Gold has fallen from $1910 to $1763 in less than 48 hours

[scheming daemons]

... and it continues to drop.


Usually when a commodity drops like that, something big is happening.

Anybody have any idea why?


Is this simply the gold bubble starting to pop?


I don't see anything in the news the past two days that could point to this...

[Fire Walk With Me]

1. http://www.goldprice.com/

http://www.goldprice.com/

[rfranklin]

2. gold is a bubble that is poised to burst

“We think the current price of gold is a bubble that is poised to burst,” said an Aug. 15 report from Wells Fargo Private Bank. The report also noted that gold has “little intrinsic value,” other than its jewelry uses, and a history of volatility.

“With very little warning, the bottom can drop out on gold prices very quickly,” the report warned. “For example, during six short months in 2008, gold lost more than 30 percent of its value. In the 1980s, in a little more than two years, the price of gold dropped approximately 65 percent.”

http://www.jckonline.com/2011/08/24/talk-gold-bubble-gr...

[galileoreloaded]

49. hahahahahah n/t

[TheCowsCameHome]

3. Impossible.

Nothing ever goes down.

The guy that sold it to me said so.

[ret5hd]

4. You've been predicting it for months.

[scheming daemons]

6. Yeah.... but I thought that something substantial would trigger it

Nothing happened the past 48 hours to trigger this gold selloff.

[jsamuel]

38. people think the stock market has bottomed and gold has peaked?

time to get out of gold and back into stocks?

[girl gone mad]

46. Yep.. haven't you been short gold from at least 1400..

Or at least advising others to short or sell?

Oops.

"Nothing happened the past 48 hours to trigger this gold selloff."

Not true. CME raised margins 27%.

[mmonk]

5. Speculation always ends at some point.

Those that bought late in the game stand to get burned.

[DJ13]

7. I think its a headfake, tied to the stock market rising

The institutions needed to move people out of gold (safe haven) in order to pump up the stock market so they could get out from under sectors they see as exposed to another market drop.

The reason I think this way is that theres a lack of any real economic news that justifies a renewed faith that the economy is improving.

Its more a lull in bad news than any good news right now, and that can change in a split second from any of a hundred different events.

[trof]

52. True dat.

[onehandle]

8. Because the Stock Market is coming back a little, or at least not in free fall.

It's all based on nothing. If teabaggers can tank the market like they did, that's proof positive.

[OhioChick]

29. Bingo...

Gold prices plunge as economic fears ease, for now

http://www.cnbc.com/id/44260555

It'll go up again once the "Super Committee" comes up with their lists of cuts...and when a few million people lose their unemployment benefits.

[B Calm]

9. It's way over valued and gold falling is good for the stock market as a whole!

[scheming daemons]

10. With the added benefit of upsetting all the teabaggers that bought Beck's bullshit

...

That's what I want.

I want gold to drop to under $1000 so all the teabagging nutjobs who bought into Beck's description of a dystopian future take a bath.

[B Calm]

16. Hell yes! I had to recommend the thread after your comment!

[TheCowsCameHome]

27. Beck's bullshit? He said his bullshit turns to gold overnight.

order now - supplies are limited.

[BanzaiBonnie]

35. Can't eat gold

[Fumesucker]

55. Federal Reserve notes on the other hand are quite tasty and nutritious..

When prepared properly and accompanied by a piquant sauce.

[ChandlerJr]

42. Or Randi Rhodes and Thomm Hartmann's BS

I never listened to Beck so I'm not familiar with his pitch, but those two have been pimpin' the hell out of gold for a long time.

Don't Schultz and Steph Miller push Gold too?

[Hassin Bin Sober]

77. They all do.

At least Hartmann uses a historical perspective when doing HIS pimping. I.E. "currencies come and go but gold stands the test of time"

Schultz basically buys the repig arguments that the stimulus will ruin the economy so you need to buy gold.

[Yavin4]

11. So, What Fundamentals Have Changed in the Last 48 Hours?

Has the economy gotten stronger? Is the dollar stronger? Are the government's debts paid off including the debts that the banks parked on their books? Is the DOW up? Is the S&P up? Is Europe financially sound? Is Bank of America financially sound?

None of these things have happened. What's happening to gold today is profit-taking. Gold reach an all time high of $1900 and many folks are taking profits and sitting on cash ahead of options expiry and the labor day weekend.

Gold is not a bubble. It's a reflection of the overal global financial picture which is horrifying.

[dipsydoodle]

12. Its called taking profits

don't worry about it.

[elleng]

13. Dow/stocks generally up. Usually a counterweight to 'goldies.'

AND treasuries have proven to be safe havens.

Markets NOT doing the crashes and burns of last week.

[Yavin4]

15. Wait Until Friday

And look for a 350 to 500 point sell off.

[elleng]

22. Could be.

[Yavin4]

14. Look for Gold to Spike and the Markets Tank on Friday

Bernake is not going to announce QE3. Methinks the gold selloff and the DOw run-up are because there will be no Q3. This will mean a massive market sell-off and a spike in gold. Big traders are shorting gold and pumping up stocks so that they can ride the spike and the downfall on Friday.

[B Calm]

19. Wow man, you should go to Vegas...

[Yavin4]

21. Linky

For your reading pleasure:


http://money.cnn.com/2011/08/24/markets/thebuzz/index.h...

[elleng]

24. 'as if

investors think he's Mighty Mouse.'

[TheCowsCameHome]

28. I can't wait. There's a hurrycane a-brewin'. Invest in plywood futures.

Be safe.

[ThomWV]

17. Its about time that Bubble burst.

I've been saying for the last year that the gold increases were just the current bubble - and when it pops it will be just like all the rest of them and some poor suckers are going to be stuck holding sixteen hundred buck gold when the crap is selling for four hundred. Bet on it.

[bemildred]

18. Bubbles pop. If you like bubbles, you must like pops. nt

[Yavin4]

20. Bookmarking this Thread for Major Bumping in 3 Months

Major bumpage.

[scheming daemons]

23. Why?

Because you agree that gold is popping or because you disagree?

Where do you see gold in 3 months?

[Yavin4]

41. Gold is not in a bubble

The U.S. dollar is though.

[Lone_Star_Dem]

45. Do you understand the definition of an economic bubble?

If you do, how can you look at the charts of the US dollar index and say that? The trade weighted dollar index is maintaining multiple year lows. Basically, the dollar is not a safe haven currency anymore, and hasn't been since the 1990's. However, that's not in anyway the definition of a bubble. It's the decline of a currency based on a country's very poor financial decisions. No matter what a bunch of pseudo-economist may be telling you.

[galileoreloaded]

50. Smart man..................n/t

[onethatcares]

25. lucky me,

I found a 9 gram gold ring the other day and after yelling out on the corner "WHO DOES THIS BELONG TO" for a few minutes I went and cashed it in for $230.00.

I don't have enough fiat money to play with precious metals, I like to eat everyday.

[Rex]

26. Wow, that is a huge plunge

Not good when gold shows instability.

[DevonRex]

30. It's just getting back to normal. Stocks are rising since they hope Bernanke

will announce a QE3 tomorrow. People who had gone to gold for protection are getting out in favor of stocks on the basis of that hope. So this is not a bubble bursting at all.

[Lone_Star_Dem]

31. I hesitate to say the bubble has burst already.

It's too soon. It usually takes longer for a bubble to reach it's bursting point than the few short years gold has been been the herd mentality investment of choice.

It's probably just some wise investors cashing in for the past two days after its most recent high. It won't be too long before the herds drive the price back up again , though.

There is money to be made in gold, just like there was in real estate during the bubble, but only a fool would invest in it at today's prices for a long term investment.

[whatchamacallit]

32. Likely profit taking

There's plenty more financial shit hitting the fan to come. I doubt we've seen the top for gold.

[Liberal_in_LA]

33. Price has tripled in the past few years. price has to fall.

[Alameda]

34. Good, maybe in a while I can wear my rings and earrings again.

It got so ridiculous I stopped wearing anything that even looked like gold. I don't want my ear lobes ripped, fingers cut off or whatever.
FWIW I remember when gold was $40 an ounce. I like that it doesn't cause my ear holes go get infected, or turn my fingers blue, green or black....and it's pretty.

[Jumping John]

36. Darn you Pat Robertson - lol he said it would hit $2500 nt

[NNN0LHI]

37. Gold bugs aren't going to like this

[dtexdem]

39. Gold just isn't as good as gold anymore.

It must be off goldbricking.

[CJvR]

40. Perhaps...

...it is the expectation that Venezuela and Libya will need to dump large quantities of gold on the market.

[Yavin4]

43. Found the True Culprit. CME Raised Margins on Gold.

Gee, wonder why they don't do this for oil???

http://www.marketwatch.com/story/cme-increases-gold-mar...

End result is that it makes rank speculation on gold a lot harder which is supressing the price. They did this two weeks ago, and it was effective for a while. But, Asian markets pushed the price higher. Yesterday, Shanghai Exchange raised margins, and now today, CME does it again.

In the end, these are just technical moves which do not address the underlying fundamentals. Gold haters can say, "see, I told you it was a bubble." Reality though says differently.

In all, it's a good opportunity to buy the physical while it's cheap. It won't be this cheap for a long while.

[galileoreloaded]

51. 27% following the Asians @ what, 15%.......again....smart post........n/t

[Yavin4]

53. Long Run, This Actually Strengthens Gold

Even after two back to bac margin hikes, gold is still higher than it was at the start of the month, and the price seems to be holding around $1740.

Check the price on Sunday at 7:00 PM.

[galileoreloaded]

70. No, I hear you. Preaching to this choir. n/t

[rdking647]

56. they raised margins after the close

after it had already fallen $100/oz

[Yavin4]

57. Never Heard of Leaks?

Inside information is leaked to major players all of the time. S&P's downgrade of US debt was leaked.

The major players knew well in advanced that the margins would be lifted. In addition, the SGE had lifted their margins right before.

[rdking647]

59. margins...

margins are set based on the volatility of the contract. after a $100 drop you better believe margins would be raised.

under the old margins if you had 1 contract you had to put up 7k or so for margin . todays 100/oz move would not only have wiped out your entire account but you would owe another 3k. under teh new markins you would be close to even

[Yavin4]

60. So, Why Didn't They Do This with Oil

When it spiked in 2008?

[rdking647]

61. they did

http://uk.reuters.com/article/2008/02/26/markets-nymex-...
http://bigpicture.typepad.com/comments/2008/05/nymex-ra...

[Yavin4]

63. According to the Artilces You Linked

One was dated in Feb. 2008 and the other dated May 2008. The massive oil price manipulation took place during the summer of 2008.

Do you have links showing margin hikes during the summer of 2008???

[rdking647]

65. in february when they hiked the first time

oil was around 100/barrel
when they hiked the second time oil was 126/barrel.

it reached a high of 146/barrel 6 weeks later.

and margin rates are based on day to day movement. just because something is moving continually in one direction or another thats not the reason they hike margins. when they hiked margins it was shortly after crude started bouncing around by $5 a day. thats why they hiked margins. after that point the daily ranges didnt increase all that much so there was no need to hike margins again.

[Yavin4]

66. Using Your Logic, If Gold Does Not Move Parabolically

over the next few days, then there's no need to hike margins, correct?

Anyway, I don't want to be-labor a point. You believe that the margin hikes were necessary because of the price movements. I believe that the margin hike was leaked which lead to the fall in price.

Whatever, neither of us know for sure.

I own physical gold because the Fed is de-valuing savings, securities, etc. Operation Twist is another assault on long term treasurys, and that's why I own gold. I am happy with my purchase, and I don't live in fear when BOA collapses or a European government defaults.

[rdking647]

69. noting wrong with owning gold

as long as its a small (1-3%) of your portfolio. any more and I think its the wrong approach.


and as for leaking the margin hikes I wish someone had leaked info to me back when i was in teh gold pit in new york

[tsuki]

76. Does this have anything to do with Chavez's call to repatriate his 99 tons?

[DCBob]

44. Gold is a rock that has little intrinsic value.

Its primary value is as a bet against stability... and that bet was and still is way over bid.

[joshcryer]

62. I wanna start an OP bashing gold. Its only industrial use is contact points in electronics.

[DCBob]

64. That would be a good topic. Actually there are many industrial uses of gold..

but even so its intrinsic value based on those uses is a small fraction of its current market price.

http://geology.com/minerals/gold/uses-of-gold.shtml

[joshcryer]

68. Yeah, I know it's more than just electronics. I expect that a topic like that...

...would just be your usual "but it's scarce" commentary, so I won't post it. I just people realized that the subjective theory of value is really screwing us badly.

[sfpcjock]

47. Yes, it is a currency actually, so it is like currency speculation.

Which is in turn like options trading. The market went up 220 yesterday. Cramer said that this would happen a couple of days ago when it was roaring up.

[galileoreloaded]

48. GS selling to cover cash needs. Insolvent. Expect 30% drop, then watch out! n/t

[Poll_Blind]

54. Naw, naw! Ya havit all wrong! The money train is just a-slowing down so you can hop aboard!

PB

[Capitalocracy]

71. Buy gold now! Right now!

From me! (I need to get rid of it quick!)

[Laura PourMeADrink]

73. hahahaha. I am sitting here thinking...dump or ride out. are you

selling?

[Capitalocracy]

74. actually, I was joking

the only gold I have is around one of my fingers, it's not for sale.

but I will admit, if I had money (which I don't and never did) I'd be feeling pretty good right about now if I invested in gold about 10 years ago or so.

[roamer65]

58. Overdue correction, that's all.

Then it will continue its upward advance. If we get to $1600, it is a buying opportunity.

What killed the gold rally in 1980? Higher interest rates from the Fed.

Will the Fed raise rates anytime soon? No. ZIRP continues until 2013.

Plus we still have the spectre of QE3. I'm still bullish on gold.

[MilesColtrane]

67. There was a big jump in Durable Orders that seems to contradict...

the prevailing market "wisdom" that the economy is headed for a double dip recession.

[Laura PourMeADrink]

72. Marc Faber's fault !! he was on CNBC the other day predicting

a huge correction - then of course it happens. Instant business news has
screwed up the economy, IMHO. It adds so much volatility and makes
companies plan for today and not tomorrow.



Stocks entering three-month correction phase says Marc Faber
Posted on 07 March 2011 with 2 comments from readers
http://www.arabianmoney.net/gold-silver/2011/03/07/marc... /

Oil prices are rocketing, but where will the flow of money go next? Emerging market outperformance is history. This is the start of a three month correction phase for stocks says Dr Marc Faber. The US dollar and bonds will rally.

But US stocks will go down by less than emerging markets. He’s always been a fan of precious metals and they are still in an uptrend but Faber warns elsewhere that gold is also vulnerable to a correction in a big sell-off.

[rdking647]

75. down another $45 this morning