Posted on 04/14/2013 9:47:15 PM PDT by Orange1998
UPDATE: Spot Gold $1426 (from $1564 highs Friday)
As Asia opens to the bloodbath that occurred in precious metals on Friday in the US, it would appear that more than a few traders got the 'tap on the shoulder'. Shanghai futures are limit-down and spot gold and silver prices are plunging once again as we suspect forced margin-calls and the raising of cash (to cover extreme variation margin - or capital reserves) needed in JGB positions, as we explained here.
Liquidation is certainly the theme of the evening - investors are selling JGBs (6th day in a row of multiple-sigma moves in long-dated Japanese bonds 30Y +56bps off its post-BoJ lows at 1.60%!), selling Japanese stocks (Nikkei -128 pts, second biggest down day post-BoJ), selling US Treasuries (futures down), selling gold and silver (gold spot down over $100 from Friday's highs), and despite selling JPY early (retracing 30% of the weakness post-BoJ), JPY is practically unchanged (jerking lower only on the US futures open and Asian equity open) - it seems Mrs.Watanabe is struggling and unwinding some her excessively short JPY and long NKY positions... and post the China data (4-for-4 misses), everything is red - JGBs down, Japanese stocks down, US Stocks down, US Treasuries down, Gold and Silver down, Copper down, Oil down, Rubber futures limit down.
While investors are dumping gold and silver, China, Russia, India, Brazil central banks/sovereign funds are picking them up at basement prices. China intends to have a gold reserve that exceeds the US and at the rate we are dumping gold, China and Russia are happy to pick up.
I think Cyprus rumor of possible gold sale in the works.
S&P Fut down 6.60
NYMEX down 2.36
Brent down 2.26
Gold down 33.6
Silver down 1.24
Goldman a few days ago put a sell on Gold. I can’t help from thinking they want to scare investors out of gold and into dollars. All the while they are snapping up Gold because fiat currency is worthless.
If they scare down gold and silver enough, I would be a buyer.
“…everything is red - JGBs down, Japanese stocks down, US Stocks down, US Treasuries down, Gold and Silver down, Copper down, Oil down, Rubber futures limit down”
http://www.zerohedge.com/news/2013-04-14/gold-asian-liquidation-mode
meanwhile, this article appears from der Spiegel:
“An Economy on the Brink
More than a decade ago, the Dutch central bank recognized the dangers of this euphoria, but its warnings went unheeded. Only last year did the new government, under conservative-liberal Prime Minister Mark Rutte, amend the generous tax loopholes, which gradually began to expire in January. But now it’s almost too late. No nation in the euro zone is as deeply in debt as the Netherlands, where banks have a total of about €650 billion in mortgage loans on their books.
Consumer debt amounts to about 250 percent of available income. By comparison, in 2011 even the Spaniards only reached a debt ratio of 125 percent.
The Netherlands is still one of the most competitive countries in the European Union, but now that the real estate bubble has burst, it threatens to take down the entire economy with it. Unemployment is on the rise, consumption is down and growth has come to a standstill. Despite tough austerity measures, this year the government in The Hague will violate the EU deficit criterion, which forbid new borrowing of more than 3 percent of gross domestic product (GDP).”
http://www.spiegel.de/international/europe/economic-crisis-hits-the-netherlands-a-891919.html
So we have Japan, China,USA, commodities worldwide, Netherlands-does this mean that the black hole which has been Japan for 20 years is spreading? If so, does it mean the reckoning we all expected to produce inflation when it ultimately came will instead produce deflation?
Is this the real problem with gold?
Gold seems to be holding at 1442.
Guess there’s not much hope that it will go back down to 200 is there.
The recent Fed minutes mention pulling back on QE. If they did and everyone realizes the FEDS has no clothes and were the only buyers rates will rocket up. The Fed will re-enter in a Big Big Way and try to calm down the notes but will find its too late and inflation takes over.
If Physical gets down to 200 per oz I will be first in line. Heck I would do the same at 800 per oz.
The more who dump their paper assets, the better the odds the futures market will be able to deliver hard goods.
As I just said on the other thread: the Fed sold 500 tons of paper IOU gold on Friday in a deliberate attempt to destroy PMs image as a safe haven.
The early release of the FOMC minutes, the mendacious Goldman call, the joke story about Cyprus's gold - these are all part of an orchestrated media blitz.
Eastern hemisphere central banks are going to buy the hell out of this paper intervention. The Gold is going east. Westerners will be left with a pile of worthless paper.
I’m buying Gold. Bought more Friday just before close.
Gold is down almost 100 dollars now. Silver is down almost 3 dollars, and copper is down 11 cents.
People like you who understand finance better than I do can add more sophisticated analysis that I can, because it's obviously much more complicated than the fall of the price of oil.
In theory, the fall of oil should be ultimately good for the stock market, but it will take time for the benefit to take hold.
But ... futures are made out of paper.
Any holding physical who bail and sell just sweeten that--at 'bargain' prices for the purchaser.
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