Posted on 04/17/2013 5:08:32 PM PDT by bruinbirdman
The facts in the public domain do not justify the sharp fall in the gold price over the past two trading days. At the time of writing, the price per 1oz is $1363, down over $200 since Friday's open. The scale of the sell-off was the worst in 30 years, with the volatility index standing at the highest level in its history. John Kemp at Reuters has calculated that based on a normal distribution, you would expect to see movements like Monday's only once in every 500 million trading days, or two million years. The news which would justify such a price swing is curiously absent – in fact, my view is that the market ought to be bullish for gold. Something doesn't add up.
In any market, price is determined by the confluence of demand and supply. In many respects supply of gold is relatively fixed. We know the extent of discovered gold reserves and the rate of production. While Cyprus is being forced to dump "excess" gold in order to meet the ever escalating bank bail-out bill, its whole holdings are worth only $750m, hardly enough to move one of the worlds deepest and most liquid markets to this degree.
In fact, most of the selling pressure has come from ETFs dumping holdings. A record $9.2bn of net outflows from gold ETFs in the first three months of 2013 are indicative of loss of faith on the part of investors, as well as of a structural change in a market which has been opened up to electronic trading by the invention of these instruments.
But why would investors wish to sell their gold holdings? As an alternative store of value, it is easiest to think of demand for gold in terms of demand and supply
(Excerpt) Read more at blogs.telegraph.co.uk ...
Our markets are just as doped as Lance Armstrong’s Tour de France victories. If your money’s still invested, you are heading for disaster.
When supply is expected to increase you should not be surprised when the value drops .
Cypriot finance minister sees gold sale within months
http://www.reuters.com/article/2013/04/17/cyprus-gold-sale-idUSL5N0D41K620130417
Your first question in all this should be where is SOROS?
I call bull on this article and the calculations of any normal distribution. Where is this data.
Odd how the price going UP isn’t market manipulation, but price going down is.
Every market is “manipulated” by the people who are willing to buy or sell an item. Nobody is forced at gunpoint to sell an ounce of gold, or to buy one, at any particular price.
For some reason, people who on Thursday wouldn’t part with an ounce of gold at $1600 are now quite willing to sell it for under $1400.
Gold has little intrinsic value, so the major part of that market is really just the expectations people have. It is a big game, a gamble on whether you can convince others that an ounce of gold has more value than what you paid for it.
But in the end, it’s a soft metal for which actual uses would only need a small fraction of the total available. The value now is mostly perception.
And when something’s value is based on feeling, it can drop like a rock, rise like a rocket.
Of course, the stock market is that way sometimes as well.
George would never manipulate a market!
</sarcasm>
LOL.
The fact that you think this is about "people" is quaint and cute.
I respectfully disagree with Thomas Pascoe's article about gold. A blunt article which indicates that the price of gold can bubble just like anything else is at the following link.
The day gold died
And more convincingly, there is a gold price history chart on the page at the following link.
Gold and Silver Prices - 100 Year Historical Chart
I notice at least 2 previous bursted gold price balloons in the 1900s.
I conclude that the price of gold has been artificially high as opposed to market manipulation to make price fall.
But I'm no expert. Critiques welcome.
LOL!!
“The facts in the public domain do not justify the sharp fall in the gold price over the past two trading days. At the time of writing, the price per 1oz is $1363, down over $200 since Friday’s open”
Public domain also doesn’t justify $4.00 gallon gas.
Lots of people whining about the price fall. But no one smiling at time to buy in?
Fed policy has rendered most markets immune to stress. Gold’s sudden sell-off was a reality check. A tragic panic for duped investors unsuited for this extremely risky investment. When our Wizard of Oz (Bernake) runs out of tricks, bigger BUBBLES will pop.
Meanwhile, watch for trial lawyers chasing Gold Market Victims. No $hit.
I cannot say that there was no price manipulation in the fall in gold prices over the last week. But the gold prices history chart that I previously posted a link to shows that same kind of sharp fall happened in 1980/81.
The price of gold is manipulated by central bankers....Has been for along time...They own the majority of it so they can!!...
even the talking heads know that...
http://finance.yahoo.com/blogs/daily-ticker/gold-rout-blame-central-bank-manipulation-says-gata-154049120.html
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