A number of reasons have been given for gold's (GLD) sudden free-fall, chief among them the...


A number of reasons have been given for gold's (GLD) sudden free-fall, chief among them the ECB's pressurization of Cyprus' central bank to sell its gold reserves to help pay for the country's bailout. That has raised expectations that other distressed eurozone members might be forced to sell gold as well. Other factors include bearish forecasts such as from Goldman Sachs, the slow improvement in the U.S. economy, and the perception that gold is no longer needed as a safe haven. Gold -4.1% and silver -7.4%.

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Comments (15)
  • Doug Eberhardt
    , contributor
    Comments (4773) | Send Message
     
    A number of reasons...but....

     

    I hope Seeking Alpha posts my article they just declined because they said I wrote too much about how I called this precious metals market almost perfectly the last year and a half, and they wanted "more current" analysis, which I did conclude with. I wrote them back asking them to reconsider, and if they don't approve the article, it will be available on my site and I will have to reconsider whether I want to write here any longer. Frustrating because what I write gold and silver investors need to hear.
    15 Apr 2013, 04:24 AM Reply Like
  • howard26
    , contributor
    Comments (261) | Send Message
     
    Doug,

     

    Just went to your site and read your article. It is not long and can't understand why you got flak over it.

     

    I have expected this drop for a while - just not all at once. Actually expect a further drop. I have my numbers in mind, but am new to some of the EW/Fib stuff. Hence I am eager to compare what folks who are more experienced and smarter in this stuff comes up with. Waiting for your all-in article soon!!

     

    Thanks.
    15 Apr 2013, 09:27 AM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (4773) | Send Message
     
    Thanks Howard. I expect a dead cat bounce and one more capitulation. Although, I don't see a problem with dollar cost averaging into an allocation for one's portfolio now. Takes price out of the equation.
    15 Apr 2013, 09:41 AM Reply Like
  • DaLatin
    , contributor
    Comments (1522) | Send Message
     
    Well, doesn't this play into the Central Bank(s) plans perfectly ! All but one were buying ! Now if Cyprus must sell an be an example for other troubled countries..

     

    This stinks to the high heavens ! The ECB knows exactly what G20 Central Banks are doing !!!!!

     

    How nice for the Central Banks to obtain there bullion at basement prices.. They are planning for a major event ! MAJOR ! Hmmmm what can that be !?

     

    Watch the money as follow the money is the key to financial life and I see the BRICS leading the way ! They stopped using the USD years back and recdently set up there own shadow bank !

     

    This allows them to service many other countries without using the USD.. And, China is seeing their YUAN climb despite their efforts to stop it. They are setting up offshore exchanges to handle the 24 swap agreements they have signed..They also have forced the IMF to use SDR 8s in bulk over the SDR 4s.

     

    Sec Geitner told us that the oral agreement he had with the IMF an other cartels was 20 years ! Not going to happen. China an other BRICS have invested more in private US paper and are getting ready !

     

    Most all Central Banks look out 5 years and what a wonderful chance to grab as much gold bullion at a great price an be ready for an event as gigantic as a Reserve drop ! tic tic tic

     

    5 years tips if Fed Ben doesn't stop
    15 Apr 2013, 04:48 AM Reply Like
  • contrarianadvisor
    , contributor
    Comments (3023) | Send Message
     
    Gold is down on deflation fears. The breakdown in gold and silver is a sign that a global bust is near at hand. Copper, gold and the rest of the commodity complex are poised to break down as well. Rumors of Cyprus that the central bank there will have to liquidate much of its holdings are the trigger but the story is deflation.
    15 Apr 2013, 06:21 AM Reply Like
  • contrarianadvisor
    , contributor
    Comments (3023) | Send Message
     
    I meant to say copper, oil and the rest of the commodity complex are poised to breakdown as well. Equities won't be far behind. A deflationary bust is very close at hand.
    15 Apr 2013, 07:55 AM Reply Like
  • Swisser999
    , contributor
    Comments (143) | Send Message
     
    I am backing up the silver truck today! Beep...beep...beep
    15 Apr 2013, 08:47 AM Reply Like
  • philais
    , contributor
    Comments (193) | Send Message
     
    Problem is prices are low but so is the inventory of silver and gold from Tulving and Apmex and all the others.....We may want to buy but it ain't there.....
    15 Apr 2013, 09:24 AM Reply Like
  • whaddyamean?
    , contributor
    Comments (498) | Send Message
     
    Two thousand years of human history tells us that gold offers the ultimate insurance against governments and bad weather. So, I'll wait out the dip and look for blood running in the streets, when history also tells us that it will be time to buy GLD again. Meanwhile....patience....
    15 Apr 2013, 09:39 AM Reply Like
  • contrarianadvisor
    , contributor
    Comments (3023) | Send Message
     
    Supply will far outstrip demand in the precious metals and most of the commodity complex in coming days and weeks. There is a lot more selling to come. My target on gold has been and continues to be $1000 and for silver $13. Copper is headed for $1.50 and oil, $40. We are talking a global bust here and a huge reversal in commodity prices. The stock market is just another place where supply will far outstrip demand once the reality hits that we are heading for a global deflationary bust. My downside target for the S&P is 500. The speed with which the equity markets decline will cause investors heads to spin.
    15 Apr 2013, 09:43 AM Reply Like
  • hummerh25
    , contributor
    Comments (99) | Send Message
     
    Well $1375. Is here. If you remember 1980 gold hit $850. and went to $250. Looks like the same story.
    I think you can look for $1000. Gold SOON.
    15 Apr 2013, 10:27 AM Reply Like
  • casper1918
    , contributor
    Comments (29) | Send Message
     
    I don't claim to be an expert in precious metals, nor do I have the psychic ability of some who can call when a market is going to rise or crash. All I do know from when I received my degree in economics 40 years ago is that gold and productive property are the only real things in this economy. Bernanke has assisted Obama by propping up the economy with printed/digitally created money creating the largest of all bubbles we have seen to date......the debt bubble. When this pops you will wish you had hard currency and a farm to grow your food. Nothing in this economy is doing well except for the stock market which we know is only being fueled by the FED's reckless actions. Corporate profits down, unemployment up, under employment up, the dollar has lost it's true value and all we can say is everyone else is doing worse. Not being the biggest loser still doesn't not make you a loser. Margin calls and governments forced to sell off gold is causing a temporary panic. Who knows how low gold can go........I sure don't. But I have framed on my wall a 100,000 Reichsmark from 1922 to remind me that paper money that year was burned as fuel to keep warm. Bet those Germans 90 years ago would loved to have had gold in their pockets.
    15 Apr 2013, 11:04 AM Reply Like
  • contrarianadvisor
    , contributor
    Comments (3023) | Send Message
     
    Casper, you might want to take a refresher course in economics. If and when the debt bubble bursts, it will be highly deflationary and gold prices will plummet with the values of all real assets, including farm land. We are imminently close to a deflationary bust, not the end of a super cycle bust but something worse than 2008. It will come with some involuntary liquidation and some major bank failures. Once it happens, maybe gold is a buy but not before. Gold has a good ways to go before it bottoms out. Could get a $50-$100 bounce given the big decline in the past week but I wouldn't touch it here. I have been targeting $1000 for the past six months and I'll stick with that number. Once the global deflationary bust hits, policymakers will be in "deer in the headlights" panic mode and we will likely see QE expand by an unbelievable $10 trillion or more as Bernanke and his associates try to stem a collapse. The stock market is putting in a generational top here that likely will not be exceeded for decades. What we've seen in gold & sliver in recent days is the kind of illiquidity we'll see in the equity markets once the herd all at once reacts to a reverse in momentum. Then we'll see a 65-70% drop in the averages in rather short order.
    15 Apr 2013, 12:34 PM Reply Like
  • turville
    , contributor
    Comments (70) | Send Message
     
    contrarianadvisor - i think you make some good points - some would say "scary" but i like some reality around a conversation.
    i live in Sydney which has become ludicrously expensive but we really have no inflation per se apart from the "grab for more pay" which is equally stupid. we are due for a significant correction in property prices etc but the demand is still there (low interest rates historically and reasonable availability of credit). i can see low interest rates globally for ages + deflation.

     

    As far as gold goes - trading live at $1336 having been down to 1324 earlier. As far as a "base" goes - can't argue with $1100 which might represent the real cost of production (all in cash cost) - maybe even a bit higher than that depending on which producing mine you look at.
    Silver has been as low as $22.08 - having gone through at least five levels of support in the last 24 hours. Silver has really been clobbered.
    Barrick (ABX) - down 65% in 12 months - unimaginable but real.
    As in all big pullbacks there will be absolute casualties (explorers who cannot continue and mines that will have to cease production). There will also be opportunities for cashed up miners or "smart new money" that has the sense to avoid the "real dogs".
    15 Apr 2013, 09:39 PM Reply Like
  • turville
    , contributor
    Comments (70) | Send Message
     
    I research mining/exploration projects under an extremely critical and exacting process. I hand back many projects on the basis of:

     

    1. People involved not satisfactory (skills and track record).
    2. Logsitics of project unresearched but generally poor.
    3. Ore quality marginal.
    4. High Capex to produce (Mine site/haulage/milling).
    5. Irresponsible spending of capital (insufficient in ground).
    6. Reprehensible treatment of shareholders (if a listed entity).

     

    Actually quite a simple process if you stick to the fundamentals and don't get too close to the people initially.
    15 Apr 2013, 09:44 PM Reply Like
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