“Woe to the land whose king is a child and whose leaders are already drunk in the morning. Happy the land whose king is a nobleman, and whose leaders work hard before they feast and drink, and then only to strengthen themselves for the tasks ahead”. (Eccl 10: 16-17)


"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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Wednesday, November 5, 2014

The West Greets Gold with More Selling

The selling kicked off in gold last evening when the comments from the Bank of Japan's Kuroda hit the newswires and has not let up as trading moved into the West.

Please refer to the chart I posted last evening showing the various support levels for the metal. The first zone of support, near the $1150 level, has been shattered conclusively. Gold now looks to have its eye on the psychological round number of $1100.

As usual, the gold perma-bulls are screaming their usual nonsense about "Flash Crash" once again. Funny how we never hear a peep out of these nitwits when we get what I have contemptuously dubbed, "the Reverse Flash Crash".

The point they are making is what? That big sellers unloaded on the metal during the Asian trade? And this is supposed to be proof of what?

Has it ever occurred to these Johnnie one-notes that there are some longs in SERIOUS trouble in the gold market? The latest Commitment of Traders report showed large speculators overwhelming LONG and WRONG in the gold market ( and this does not even include the over the counter markets). They are abandoning gold in droves.

The assumption that these perma gold bulls sites make is that "this would not be done if a LEGITIMATE SELLER wanted to ensure the best possible price". Again, who says that a trapped long wants the best possible price? The only thing a trapped long wants is "OUT".

"GET ME OUT before I am ruined" is what the motivating force is behind such moves.

I have to shake my head at the appalling ignorance that somehow passes for sound analysis in the gold bug community when it comes to the breathless commentary on gold whenever there is a sharp fall in price. Those of you who are regular readers at this site are keenly aware of what has been transpiring in the soybean markets of late. I have been especially detailed in discussing the meal markets in particular. If you want to see a market in which one group was "engineering a reverse flash crash" ( My words denoting sarcasm) just go back and look at the price chart of December meal. Panicked shorts were saying the same things as panicked gold longs were saying: " GET ME OUT AT ANY PRICE BEFORE I AM COMPLETELY RUINED".

These huge volume spikes speak of fear, panic and devastating losses all being compounded by margin calls from busy margin clerks at the various brokerage houses.

The idea that somehow huge sell orders in gold indicate the presence of "market manipulation" is patently absurd. We see this sort of thing all the time in the futures markets as one side or the other gets run over whenever a key technical support level gives way to the downside or a key technical resistance level is taken out on the upside.

Of course those that are on the winning side of a market move are going to press their advantage. That is a REGULAR occurrence in the futures market and is simply how they work. Ask the feeder cattle bears who had been obliterated by the bulls in that market since late August until only just recently if the ones doing the buying were interested in "buying at the best possible price". That one should even venture to ask such an insipid question would betray a breathtaking ignorance.

The simple facts are that gold is in a bear market and those who remain long are losing tremendous sums of money. Some have had enough and are done with the metal from the long side. Expect to see more of this the longer it takes gold to show any signs of stability. Each fresh push lower will take its toll, both psychologically and financially on the remaining longs. Bears will push until the downside momentum slows and then they will halt their selling. It really is that simple.

At some point the bleeding with temporarily halt and a respite will follow. Objective traders will watch key indicators to see if they can discern where and at what level.

I might point out here at the risk of incurring even more wrath from the gold cult members, but in the hope of waking some of them up, that their whistleblower hero and priest, the one who keeps regaling them with claims of special insider information about "massive gold buying", "massive rally of epidemic proportions", etc,. has once again proved to be nothing but a bag full of hot air. Wake up out there. Gold is in a bear market. That is what you really need to realize.

Until such time as the charts indicate a true bottom and a true turn in the direction of the main trend, rallies are going to be sold. Maybe the US Dollar will become weak, maybe inflation will begin to become a problem, maybe the commodity sector will turn sharply higher, maybe the GLD will start showing strong inflows of money with rises in its reported holdings, maybe this and maybe that, but until you see something on the fundamental front change that favors sharply higher gold prices, just remember a very simple but always ignored axiom: " The trend is your friend".



99 comments:

  1. Dan,

    You are a breath of fresh air. Thanks again for your sobering thoughts and dose of reality. We need more people like you.

    ReplyDelete
    Replies
    1. Amen. Dan for president.

      Btw, do you guys remember the hilarious "Mexican silver standoff / imminent silver short squeeze" these same perma-bulls were touting in July? LOL. Hopefully no one followed these clowns or it'd get really ugly.

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    2. Shaun;

      Thanks much but I suspect the gold cult members would have a different perspective of me whom they now view as having crossed over the Dark Side of the Force.
      The deal is, I will be bearish when the charts call for it and bullish when the charts call for being bullish. That is not that hard to understand but some of those people are in so in love with their yellow metal god, that they cannot be objective. The result is that many of them are now financially ruined and will probably never recover from the drubbing they have endured until the day they die. This tragedy could have easily been avoided but they chose to lend their ears, and their hearts, to those who did not have their best interests at heart and who were peddling something gold related.

      Delete
  2. and the USD and US centric stocks keep doing a gold 2011.

    The gold bugs were about 6 month early on their gold 1800 calls in 2011. Goldman Sachs was almost exactly 6 months early on their S&P call.

    ReplyDelete
  3. "
    "GET ME OUT before I am ruined" is what the motivating force is behind such moves."

    Is that the same thing as GOTS? Im wondering because i got all these certificates that crashed from 6 dollar to 1.10 after i followed jims advice to clean out my pension account.

    And now i learn that giancarlo, jims son in law got paid 250.000 dollar for flying a drone and the average salary for the board is 400.000 dollar after a 300% raise across the board in 2011.

    Meanwhile im waiting for production. In 2012 at the agm the story was production in 30 months. In 2013 the story was production on multiple sites im 2013 for 350 dollar production cost. In 2014 it was promised first poor ar buckreef before september.

    But nothing really happens and the 45 million dollar jim raised in 2011 and 2010 is nearly spent. 1 million left.

    Then there issue of jim selling mist of his shares before 2011 and not buying any like he said he would in 2013.

    ReplyDelete
    Replies
    1. Jasper, I called out a certain person years ago when he said he sold 5000 silver contracts into the Hunts back in later '79. Dan and I got into a serious pissing match until I resolved it by e mailing this certain person about his false claim. It was almost funny in his response, as he said "are you calling me a liar?" I just laughed and asked him if he pissed in everyone's ears and told them it was raining, would that make his lies become truths?" No response. A very sad person.

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    2. Jim has woven a web. I emailed jim to inform him the hedgefund he is working with since 2011 has been pumping the stock on the trx fanclub website and shorting it. That was late 2013 and jim didnt post on mineset for nearly two weeks as he was in bed with a "pinched nerve".

      Its pathological.

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    3. Stock is being slaughtered. Sad.

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    4. Not sad- just deserts. I earned back some of my gold bug folly w/ TRX puts. mostly Jan $2 puts, but on a lark a boatload of Jan $1 puts.

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  4. GASC Egypt results, mid-December shipmet, bought 235,000 mt, 55kmt from Ukraine and 180,000 mt French at avg price $ 258.3
    ..usa was close but then one has to add shipping.

    real cold weather next week has wheat bulls talking crop problems, like premature dormancy. nat gas bulls happy with the weather.

    ZW now +5 above the 20dsma touch it hit, and ZF +9 above the 10 round number..

    CL led the way up for the commodity bounces, on it's weds oil inventory econ data and a saudi diesel pipeline explosion.

    cheers!

    ReplyDelete
  5. http://www.zerohedge.com/news/2014-11-05/wgc-improving-gdp-benefits-gold-demand

    My, how we laughed and laughed!

    (China's GDP growth has fallen quite sharply in recent yesrs, from 10% to just over 7%)

    ReplyDelete
  6. FWIW, Avi Gilburt has been pretty dead on for the last 3+ years...he is an Elliot Wave guy. He is long term bullish...yet has been calling for new lows for a while now. Here is his EW setup...hope it is ok to C&P the highlights (the alien story is somewhat humorous).

    http://seekingalpha.com/article/2628365-the-real-reason-gold-will-see-5000

    "So, allow me to reiterate my long term downside targets, which many of you were so certain would not be seen. Ideally, this current drop should take us down towards at least the 109/111 region, with the potential to extend as low as the 105 region. Once this downside segment of the selling has completed over the next week or so, I expect us to see a corrective rally, which can take us back as high as the break down point in the 114 region. I would guestimate that this rally would top towards the end of this month, followed by a final decline to our target region of 95-105, with an ideal target of 98. Of course, I have also noted in the past that we could see an overreaction selling phase to take GLD down as deeply as the 75 region, but, based upon the relatively muted manner in which we broke the 2013 lows, I think that is becoming much less likely at this time.

    Based upon the current set up, it would seem that this 3+ year correction will be ending over the next 2-3 months."

    ReplyDelete
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    1. The GDXJ index has fallen from 170 to 22.7 today. Utterly amazingly! At some point soon it will be the investment of a lifetime. But not quite yet. If gold went to 700 what would it be then? 3 or perhaps 5? Don't think it will happen.

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    2. Probably quite soon there will be a violent rise in the gold shares, but I don't think it will last. It is quite likely that Ari is right in the first part but the second part more dubious.

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  7. DAN YOU HAVE IT ALL WRONG. THE PRICE ACTION IN THE YELLOW METAL IS EASILY EXPLAINED BY MASSIVE CHINESE DEMAND.

    for a graphic explanation, see here:

    https://twitter.com/KidDynamiteBlog/status/529978329894752258

    ReplyDelete
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    1. To of course fill the giant vault they've been building

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  8. Wow, Kuroda announces more record levels of money printing to buy bonds and gold sells off huge even in Yen terms.

    Perhaps history will have to be re-written along with economic text books as Money printing is now bad for precious metals and only good for stocks.

    When a country prints money, always sell precious metals is the new investing idea it seems.

    "In announcing that it will boost purchases of government bonds to a record annual pace of $US709 billion, the central bank has just added further fuel to the most obvious bond bubble in modern history – and helped create a fresh one on stocks."

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    1. How is your prediction of hyper-inflation working out for you, money printing man?

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    2. When did I predict hyper-inflation Eric?

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    3. Anyone who talks day after day after day after day after day about money printing is DEFINITELY insinuating that we'll have hyper-inflation. This is NO doubt one the rules of goldbuggism. A good gold bug must always and forever keep repeating the words "money printing". So, Let us all know when it comes.

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    4. I thought a goldbug was someone that invests in gold all their life for any reason Eric?

      Just because an investor chooses to invest in gold until the central banks can prove they can stop printing money does not make them a goldbug does it?

      You use that goldbug word a little too freely on people that invest in gold.

      Not every investor in gold worships gold.

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    5. YOU are indeed a goldbug IF you are buying gold as a result of your "money printing" fantasy WHILE the price of gold continues to fall!

      Here are the 12 rules of Gold Buggism. Ask yourself if these apply to you.

      1. Gold is a Currency: This is rule number 1. It is not a decorative or industrial metal, it is a permanent store of value, as dictated by Greeks in Lydia around 700 B.C. And, it shall be ever thus.

      2. The price of gold cannot fall, it can only be manipulated lower: When gold’s price falls, it is an unnatural act. It can only occur as the result of an international cabal of Central Bankers and politicians. Its a conspiracy, and we know who the guilty parties are.

      3. If the price of gold is rising, it is doing so despite enormous and desperate efforts by manipulators to prevent the rise: This is the corollary to the prior Rule of Gold manipulation. Gold runs up despite the overwhelming opposition to it.

      4. The world MUST return to the Gold Standard one day: It is inevitable that we will return to a Gold Standard. We all know this to be true. When we compare the size of the money supply to past amounts when there was a Gold Standard, we can derive prices of Gold in the $7,000, $10,000 even $15,000. Hence, we know its cheap even at $2,000.

      5. Central Bankers are printing money relentlessly, and this can only drive Gold prices higher: NOTE: You must ignore, for the moment, that Gold has not gone higher for the past 2 years as Central Banks around the world have ramped up QE. This only means that ultimately, Gold will go much much higher.

      6. Gold works whether the economy is good or bad: When we have a red hot economy, Gold is your hedge against inflation. When we have a bad economy, Gold is a safe harbor against collapse. It is a one way trade that never fails!

      7. Gold will survive after the world economy crumbles: Gold is the ultimate currency, as it has a value that will survive even after the whole world tumbles around you. Get yourself some gold coins and a Glock and you will be just fine when the whole world goes to shit. We welcome the era envisioned in the movie Mad Max.

      8. Never admit that Gold is essentially a sucker’s bet: Never discuss how in the last century, gold has run up only be to trounced in repeated massive sell offs (always blame rule #2 for this). Do not discuss how this has happened in 1915-20, 1941, 1947, 1951-66, 1974-76 1981, 1983-85, 1987-2000 and 2008.

      9. Gold is a rejection of government, and their control of fiat money and finance: There are no printing presses that produce gold, it is finite, natural and God created. How much we scrape out of the ground each year is limited, and the only variable to the old equation. (Just ignore Man’s natural tendency to organize into to City-States over the past 12,000 years).

      10. All Gold discussions must contain ominous macro forecasts: Your description of why Gold is going higher must consist of spurious correlations, unprovable predictions, and a guarded expectation of bad things in the future. Avoid empirical data at all costs.

      11. Gold is always rallying in one currency or another: Sure, it may be down 30% in Dollars, the reserve currency it is priced in, but you can always find a currency falling faster than it does and claim you own it in that denomination. Last week, it was up in Japanese Yen. This week, it is up in Zimbabwe dollars.

      12. China & India know the value of Gold; the Western world does not: The massive buying of gold by consumers in Chindia reflects the culture, intelligence and investing savvy of the people in these countries. The West doesn’t get it, and it is their loss.

      Delete
  9. Corn, soybeans rebound off chart support as crude oil bounces; corn up 5, beans up 10, meal up 3.0, wheat dn 5, KC dn 6, MN dn 9

    the stock market seasonality takes a break tomorrow as eyes will turn to non-farm payroll friday.

    oh, ecb decision tomorrow..If you see the headline "Draghi quits" what do you do?

    cheerio!

    ReplyDelete
  10. William Kaye is not a hedge fund manager, but he is a liar, when he says gold and silver are in backwardation. Eric King should be shot for putting these guys up on his site. And another thing, he should really think long and hard about the headlines he puts up. Very sorry and very sad.

    ReplyDelete
  11. Goldbugs are going to drop dead when they figure out that ALL their cult leaders sold everything gold a while back. Just because they keep talking bullish does not mean they hold anything.

    ReplyDelete
    Replies
    1. Eric Sprott and Jim Sinclair are the perfect example. Selling their holdings while still pumping gold because admitting they were wrong is too painful.

      Delete
  12. And I have this gut feeling that Eric King sold his silver stack long time ago. And look what happened to his darling U308 stock where he told his audience he bought 1 million shares while interviewing " The man who made one of the greatest discovery in the last quarter century" Complete collapse to ZERO.

    ReplyDelete
  13. @ Kid Dynamite

    clearly, you are not a "savvy" investor or "one of the top names out of Europe" or the World's Leading Trends Forecaster, because if you were, you would know that all this Chinese buyjng has been done "by stealth" using €uros rather than US$ (and that makes a difference, really it does).
    http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/10/31_Maguire_-_Were_Seeing_Stunning_Amounts_Of_Euro_Gold_Buying.html

    If only you had worked in M&A at Goldman Sachs 25 years ago, they would have taught you that! Alternatively, you could have learnt it as a Car Lease salesman, a pharmacist or a frozen yogurt vendor, but whichever way, you would know by now that nobody in Asia - NOBODY - EVER sells metal, they only buy it. So when you see a couple of dozen bars dropped during Hong Kong hours, IT ISN'T THEM, OK as all purchases are settled via a secret maguc formula which involves a Purchaser but NO SELLER. EVER!!!! !

    Have you got that now?

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    2. You make an interesting point Gustav, much time is spent slamming these KWN guys but what many of those KWN guys reasoning for buying gold has been, is endless money printing.

      Sounds like a very good reason to buy gold one would think?

      And there does not seem to be a good answer for why gold would be sold off huge in Yen terms as their already broke currency gets printed into oblivion even more now but the stock markets rocket higher on the news?

      Perhaps investors just forget history or part of it anyway, as stocks are reacting the way one would think by going higher.

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    5. Indeed Gustav, I have not heard that there was any new way devised for central banks to buy assets like bonds without paying money for them. The money has to come from somewhere to purchase those assets right?

      For any KWN guy that said buy gold because of endless money printing that seems like good reasoning so not sure one could call that guy a huckster.

      For ones that said buy gold for no good reasons as gold is going up to the moon next week, then those would be the hucksters.

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    7. Geniuses of the world, Gustav, Barney -- how is your prediction of hyper-inflation working out for you? Let us all know when you see evidence of it occurring in America.

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  14. Physical market update:

    US Mint temporarily sells out of US Silver Eagles.
    "The Mint will advise when additional inventory will become available for sale"

    http://www.reuters.com/article/2014/11/05/usa-mint-silver-coins-idUSL1N0SV2RP20141105

    ReplyDelete
  15. Matt

    well, that's IT then. Game Over!

    COMEX default in the morning, no doubt

    ReplyDelete
  16. Dynamite, I cannot get over just how ignorant and ill-informed you appear to be! The "Market Legends" will tell you as a certain fact - A FACT, and you can't argue with facts - that

    "We saw 30 tons of gold sold at 2 PM Hong Kong time.  That is a time in which no one does any real trading.  What Asian trading is going to take place is already done by that time of the day....

    http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/11/5_Shocking_Facts_About_Todays_Smash_In_Gold_%26_Silver.html

    whereas you, you poor fool, continue to believe that nonsense about how both the SGX in Singapore and the SGE in Shanghai have an afternoon trading session from 1.30 pm onwards http://www.bullionstreet.com/news/chinas-sge-to-launch-afterhours-trading-in-goldsilver/4241

    You MUST by now - surely - realise that Gold is being manipulated by the Saudis to punish the Dalai Lama for not being a Muslim?

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    2. "You MUST by now - surely - realise that Gold is being manipulated by the Saudis to punish the Dalai Lama for not being a Muslim?"

      wow... i had NOT REALIZED THAT! thank you. it all makes sense now!

      Delete
    3. Kid, why don't you post something useful instead of Ophelia type nonsense???

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    4. Yes. I would like to hear Kid's thoughts on the intermediate and long term PM prospects. HE is a smart dude, no doubt, and could offer valuable insights. Ophelia...even though your target deserves it, the jokes are getting tired.

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    5. @ Gustav --- The purpose of shorting gold is to make money, by taking it away from goldbugs like you, who cannot figure out how to read a price chart. OR to realize that America will never experience hyper-inflation any time soon. Shorting is to take advantage of your mentality and your perpetual lack of grip on reality.

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    6. **Gold is being manipulated by the Saudis to punish the Dalai Lama for not being a Muslim?**

      Ohh dear.......I've snorted my morning coffee all over my keyboard..... Thanks for the laugh mate!!

      Delete
    7. Gustav;

      I will echo what Eric stated. One shorts gold, or any other market, when they expect lower prices ahead. Why is that so hard for you to understand? Prices go up and prices go down. Those who possess the skill and know how, can profit both ways. That is the beauty of the futures markets.

      Also, the entire thesis of the gold cult has been that it is the BULLION BANKS that manipulate the gold price lower. Suddenly they have now changed their tune for manipulation to include hedge funds, HFT's, algos, my dog, my cat, and two crows that fly around.

      In other words, only when gold GOES UP is it NOT MANIPULATED in the minds of these people.

      Delete
    8. Eric if you believe money printing is going to work out then you are the one with a lack of grip on reality.

      Delete
    9. barneyb6;

      A bit of advice... if you will accept it... those who keep advocating buying gold due to what they call "money printing" are expecting the Dollar to weaken and collapse at some point. The fact is that it has not. Why is that? There are various reasons but the Dollar does not trade in a vacuum. It competes against other currencies and nearly every single one of them has its own set of problems.

      Thus, the Dollar remains the best of the bunch. As long as that is the case, gold is going to move lower except for occasional periods when safe haven trades get slapped on.

      One thing you might do well to come to terms with - when a market does not respond in the manner in which you expect it to, then your thesis needs to be examined. Good traders and investors learn to adapt.

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    10. Thanks Trader Dan. Yes, Is the name of the game to be right about our per-conceived notions, or our ideologies or philosophies? Or is the name of the game to make money?

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    11. Thanks Dan, what you say makes sense. I appreciate your comments.

      Money printing stopped with the dollar now, so makes some sense that gold goes lower against the dollar.

      I am kinda thinking gold would eventually rise against most currencies longer term as an alternative to holding paper currencies which constantly look for ways to devalue themselves to create inflation.

      Guess we will see if investors connect those dots ever.

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    13. Eric I thought a goldbug was someone that invests in gold all their life for any reason? Not just over worries of hyper-inflation from money printing.

      Just because an investor chooses to invest in gold until the central banks can prove they can stop printing money does not make them a goldbug does it?

      You use that goldbug word a little too freely on people that invest in gold.

      Not every investor in gold worships gold as you seem to think.

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    15. Gustav;

      Here is the crux of the matter - there is a very large, very vocal and very obnoxious contingency of the gold bug community whose entire reason for existence is to PROVE that the federal government, through its proxies, JP Morgan and Goldman Sachs in particular, are working secretly behind the scenes to deliberately suppress the price of gold and that they do this, by selling thousands of gold futures contracts at the Comex.

      When gold bugs therefore speak of price manipulation, they are speaking about bullion banks "smashing the price of gold to discredit it".

      I have written about this over and over again, but have noted that during the current bear market in gold, it has not been bullion banks that are selling but rather hedge funds and other large speculative interests.

      This is VASTLY DIFFERENT than claiming that the federal government is smashing the price of gold.

      Can you see the subtle shift in their vernacular? Now, the culprits are not just the bullion banks - because that is easily refuted as I have done often enough, but also hedge funds, HFT's, algos, etc.

      In other words, as long as gold goes lower, there is some form of manipulation involved in their mind. Such is not the case when gold is moving higher.

      that is duplicitous, deceitful and hypocritical. It also betrays a gross ignorance of the nature of today's modern futures markets.

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    18. Gustav:

      Define the term "bash". If you mean to shine the light of truth on error, deception, ignorance and falsehood, I plead guilty.

      When they stop with the incessant blather about why gold moved lower as being part of some nefarious plan by "evil and sinister forces attempting to drive the price lower but which, any day now, it will gloriously free itself from, and soar to the heavens, then I will "bash" as long as they BS.

      As far as Eric's posts presenting reasons why QE is not having an inflationary impact, I suspect it is more a case with many that they are bewildered that their expectations of runaway inflation are not coming to pass and thus feel the need to lash out at anyone presenting an alternative point of view to attempt to educate them as to the reason.

      Buy gold if you want to but please to do attempt to use this forum to tell some here to "shut up" and "not disorient the public".

      What in the world are you even talking about and what gives you the authority to tell me what to write or not to write or some other poster on here that is attempting to explain why those who keep expecting runaway inflation why they are incorrect?

      There are times when I am tempted to just shut down this entire posting forum to keep the gold bugs from pestering us all. Our stance here is very clear - most of the posters here and many of the readers hold physical gold for insurance. We also understand that very clearly gold is in a bear market. For twenty years, from 1980 - 2000, it was also in a bear market and was essentially a dead asset.

      If you wish to load the boat, please feel free to do so. If you wish to convince the public to load the boat, please start your own blog and do just that. I am not in going to assume that I can influence the public either way. Those who believe in the metal as insurance will continue to buy some; those who do not, will not.

      Why can you not leave it at that and stop arguing with the tape? At some point gold will stop going down but that DOES NOT MEAN it is going to go up in a big way either. See 1980-2000. Talk about lost opportunity cost! That is an investment disaster - locking up the majority of one's wealth in an asset class that went absolutely nowhere.

      That is all I am going to say on this as in answering you I get the distinct impression that I have written the same thing hundreds of times already and quite frankly, I have run out of patience with the gold perma bulls.

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    20. Gustav Martincek
      "That might just disorient people who could benefit from investing long term."
      How long term do you mean? If you mean a few decades you might be right. It will take that much of time for gold to get into a bull market again. Before that we will visit $300 again. Not tomorrow, not next year, in app. 5 years time. After that a decade of nothingness and than a new bull market might start. I doubt many investors who are reading your comments will be around by that time. This is how cycles work. And this is how the stubbornness of the majority of people keep the cycles working.
      I was also a stubborn gold bug until the April of 2013! But I am flexible enough to change when I need to....

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  17. The Dubai exchange also ISN'T open at 2pm Asia time. Or ever. And Arabs have no miney or Gold anyway

    http://www.dgcx.ae/index.php/en/precious-metals/gold-futures


    NB "Talking the Market Down" - I'm flattered. is it really listening?

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  18. Asia has stepped back as the buyer of last resort. They have pulled the chair out, and gold is flailing to the floor. This is exciting action for the bullion, and personally I'm waiting for a stellar opportunity on the HUI to step in and scoop up some quality names at bargain prices.

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  19. Is this quote from Shakespeare's Julius Caesar relevant to investing in gold shares at this time?

    There is a tide in the affairs of men,
    Which, if taken at the flood leads to great things,
    Omitted, all the rest of their life
    Is bound in shallows and miseries,
    On such a full sea are we know afloat,
    And we must take the current when it serves,
    Or lose our ventures.

    Once in a lifetime do we get outstanding opportunities, and it takes an extraordinary person to recognize them, and take advantage.

    Oh, I forgot to mention that the above quote was made by Brutus to Cassius, two of the assassins if Julius Caesar, on the eve of the battle of Phillipi, a battle which they lost, with both of them committing suicide.



    ReplyDelete
    Replies
    1. I've always loved that speech (but i remember it as '...taken at the flood leads on to fortune.')
      Quite true, but opportunity cuts both ways...from The Tempest: "f I’d been a god I would’ve let the sea sink inside the earth before it had a chance to swallow up that ship and all the people it was carrying."

      Delete
    2. Yes, Joe, there is that version. Trouble with Shakespeare you never know which is the right one. Like his name, which can be spelled many different ways.

      Delete
  20. But I will say this, if this panic rout continues, and the HUI gets down to about 130 I do think it would be the opportunity of a lifetime, but very few will take it. I suspect many on this site are casualties from gold share investment who bought at giddy heights, some are even more seriously wounded, and some are the walking dead. They are most unlikely to participate. Others, who are relatively intact, could be tempted, but very few will. It is always like that, but they buy at the top without a care in the world. We humans are certainly herd animals!

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    1. This comment has been removed by the author.

      Delete
  21. Mr. Norcini,
    I am taking the liberty of bringing this discussion to you since it is about you. You can delete it anytime you want.

    ReplyDelete
    Replies
    1. Bright Aurum;

      I always love to see people explaining to me what it is that I believe.
      It helps me as I am very confused about myself.
      Seriously, one thing those who know me intimately know about me is that I do not particularly care what people say about my profession or my method of approaching markets. I have been at this for more than a quarter of a century now and have made myself a very good living so frankly I could care less what they want to postulate and speculate about.
      I do not broadcast my investments or my trading positions abroad nor will I in this forum as it is no one's business. Those who understand how I approach the markets and who know how to interpret my comment will have a general sense of my sentiment on various markets but as a trader, I reserve the right to totally flip my perspective on a moment's notice if the price action and chart pattern calls for that. In other words, I do not get married to any position and that is what separates me from the gold perma bulls who are blinded to reality by their love affair with a block of yellow metal.

      Delete
  22. M said...
    @ Jim

    This is why this keynesian credibility inflation is so dangerous. The markets are aligned perfectly to discredit Austrianism and pump up keynes.

    Even a guy like Dan Norcini gets sucked into the vortex of insanity. He's been on this anti gold tirade for a couple years now. And he thinks that anyone who recommends it is a lying huckster. (even though he owns physical gold) The most marketable good in the world needs a salesman I guess. Talk about an oxymoron.

    ReplyDelete
    Replies
    1. HOW does being against the Keynesian school of economics EQUAL you must buy gold? That is extremely delusional!

      Delete
    2. Second, the markets do not give one JACK CRAP about the augments between "Keynesian" & "Austrian" schools of economics.

      Delete
    3. No time for lightweights.

      You either believe there is some black magic in central bank balance sheet expansion or you don't.

      Delete
  23. MatrixSentry said...
    Actually M, Dan Norcini is quite sane. The problem is the two of you speak different languages. To Dan Norcini, gold is a trade. As such, gold is a contract, a digital marker in a betting game. Dan cannot conceive of a trade in physical gold, and rightfully so. Why would anyone do something that foolish? Why not just trade the digital contract?

    I presume from your posting here that you view gold as contractual gold derivatives plus physical gold. As such, you see utility in gold for saving (physical) and trading (mining shares, ETF, etc). Your grasp of the Freegold concept, as I glean from your posting here, leaves a lot to be desired.

    Dan Norcini gets frustrated with people who see gold as a trade. People like you who believe they are insulating themselves against the evils of fiat by going long in the paper gold markets. To him this does not make sense. Why would someone go long in a trade when that market is displaying bearish trends across virtually all timescales that rational traders would utilize? Worse, why would someone be perpetually bullish for the gold trade?

    He is spot on as far as I am concerned. I wouldn't touch digital gold with a ten foot (long) pole. I would short the shit out of it however. Dan Norcini would have zero problem with a saver of gold bullion, who is stacking it away as a reserve. He would likely scratch his head in bewilderment at my actions. I have far more physical gold than I need. He would wonder why I do this and would see a huge opportunity cost in my actions. Why not put some of that reserve into the markets to generate more fiat, and then convert that fiat to gold in reserve? My only response to that line of logical inquiry would be to say that I see a collapse of financialization on the horizon and cannot possibly predict the timing. Therefore, I am being as conservative as possible in order to preserve as much of my wealth as possible.

    ReplyDelete
  24. The miners can probably keep high grading their deposits for another year but after that they will go into care and maintenance, or go bust, unless the gold prize increases to at least 1300. Miners in the US will not have the benefit of having their costs in a weak currency so they will be the first to throw in the towel.

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  25. MatrixSentry said...
    Dan Norcini would not agree with me that a collapse of financialization is likely. He makes his living in the market, trading digital contracts. He is a very successful gambler who uses TA to sheer sheep in the market. He would not consider a fracture of the physical gold market from the overall gold market as likely. He sees the two forms as parts of an inseparable whole. Dan believes that the stock of gold is nearly unlimited (he's right). He believes that regardless of how low or high the gold price goes, there will be physical that flows in order to keep the physical and digital market joined. That is where I differ with him.

    Your credibility is shot with him. He sees you as a babbling troll. Too bad. You might have asked him what he saves in, while making the distinction between saving and investing. My bet is that he would acknowledge holding physical gold for this purpose. Further, you could have asked if now was a good time to buy physical gold, to be held over the long haul, and to be called upon after one's productivity has ended? I suspect he would say sure, a bear market is great time to acquire long term gold for this purpose.

    Owning mining shares is irrational at this point. Owning GLD shares is quite mystifying. Going long gold futures is suicidal. Owning physical gold for the trade, to stick it to a gold short is just plain stupid. This is Dan Norcini's perspective. I agree 100% with him.

    The only hit I have on Dan is that he doesn't understand how GLD works. He believes that if gold is going down, GLD stock must decline. He sees this as confirmation of his bearish stance, when no such confirmation exists. He does not need confirmation from GLD. There is enough of that in the charts. He does not see that physical gold is flowing from GLD for a specific reason, namely to augment a flow that is experiencing increasing demand. His view is that flow will always be present from stockpilers of gold at any price point. He would reject that idea that stockpilers are less likely to cough up gold as price declines. In fact, I suspect he would say that as price declines, more would part with their gold in disgust. He sees gold as a trade, therefore this would make sense.

    ReplyDelete
    Replies
    1. Bright, do you have any idea how tiny the gold mkt is?

      Delete
    2. Bright, why are posting nonsense from some idiot?

      Delete
  26. Roacheforque said...
    Matrix,
    Indeed. I can't speak for Norcini as I have never read him or spoken with him, but you certainly have artfully expressed what I consider to be the prevailing mindset of the "investor class". A class not wholly responsible for the current "market action" but certainly helping it along its merry way - oblivious to the greater purpose they serve, as influenced by higher powers they do not perceive.
    November 5, 2014 at 7:54 AM
    M said...
    @ matrix

    He is the most against people who advicated buying lots of physical. Because he feels bad for the ppl with lots of physical because they didn't have the chance to sell it earlier in the bear market. He knows nothing of freegold and he thinks we are the worst of them all.

    My position has always been the same. I've understood freegold for a long time now. But I've also been playing the miners just in case we get a bubble in PAPER gold. I maintain that position now because we have no proof that this is a freegold move in the paper markets. The run up in paper may still be in front of us. If it is, then I'm getting in at the bottom. If it's not, then my physical gets revalued. And in that case, I don't care what happens to the miners.

    ReplyDelete
  27. MatrixSentry said...
    M,

    As I said, he would scratch his head if he saw my stack. Opportunity cost. He cannot understand the saver's mindset. He thinks he does. He thinks that saving entails risk. I do not. He confuses saving with investing. He believes they are one in the same. Everything he sees in the world says this view is correct.

    It will be correct until the day it isn't. Then Dan will have an education. He simply cannot see that day ever occurring.

    I do not hedge my gold. I hold as much as I understand. Which as it turns out, is quite a bit. I understand enough to see very little utility in a hedge or opportunity to make a killing in miners.
    November 5, 2014 at 8:26 AM
    Indenture said...
    M: You have now used the word 'miners' sixty-nine times since you first visited FOFOA's site.
    November 5, 2014 at 11:16 AM
    M said...
    @ indenture

    Cool.

    My physical position is about 3 times the size of my miners position.

    We still don't know if this is the move. ANOTHER said the move would be quick. This has been a slow meltdown. So the paper run and subsequent crash could be in front of us. I hope it's not.

    ReplyDelete
  28. corn and soybeans held a 'trendline off the oct low' for their technical bounce, in confluence with the august low in corn and the .38 fib on soybeans.

    funds bought a net +9k corn and also the freezing weather upcoming was mentioned for 'denting'.

    firm basis for corn,meal, and beans is said to be that the end user is not getting filled yet.

    technicals in KC and MN wheat are looking poor, couldn't hold 20dsma's like chicago and weekly charts rolling over. spread traders using wheat as short leg perhaps.

    Ags export sales tomorrow morning for an econ number.

    everybody's workin' for the weekend!
    ...2 sessions to go,,cheerio!

    ReplyDelete
  29. Today's HUI close was 146.8
    Oct 2008 low was 150.27
    The last time before Oct 2008 it closed under 150 was July 2003.
    It closed above 150 a number of times in 2002.

    HUI:Gold is uncharted territory @.129 That is 1/2 the level it was at at the 2008 bottom. No goldbug will be able to take an opportunity because he or she will be broke having clung on to shares until the bitter end.

    THe HUI has declined 44% from its summer 2014 level and some 76% from its 2011 high.

    Sorry if I sound like a cub reporter Steve!

    ReplyDelete
  30. Lassonde has been out of the loop for about as long as Easy Al the Maestro; kwn getting desperate for interviews, but I always want to know Eric, how do you know how wealthy everyone is? Are you really their accountant and just shamming over here with your worthless site?

    ReplyDelete
    Replies
    1. Easy Al is still charging $200000 a pop. Not bad for someone out of the loop.

      Delete
    2. Peter, just ask yourself who is paying the Maestro, the all time panderer to power hypocrite who buys new knee pads every other week?

      Delete
    3. Greenspan ?

      I wouldn't mind hearing from Lassonde. Somebody defaulted on a Franco revenue stream recently.

      Delete
  31. If you want to know what the price of gold will be just look at the dollar. Nothing else is really relevant. When the dollar turns gold will turn. But certainly not yet.

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  32. Please, Mr. Norcini, don`t get me wrong for I am not trying to read you or interpret you, or be condescending towards you in any way. What I am trying to do is to show you that there is a whole different universe of interpretation of what is valuable in life and between individuals and between societies and cultures that you seem oblivious to. That universe is respectfull in many ways of what you do and who you are; so that is why I am making this effort not to show you that you are walking on a wrong path but that there may be a straighter and more fulfilling way towards what is good in life.
    Thank you.

    ReplyDelete
    Replies
    1. Bright Aurum;

      my comments were not directed at you but at those ridiculous comments you lifted from some off the wall web site in which I am being psychoanalyzed.

      On the latter point - I am a Christian and thus have my own view of what is the straight way that leads to eternal life and my own idea of what is fulfilling and I see no connection whatsoever to what I am doing as a trader in my analysis and the comments of others. Frankly I do not care as there are only two sides to a trade, the right one and the wrong one. and yes, it is that simple.

      Delete
  33. It seems not all of Harvey Organs new Audience over at silverdoctors have welcomed him with open arms.

    http://www.silverdoctors.com/harvey-organ-gold-silver-mutiny-at-the-ecb/#comment-124388

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  34. This comment has been removed by the author.

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  35. I am a Christian myself thus I hope to receive salvation, I believe in The truth and The way and The life, and I love God and man for what they are (mostly a mystery) and try to do His will and intent for me and mankind, my Christian brothers in particular. It is the {http://fofoa.blogspot.com} website that relieved me from the daily strife and anguish to perform against the others in the material world and gave me a peace of mind and longterm perspective. So I recommend it to you and I hope you find it illuminating.
    And yes long-term exists as one gets close to eternity only mens`desires are vein and fleeting.

    ReplyDelete
  36. I think we are getting very close to a short-term mega trade in gold shares, or for even more oomph something like JNUG or NUGT, which are good for quick exits. But keep steady men, hold your fire till my command, wait till you see the whites of their eyes.......

    ReplyDelete
  37. Dan, why is there such a divergence between the physical and paper markets? Today in the futures market Silver gets taken to the woodshed, yet the U.S. Mint reports it can no longer keep up with demand for Silver Eagles. Any insight you can provide on this topic would be greatly appreciated.

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  38. Gold is doing it's best to tell us the world economy is stuffed but no one apart from Gold bugs and miners are aware. CBs keep pumping Government debt and stocks which are now part of many CB balance sheets. Common sense says whats going on in the Gold market isn't normal, if all assets were collapsing then one would expect Gold to fall along with everything else. If the big stock markets don't role over soon and Governments magically balance budgets and clear their debt Gold has some serious catching up to do. Could Gold go lower before the turn sure but before long there will be a serious up move.

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  39. Dan,
    You don't think the gold short is a crowded trade now that it is all over the news and we have already had a major drop back in 2013? I see us going lower but seeing less selling pressure and lots of short term buying/ squeeze spikes

    ReplyDelete
  40. Hi Dan,
    nice analysis as usual.
    am I right to assume that the next important support for gold is only at $1050 or so? so we might have a bounce if we get there...
    thanks,
    Kris

    ReplyDelete

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