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Some gold bugs think storm has passed
Market Watch ^ | June 30, 2011 | Peter Brimelow

Posted on 06/30/2011 10:09:26 PM PDT by OneLoyalAmerican

Gold stumbles, but some gold bugs think the storm has passed. When I last wrote on gold, the metal was looking good—but I described gold shares as a “train wreck”, while noting that a number of observers were thinking the gold shares might have lagged too much.

In the past week, it is tempting to say the situation has reversed. Last Wednesday, gold closed at a seven-week high, and the Aden Report was talking of a possible move to $1,600 soon.

Then the roof fell in. By Monday, gold /quotes/zigman/700181 GC1Q -0.10% had fallen $58 (3.7%) to close at $1,496.40.

As a correspondent on the LeMetropoleCafe website pointed out, the drop in open interest (the number of gold contracts outstanding) was even steeper, over 5%. This is regarded as discouraging: It suggests real selling by contract owners was involved, rather than short selling, which carries with it the possibility of a short-covering rally.

In the past two days, gold has managed a modest recovery — $14 as of Wednesday’s close. But the Aden Report is now discouraged, saying this evening that gold (and silver) “are bouncing up this week as global tensions ease, but this may not last long. ... Note that both of the short-term indicators are declining, suggesting prices will likely soon head lower in a further downward correction.”

(Excerpt) Read more at marketwatch.com ...


TOPICS: Business/Economy; Extended News
KEYWORDS: gold
Buying opportunity ahead?
1 posted on 06/30/2011 10:09:29 PM PDT by OneLoyalAmerican
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To: jiggyboy; PA Engineer; blam; TigerLikesRooster; Cheap_Hessian; CJinVA; Jet Jaguar; ...

goldbug ping


2 posted on 06/30/2011 10:11:04 PM PDT by OneLoyalAmerican (In God I trust, all others provide citations.)
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To: OneLoyalAmerican

The debt deal hasn’t even been finalized. The economy hasn’t even hit its low as of yet. I’m still waiting for a reason why the fundamentals have changed. I suspect that someone[PPT] is pulling some strings.


3 posted on 06/30/2011 10:18:12 PM PDT by Palter (Celebrate diversity .22, .223, .25, 9mm, .32 .357, 10mm, .44, .45, .500)
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SELL before it’s too late!

I’m buying.


4 posted on 06/30/2011 10:22:16 PM PDT by Rio
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To: OneLoyalAmerican

Seems the opportunity is now. These dips in recent history have been very short lived. I have been praying for a big correction for quite a while in order to get the heck out of greenbacks. I have always hated the thought at buying at historic highs, suspecting it would drop as soon as I made my move. I almost moved in May thinking it won’t ever turn back. I am now glad I didn’t. Silver is trending down too. I wish someone had some clue how low it could go. I tend to doubt it will stay down for very long. I’m driving both me and my spouse nuts waiting. GOD I hate bubbles.


5 posted on 06/30/2011 10:27:17 PM PDT by ri4dc (Cut your cable, Break Wind for the TSA, Flush Twice in 2012, ROTUS Meet the Hermanator)
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To: Palter

You’re one person who has a clue. I won’t touch gold or silver in this economy. It reminds me of the NASDAQ climb to the sky in 1999.


6 posted on 06/30/2011 10:37:27 PM PDT by Sarajevo (The only reason I would take up walking is so that I could hear heavy breathing again.)
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To: Sarajevo

The price of gold keeps going up though.


7 posted on 06/30/2011 10:39:09 PM PDT by Republic_of_Secession.
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To: OneLoyalAmerican
With the end of QE and some action on the debt, though modest, I expect to see gold near $1,000/oz by Christmas and oil near $65/bbl (absent military tension).

We are and have been in a serious debt deflation...hidden by the printing presses. Now that money has been found to have nearly zero velocity as it went from bank balance sheets, to investment bank subsidiary to commodity markets.

Very soon those "investors" will turn around and find there's nothing but a cold wind at their back.

8 posted on 06/30/2011 10:44:06 PM PDT by Mariner (War Criminal #18)
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To: OneLoyalAmerican

Been coming down tonight. $1498.46 overseas.

http://www.oilbull.com/gold-charts/ten-minute/

I’m actually hoping metals come down more so I can buy more.


9 posted on 06/30/2011 10:59:01 PM PDT by bluefish (NoBama! Because Commies Suck)
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To: Sarajevo

I’ve been hearing and reading comments like yours for years and they have never deterred me. Nor have they ever deterred the price of gold. Sure, there has been temporary dips, but they always proved to be buying opportunities.


10 posted on 06/30/2011 11:04:01 PM PDT by bluefish (NoBama! Because Commies Suck)
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To: Mariner
Greetings Mariner:

I expect to see gold near $1,000/oz by Christmas and oil near $65/bbl

Thinking that means President John Boehner has taken his Oath of Office.

Take care,
OLA

11 posted on 06/30/2011 11:13:39 PM PDT by OneLoyalAmerican (In God I trust, all others provide citations.)
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To: Stillwaters

Commnets you may find of interest


12 posted on 07/01/2011 12:00:51 AM PDT by lonevoice (Where the Welfare State is on the march, the Police State is not far behind)
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To: OneLoyalAmerican

Silver went into a bubble and Gold is in the same mode.
They will go lower not higher in the next few years.

Gold is down because systematic financial failure risks are now down thanks to Greece’s vote.

Inflation is not as big a risk as assumed.


13 posted on 07/01/2011 12:13:35 AM PDT by WOSG (Herman Cain for President)
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To: WOSG

I ain’t worried about gold.....I’m buying at every dip. I’M WORRIED ABOUT THE FEDERAL GOVERNMENT BUBBLE


14 posted on 07/01/2011 3:35:57 AM PDT by Fred911 (YOU GET WHAT YOU ACCEPT)
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To: OneLoyalAmerican
WWGBD?

What would Glenn Beck do? ;D

God bless the man.

15 posted on 07/01/2011 5:58:51 AM PDT by Caipirabob ( Communists... Socialists... Democrats...Traitors... Who can tell the difference?)
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To: WOSG
Gold is down because systematic financial failure risks are now down thanks to Greece’s vote. Inflation is not as big a risk as assumed

I'll have what you are having


16 posted on 07/01/2011 6:30:26 AM PDT by qam1 (There's been a huge party. All plates and the bottles are empty, all that's left is the bill to pay)
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To: Sarajevo
. It reminds me of the NASDAQ climb to the sky in 1999.

But when the tech-market was bubbling, all we heard was that we had entered a "new" economy. And when the housing market was at its highest, the conventional wisdom had it that houses would always appreciate so buy, buy, buy.

This is different. This is driven by pure fear that the world's monetary system will collapse -- not euphoria about imagined, never-ending growth.

Unless Bernanke is fired and Paul Volcker replaces him, I can't see a single reason why people wouldn't continue to accumulate gold.

17 posted on 07/01/2011 7:03:37 AM PDT by BfloGuy (Even the opponents of Socialism are dominated by socialist ideas.)
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To: OneLoyalAmerican

If silver gets anywhere near 25 I’m buying. Not much cause I’m poor but I’ll buy what I can.


18 posted on 07/01/2011 7:07:48 AM PDT by jpsb
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To: qam1

I simply explained the market action.
Fine to disagree, but posting silly pics is not an argument.


19 posted on 07/01/2011 10:39:28 AM PDT by WOSG (Herman Cain for President)
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To: BfloGuy

“This is different. This is driven by pure fear that the world’s monetary system will collapse — not euphoria about imagined, never-ending growth.”

It’s a ‘bubble’ in panic-phobia and the-end-is-nigh thinking. Understandable aftereffect of the 2008 meltdown, but what if it is over-estimating the issue?
But what if the international monetary system WONT collapse? What if the US doesnt have hyperinflation? Then what happens to gold vs dollar?

We are going through what Japan went through in the 1990s and they had bouts of deflation not inflation. Gold v Yen stayed low.

You are right about Bernanke though. he’s a dollar trasher. Another volker would get gold under $1000 imho.


20 posted on 07/01/2011 10:45:26 AM PDT by WOSG (Herman Cain for President)
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To: BfloGuy; Republic_of_Secession.; bluefish
Have at it guys. 1980 wasn't that long ago.....


21 posted on 07/01/2011 1:46:37 PM PDT by Sarajevo (The only reason I would take up walking is so that I could hear heavy breathing again.)
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To: OneLoyalAmerican

The problem with this headline is that “the storm” is what has caused gold to essentially quadruple since 9/11.

The storm passing would see gold prices come back down to earth. It’s a safe haven investment in times of turmoil and uncertainty.

To believe otherwise is to eventually experience a big loss somewhere down the line.


22 posted on 07/01/2011 1:50:58 PM PDT by RegulatorCountry
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To: Sarajevo
Greetings Sarajevo:

Excellent contribution, my FReeper FRiend. Conditions are different today, but Barry 0bozo is attempting a Jimmy Carter redux.

In 1980, the prime lending rate was approaching 22%, democRats owned Congress and did what they always do: tax, regulate, and spend. This sent stocks into a tail spin. Given US private citizens could not own gold, silver was the only hedge for inflation.

The upward gold climb was also partially in response to the Soviet invasion of Afghanistan, the Iranian hostage situation, a tumbling stock market, and the Hunt brothers along with some wealthy Arabs attempting to corner the silver market. They had amassed about half the worlds deliverable supply: 200 million ounces of silver.

The downward spike in silver and gold was driven in part by COMEX changing metals trading rules and Federal Reserve intervention.

Cheers,
OLA

23 posted on 07/01/2011 9:59:07 PM PDT by OneLoyalAmerican (In God I trust, all others provide citations.)
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To: Sarajevo

It reminds me of the NASDAQ climb to the sky in 1999.


Aside from the fact that both had increases, what other facts are you basing your opinion on?

Do ALL markets that rise inherently crash? Or do you have some insight to share?


24 posted on 07/03/2011 7:48:54 PM PDT by Atlas Sneezed (End the "Fiscal Fiasco" in 2012!)
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To: Sarajevo

Looks nothing like current charts.


25 posted on 07/03/2011 7:50:50 PM PDT by Atlas Sneezed (End the "Fiscal Fiasco" in 2012!)
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To: Beelzebubba
Looks nothing like current charts.

The chart is from the 1980 spike and crash in gold prices. It was posted as an example.

Do ALL markets that rise inherently crash? Or do you have some insight to share?

IMO- the vast majority do. Down cycles are required to maintain a healthy market.

26 posted on 07/05/2011 11:08:32 AM PDT by Sarajevo (The only reason I would take up walking is so that I could hear heavy breathing again.)
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