The Price Of Gold Is Crashing. Here's Why

[Suradit69]

One of the reasons that the sell off accelerated was because most of the large positions were heavily leveraged and when those funds got hit with margin calls that they couldn't meet or were forced into liquidation, the fall gained momentum. In fact insiders have said that it was known that one holder was already in deep doo-doo, so the bears increased their short selling to wipe him/them out. Lovely people in the precious metals biz.

At any rate, the buy-low-sell-high mantra still holds and if you have a longer term perspective it MAY be a buying opportunity. In the short term it will undoubtedly be volatile ... and physical is probably better than the ETFs and either is better than bit coins.

"Baron Rothschild, an 18th century British nobleman and member of the Rothschild banking family, is credited with saying that "The time to buy is when there's blood in the streets."

He should know. Rothschild made a fortune buying in the panic that followed the Battle of Waterloo against Napoleon. But that's not the whole story. The original quote is believed to be "Buy when there's blood in the streets, even if the blood is your own."

Edited April 17, 2013 by Suradit69

[belg]

does anyone believe those market manipulators? they sure were the first to sell most of their crap bonds and funds before the market collapsed

all those people that were made to believe the price could only go up, i remember a few months ago in the gold shops

and now the shops were full again with people in panic

[canuckamuck]

Gold hasn't lost value, their just having a sale.

[DeepSea]

Hi Naam,

Not replying to your post to provoke you or in response to anything you have said, only because you seem to be a fairly reasoned thinker when it comes to the subject of investing and other matters financial, so to my point...

Of course JP Morgan (cited as the source explaining 'why' the Gold price has plummeted), as a thoroughly respectable financial institution, has no vested interest in manipulating/depressing the price of precious metals (do they have an unsustainable silver short position anybody?).

Looking at the facts (sorry I'm old fashioned) and setting conventional wisdom aside for a moment, how about taking a look at the post on GATA's website, which suggests a more reasonable explanation for this turn of events (far be it for me to suggest that powerful banking institutions collude in any way, perish the thought). http://www.gata.org/node/12456

[horsewell]

No matter what anyone thinks now... we just have to wait and see. If Gold goes to 200 or 300 USD I will be buying a few kilos ;-) Even if doesn't increase again, I'm sure I can hand it out to future girlfriends to much delight!

[Suradit69]

Gold hasn't lost value, their just having a sale.

Exactly. Warren Buffett isn't a fan of gold, but what he's said about stocks can be extended to precious metals as well:

"Long ago, Ben Graham taught me [buffett] that “Price is what you pay; value is what you get.” Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down. "

"Warren Buffett has said that stocks are the only things people don’t want when they are cheaper. If cars, hamburgers, real estate, perfume, gourmet coffee, furniture, clothing, concert tickets, or televisions go on sale, you’ll see people lining up outside of the stores at 3 a.m. to be first in line to save money. But if the market goes south and shares of companies ...drop in price, they not only refuse to line up to buy more, they often bottleneck at the door in a panicked effort to sell. Ten years pass and then they wonder why those who have patiently stayed the course are able to retire sooner and spend more on the things they enjoy."

No matter what anyone thinks now... we just have to wait and see. If Gold goes to 200 or 300 USD I will be buying a few kilos ;-) Even if doesn't increase again, I'm sure I can hand it out to future girlfriends to much delight!

About 1/3 of gold miners have costs of $1250 to $1750 per oz to get the gold out of the ground and the rest have costs from $450 to $850. The average cost for silver producers is in the $22 to $24 range

If prices stay below costs, production will fall and some of the marginal miners won't reopen later. Not saying it can't happen, but supply/demand pricing has two components.

Edited April 17, 2013 by Suradit69

[HerbalEd]

Gold is oversold, it's price is too high.

It's time for a readjustment to reality for Gold prices.

The "Gold Freaks" who have been preaching the "Buy Gold now" religion never did answer my sarcastic question which always was this:

"If everything falls apart, and there is no one with any money to buy your Gold, can you eat it"?

"How many calories are there in a bar of Gold"?

But don't worry, it's a readjustment of overpricd Gold, not the end of the world.

You can't eat money either, so if, as you say, "everything falls apart" I'd rather have gold in hand that paper money. And if indeed there is a total collapse I fortunately have a farm and the skills to grow food and medicinal plants, and to make and use herbal medicine. But then I'll need the resources, skills and balls to defend that from those who'd try to forcibly take it from me. I don't think this scenario will actually happen, but ....

[KimoMax]

Sold all of my holdings yesterday.

Made a profit from what I had bought it for.

Holding the funds instead until the roller coaster gold ride is over.

Will see where prices settle, and proceed from there if it was a good gamble or not on my part.

But I am still ahead of the game by selling in case things tumble further.

If prices increase to where they were and remain stable, will just have to buy less gold and less % of my speculative funds.

Edited April 17, 2013 by KimoMax

[OKF]

Gold always has had a value and will always have a value. There also is some fascination with it so there is some psychological thing to it as well. Anyway when you talk to people that have been through WW2 here in Germany u get a better understanding of it that only people that had property, silver, gold and valuable belongings could start easy after the war. Also during the hard times to the end of the war and after it did ease their lives. However I think gold should be seen as a hedging instrument and not so much for speculation. If you live in a Eurozone or USD zone it maybe worthwhile to hold this against ur cash. Only buy when u have acces money and never buy for speculation because we all sit in the backrow and can never guess where the market turns because it is heavily influenced. It is a kown secret that governments try to suppress the gold price because they have not interest in high gold prices as this means people loose trust in paper money. Also once u understand how paper money works and is 'created' most people would be shocked and disgusted. It is quite a complicted construction. Paper one day may come back to its value which is nothing. Loads of problems still with the financial sector, no probs solved in Europe and not in US either. The slow erosion in the western world does continue and will continue and there is many signs of it. That decline cannot be stopped anymore I believe. Buy gold and also silver when it comes down, maybe one day in particular silber maybe helpful to buy some bread at least here in Europe.

[upena]

With the drop, people will start selling causing the prices to drop even more. It is a time to buy.

[HerbalEd]

gold price hits lowest level in 30 years

= rubbish!

Can you give us specific details why that is rubbish? Has the price indeed been lower in past 30 years?

[HerbalEd]

RT @RichardBarrow: 9:40am Long queues outside gold shops in Bangkok's Chinatown as gold prices drop by ฿2,350 (Pic @Wootthinan) http://twitter.com/Wootthinan/status/324351973656764417/photo/1

Are they selling or buying? I'm definitely buying.

[MobileContent]

gold price hits lowest level in 30 years

= rubbish!

Can you give us specific details why that is rubbish? Has the price indeed been lower in past 30 years?

I remember buying a few Baht Gold at around 7,000 - 10,000 Baht per Baht in the middle of the 90's

[HerbalEd]

Okay I'm sorry I need to gloat........I posted on the Gold thread over a year ago that the price of Gold would be $1250 by January 1 2015. It was a lemmings market, and now it's adjusting to reality.

Personally I still think $1250 is too high, but we'll see.

http://www.thaivisa.com/forum/topic/218064-where-is-gold-going-in-this-market/?view=findpost&p=5045576

Jan. 2015 is a ways off. Maybe you should wait until then to gloat.

[Lobber]

I remember seeing some Gold futures "expert " on Thai TV a few months ago saying gold was the thing to buy and that mid 2013 it would be around 2000 $ you should invest !!!.......well what an expert, non of the "experts" know whats going on.. just the "chosen few" !!!!!!

BYW how long before the Thai gold market starts to manipulate things so the "chosen few" don't loose too much !!

[gjwgjw]

What a load of crap! the federal reserve is manipulating the gold and silver market to support a weakening dollar and trying to prevent a run from paper to gold.http://www.infiniteunknown.net/2013/04/15/dr-paul-craig-roberts-the-assault-on-gold-assault-on-gold-update/

[HerbalEd]

I remember seeing some Gold futures "expert " on Thai TV a few months ago saying gold was the thing to buy and that mid 2013 it would be around 2000 $ you should invest !!!.......well what an expert, non of the "experts" know whats going on.. just the "chosen few" !!!!!!

BYW how long before the Thai gold market starts to manipulate things so the "chosen few" don't loose too much !!

How can one believe the "experts" when you see two of them on Bloomberg or CNBC ... both with MBA's, impeccable credentials, and many years in the business, and both very well respected ... and each having diametrically opposed opinions? Obviously both of them can't be correct ... so which one do we believe??

[55Jay]

I remember seeing some Gold futures "expert " on Thai TV a few months ago saying gold was the thing to buy and that mid 2013 it would be around 2000 $ you should invest !!!.......well what an expert, non of the "experts" know whats going on.. just the "chosen few" !!!!!!

BYW how long before the Thai gold market starts to manipulate things so the "chosen few" don't loose too much !!

Do the opposite of what any expert on TV says.

[Joe Mamma]

Let's see, countries printing lots of their currency to flood the market, they buy gold with the printed money to reserves. Panicked people selling stocks and cashing in bonds and property investments and converting it to gold, big and little guys collecting up all the shiney stuff. And people are shocked when the sell-outs happen and people re-invest in non gold vestments and the price drops and causes reverse panic and major losses! Gold loves tough times and now things are softening up.

[gjwgjw]

I remember seeing some Gold futures "expert " on Thai TV a few months ago saying gold was the thing to buy and that mid 2013 it would be around 2000 $ you should invest !!!.......well what an expert, non of the "experts" know whats going on.. just the "chosen few" !!!!!!

BYW how long before the Thai gold market starts to manipulate things so the "chosen few" don't loose too much !!

How can one believe the "experts" when you see two of them on Bloomberg or CNBC ... both with MBA's, impeccable credentials, and many years in the business, and both very well respected ... and each having diametrically opposed opinions? Obviously both of them can't be correct ... so which one do we believe??

don't believe a word the main stream media or Bloomberg publishes about anything, would be a good start, their agenda is not about information but disinformation and these experts are only respected amongst their peers who are equally miss informed

[PhyllisStein]

Goldbugs are selling? Hardly: this 10 min vid is worth viewing especially for those who think gold is overpriced still. The chart KunMatt is a good one, but I have seen a presentation in the last six months that puts us squarely in the early part of the third section (Public awareness) as the central banks have been (and still are) buying. In the video the stats for real gold purchases versus paper gold derivatives should encourage anyone holding the 'barbarous relic'. I bought a few baht more today...

[yoshiwara]

I remember seeing some Gold futures "expert " on Thai TV a few months ago saying gold was the thing to buy and that mid 2013 it would be around 2000 $ you should invest !!!.......well what an expert, non of the "experts" know whats going on.. just the "chosen few" !!!!!!

BYW how long before the Thai gold market starts to manipulate things so the "chosen few" don't loose too much !!

How can one believe the "experts" when you see two of them on Bloomberg or CNBC ... both with MBA's, impeccable credentials, and many years in the business, and both very well respected ... and each having diametrically opposed opinions? Obviously both of them can't be correct ... so which one do we believe??

don't believe a word the main stream media or Bloomberg publishes about anything, would be a good start, their agenda is not about information but disinformation and these experts are only respected amongst their peers who are equally miss informed

That's right. In the real world of the loony-tune websites, gold is going up and has been for 2 years now.

[gjwgjw]

Hi Naam,

Not replying to your post to provoke you or in response to anything you have said, only because you seem to be a fairly reasoned thinker when it comes to the subject of investing and other matters financial, so to my point...

Of course JP Morgan (cited as the source explaining 'why' the Gold price has plummeted), as a thoroughly respectable financial institution, has no vested interest in manipulating/depressing the price of precious metals (do they have an unsustainable silver short position anybody?).

Looking at the facts (sorry I'm old fashioned) and setting conventional wisdom aside for a moment, how about taking a look at the post on GATA's website, which suggests a more reasonable explanation for this turn of events (far be it for me to suggest that powerful banking institutions collude in any way, perish the thought). http://www.gata.org/node/12456

Take a look at this article I believe its pretty accurate http://www.infiniteunknown.net/2013/04/15/dr-paul-craig-roberts-the-assault-on-gold-assault-on-gold-update/

[Joe Mamma]

I'm a platinum man myself, strategic and scientific uses waiting to be discovered!

[gjwgjw]

I remember seeing some Gold futures "expert " on Thai TV a few months ago saying gold was the thing to buy and that mid 2013 it would be around 2000 $ you should invest !!!.......well what an expert, non of the "experts" know whats going on.. just the "chosen few" !!!!!!

BYW how long before the Thai gold market starts to manipulate things so the "chosen few" don't loose too much !!

How can one believe the "experts" when you see two of them on Bloomberg or CNBC ... both with MBA's, impeccable credentials, and many years in the business, and both very well respected ... and each having diametrically opposed opinions? Obviously both of them can't be correct ... so which one do we believe??

don't believe a word the main stream media or Bloomberg publishes about anything, would be a good start, their agenda is not about information but disinformation and these experts are only respected amongst their peers who are equally miss informed

That's right. In the real world of the loony-tune websites, gold is going up and has been for 2 years now.

gold has not gone anywhere for the last two years because of naked short selling on the paper gold market,

by the fedral reserve to prevent a run from the US dollar to bullion

[HerbalEd]

I remember seeing some Gold futures "expert " on Thai TV a few months ago saying gold was the thing to buy and that mid 2013 it would be around 2000 $ you should invest !!!.......well what an expert, non of the "experts" know whats going on.. just the "chosen few" !!!!!!

BYW how long before the Thai gold market starts to manipulate things so the "chosen few" don't loose too much !!

How can one believe the "experts" when you see two of them on Bloomberg or CNBC ... both with MBA's, impeccable credentials, and many years in the business, and both very well respected ... and each having diametrically opposed opinions? Obviously both of them can't be correct ... so which one do we believe??

don't believe a word the main stream media or Bloomberg publishes about anything, would be a good start, their agenda is not about information but disinformation and these experts are only respected amongst their peers who are equally miss informed

That was my point.

[HerbalEd]

I'm a platinum man myself, strategic and scientific uses waiting to be discovered!

Platinum is used in catalytic converters which is why they're being stolen from underneath cars.

[carib102]

gold price hits lowest level in 30 years

= rubbish!

Just poor journalism. What was meant is that gold suffered its worst single session decline in 30 years on a percentage basis. It is nowhere near its lowest levels of 30 years and anyone who believes that tripe has no business speculating in gold. And anyone who wrote that has no business reporting on the financial sector.

[Stjohnm]

gold price hits lowest level in 30 years = rubbish!

Not quite rubbish, it has dropped off quite a bit recently

Sent from my iPhone using ThaiVisa app

[yoshiwara]

gold has not gone anywhere for the last two years because of naked short selling on the paper gold market,

by the fedral reserve to prevent a run from the US dollar to bullion

Best unhinged posting of the week so far.