Posted on 05/19/2013 10:03:56 AM PDT by blam
BARRON'S: There Were Two Gigantic, Suspicious Sales Of Gold On Friday That Caused The Price To Plunge
Joe Weisenthal
May 19, 2013, 10:34 AM
Gold went down the toilet again on Friday, and is now close to revisiting its April lows.
This gold weakness is causing a lot of consternation to fans of it who don't understand how the precious metal can keep falling, when central banks around the world continue to press down on the gas pedal.
A lot of gold bugs think the price is being manipulated somehow, or that there's some divergence between what's going on in "paper" gold (gold prices that are tied to ETFs) and what's going on in physical gold (people buying ingots or jewelery)
Randall W. Forsyth at Barron's fans the flames of goldbug conspiracy theorists a bit this weekend, arguing that there have been suspicious sales in gold seen on the exchanges (probably driven by the ETFs).
He writes:
These improbable moves have made gold bugs suspicious, which isn't unusual. Folks who own gold do so because they don't trust the status quo, especially when it comes to government-issued paper money. But just because you're paranoid doesn't mean somebody isn't out to get you. They point to bursts of selling on Friday, April 12, which resulted in prices plunging by more than 5%, and to dumping that resumed the following Monday in Asia, early in the day when markets are illiquid. That culminated in a 9% collapse by the time the New York market had settled. But a seller who wanted to unload a large position at the optimal price would have done precisely the opposite—liquidate as discreetly as possible. Instead, sellers dumped the equivalent of more than 300 tons of the metal in staccato-like blasts during
(snip)
(Excerpt) Read more at businessinsider.com ...
Video re the bad news for gold junkies!
It’s not so bad....I was able to pick up a few tons on the cheap..
The “paper” gold market is much bigger than the physical gold market. You can make as much “paper” gold as you want, as long as no one comes to the window to cash in the “paper” gold for physical gold.
This is the only explanation. The laws of supply and demand dictate that gold should be going much, much higher. I suspect that it will, eventually, but not until those who are manipulating the market buy in at a purposely depressed level.
This is really strange stuff. Makes me glad my tangibles are in silver bought back before 1995 for resale.
Not low enough for me to buy again. If the price dips below $1000/once, I will consider it.
I sold what little gold I had when it was around $1600/once. I held on to some silver though. I bought the silver at $13/once, so it would have been nice to have sold it at it high price, but I am still ahead of the game.
I think Gold is being replaced by political power as the arbiter or wealth...gold has just become a placeholder and a means to that end..
Actually, you can't. Exchange-traded ETF's are regulated in the same way other securities are, except the business has no moving parts, so it's extremely easy to audit. Here's an explanation of how GLD works.
Something happen to gold prices Friday? I didn’t read anything...
Can 0bama order gold from the reserves to sell? I’m serious, can he? What is there to stop him?
I think that 1,250 or so would be the buy point now. The gold bugs are ready to pounce.
Eventually, GLD should be near worthless as the physical stocks backing it dry up. Conversely, the premium that sellers can charge for the physical will rise as supply diminishes.
We will then have a better idea of the true value of physical.
He could, but that’s one area of the country’s destruction he is probably happier to leave to the experts at the Federal Reserve.
It goes up, it goes down. Elevators, the stock market, and gold. I have no sympathy for anyone who is crying over the latest plunge. You can’t eat gold. You have to convert it to money to buy bread.
In a crisis everyone will be looking to convert gold to money, and so the ratio gold/dollars will drop.
The reason why it dropped is that rampant inflation didn’t happen (because the economy is in the dumps) and all the hype ads predicting 20,000 were lies.
Actually, if the price of GLD falls faster than that of physical gold, the ETF's managers buy GLD shares and finance that by selling their physical stocks of gold, thereby increasing the supply to retail buyers. The point of this activity is to increase GLD's share price so as to bring it in line with that of physical gold.
When GLD's price rises faster than the price of physical gold, the ETF's managers do the reverse - they issue new shares of GLD, depressing GLD's price and use the funds to buy up physical gold, thereby increasing the price of physical gold. The whole idea is for GLD's price to track physical gold all the time.
Bubbles pop.
Goldbug ping.
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