Skip to comments.“When People Realize Where All This Gold Is Going—There Will Be A Scramble To Buy It Back”
Posted on 04/14/2013 10:21:02 AM PDT by Diana in Wisconsin
I had the opportunity this afternoon to connect with Peter Schiff, CEO and Chief Global Strategist of Euro Pacific Capital. It was a fascinating conversation, which took place while gold was absolutely collapsing.
During the interview, Peter explained that todays sell-off, triggered by a Goldman Sachs sell recommendation was based on the false idea of European Central Bank gold sales hitting the market. Instead he explained, gold is preparing its move from weak hands to strong hands, before heading to new all-time highs.
When asked his thoughts on the complete panic in the market this afternoon, Peter commented that, Gold had [previously] sold-off on false anticipation of [economic] recovery bringing an early end to QE. But when Goldman Sachs came out with the sell recommendation sentiment was already negative so I think theres a lot of stops being hit [right now] [However], the lower prices will create an opportunity for buyers wanting to accumulate large positions without moving the market. The only way to do that, is to have a lot of selling...Goldman Sachs certainly could have done a lot of favors for people interested in accumulating gold, because now youve got the selling that makes [it] possible.
With respect to Cyprus selling of its gold reserves, Peter said that,The European community is trying to force Cyprus to sell-off its gold and now you have the anticipation that other highly-indebted European nations like Greece, Spain, Portugal, and Italy, that [all] have lots of gold, [will have to do the same]. Portugal has I think 90% of its reserves in goldthats about the highest in the world [So] these countries [being] forced to sell their gold has really [spooked] the market, and people are selling in anticipation of this avalanche of selling by European central banks [but] thats a false idea The reality is none of that gold is going to be sold into the market [because]the buyers will be other central banks.
According to Peter those other central banks, will be the strong-hand central banks of emerging economies. The indebted Western countries he indicated, [Are] going to be forced to liquidate [and] whats going to happen, is that broke countries are going to be selling off their gold to rich [BRIC] countries.
He further noted that, Moving gold from weak hands to strong hands is very positive for the gold market [and] when people realize where the gold ends up, [they're] going to scramble to buy back what theyve sold.
As a concluding remark on the gold price, Peter indicated that, We have to get through this sell-off and [then] I think were headed [to] new highs. Im surprised at the degree to which weve already sold-off, but I dont think that changes the fundamentals
the bigger the sell-off is, the bigger the [subsequent] rally is going to be.
PING for Monday.
I’m not panicking, but gold could go as low as $1,340.00 while this all shakes out. Stand fast and don’t look at gold prices every two minutes, LOL! :)
By some measures, it’s already as bad as 2008 was, just not as quickly. Silver has been cut in half again, every moving average has been busted again, HUI-to-gold ratio is even worse, etc.
The old saying, “markets can be irrational longer than you can remain solvent” is even more true when they aren’t even markets any more but just a sequence of obvious and even admitted central bank interventions and manipulations.
“The old saying, markets can be irrational longer than you can remain solvent is even more true when they arent even markets any more but just a sequence of obvious and even admitted central bank interventions and manipulations.”
There are no free markets anymore. Currencies are manipulated, stock markets are manipulated, commodities are manipulated and real estate is manipulated. Either governments, multinational organizations, or megabucks/securities firms are moving markets to the benefit of insiders. The average citizen will be fleeced no matter what. Unfortunately investing is a fools game and holding cash is a fools game.
Haynes - Gold & Silver Buyers (physical metals) Outpacing Sellers 50 to 1
It’s a buyer’s market right now!
Who has the lowest silver pricing out there? And is it better to buy rounds or (”junk”) old 90% coins?
As a very long time silver owner, I don’t really consider silver to have been “cut in half”, because the almost $50 mark set a few years back was so transitory it in essence “never happened”. Of course, it DID happen and in no way am I implying you or anyone else is delusional. I saw it, you saw it, the world saw it. But it was so transitory, it was uncatchable...except for buyers/chasers. I was super lucky to have sold some when the price was well over $40, but because the form factor of the silver I sold then was sterling flatware I had gathered over many years, by the time the refiner got it and settled me out, I “only” got about $39.50. This happened in the 1980 spike as well. The refiners knew that the price would not last and with lines of folks around the block trying to sell candlesticks, etc; they got overloaded. Very, very, very few folks rec’d over $35 at that point. Just trying to supply some context. I am not a “never sell an ounce” guy. I’ve sold silver at $8, $18, $28, and $39.5. I’ve also bought it back, but again, not much over $30. My own delusion is that I don’t believe silver ever got over $35 this last time. As such, I would encourage the dismayed among us to measure the whack from $35. Still big, let there be no doubt.
I’ve been a tad concerned over the price of Ag for a while. The chart even before Friday looked just horrible.
I remind people of two things: Silver did not leave $10 decisively behind until 2009 and it spent about 1/3rd of 2008 well under $10.
I am expressing no opinion as to the future price or direction. I have bought silver at every price between $5 and $35 but I really really slowed down above $28 and I suspect what I own, I own at about $15-17. That does not help recent buyers much, and don’t get me wrong, I’d be plenty pissed to see prices much lower than here. But I absolutely know the proper reaction is NOT to sell out. Nobody ever made money panicking. Silver is a fiendishly volatile item and always has been. We live in a world of floating currencies and the USD is at present the worst bad one. If you want to buy and sell silver as a trading matter, it’s crazy to do so with the physical because the spreads will kill you. That’s what SLV is for. This implies that he/she who wants the physical in their possession is not a flipper. If the reasons you/they/I bot silver in the first place are still in place, then that’s what should be kept in mind.
Peter Schiff is saying that the treasure of the West will be sent to the East to pay off the banker scum. That Portugal’s central bank or Gov’t will sell its gold to China/Chinese central bank. The gold will not really be sold on the free market, anyhow certain central banks (China Russia etc) are the largest gold buyers these days. Along with India whose population buys gold.
Gold leaves the weak hands of degenerate borrowers who are not producing (Spain, Portugal) and is sold to those who produce be it China, Russia, Brazil etc
Check out APMEX on ebay http://www.ebay.com/gold-and-silver
buy rounds or (junk) old 90% coins>>>>> both
I agree with everything else in your post -- worst decision is to sell here, toss-up as to whether next worst is to wait for a month for lower prices or just buy something and close your eyes for a year.
According to the World Gold Council, gold buying by global central banks in 2012 was at the highest level that we have seen since 1964
Worldwide gold demand in 2012 was another record high of $236.4 billion in the World Gold Councils latest report. This was up 6% in value terms in the fourth quarter to $66.2 billion, the highest fourth quarter on record. Global gold demand in the fourth quarter of 2012 was up 4% to 1,195.9 tonnes.
Central bank buying for 2012 rose by 17% over 2011 to some 534.6 tonnes. As far as central bank gold buying, this was the highest level since 1964. Central bank purchases stood at 145 tonnes in the fourth quarter. That is up 9% from the fourth quarter of 2011, and the eighth consecutive quarter in which central banks were net purchasers of gold.
This all comes on the heels of decades when global central banks were net sellers of gold. Marcus Grubb, a Managing Director at the World Gold Council, says that we are witnessing a fundamental change in behavior by global central banks
Central banks move from net sellers of gold, to net buyers that we have seen in recent years, has continued apace. The official sector purchases across the world are now at their highest level for almost half a century.
You'll note the very nice refiner I dealt with managed not only to lose 4% of my load in the "pot", he assayed my 92.5% sterling at 90% as well. 4% is huge, should be ~~1%.
I strongly reco against buying silver on ebay. There is simply too much fraud going on. I bought loads of sterling on ebay but that was long ago and far away.
“The physical market is on fire and it will become an inferno if the central planners continue to artificially push prices lower.”
When this taught rubber-band economy snaps, it’s gonna be a doozie!
Junk silver, coins 1964 and prior, 90% is my choice.
Trust me, I’m watching gold closely. I’ll be all in if it’s starting to fall below what I need to pay off my farm.
I want to be completely debt-free when TSHTF. I’m thinking my timing is right. 13 years is a long time to wait - and frankly, what I’ve been waiting for isn’t going to be good for any of us!
That’s about 3 days of central bank buying at current velocity and it’s certainly possible that “the market” in the form of ^GSCI saw this and deliberately jumped on it. Like Soros shorting the GBP into the weakness that existed back then.
I’m not saying “this is the bottom” or anything like that. From my research, the cost of extraction is about $1000. and the price could go there or even a tad below there. Fuel is a big part of that and fuel prices could also collapse. But literally everything else we see in the MSM is an illusion or quickly turns into one, and the “gold press” has an inordinate number of kooks as we both know.
Anyone who has ever tried to flip gold or buy it for the purpose of reselling it in a modest amount of time has been made aware of the vicious spreads involved. So I don’t think that anyone but small-amount amateurs (who have little effect on market prices) bought gold for that purpose. Thus they are not in it to flip it. That does not mean it can’t go lower, as I said.
It also seems unlikely that anyone wanting to sell large amounts of gold would telegraph their intentions so as to crush the market and thus mash the amount of money they would get from the sale. Although we don’t expect genius from bankers, particularly from a small country like Cyprus.
Our brains see a decline in price and somehow expect it will continue until the price is zero, just like we see a price rise and expect it to continue into infinity. Neither occurs.
What happens next, next-next, and next-next-next in gold is what matters to folks or entities who bought it. I can’t predict that any better than anyone else. But it would not surprise me to ultimately find out that this was a financial gang-rape of Cyprus.
FYI, not sure what impact this will have on the precious metals market, but a gold and silver mine just collapsed.
What investment is not a fools game?
Jim Sinclair has alot of respect for the views of Alf Fields.
The latest from Fields is here: http://www.jsmineset.com/
A comment on the article says the mine is a copper mine. Check out the comments following the article.
meanwhile, every other corner has a “We buy Gold “ sign.
When they begin to disappear, we will be at the bottom
HOW THE HECK DID I SCREW UP A SIMPLE CUT AND PASTE!!!! Sorry people. Trying again.
Hmmm, was it Goldfinger or Zoran?
This is absolutely an example of the dirtbag neighbor selling off his Harley to pay for LAST month’s rent.
According to this, 10% of US annual silver production just vanished overnight.
Make that 16% of the US annual silver production just collapsed
use this site for comparison shopping:
That link was uplifting. Thanks
That’s a very interesting conflation of events.
90% silver is disappearing fast and the premiums are going thru the roof.
It’s actually pretty easy to see when a bubble is about to pop. When you see promotions on tv (or in Parade magazine) trying to sucker the ignorant, it’s about at the end. Flipping houses, buying gold, day trading, foreign exchange. Just watch for late night TV ads or other promotions.
Fair enough, but how long has that (for gold) been going on? Gold has just lost 2 years of gains but is still more than a double over the last 5 years.
I’m not especially trying to invalidate your comment, I’m just saying that if I take it as the only salient truth involved, then one must define the “bubble window”. I sold a piece of property in 2002 that I thought had achieved its maximum conceivable value, only to see it more than double over the next 5 years.
And, there are bubbles and there are bubbles. If I take the low low price of gold in 2001 circa $250 and the highest high of $1900 a couple of years ago and average those prices I get $1075. Nobody can predict the future, but could gold go that low? Maybe, it would be at almost the cost of extraction.
I am concerned about the double top formation on gold, I will admit, but the velocity of the rise in gold has been very, very gradual, very non-bubble like. Silver is a different story, especially its behavior over the low 30’s.
Meanwhile, there is no shortage of vendors selling stock market trading courses, so is that a bubble?
Some have mentioned the “cash for gold” thing. Those stores typically pay about a third of what the gold is worth and are a pure sucker play. They can handle a serious price whack buying 70% under market!
I don’t think one can take only a single data point, and that goes for just about anything.
Besides, who would go to the trouble of forging dimes, quarters and half dollars, then aging them.
As such they would be a natural for any barter or black-market trade that sprung up.
The real question is whether the gold claimed to be at the Fed is really there, or whether it’s gold plated tungsten. When the Germans wanted their gold back, the answer was pretty much ‘sure, later.’
Whats the conversion, is it $1.10 of junk per ounce of silver?
I don’t know. I’ve never had to cash any of it in. Yet. :)
Gold is at 1438 right now. Down 63.00 Yikes
About $1.40 is one ounce assuming it’s not too circulated. Out of the mint, 90% silver is .72 oz per dollar, except if it’s a silver dollar then it’s about .77 oz.
Getting hammered. (gold & silver, not me!)
Easiest site to see the numbers is apmex.com