Skip to comments.Gold drop hammers commodity producers ~~ gold off more than $90 an ounce over two days,....
Posted on 03/20/2008 9:36:43 AM PDT by Ernest_at_the_Beach
Technical analysts at Credit Suisse suggested gold futures may test the $896 to $900 level an ounce, with the next support coming in at $876 to $880.
(Excerpt) Read more at marketwatch.com ...
oil down similarly, and the dollar is bouncing off the lows. Looks like there were bubbles in places other than Real Estate
Should I really feel the pain for the owner of a GOLD MINE?
We are not at the bottom yet. While everyone keeps looking at liquidity, foreclosures etc, the economy is heading to recession and the tool normally available to curb recessions (the lowering of interest rates) is off the table (unless the feds want the dollar to be worthless). Remember what happened to Japan when they, in the late 80's, were in the same boat we're in. They had a 10 year span with no economic growth.
Platinum was fluctuating wildly last week, plenty of warning. Nobody was caught off base by this sudden drop.
I think we are seeing a rotation of commodities and into financials.
You may be right. I was at a local jewelry store (the guy also buys and sells gold and coins) recently. The owner and I were discussing the price of gold. He speculated that the bottom would arrive soon because all sorts of people were wandering in wanting to buy gold coins.
He pointed out that in the post this activity invariably occurred just before the bottom. He also said the smart people were the ones coming in to sell gold.
We can hope :)
When that occurs, watch for a mad rush of home buying from those investors/buyers that have been sitting on the sidelines that have been waiting to purchase.
When that happens, well, we all know what direction the home prices will go.
It's going to happen...Just a matter of when.
Oh and by the way, they just shot down that project to build 5000 homes up near Santa Clarita Ca.
looks like it’s time to go sell the silver ... that was bought at 4 :)
We get conflicting reports. Gold is dropping; the dollar is dropping so buy gold. News is more about advertising to work on people’s fears for the simple reason to get people to move money from one account to another. This way the hustlers free the flow of money so they can grab some for themselves. The older I get, the more cons I see.
You mean to tell me that the Fed isn't going to bail out commodities traders if the bubble has burst?
The Gold Train is derailing!
The commodity bubbles are finally popping as well? Guess the bigger fool can’t show up for ever.
IBs selling off commodities to raise cash?
Good luck with that one.
Yeah, a 400% gain is always nice. But hurry - silver is falling faster than gold.
Gold is never worth zero! I’m sure that’s a comfort to those who bought gold when it was $90 higher than it is today.
The unreported component of the commodity market run ups is the manner in which credit is extended to hedge funds to get in — No more than 25% of the actual contract price needs to be paid for the contract (sounds like the mortgage bubble to anyone else). 4:1 leverage on items going inflationary due to weak dollar policy is nothing short of free money and big money investors have been moving all-in at the expense of end-users.
In the UK news yesterday, trading firms have been changing terms on contracts the last couple days, right on the heels of collapsing leverage plays like the mortgage scheme put together by Bear Stearns. I just read this morning that trading firm in the UK are moving toward requiring 90% down terms on contracts, in a move that will hopefully shake out quite a bit of hedge fund play in the commodity markets. My feeling is that a lot of the boom of commodities has been boosted by nonexistent money creating artificial demand. By requiring that investors actually pay for investments, the firms can protect themselves in the face of maturing contracts - and hopefully some semblance of order will return to the markets.
Not the time to sell.
Time to back up the truck to the loading dock.
We’ve been buying gold every month for the past couple of years. Yeah, the couple hundred dollars worth from last month sting...but the several thousand from 2006 still feel pretty good.
As with anything else, moderation is the key.
Nope, its ten thousand hedge funds facing margin calls unloading anything with cash value. Its a sell at any price to keep hope alive...
I imagine that is what it is. Deleveraging in general, and this is the easiest and most attractive stuff to unwind, since unlike a lot of things on the book, it has a profit, and it is probably relatively less structured.
Today’s Industry Highlights
Top Performing Industries % Change
Mortgage Investment +8.41%
General Entertainment +5.83%
Textile - Apparel Footwear & Accessories +5.54%
Residential Construction +4.90%
Broadcasting - Radio +4.33%
Worst Performing Industries % Change
Independent Oil & Gas -5.19%
Agricultural Chemicals -4.00%
Foreign Regional Banks -3.74%
Also when you see a big bear on the cover of every financial magazine around it’s time to buy stocks (that means now). Conversely, when you see “How to Trade Options” on the cover of BusinessWeek, it’s time to sell stocks (that was an actual cover of one of the mags in early 2000)
Peter, we haven´t seen the bottom of the baisse right now. Nahh, this is not the end (of the baisse). It is is not even the beginning of the end. But it is, perhaps, the end of the beginning!
- Freddie Mac CEO Richard Syron, March 2008
Folks this it the the bottom of the 2nd inning, The 3rd hole, the middle of the first quarter,
you ain't seen nothing yet!
-—if you were the owner of one you would be aware of what the cost of diesel fuel has done to production costs in the last couple of years-—you would indeed feel the pain—
They are selling what they can ( as selling what they would like to sell has no buyers ).
My comment on “the bottom” was relative to the stock market....could be the bottom for the dollar and the GDP...housing is another story...
“””IBs selling off commodities to raise cash””””
You are indeed correct about this. Hedge funds who operated on 10% cash and 90% margin until 2 days ago are dumping gold and commodities. In an effort to raise cash, investment banks have raised margin requirements on hedge funds and commodity pools. Massive margin calls along with a bounce in the US$ is the selling pressure. Gold has stabilized at about $920-$925 and the bounce in the $US Dollar Index is going to be short lived.
I’ll buy it from you at spot.
That’s exactly my take also, for what it’s worth. Today is OPX, but come Monday I think that in terms of the stock (and bond) market we may be headed back into the storm.
Publius, good call!
george76, are you gonna buy more today?
Digging gold by doubling down
New Deutsche Bank ETNs that short gold rack up gains on metal's plunge
BOSTON (MarketWatch) -- An exchange-traded note that shorts gold by doubling down on futures prices rose about 14% in just two days this week and was up again Thursday as the metal and other commodities continued to plunge following the Federal Reserve's rate cut and inflation warnings.
Ouch. Gold down over 10% since Monday. Silver down about 20%. How many ounces of gold did you have again?
I am reminded of my brother, several years ago, breathlessly urging me to buy krugerands when they were between $800 and $900. I waited until Eagles were going for $280. The last I bought were $320.
Groanup? Any ideas for my friend here?
As to whether this is just noise in a continuing bull market upleg or the beginning of a correction and long consolidation, I can't say. The latest upleg has been prodigious, so if the market consolidates, and then coils and twirls for a year before the next upleg, that's fine with me.
I have nothing to complain about.
Remember Toddster - buy LOW sell HIGH.
The high on silver will be $180.
PS you gotta be asking yourself: “why is this guy buying??”
Same reason I bought when silver was at $4.75/oz, 6.00, 6.25, 7.00, 7.50, a boatload at 8.00 and 10.00. Well you get the idea. It could drop $5.00 and I wouldn't even notice it because - I'm not selling.
Come on, you can tell me.
Remember Toddster - buy LOW sell HIGH.
How much did you sell HIGH?
PS you gotta be asking yourself: why is this guy buying??
I'm still asking how much you bought.
Well you get the idea. It could drop $5.00 and I wouldn't even notice it because - I'm not selling.
I thought the idea was to sell HIGH?