Gold Gap Down
October 16th, 2008WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
Just FYI.
Via: MarketWatch:
Gold futures tumbled Thursday, at one point down more than 5% to below $800 an ounce for the first time in one month, as nervous investors seeking cash sold futures contracts.
Some hedge funds were forced to liquidate their positions to cover losses in stocks and other markets, according to economists at research firm Action Economics. Global stock markets saw another day of heavy selling Thursday.
Gold for December delivery fell more than 5% to $793.50 an ounce, dropping below the $800 mark for the first time since Sept. 17. Futures were last down $35.50, or 4.2%, at $803.50 an ounce on the Comex division of the New York Mercantile Exchange.
The contract has surrendered more than $100 an ounce since Oct. 8.
Also pushing gold prices lower were news reports that central banks were selling gold. The latest weekly data from the European Central Bank showed 7.6 tons of gold was sold during the week ended Oct. 10, according to Bloomberg, citing Barclays Capital.
Central banks sell gold to earn more cash, but their selling is helping push the gold prices lower, analysts said.
So now the top greeders get U.S.S.S. protection
(I thought it was reserved for Sitting & ex POTUS
and POTUS candidates “ONLY!”).
Creepy!
Bonus points spot the undercover plainclothes Blachwahhter
merc’s.
http://elainemeinelsupkis.typepad.com/ezmoneymatters/images/2008/09/25/bernanke_congressman_and_ss_agent.jpg
Not a problem “my friends”, forced selling, it’s all forced selling! Mister Margin is stalking the halls of funds, institutions and individuals alike.
The entire commodity complex is getting beat up because of allocation and weighting in indices that at the moment are getting slaughtered. Wait until the big not speculative money get’s going into this sector. They will want to corner the things that mankind wants (real money) and needs (metal, oil and food).
Darn. I bought yesterday. All I could spare to do so. I figured, better do it now, this paper bubble thing with gold (I think) is about to blow.
Paper gold may be going down. But not in the physical market. I think this is just another one of those paper bubbles, another manipulation of markets, and I don’t think I’ll mind a bit where I sit when this bubble explodes. TeeHee.
@Smarks, gold IS MONEY which is another thing mankind needs for things they cannot barter for or do for themselves. Cheers!
I dunno why I had to come back to this topic but I’m probably preaching to the choir here about how much there is to adore about gold and silver.
At this point in my life and our times I’m hearing from my sister that her husband has been “Enronized” with his 401K TO THE TUNE OF ABOUT $100K. My Thrift Savings Plan which is is in un-named investments, but “funds” died about a year ago for me, when I lost $25k over a weekend.
Discussing these matters with the Head of my Agency over dinner one night last year (in front of about 8 other people), this person who I do adore said what the heck are you doing investing all this money in the Thrift Savings Plan? I was so embarrassed in the right way.
I realized I was so NAIVE. I trusted my employer, the US Govmnt to do right by me.
To invest my money for me.
I felt like such a fool.
That my mentor was of philosphical persuasion is sort of relevant to the times. He is Jew to the max.
The Jews, if u believe the legends, had their lives and livelihoods destroyed by uh, I think folks with the same mindset that are controlling our world today.
Take the money in wages now and pay the taxes.
I hope you get it. Deferred taxes are an effin joke.
No one will ever manage your money and savings better than you.
That’s what I don’t get about 401k mania that occurred from the 90’s on up.
Are these people swayed by some false assumption
that taxes in the 30 + whatever years they wait for their distribution(paying mgmt. fees the whole way) going to be less than today?
There’s a great “picture worth a 1,000 words” chart just about a 1/4 of the way down this piece, showing the soaring margin lending this past year vs. even the huge amounts during the tech-frenzy era.
Plus there’s another interesting graph there toward the bottom showing the disconnect between physical gold prices and futures prices (which actually largely seem to have already come back in line).
My experience during the tech-bubble was that I knew it was going to deflate, I was always poised to get out, I was very speedy to exit it completely when it started to pop, I went entirely into conservative bonds, dividend-paying utilities and energy stocks….and I still lost my ass. It’s not that those were bad decisions (and obviously now looking back the energy plays were absolutely the best place to be). The problem was that in the transition between then and later, everything got sold (even gold). Absolutely everything.
So from that experience, and from what I see now, when leveraging unwinds there is literally no safe place to hide. That’s why cash is king right now, and short-term treasuries pay next to nothing. But ultimately I don’t want too much cash, either, so I’m averaging-down into gold (thru Bullion Vault) anyway, because when the unwinding has finished, saner conditions will return and the right asset plays will likely be selling at fire-sale prices. I’m also investing in other real assets, like land, a home, my farmer-neighbors, essential equipment, etc.
One last observation, evidently Buffet just said something similar — “get out of cash and start buying stocks for the long term”. I just disagree that buying stocks is the right asset play. My belief is that passive investments (i.e. “un-earned” earnings-vehicles like stocks, bonds, CDs and such) rise to the fore for societies that are in ascendency, but when a society goes into decline they quickly fade into irrelevance for the general populace.
In fact it’s often been noted after severe market crashes that sometimes an entire generation of disillusioned people walk away from stocks and never return. I firmly believe this is what’s happening right now, as individual retirement savings and 401(k), the essential fuel of our modern markets, become just so many busted pipe-dreams and ponzi-schemes.