Posted on 02/13/2013 7:33:47 AM PST by blam
Against the Odds, Gold Slips Again
By Greg Guenthner
02/13/13
I’ll cut right to the chase…
Gold is set to drop to $1,550.
The spot price briefly dipped below $1,640 early yesterday, posting new five-week lows. It rallied back above $1,650 by the end of the day — but the damage is done.
After a weaker push last summer that failed to break $1,800, gold has consistently trended lower for more than four months. Yesterday’s brief breakdown is just advance notice that lower prices are in store for gold in the near future…
Looking back over the past two years, you can see how gold has significantly lagged the S&P 500 since mid-2011. Even a brief moment of outperformance early last year was short lived when the spot price failed at $1,800 for the third time in less than 12 months…
Gold just can’t shake this slump. And as $1,650 falls this morning (Gold sits at $1,647 now), $1,550 won’t be far behind.
Now, I’m not some lunatic who doesn’t understand the strong fundamental arguments backing gold. Rampant money printing and overseas demand are the first that come to mind. Both are valid points. But gold’s decade-long bull market has attracted more than a few momentum buyers. And like it or not, these weak hands are adding to the selling pressure.
Here’s what you have to do:
First, don’t get too hung up on the story right now. You can scream about how gold isn’t acting like you think it should until you pass out. But none of your arguments can change the price action.
(snip)
(Excerpt) Read more at dailyreckoning.com ...
China’s closed for New Year’s this week, so there’s nobody to balance the thieves at the NYMEX and COMEX.
So gold is going to decline rather than gain against the dollar?
Then please explain why the Germans want to get physical possession of the gold they have stored at the fed.
Explain why the Swiss are doing the same.
Why did Russia just purchase a lot more gold?
Several major economies, including Japan, are devaluing their currency. Why?
Because they see the US currency as being in the process of devaluation, long term even more, and exports to the US will fall by big numbers unless they do something to keep their currency where they want it to be in relation to the dollar.
All of these things point to gold becoming more valuable as a safe haven.
All of the talking heads in the world do not change the facts. The dollar is headed for big devaluation.
If we do not wish to lose our freedom, we must learn to tolerate our
neighbor’s right to freedom even though he might express that freedom
in a manner we consider to be eccentric.
Protect your privacy. Replace Google with https://startpage.com/
This country and our position in the world economy was not built on Marxism
and Marxism will not be the force that returns us to the level of employment, prosperity
and position in the world economic system that we once enjoyed.
Repeal the 17Th Amendment.
Senators appointed by the states will end federal mandates that destroy state sovereignty.
Return to the states the control of their schools, medical care, etc.
Chartwise, gold likes like crap.
NO WAY are you going to see a ramp in gold with the relentless pumping going on in the stock market. No way. The impression is being successfully created of no-possible-downside to the market is nearly complete, but it takes a little time to drag the last holdouts back in so they can be hosed. Quite frankly, it’s a better bet to bet on continued upside. IMO the market is now going show it can hang on to and continue from DJ 14K. It feels awfully late to be getting in now, but it is a poor bet, IMHO, to short the market with abandon.
And...it’s my opinion that gold, too, will correct some more if and when the market corrects, which seems overdue; I am not talking about anything really serious, maybe a 5 percenter.
Gold’s upside potential lies, again, IMO, *past* the next market correction. This is always the challenge of investing, not to discern what is happening now, but what might happen next, and next-next.
Not intended as investing nor end-of-world advice.
My take: The gold bugs are absolutely right - but their timing may be off.
I have not sold a fraction of an oz of PM since I started collecting it. I have no intention to part with it any time soon. PM’s and real-estate (I can build a full compound/commune on my farm) are the surest bets against the coming storm. And it WILL come - sooner rather than later. Frankly, I expect Obamacare to be what history records as its harbinger.
I wish I had some gold. Don’t plan on buying any. Especially with the new requirements for 1099’s on the sale of gold.
Here’s the problem with your analysis.
Fracking.
It just added 50-100 trillion —that’s with a t—dollars worth of oil and gas the US inventory to back the US dollar. Fracking promises to make the USA energy independent in 5-7 years. This is very big stuff. there are no energy independent countries with weak currencies.
I would also point out that neither does obumbler and he will as he has always done, do everything he can to make it difficult for any expansion of the use of fossil fuels.
This country will never be the economic powerhouse it once was until we get the EPA, the Department of Interior, the Department of Land Management and the various others that are filled with Marxists and useful idiots under control.
Lots of oil in the ground does not do much for Venezuela.
old curmudgeon ~:” Lots of oil in the ground does not do much for Venezuela. “
Yeah , but oil in the ground doesn’t make you any money , just a promise of a future income.
Venezuela shot itself in the foot when the Facists nationalized the refineries.
As a result of State takeover , there are fewer international companies willing to invest there.
That , and I had heard that their petroleum has high sulfer content which lessens the value of their product.
Maybe things will change with a new regieme in power ?
The Venezuelan government policies are obama policies on steroids. We’re talking much higher government spending per capita and much higher government actions to inhibit drilling.
The barriers to drilling that the USA puts on drillers pales in comparison to corruption theft and regulation typical of all other countries in the world.
The Brazilians have huge reserves off their coasts. But the government got greedy a couple years ago and changed the laws so that companies could not make profit. So that despite their huge reserves — no companies are bidding on their oil and drilling it. The oil does them no good.
Yes, but have just started down that road.
A few more years and we will be in the same situation.
Maybe not as much bribery, but certainly regulated to death.
But then our bribery is not called that.
Wow... Somebody is playing games, and the smart people will take advantage of lower gold prices, ie., artificially puffed-up reserve notes.
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