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Thread: The market is going down, but the price of gold is not moving up

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    Default The market is going down, but the price of gold is not moving up

    Why is it so? I'd think as the sentiment of the investor changes to negative, and there is more talk about falling of the dollar, investors would flock to gold as a protection against inflation. The price of gold today was actually down although the market was in decline. Does it mean that someone knows the Fed will not cut rates and thus we shouldn't expect as bad of inflation, or do big investment funds continue to dump their holdings of assests including gold and it's a buying opportunity? Please someone explain this to me.

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    Default Re: The market is going down, but the price of gold is not moving up

    answering your question completely really requires donning a proverbial 'tin foil hat' ... or at least a viewpoint that is unclouded enough to realize that Central Banks and Sovereign Wealth funds routinely manipulate the gold price to affect their currency exchange rates and gov't policies, to realize that speculators can deliberately 'sell' gold that is leased or that does not really exist in order to profit from the resulting price volatility, etc.

    Very recently, there has also been a scramble by troubled hedge funds who were 'stuck' with illiquid CDO's and MBS's to sell anything in their portfolios that would raise quick cash to cover margin calls. This has resulted in the hedge funds 'dumping' gold futures along with natgas futures, oil futures, etc.







    the last link refers to a 'new' development ... which deals with small and medium sized investors selling out of commodity ETF shares. This may be a 'loss limit' reaction to the gold price downdraft recently started by the hedge fund dumping. It is also speculated to be due to the fact that many Americans have first exhausted their home equity / refi options as a means of raising cash, and have next maxxed out their credit cards as a means of raising cash, and are now resorting to the liquidating of 'below average performance' investments as a means of raising cash. Certainly gold has not performed spectacularly in the past few months.

    (snip)"Bullion appears to have found support at the $655 level after being battered nightly in New York for the past two weeks due to large selling out of StreetTRACKS the main gold based Exchange Traded Fund. They ditched over 17 tonnes onto the market during the past couple of weeks. Effectively this huge ETF has a similar depository role to that of a central bank, except that it is subject to the whims of its investors. If they sell the shares then the ETF must dump gold. It appears that several hedge funds ditched their stock forcing the ETF to take sudden action. Whereas central banks are relatively slow to act the ETF's are attractive to hedge fund managers and they can be extremely fickle in terms of their market action thereby transferring that volatility back to the ETF and hence the gold price. Gold based ETF's can be beneficial in a rising market but awfully destructive when hedge funds decide to ditch their stock. It would appear that far from being the gold depository for the man in the street the ETF's have attracted a far more volatile customer in the hedge funds so that the average investor in gold via an ETF is more aligned to the vagaries of hedge fund managers than real movement in the gold price. Food for thought??? This poses the question … are you in an ETF investing in the gold market or hedge funds views of the gold market??"(snip)

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    Default Re: The market is going down, but the price of gold is not moving up

    Another reason to go short.

    (I know, I sound like a broken record)
    Rebecca Avalon







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    Default Re: The market is going down, but the price of gold is not moving up

    Gold and equities don't have a directly inverse relationship with one another.

    "Have you ever been to American wedding? Where is the vodka, where's marinated herring?" - GB
    "And do the cats give a shit? No, they do not. Why? Because they're cats."-from The Onion

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    If a cupcake was tossed at me... well, I'd only be upset if it missed my mouth

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    Default Re: The market is going down, but the price of gold is not moving up

    I'd think the fear of US inflation and the possibility of spread of financial crunch to other parts of the world would have people look into buying gold...

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    Default Re: The market is going down, but the price of gold is not moving up

    Quote Originally Posted by britneyireland View Post
    Another reason to go short.
    what does that mean???
    "Can we read it on the Smoking Gun? "

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    Default Re: The market is going down, but the price of gold is not moving up

    I'd think the fear of US inflation and the possibility of spread of financial crunch to other parts of the world would have people look into buying gold...
    well, that's the great unanswered question ... whether or not we'll see a round of deflation first i.e. nobody has the cash / credit to buy much of anything thus the price of everything will drop, versus the Fed printing money at warp speed to allow broke individuals and corporations to pay off their massive old debts with new dollars that aren't worth anything. If it's the latter, gold could quickly race to $2000+ per ounce.

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    Default Re: The market is going down, but the price of gold is not moving up

    what does that mean???
    this graph shows what going short means ...



    ... speculators pay interest to actual owners of gold (like central banks) in order to 'lease' their gold for a while. Then the speculators sell the gold that they don't actually own on the COMEX, driving down the market price. However, sooner or later, those speculators must buy back an equal amount of gold from the COMEX or some other source in order to return it to the actual owner when the term of their lease expires. The speculators are gambling that the future price of gold will be driven down and stay down, so they can 'cover' by purchasing the future gold at a lower price than they sold it for !

    You can get a rough guess of how much gold leasing is taking place (thus how much gold is being sold on the COMEX by people who don't actually own any gold, thus how much the gold price is being manipulated downward) by checking the gold lease interest rate percentage. This percentage rose abruptly during the second week of August, just about the same time that the stock markets started tanking and European banks and hedge funds started making their financial woes public.

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    Default Re: The market is going down, but the price of gold is not moving up

    Look at the summer of 1990. Very similar technical signals to the current market. Obviously Oct 87 too.

    When I said go short, I mean short sell stock, buy puts, sell naked calls, bear call spreads, bear put spreads, any bearish strategy that profits to the downside.
    Rebecca Avalon







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    Default Re: The market is going down, but the price of gold is not moving up

    I'll reiterate my bearish stance on gold we're going to get down around 500 before we break 700.

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    Default Re: The market is going down, but the price of gold is not moving up

    ^^^ I'll make this comment for whatever it's worth ...

    There seems to be an unnatural force that appears to keep sending thg gold price towards $ 6 6 6 !


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    Default Re: The market is going down, but the price of gold is not moving up

    Also, for what it's worth, take a look at the clip titled "America: Freedom to Fascism" here:

    http://www.youtube.com/watch?v=vmCzf...elated&search=

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    Default Re: The market is going down, but the price of gold is not moving up

    well, lunchbox, care to reconsider ?



    (snip)"December gold had a massive upside today at the Comex closing up a monstrous $13.90 at $704.60. I gotta tell you folks, it sure is fun writing commentary on a day like this.

    Euro-gold made it back above the €500 level at today’s PM fix coming in at €503.328. It is very encouraging seeing gold taking out this level in euro terms. Gold is only up about 3% or so from its closing level last year when measured in euro terms and has not attracted too much attention as a result. Getting its head back above 500 will certainly garner some headlines and that will attract more investment demand from that part of the world. If it can manage to work higher and stay above the €508-510 level at tomorrow’s fix, that will be construed as a bona fide breakout from the nearly 16 month coiling pattern on the price charts. Technicians will take notice and move in on the buy side.

    Yen gold is also moving higher and is inching slowly but steadily closer to recapturing an “8” handle in front of its price.

    Gold for December delivery was having a very good day this morning when suddenly around 10:15 AM CDT, it simply blew upward through $700 and annihilated all the upside buy stops that were in place at that level. That touched off a cascade that saw stops take it into successive levels of further buy stops running the price $16.50 higher before some short term traders took profits and shell-shocked sellers had a chance to regroup. It was reported to me that one large short was seen meandering aimlessly on the floor of the Comex with a dazed look in his eyes crying, “I want my mommy”.

    Today’s price action in gold confirms that the upside gap left on the pit session gold chart on August 31 was indeed an upside breakaway gap. That is an important technical signal for trend following funds.

    This is what can happen when open interest gets knocked down so dramatically and fund long exposure hits such low levels even as prices remain at relatively high levels. The technicals turn, the black boxes give their signals and all those strangers to the long side, come back at the same exact time. The result is that the door is too narrow for them to fit just as it was too narrow for them as they were exiting. I am going to be extremely interested in seeing the volume and open interest numbers that will be released tomorrow morning to see just how many specs rediscovered gold. As it now stands, there is room for an additional 110,000 new longs by the funds to come anywhere near previous peak levels. That is one helluva lot of fund buying that COT is going to have to absorb and it does not even include the small specs."(snip)


    The economic conspiracy theorists are attributing this to China quietly starting to dump a few tens of billions worth of their US Treasury bonds from their US trade surplus hoard and quietly starting to buy gold with the proceeds ... in response to the continued yuan revaluation jawboning and threats of new import tariffs by certain economically ignorant US politicians. If the hedge funds follow suit, the price of gold could be 'off to the races' !

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    Default Re: The market is going down, but the price of gold is not moving up

    Isn't it a little late to reconsider?

    I still don't want to own gold till December, I'm probably going to put a credit butterfly saying gold won't close between 710 and 690. Spot has only closed above 700 like 8 days in history before crashing back down.

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    Default Re: The market is going down, but the price of gold is not moving up

    Quote Originally Posted by Adelina View Post
    Also, for what it's worth, take a look at the clip titled "America: Freedom to Fascism" here:

    Be aware the movie maker has tax problems - but for the most part - I agree with the movie.

    A clip from an email I received recently:

    Accounts Receivable Tax
    Building Permit Tax
    CDL license Tax
    Cigarette Tax
    Corporate Income Tax
    Dog License Tax
    Excise Taxes
    Federal Income Tax
    Federal Unemployment Tax (FUTA)
    Fishing License Tax
    Food License Tax
    Fuel Permit Tax
    Gasoline Tax (42 cents per gallon)
    Gross Receipts Tax
    Hunting License Tax
    Inheritance Tax
    Inventory Tax
    IRS Interest Charges IRS Penalties (tax on top of tax)
    Liquor Tax
    Luxury Taxes
    Marriage License Tax
    Medicare Tax
    Personal Property Tax
    Property Tax
    Real Estate Tax
    Service Charge Tax
    Social Security Tax
    Road Usage Tax
    Sales Tax
    Recreational Vehicle Tax
    School Tax
    State Income Tax
    State Unemployment Tax (SUTA)
    Telephone Federal Excise Tax
    Telephone Federal Universal Service Fee Tax
    Telephone Federal, State and Local Surcharge Taxes
    Telephone Minimum Usage Surcharge Tax
    Telephone Recurring and Non-recurring Charges Tax
    Telephone State and Local Tax
    Telephone Usage Charge Tax
    Utility Taxes
    Vehicle License Registration Tax
    Vehicle Sales Tax
    Watercraft Registration Tax
    Well Permit Tax
    Workers Compensation Tax

    STILL THINK THIS IS FUNNY?

    Not one of these taxes existed 100 years ago, and our nation was the
    most prosperous in the world.

    We had absolutely no national debt, had the largest middle class in
    the world, and Mom stayed home to raise the kids.

    What the hell happened? Can you spell "politicians?"

    And I still have to "press 1" for English.

    I hope this goes around THE USA at least 100 times

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