I see gold has dropped over $100 in the last month

mrtom

I see gold has dropped over $100 in the last month.
I understand the Indian market which accounts for 50% of demand in in decline, however according to Max Kiser Russia & Chinia and central banks everywhere are buying all they can.
Couple this with the currency wars and QE hammering the value of fiat currency it appears counter intuitive that gold should be falling in value. What forces are at play?
thoughts welcome

euroboom13

"middle east oil "is at play
inflate gold
inflate oil
get the middle east drunk on false income
let prices return to moderate levels($80),by increasing western oil production(happening massively)...let propaganda on gold fall and price will decline ....

Put imf programs in action in bankrupt eastern states and sell off their assets(oil) and modernise the middle east..
Just a thought..
gold bugs and oil speculators will discredit this as conspircy ****e ....i`d call it "high finance"

Time will tell....

Cavehill Red

Gold hasn't dropped at all.
Paper gold has plummetted.
Try buying actual bullion for delivery and see what relevance the spot price of paper gold has.

mrtom

I use Goldprice.org to monitor the live gold spot prices on a daily basis and see it has decreased by $113 in the last 30 days.
http://www.goldprice.org/spot-gold.html

As for prices for “actual bullion delivery” I watch “goldbank.ie

http://goldbank.ie/index.php?option=com_virtuemart&Itemid=7

What am I missing?

odd1

its the markets are playing games again, drop down to flush out all the weaker holders and onwards and upwards. $1540 was been touted a few weeks ago by some heavywieghts as a good entry point, when the price was trying to break through $1700, i thought they were crazy at first, but hanging on to coat tails here and going with flow.

odd1

odd1 wrote: »

its the markets are playing games again, drop down to flush out all the weaker holders and onwards and upwards.

Yessir, the smart, ballsy guys are buying up gold right now.

Mahou

Rojomcdojo wrote: »

Yessir, the smart, ballsy guys are buying up gold right now.

If that´s a sarcastic attempt at saying gold is in a bubble please explain how. Don´t forget to mention the numerous central banks buying tonnes of gold and the current race to the bottom in currencies. Good man, thanks

Jim2007

There is one central bank with 450 billion in gold reserves based on 2005 prices that is selling... in 2012 it financed the deficit of the five biggest economies in the Euro zone...

moneymad

Jim2007 wrote: »

There is one central bank with 450 billion in gold reserves based on 2005 prices that is selling... in 2012 it financed the deficit of the five biggest economies in the Euro zone...

They're selling their gold?

martyoo

They're selling their gold?

Bringing it home


Link

moneymad

martyoo wrote: »

Bringing it home


Link

That's very old news. It's not their gold to sell. Your comment was very misleading.

martyoo

Your comment was very misleading.

I don't see how it was. It is their gold and they are bringing it home and it's not very old news.

moneymad

martyoo wrote: »

I don't see how it was. It is their gold and they are bringing it home and it's not very old news.

There is one central bank with 450 billion in gold reserves based on 2005 prices that is selling... in 2012 it financed the deficit of the five biggest economies in the Euro zone...

Nobody is selling gold. And yes it is old news. Weeks old.

jank

Can never understand why people are so obsessed with gold. There are tons of better investments out there than gold.

Jim2007

martyoo wrote: »

Bringing it home


Link

Wrong country!

Jim2007

moneymad wrote: »

They're selling their gold?

Yes they most certainly are! They started middle of last year in order to achieve a certain economic objective, first went the foreign currency reserves and now....

I've no interest in Gold, but I'm very interested in the impact they are having on certain industries...

delux

Can never understand why people are so obsessed with gold. There are tons of better investments out there than gold.

Think it's just when it outperforms the stock market that it attracts attention.
I remember something similar with crude oil back in 2006 or 2007 when it was making new highs and the boards were full of people looking to invest
I often wonder how many people lost their shirts in that.(i feel sorry for them)

daithi7

Good article on gold
http://www.economist.com/blogs/buttonwood/2013/02/gold-and-sterling

tony81

Mahou wrote: »

If that´s a sarcastic attempt at saying gold is in a bubble please explain how. Don´t forget to mention the numerous central banks buying tonnes of gold and the current race to the bottom in currencies. Good man, thanks

Sounds like a pop at Brendan O'Connor and his advice to buy property around the time of the property bubble busting.

I think what's going on now with financial markets is unprecedented. With the exception of the price of gold: it's worth what the markets are willing to pay for it (as it always has been).

jank

delux wrote: »

Think it's just when it outperforms the stock market that it attracts attention.I remember something similar with crude oil back in 2006 or 2007 when it was making new highs and the boards were full of people looking to invest
I often wonder how many people lost their shirts in that.(i feel sorry for them)

It may outperfom the stock market during periods of high voliativity but for reasonable periods of time say 10-25 years plus, stock markets win out.

Oil has a use, we use it for energy, it has an economic value. Gold is just a hedge against inflation. Nothing else. Its a very poor investment but a very small number of speculators can make some money out of it, hence the herd mentality we are seeing here. Note the difference between the two.

Mahou

It all depends on where you are coming from with gold.

As stated, gold is primarily a store of wealth. Some savers might see the value of their savings being eroded and put some money into gold.
Some might look at the longer term and come to the conclusion that things are going to go pear shaped and get out of cash and stocks and buy some physical coins or ingots
Some buy ETFs and play the short term game.

I expect plenty volatility as we go on, 50 dollar up and down days but when Bloomberg and CNBC tell me how bad gold is and that Soros has sold some GLD I tend to ignore it.

Roonbox

delux wrote: »

Think it's just when it outperforms the stock market that it attracts attention.
I remember something similar with crude oil back in 2006 or 2007 when it was making new highs and the boards were full of people looking to invest
I often wonder how many people lost their shirts in that.(i feel sorry for them)

The stock market is where it was 12 years ago, gold has been up every year for the last 12 years

jank

And that is exactly the reason why people shouldn't go near gold.

Roonbox

jank wrote: »

And that is exactly the reason why people shouldn't go near gold.

We'll have to agree to differ on that, although I wouldn't buy Gold today

Jim2007

Mahou wrote: »

As stated, gold is primarily a store of wealth. Some savers might see the value of their savings being eroded and put some money into gold.
Some might look at the longer term and come to the conclusion that things are going to go pear shaped and get out of cash and stocks and buy some physical coins or ingots
Some buy ETFs and play the short term game.

Not at all. In addition to the manufacturing process, the price of gold is driven by fear and greed. This means that the gold I buy today has very little to attach it to my purchasing power today versus the purchasing power I will have from the gold in say 10 years time. Thus for example if trends were to change in India and women were to favour precious stones over gold during that time it could have a major impact on the price of gold, since India women are estimated to own about 18,000 tones of gold!!!

Mahou

Jim2007 wrote: »

Not at all. In addition to the manufacturing process, the price of gold is driven by fear and greed. This means that the gold I buy today has very little to attach it to my purchasing power today versus the purchasing power I will have from the gold in say 10 years time. Thus for example if trends were to change in India and women were to favour precious stones over gold during that time it could have a major impact on the price of gold, since India women are estimated to own about

18,000 tones of gold!!!

Not at all what?

Fear and greed. A lack of trust in the current monetary system could be called fear. People sensibly want to protect themselves.
Greed? Speculators? Just like everywhere else, like the apple is going to a $1000 goons.

Fair enough gold dropped in the 80´s but a lot of people can´t see much of a future for the dollar. Some feel things are out of control and there is no way back with the ongoing printing of money and the massive debt to GDP rates. America´s debt is about $16 trillion. Japanese savers are down a fair bit since Abe took over and Sterling isn´t doing great either.

Purchasing power - In ten years time I´d doubt I´ll get a pint of guinness in Dublin for 4 euros...actually I´m not sure how much they are now but you get my idea.

Your India example is utterly useless.
The gold trend in India is a very very long one which ain´t going to change soon.

Where do you see gold going? How are the U.S. going to cut their debt?

willietherock

What could possibly go wrong buying gold after this massive runup?

Skr4wny

mrtom wrote: »

I see gold has dropped over $100 in the last month.
I understand the Indian market which accounts for 50% of demand in in decline, however according to Max Kiser Russia & Chinia and central banks everywhere are buying all they can.
Couple this with the currency wars and QE hammering the value of fiat currency it appears counter intuitive that gold should be falling in value. What forces are at play?
thoughts welcome

The decline in demand from India is due to the fact that gold prices have rocketed in rupee terms which is impacting their gold purchasing power.

On your other point, yes, China & Russia are buying up during the dips and that's what any sensible person would be doing from a personal investment point of view.

Gold will go up, it's guaranteed given the increase in the money supply all over the world. The million dollar question is when.

Fund managers concentrate on investing quarter to quarter and on that basis now is not a good time for them to invest as the price might be stagnant, but for a personal investment where you can sit on it for a few year until we have our next big crisis, it's a great investment.

Peope who rubbish gold as a personal investment are idiots who know nothing about the history of banking, currencies and financial markets.

The above said, the likes of Max Keiser are very sensationalist and it's unlikely these ridiculous increases they are on about will materialise, especially with paper gold muddying the waters but gold will most definitely break the $2000/oz barrier when the next crisis hits. That may for example be if the current dow bubble burst and money flies out of equities.

There's no easy money in life but gold is guaranteed safety which currencies, equitites and even bonds cannot give. I would also say Silver is a better investment than gold at the moment.

Skr4wny

willietherock wrote: »

What could possibly go wrong buying gold after this massive runup?

You do realise a graph showing the increase in the money supply would be far steeper than the rise of gold prices?

The next time you try to impress everyone with a graph at least be aware of the other contributing factors!

Skr4wny

jank wrote: »

It may outperfom the stock market during periods of high voliativity but for reasonable periods of time say 10-25 years plus, stock markets win out.

Oil has a use, we use it for energy, it has an economic value. Gold is just a hedge against inflation. Nothing else. Its a very poor investment but a very small number of speculators can make some money out of it, hence the herd mentality we are seeing here. Note the difference between the two.

Not many people make money on equities either, so despite them rising it's the same insititutions who are speculating on both equities and gold and making killings.

Gold is a hedge against the arse falling out of any number of things. In a time where the world economy is being propped up by money printing and spin I see gold as a pretty bullet proof safe haven.

As a personal investor putting money into equities now without a nice diversified safe bedrock of savings behind you is stupid and while compairing it to walking into Paddys Powers might be a bit extreme there are many similarities.

What do you invest in personally? Would equities be your preference? I see you mention oil. I've often thought about oil futures. I believe the minimum is 10000 barrells, but could be a good way to make money with not a massive amount of risk.

In harsh times it's all about incremental increases, making a killing brings with it too many risks.

willietherock

Skr4wny wrote: »

You do realise a graph showing the increase in the money supply would be far steeper than the rise of gold prices?

The next time you try to impress everyone with a graph at least be aware of the other contributing factors!

and of course this fact hasn't been discounted in the price of gold by the market because ...

Cute Hoor

Skr4wny wrote: »

Not many people make money on equities either, so despite them rising it's the same insititutions who are speculating on both equities and gold and making killings.

Some people do make money on equities though, and if you pick a basket of blue-chip companies across a variety of sectors, companies that you have a bit of knowledge about, and companies that produce products/services that are likely to stay in demand irrespective of what happens in the economic world, then you have a bit of a chance of making a few bob both in terms of annual dividend and share price appreciation.

Cute Hoor

willietherock wrote: »

What could possibly go wrong buying gold after this massive runup?

This time will be different!

Skr4wny

willietherock wrote: »

and of course this fact hasn't been discounted in the price of gold by the market because ...

When central banks start printing money as the Fed has been doing with QE and as other central banks around the world have also been doing, it's rare that the impact is immediately noticable.

Considering the fact that most of this money being printed is flying into the stockmarket the correction is most likely to happen when the stockmarket hits it's next bump in the road.

On CNBC lately they they talk about the same thing everyday, the disparity between the rising stockmarkets and the economic situation on the ground for average joe which is still bleak at best. Despite all the spin something has to give in the next 6 months to 2/3 years and that's when the money will come out of equities and go to the only bulletproof safehaven....precious metals.

The US monetary base has gone from circa 400billion in '94 to around $3trillion and counting given the Feds continued QE.

Based on that when the correction comes my prediction of gold breaking $2000/oz is quite realistic as the money supply will have increased even more since the gold high in September 2011.

In other news:

The BOE decided today not to pursue more QE.

Skr4wny

Cute Hoor wrote: »

Some people do make money on equities though, and if you pick a basket of blue-chip companies across a variety of sectors, companies that you have a bit of knowledge about, and companies that produce products/services that are likely to stay in demand irrespective of what happens in the economic world, then you have a bit of a chance of making a few bob both in terms of annual dividend and share price appreciation.

While you are technically correct, the best kind of correct ........the investment landscape has changed.

I used to have loads of BOI shares which I offloaded in 2006. A few years later they were worthless and they were considered blue chip. The problem now with the stockmarket is even if you have a good spread of blue chips shares to protect yourself against one hitting hard times if the markets in general hit a bad patch you will lose.

Again I suppose it goes back to my point in a previous thread. If you have a base of savings in gold/silver and some currency reserves then putting some money in equities can make sense but having an equities heavy investment approach in the current climate would not be at all prudent.

euroboom13

equities heavy investment approach in the current climate would not be at all prudent.[/QUOTE]


TIME WILL BE CRUEL TO THIS QUOTE(if said in 2006/v smart...2013v wrong)

gold has priced in to much qe already...2003 to 2013 price rocket.... now it's a gamble not a hedge.....

fed/ecb/boe/japan....all following same line..."inflate problems away"...and i can't see them changing this crazy policy...(gold is the decoy)

the big winners ...BANKS/BLUE CHIP EQUITIES...(previous losers)

the losers are our previous winners OIL and GOLD.....two twin bubbles...(30% drops on the way/at least)

Don't be mislead

.....what goes up must ...etc.. and viesa/versa

Only invest long term at the bottom of a cycle....never risk on highs

Skr4wny

I'm losing the will to live here people......

X=Unit of Gold
Y=Unit of Currency

When time began.....

X=Y

Then overtime.....through stupid monetary policy.....

2X=10Y

and further on in time

3X=100Y

While the money keeps printing, it's not mathematically possible for gold not to be worth more and have a correction at some point. Central banks from Russia, China, Kazakstan & Korea are still buying up pyhsical bullion. Korea bought just over $1bn in bullion a few days ago. Kazathstan & Russia are very smart pumping some of their oil money into bullion. Paper gold is keeping the price suppressed as fund managers are selling their investment as it's not making money quarter to quarter.

Gold may drop even to 13 or 14 hundred before it will then rise to over 2k/oz as I and lots of analysts who know more than all of us predict.

Look at history, we had QE during the oil crisis in the mid 70s, then gold spiked and after the spike it settled back, but to a higher average. This time the same has happened. The big difference this time is they are still printing money and in unbelieveable quantaties.

Gold long folks, it's the only way. If you can't see it your a bit special! :P

Roonbox

Skr4wny wrote: »

I'm losing the will to live here people......

X=Unit of Gold
Y=Unit of Currency

When time began.....

X=Y

Then overtime.....through stupid monetary policy.....

2X=10Y

and further on in time

3X=100Y

While the money keeps printing, it's not mathematically possible for gold not to be worth more and have a correction at some point. Central banks from Russia, China, Kazakstan & Korea are still buying up pyhsical bullion. Korea bought just over $1bn in bullion a few days ago. Kazathstan & Russia are very smart pumping some of their oil money into bullion. Paper gold is keeping the price suppressed as fund managers are selling their investment as it's not making money quarter to quarter.

Gold may drop even to 13 or 14 hundred before it will then rise to over 2k/oz as I and lots of analysts who know more than all of us predict.

Look at history, we had QE during the oil crisis in the mid 70s, then gold spiked and after the spike it settled back, but to a higher average. This time the same has happened. The big difference this time is they are still printing money and in unbelieveable quantaties.

Gold long folks, it's the only way. If you can't see it your a bit special! :P

I'm actually in the same camp as you but you'd do well to keep the insults at bay. I've never known an investor/trader be right every time ever. There's always another side to the trade, that's how markets work. Having a huge amount of conviction on a trade usually leads to people looking foolish.

You are correct over the long term.

euroboom13

Skr4wny wrote: »

I'm losing the will to live here people......

X=Unit of Gold
Y=Unit of Currency

When time began.....

X=Y

Then overtime.....through stupid monetary policy.....

2X=10Y

and further on in time


3X=100Y

While the money keeps printing, it's not mathematically possible for gold not to be worth more and have a correction at some point. Central banks from Russia, China, Kazakstan & Korea are still buying up pyhsical bullion. Korea bought just over $1bn in bullion a few days ago. Kazathstan & Russia are very smart pumping some of their oil money into bullion. Paper gold is keeping the price suppressed as fund managers are selling their investment as it's not making money quarter to quarter.

Gold may drop even to 13 or 14 hundred before it will then rise to over 2k/oz as I and lots of analysts who know more than all of us predict.

Look at history, we had QE during the oil crisis in the mid 70s, then gold spiked and after the spike it settled back, but to a higher average. This time the same has happened. The big difference this time is they are still printing money and in unbelieveable quantaties.

Gold long folks, it's the only way. If you can't see it your a bit special! :P

X=y yes but
gold has increase at least x4 since 2003 (gordon brown)
monetary policy is only catching up..... to correct x=y....and falling gold is meeting it halfway
be very carefull is all i say!!
i would be very careful in trying to predict accurately whom(nations) has the gold!!
good luck.......and i wont say simple...nothing's simple about whats happening now...

Cute Hoor

I wonder did anybody buy gold at $1,791.75 on 4th October last, they'd be down 12% on their investment, only a question of time before it goes shooting back up of course, them ruskies are getting it for half nothin now.

euroboom13

must set up a" buy used gold shop"
if only i had the time between watching...gold diggers...gold divers...jungle gold...
if hoffmans can make a lliving out of gold between breakdowns,praying,fighting and hugging out,it must be a $$ to pricey

oh i wish a was born smart...up again or down.....

can't decide bruce!!

Dont care if i'm wrong ....gold stinks of something....not always...seldom...but now ....STINKS:mad:......8/3/2013pong....

Love gold, but not today or this year.

Cavehill Red

The euro's just hit the skids in Cyprus, Osborne's bet sterling's future on reinflating the British property market, and the dollar is on perma-print.
I love gold too, and definitely this year, primarily because safe havens are at a premium when an entire flock of black swans come in for landing.

Skr4wny

Cavehill Red wrote: »

The euro's just hit the skids in Cyprus, Osborne's bet sterling's future on reinflating the British property market, and the dollar is on perma-print.
I love gold too, and definitely this year, primarily because safe havens are at a premium when an entire flock of black swans come in for landing.

Eloquently put and true. In addition to all the above Citigroup and Nomura have both said Portugal will need a second bail out and I personally think that may be one of the next big triggers if we make it through Cyprus and Italy put a government together. There's so many obstacles and moving pieces, a crash of some form or another is inevitable.

euroboom13

what interesting times......hope not to many got fubarbed...
Goldbugs didnt want to hear tell .....fall only starting ............GOLD down OIL down ....ALL HAPPENING NOW.....

back equities thats where the printing presses money is heading ,gold pull back was the TRAP

Roonbox

euroboom13 wrote: »

what interesting times......hope not to many got fubarbed...
Goldbugs didnt want to hear tell .....fall only starting ............GOLD down OIL down ....ALL HAPPENING NOW.....

back equities thats where the printing presses money is heading ,gold pull back was the TRAP

Commodities lead the liquidation in 2008 and bottomed 4 months before stocks, I would rather be in Commodities (esp Silver and Gold) than US equities now.

euroboom13

go for broke.....

fed taking out risk...supporting equities....commodities doomed...for now..

gold/oil/silver....heading south...with or without you ...you decide

Skr4wny

It's been an amazing few days. Gold is getting it's final shakedown and in the next week or two will be bottomed out I reckon. That's when it's time to start really agressively acquiring it. I'm just keen to see if $1300 will be the bottom or if the etf's will manage to drag closer to the $1000.

Anyone who has been buying under $1600/1700 will be fine if they sit on it because it will go past that again. The fundamentals remain unchanged. I still see it breaking $2000 in the next 2/3 years.

My only fear is that everytime they bail out another eurozone country they will make them sell their gold thus continually supressing the price and breaking the one barometer of economic health. It could be a good ruse to disable it.

hmmm

Skr4wny wrote: »

The fundamentals remain unchanged.

Fundamentals? Gold? I'm afraid you are mixing gold up with some useful commodity that doesn't rely on a huge speculative value. It's a shiny metal that has some industrial use, some jewelry use and a massive premium that people pay based on something that I've never been able to make sense of.

My only fear is that everytime they bail out another eurozone country they will make them sell their gold thus continually supressing the price and breaking the one barometer of economic health. It could be a good ruse to disable it.

The conspiracy theories are out in force tonight. What would "they" have to gain from this?

Roonbox

hmmm wrote: »

Fundamentals? Gold? I'm afraid you are mixing gold up with some useful commodity that doesn't rely on a huge speculative value. It's a shiny metal that has some industrial use, some jewelry use and a massive premium that people pay based on something that I've never been able to make sense of.

Many see it as a hedge against rampant inflation.

euroboom13

one thing rampant the past 10yrs is gold(x4)...we would need 10%+ inflation for alot of yrs to catch up.....hence correction .........rampant gold propaganda ......

Roonbox

euroboom13 wrote: »

one thing rampant the past 10yrs is gold(x4)...we would need 10%+ inflation for alot of yrs to catch up.....hence correction .........rampant gold propaganda ......

You are ignoring the 20 years before that where gold went sideways and the SnP went up 1500%