Another coordinated hit on the gold price in today's session. Goldman Sachs issues a "short gold" advisory on the same day that news breaks about Cypress having to sell gold to raise funds for its bailout requirement.
What is so perverse about all this is that I do not believe there is a thinking person on this planet that does not attribute this bubble rally in the US equity market to the Fed's massive doses of QE. Yet, when the FOMC minutes are released (that is another story all in itself as they were released yesterday) the stock market utterly ignores the comments from those on the FOMC who believe that the bond buying program can begin to be wind down later this year. Yet, those same comments, again, completely ignored by the equity markets, are supposed to be the catalyst for a huge smashing of the gold price. Come on already! Do they really believe that people are that damned stupid?
Show me one person who believes that were the Fed to pull the plug on the QE program that it would have NO EFFECT whatsoever on the equity markets and I will show you a talking rock! Yet somehow, miraculously, the stock market can completely ignore any talk of an early cessation of QE while gold is mauled! Yeah....
I suspect that Goldman needs to get long gold for what they see coming down the road and has to get the hedge funds and the public selling it so that they can take the other side of the trade for themselves.
I will send up a chart later on today as I am pressed for time right now but gold is back down into the zone that has attracted strong Central Bank buying previously.
Also, I should note here that silver held up fairly well today considering the mauling that gold received. It was only down 33 cents or so. Not bad given a $30 plunge in the price of the yellow metal....
The VIX is falling off the edge of the world into the abyss. There is no fear anywhere. Total and complete complacency rules.
"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat
Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput
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