly inflated western equity markets, diverging opinions about impending inflation, deflation, hyperinflation, ... seemingly insoluble levels of sovereign debt, further QE or not (or under a different name) in Europe vs US, regional instability worsening, interest rates approaching nothing, real inflation and unemployment in west rising, lies from political leaders about economic health to cover the cracks (gorges). I'll risk holding gold (and silver) in the light of this lot, which isn't going to be resolved any time soon.
    14 Jul, 01:42 PM Reply Like
  • sinedo
    , contributor
    Comments (316) | Send Message
     
    "...Barclays, which expects gold to drop to $1,200/oz. by Q3, also expresses caution, saying recent gains across the metals complex look toppy..."

     

    The pop us was herd-trading. Funds have to stay "average" to keep their investors from running away, so one follows the other. The move was a "risk on" move over Portugal; now it's "risk off", and it is the way the daily gold market works. The gold traders are very "goosey", with no conviction. I think gold could hit $1200, maybe even get into the $1190's in an effort to scare out the weak hands.

     

    I like Silver better, and it is not a completely emotional metal. There's big industrial demand that will support it, and SOME emotional demand. That's what you watch to know what's really going on, IMO.
    Regards,
    14 Jul, 01:52 PM Reply Like
  • haleiwahu
    , contributor
    Comments (3492) | Send Message
     
    i sold out a big portion of my gold& silver nearly 7 months ago for $1308 fearing a further drop in value and bought property with it. I wasn't sure then if I made the right decision, but now property value has increased and gold & silver hasn't. This next year should be interesting. My gut feeling is arrows point down for gold & silver.
    14 Jul, 02:22 PM Reply Like
  • Debutant
    , contributor
    Comments (2177) | Send Message
     
    Haleiwahu,
    A similar situation here: I sold a significant part of my gold and bought real estate, both in local currency in an emerging market in 03/2013. The price of that particular property went up 20% in the past 6 months, with another 16% on the cards in the next 6 months (all in local currency).

     

    I'm keeping all my silver (a lot) and the remainder of my gold for a similar transaction or for strong appreciation of the metals, whichever may come first.

     

    Conclusion: Gold and silver have been good to me for decades, but I don't hesitate to pull the trigger and sell when better opportunities present themselves.
    14 Jul, 04:12 PM Reply Like
  • AntonioSonoQui
    , contributor
    Comments (193) | Send Message
     
    Why doesn't everybody just short gold, silver and the miners, after each and every run-up, and smile? I just don't understand it...
    14 Jul, 04:47 PM Reply Like
  • nooseah
    , contributor
    Comments (452) | Send Message
     
    As rubber duck suggested above, someone unloaded a huge chunk of paper gold at illiquid trading times. There isn't an ounce of real gold behind the slam-down and the timing is deliberate.

     

    If you believe in conspiracy theories this was a concerted attempt to take the wind out of gold's recent rally and more attempts will follow in the coming days.

     

    If you don't believe in conspiracies it was just one of the bullion banks trying to run a bunch of the Stops in place after the recent run-up in spec longs. Once the specs have been cleaned up the slam-downs should stop.
    14 Jul, 05:07 PM Reply Like
  • rubber duck
    , contributor
    Comments (194) | Send Message
     
    When you own physical you don't sweat these days. If they decide to bring the paper price down lower I might scrap together a few more of my paper dollars in exchange for the real thing.
    14 Jul, 10:19 PM Reply Like
  • Tas 2010
    , contributor
    Comments (256) | Send Message
     
    In my humble opinion, these slams are a sign of much needed physical gold. Yes, it seems counter intuitive, but think of it this way. As the price of gold rises, people around the world buy and hold in a rising market. As the price of gold falls, weak hands sell physical gold into the market. Conclusion, if you need physical gold, drop the price....
    14 Jul, 05:54 PM Reply Like
  • Paul Mosgovoy
    , contributor
    Comments (113) | Send Message
     
    Tas 2010,

     

    Interesting post.

     

    You may find the updates on gold at the following link useful to you as they mirror your thought process.

     

    http://bit.ly/1jn2V2A

     

    Regards,

     

    Paul
    14 Jul, 07:37 PM Reply Like
  • WRC_168
    , contributor
    Comments (89) | Send Message
     
    @Tas 2010,
    Yes, weak hand "Sell", but not physical gold because they don't have it in the first place.
    14 Jul, 09:28 PM Reply Like
  • bobzic
    , contributor
    Comments (75) | Send Message
     
    Barclays is often wrong. I am bullish on gold and silver.
    14 Jul, 08:33 PM Reply Like
  • Rusty Brown in Cda
    , contributor
    Comments (52) | Send Message
     
    "...a bottoming process has been ongoing since last spring, [i.e. spring 2013] believe it or not...Do not listen to the hype. The macro fundamentals have begun to improve for the gold sector and this will need to continue...There will be hysterical rises and challenging declines going forward, but sector fundamentals and support parameters will successfully guide us..."
    http://bit.ly/1mFxe4e [Feb 14 2014]
    Gary Tanashian of biiwii.com

     

    (Short article and well worth a read, if you ask me. Gary T. seems to have called it exactly right, way back in February of this year.)
    15 Jul, 04:42 AM Reply Like
  • Vegas Brit
    , contributor
    Comments (46) | Send Message
     
    How dumb do these guys think we are. Why is it that the sellers of paper gold sell at a time that is the least liquid. Do they do this to deliberately get a bad price !! No of course not. It's the banks selling (Naked shorts) they do not own. The objective is to have the biggest negative price impact when there is no liquidity and we all sleep. A 2% correction can only be generated by massive bets.

     

    Articles that say Asia is selling is BS. China, Russia and other countries are buying large quantities of gold. The USA leased all their gold. That’s why we told Germany we need 7 years to give back the gold.

     

    Last week there were lots of articles stating gold could be in for a period of being long. The suckers go long and the Banks naked short and take em all out (Stops activate and they all lose) to the individual investor a tuff lesson. Don’t bet against the banks and Fed that want us to believe dollars are better than silver and gold. We don’t have a real market.

     

    For all the neigh sayers . Tell the SEC to audit the banks and find out how much silver and gold they really own. It's impossible for the average guy to play this market in the short term. We buy physical gold as long term insurance to protect against the banking Ponzi scheme printing money and making it by magic.

     

    Go back and look at any silver ETF. Every time we get at large correction its always outside the normal trading hrs with no liquidity... That should be a RED FLAG for the SEC to investigate . We should all complain. This is a rigged market.
    15 Jul, 09:57 AM Reply Like
  • james.
    , contributor
    Comments (287) | Send Message
     
    I strongly recommend an outright purchase of NEM today, now that Mr. Joko Widodo has been elected the new President of Indonesia today by 53% of the vote cast. Why ? Mr. Joko Widodo is strongly pro-business, as he was a Business Man himself before being elected Governor of Jakarta in 2012; therefore, Mr. Joko Widodo will change the current law in Indonesia which caused NEM to institute a Force Majeure at its huge Copper Mine in Indonesia in early June 2014 on its Copper Concentrate Production in accordance with its CoW (Contract of Work) signed in 1986, and then file for Arbitration as per the NEM CoW. This Force Majeure allows NEM to pay its Indonesian Workers only 20% of their normal pay until the end of 2014 when all stored Copper Concentrate will have been shipped to the local Copper Refinery. This brilliant NEM Force Majeure will add approximately $0.10 EPS to the NEM Q3 and Q4 Earnings Reports. Look to it ! July 22, 2014 @ 10:52 a.m. PDT.
    22 Jul, 01:52 PM Reply Like
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