The Price Of Gold Is Crashing. Here's Why

[brfsa2]

gold price is going up everyday is because you cannot print gold, but the government can print money paper. money paper "has no value" whatsoever.

also because thai baht is not backed by gold. no currency is as I'm aware.

in a decade you will see gold go up to 100,000 baht.

in 2000 I remember the gold being 3,000-4,000 baht.

If the technology discover ways to stops using gold for electronics, then yes, the gold price will be "reasonable"

[Naam]

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

DeepSea,

if i had time to waste i could present you (by copying and pasting from various websites and blogs) dozens of "reasonable explanations" backing up or undermining any view or opinion on Gold ranging from "only idiots hold gold" to "only idiots do not hold gold".

my personal view, concerning GATA et al (e.g. World Gold Council) is ²

but please keep in mind that my view is not necessarily correct!

[yoshiwara]

gold price hits lowest level in 30 years

= rubbish!

So true, complete BS

Most of my gold purchases were in the 300 to 400 USD range.

I was stupid enough to sell some of it for about 700 USD

Today after the "big crash" 1379.

What a laugh.

Some short time market manipulation by the big players to cash in.

Let the first North Korean rocket fly an wait what happens with the gold price.

Let the next Euro domino topple and wait what happens with the gold price.

One of the interesting observations one can make about the graph is that gold was a dead duck between 1980 and gone 2005. That's 25 years of failure to keep up with inflation and an appalling loss in real terms.

The second is that the current adjustment in the gold bubble might have a long ways to go.

Bottom line is that gold is not a place of safety but just another place to trade.

Anybody who has listened and acted on the gold bug hysteria the last 2 years are not very happy bunnies at all.

[Billmont]

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

Well done. The law of large numbers would state that eventually one of your inane posts would turn out to be correct, I guess it was that one!!

Hang on gents. Wait until January 2015 before you say he is right. By then gold could be at a record high, unlikely but possible. What is fairly definate is that gold will come back, at worst it will only keep pace with inflation, but in this world of unknowns it will only take one financial or military crisis to see gold rising as fast as the recent drop.

[brfsa2]

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

Well said, the US media is all about Disinformation

[Naam]

Anybody who has listened and acted on the gold bug hysteria the last 2 years are not very happy bunnies at all.

quite sad is the fact that that honest but naïve people were mentally pressured by charlatanes and wannabe know-it-alls to buy gold although they could not afford it.

evidence are a big part of the nearly 10,000 postings in Thaivisa thread "where is gold going in this market" with the repeated "buy gold, it can never go down".

http://www.thaivisa.com/forum/topic/218064-where-is-gold-going-in-this-market/

[gjwgjw]

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

Buys of gold this week have been 50 to 1 against sells

[gjwgjw]

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.

http://www.infiniteunknown.net/2013/04/15/dr-paul-craig-roberts-the-assault-on-gold-assault-on-gold-update/

[BrianCR]

Naam, on 17 Apr 2013 - 09:46, said:

Quote

gold price hits lowest level in 30 years

= rubbish!

I couldn't agree more with you - when I came here 33 years ago gold with a weight of 1/2 baht was selling for 4,500 baht and, more or less stayed around that price for many years. God! I've bought enough of it as presents to remember the price!

[Naam]

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

Well done. The law of large numbers would state that eventually one of your inane posts would turn out to be correct, I guess it was that one!!

Hang on gents. Wait until January 2015 before you say he is right. By then gold could be at a record high, unlikely but possible. What is fairly definate is that gold will come back, at worst it will only keep pace with inflation, but in this world of unknowns it will only take one financial or military crisis to see gold rising as fast as the recent drop.

here we go! the usual BS goes on "just wait... time will tell... if not tomorrow then next week, next month, next year, next rebirth" with "intelligent" reasons added "it only takes... if x equals y... those who bougt gold in 1973... it's the conspiracy dummy... if only my Granny had left me gold instead of old furniture."

the same sermon i heard for 20 long years after the 1980 gold crash whilst during these 20 years some of the poor buggers who held on to their gold and who believed in this BS starved to death.

oh well...

[Naam]

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

Buys of gold this week have been 50 to 1 against sells

clear evidence for this claim is the economic fundamental "buying depresses prices, selling increases prices!"

[midas]

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...

“ Fractional Reserve Gold “... ,,,,Yes and these kinds of allegations seem to be cropping up more and more right across the world of finance

[hay2u2]

Are these figures from the same Jp Morgan who are lying cheating bankers that screw their own customers? The same ones that collude with the likes of Goldman Sachs (who exist for their own benefit, by their own admission to rob their clients) .The same Jp Moprgan that also deal in gold bullion themselves and have a vested interest in the gold price? You bet they are.

People are selling gold certificates, but the ones buying real gold cannot get enough...especially at these prices.

[khunken]

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.

http://www.infiniteunknown.net/2013/04/15/dr-paul-craig-roberts-the-assault-on-gold-assault-on-gold-update/

That link is just more of the same rubbish. It's just conjecture & rumour.

The Op seems to be of the same low quality. It says low inflation is the main cause. If it is, & it's a minor contributor at best, why the sudden 2-day drop? Certainly rumour played a part & the possible sell off by Cyprus & maybe others was a major factor.

I suspect a buying opportunity has occurred & if I has some spare funds, I'd buy some.

I could be wrong too.

[Psych01]

I am going to buy more Thai gold as there is more here in Thailand according to this: http://www.thaivisa.com/forum/topic/629954-loei-could-yield-1-million-tonnes-of-gold/, if that is the case quids in at these low prices.

I wander if JPM Organ know about this hoard?

Edited April 17, 2013 by Psych01

[apetley]

So I now wonder where to invest. Even my gold has suddenly lost a lot of value. My USD and Euros are also worth nothing. Seems like the end of luxury life !

relax!

-let your wife take up a job,

-sell all the slave girls you have,

-tell your mia noi austerity measures apply,

-switch from lobster, caviar and champagne to fried rice (no eggs!), som tam and tap water,

-sell all iPhones (including the old models) your family members have acquired,

-convert your Bentley and Ferrari from gasoline to liquified natural gas,

-train your dogs to hunt for their food and steal from them.

if you need more advice, let me know.

Great advice. You should be on Doomsdaypreppers :-)

[Misterwhisper]

gold price hits lowest level in 30 years

= rubbish!

I agree. Absolute rubbish and misleading. Gold only started to rally steadily in late 2008. Until then the price per ounce had been lingering around the $830 mark for years on end. I think what the writer wanted to convey that gold experienced the largest two-day slump in 30 years, which would be true.

I also agree with another poster (IMA_FARANG) that gold is grossly over-sold, thus over-priced, at current levels, although I do not share his reasoning for that. I mean, just a while ago (last September, I think) gold topped out at close to $2,000 per ounce (appox. 31 GRAMS), which was absurd.

[CBinParadise]

Which could mean we are in the "Bull trap" and will see a slight surge before a huge plummet;

Let watch what happens...

The phases in the OP's chart are meaningless absent some argument/data showing their validity. Same goes for the curve itself. Without some concrete anchor + scale + argument we could be anywhere on the curve, not just at the points that are noted in red in the OP.

So let's take a look using actual data. Please note the "mean" line --- I think Dr. Rodrigue is confusing "mean" with "linear best match" --- no "mean" would be a straight line unless it were horizontal. In any event notice that the relative positions of the line and the actual price curve in both diagrams. It is clear that we are already in despair territory. I don't believe either Rodrigue's curve or mine supports any particular prediction.

On a much different (but related) theme, there may be evidence that the gold price is being manipulated. The London AM and PM price points are the work of the same general crowd that brought us LIBOR, for example.

<<< I tried to insert a jpg showing my chart --- but do not have the time/patience to screw around any further with TV's system. Go to kitco and look at the 10 year chart, then eyeball a linear match. CB >>>

Edited April 17, 2013 by CBinParadise

[petedk]

gold price hits lowest level in 30 years

= rubbish!

Agrred. I read this article this morning but didn't have time to reply.

Gold prices are still much higher now than just five years ago.

2007 695 dollars an ounce.

Edited April 17, 2013 by petedk

[a99az]

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.

Glad I have gold and not money in a Cypriot Bank

[Naam]

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/

it does not a matter whether an opinion or theory is accurate or not. an investor can bet and win against a manipulated or otherwise adverse market, nothing wrong with that because "no risk, no reward." but if he is betting the ranch instead of a calculated bet with just a part of his net asset value then he's a gambler.

[Psych01]

Whatever you do, in any investment, it does not matter unless you can ride the loss of the investment. Most investments only give you a real return after 5 years minimum, that is the basic law of any investment in anything. in a sales term peeks and trough, in investment terms gains or loss.

[Pinot]

Ye gods, there is so much misinformation here. Gold has always been a fear based investment.

This gold price plunge has been a reminder that fear-based assets can be just as risky as greed-based assets. Rising interest rates can eat away the value of your bond portfolio, inflation can erode your cash, and as for gold (or
bitcoins, for that matter), it can plunge in value literally overnight.

The obnoxious gold bugs here are sounding more and more silly as they try to defend their fear based investment as it rolls quickly downhill. $400 an ounce, $200 an ounce, when will they finally say, they was wrong? I suspect...never. Put savings to work in a productive manner. A 3% savings account in a Thai bank was always a safer investment than gold. You can double that return with some conservative investments.

[yoshiwara]

Gold is always the canary in the coal mine

Folks should forget their preconceived notions about worth & gold vs paper

overbought, oversold etc.

When you see something like this happen for no apparent reason you better take

a deep breath & grab onto to something. The canary is trying to tell you something

This is not about gold or bubbles that did not even yet exist

You would need to point to research indicating that. Or is it a pet theory?

That's so rich coming from YOU !

When have you EVER pointed to any link about ANYTHING to support your views ?

You only ever insult others and make totally meaningless remarks. A complete waste of space.

Maybe I should buy a canary. I do have subs to the FT and WSJ but they would be a trifle mainstream for you and others with limited understanding of economics. Edited April 17, 2013 by yoshiwara

[midas]

Ye gods, there is so much misinformation here. Gold has always been a fear based investment.

This gold price plunge has been a reminder that fear-based assets can be just as risky as greed-based assets. Rising interest rates can eat away the value of your bond portfolio, inflation can erode your cash, and as for gold (or

bitcoins, for that matter), it can plunge in value literally overnight.

The obnoxious gold bugs here are sounding more and more silly as they try to defend their fear based investment as it rolls quickly downhill. $400 an ounce, $200 an ounce, when will they finally say, they was wrong? I suspect...never. Put savings to work in a productive manner. A 3% savings account in a Thai bank was always a safer investment than gold. You can double that return with some conservative investments.

Well, at least you use the word “ was “ as opposed to “ is “ because the Cyprus

debacle should at least have taught us that no bank account is safe any more .

And dont talk about deposit gurantees because when the Ponzi gives way

people will see the banks are insolvent. Wait to see the outcome soon with the Irish banks.

And in New Zealand they don't even have a bank deposit guarantee scheme at all.

I believe that is the reason why some people will continue to keep owning gold in

preparation for when the next bank accounts are “Cyprus’d “. ( And I used “ when “ not “ if “ )

Edited April 17, 2013 by midas

[midas]

Gold is always the canary in the coal mine

Folks should forget their preconceived notions about worth & gold vs paper

overbought, oversold etc.

When you see something like this happen for no apparent reason you better take

a deep breath & grab onto to something. The canary is trying to tell you something

This is not about gold or bubbles that did not even yet exist

You would need to point to research indicating that. Or is it a pet theory?

That's so rich coming from YOU !

When have you EVER pointed to any link about ANYTHING to support your views ?

You only ever insult others and make totally meaningless remarks. A complete waste of space.

Maybe I should buy a canary. I do have subs to the FT and WSJ but they would be a trifle mainstream for you and others with limited understanding of economics.

Having subscriptions to FT and WSJ doesn't necessarily mean you have the

intellectual ability to understand them-and you prove that point

[watcharacters]

Full explanation here:

Gold Bubble Pop.

.

+ 1

[midas]

A question to the sceptics :-

If gold is such a useless and overpriced item, why does Germany have to wait SEVEN years to get its gold back?

[watcharacters]

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.

I don't own gold, and would never buy it. But the answer to your question is that it would still have value. People might not have money in your scenario, but you could still trade your gold for food, and other things. If everything falls apart, gold will be one of the few things that people will really value.

Yes, back to the cave and start all over again !

.

Yeah, I was wondering how thin and many shavings it takes to buy a loaf of bread.

[Andre0720]

Lots of good post here...

But one question, if someone can answer....

What happens to Thai gold shops that has millions of bahts worth of gold....

Now they have to sell at a very lower price...

Do they take a beating out of this??