GoldMinerPulse Blog, April, 2013
An ad hoc sampling of news, views and opinions on the 12 April to 15 April take down in the price of paper gold.
Four Important Facts to Remember About Gold, Frank Talk, U.S. Global Investors
You can't print more gold
The Federal Reserve continues to print fresh, crisp stacks of U.S. dollars amounting to $85 billion every month, driving up the balance sheet to almost $3 trillion dollars. If Ben Bernanke continues churning out dollars at this rate, by 2016, the balance sheet will more than double to $7 trillion dollars.
Gold is viewed as a currency by central bankers
The World Gold Council (WGC) reported that in 2012, central banks purchased 535 tons when only a few years ago central banks were net sellers of gold. And it’s important to keep in mind that these central banks love these corrections, as they can purchase gold at cheaper prices.
A lack of love from the Love Trade is affecting fundamentals
Too many people focus on the Fear Trade, which is when investors buy gold coins or a gold ETF out of a fear of the fallout that may result from governments’ rising debt levels and weakening currencies.
The Love Trade, on the other hand, is the buying of gold out of an enduring love for gold. Two emerging countries that make up almost half of gold demand—China and India—have had a long relationship with the precious metal that is intertwined with their culture, religion and economy. With half of the world’s population buying gold for their friends and family, it’s important to put into context what is happening in their countries.
Corrections happen, but have historically offered buying opportunities
As of the end of April 15, the gold price on a year-over-year percentage change basis registered a -2.6 standard deviation. While minor corrections in the gold price happen frequently, a move this severe has never occurred before over the previous 2,610 trading days.
Full details here.
Kaye - Central Planners Risk Having All Hell Break Loose Here, William Kaye on KingWorldNews
Eric King: "As they are doing this kind of smash, it's not having the impact that they anticipated, which is, 'Hey, we will discourage buying. We will get people to walk away from (buying) physical.' It seems to have blown up in their faces last time (2008), and the same thing is happening this time."
Kaye: "I think that's right. There is a real risk that they lose control of this process. So it could get very, very interesting. The timing here is extremely suspicious. Again, we can speculate as to what these guys are worried about, but they are definitely worried about something, and they are desperate." more...
The gold panic of 2013, Bill Fleckenstein
The gold market itself has experienced similar declines in the past, which have predicted nothing. in 1976, gold dropped from a high of $198 to $105 an ounce, a decline of about 40%. Interestingly enough, the last three days of that decline saw the market drop about 12% (similar to the amount lost during trading on Friday and Monday).
However, that collapse was a giant head-fake. Within about a year gold was back to its previous high (that would be $1,900 in today's environment), and over the course of the next four years it traded up over eightfold from those lows, even as our Federal Reserve (under Paul Volcker) was trying to do the right thing in the end. (And when it was pursuing the wrong policies, prior to Volcker's appointment, that was kid stuff compared with what the Fed and the rest of the world's central banks are doing today.) more...
Flags flying at half mast in Gold and Silver, Factor Research Trading Services
If these pauses in the Gold and Silver debacle prove to be flags, the targets would be $18.27 for Silver and $1,139 for Gold more....
Hedge funds add to bets that gold prices will rise: CFTC data, Market Watch
Managed money traders raised their net 'long' positioning, or bets prices will go higher, by 21,675 contracts to 68,662 contracts net long, according to Gene Arensberg, editor of the Got Gold Report. Managed money, which had recently built up a record short position in gold, covered 12,411 shorts to show a 'still high' 54,025 contracts of short gold futures, he said. more...
Why $50,000 Gold?, Jim Sinclair's MineSet
I have a huge number of emails all asking why $50,000 gold. The answer is that the bullion market is in the process of emancipation of the gold price from the fractional paper gold system. The actualization of the real price of gold will be its emancipation from the prison of paper gold. The emancipation will occur because there is no gold whatsoever behind the deluge of paper we have just witnessed. more...
10 Signs The Takedown Of Paper Gold Has Unleashed An Unprecedented Global Run On Physical Gold And Silver, The Burning Platform
The crash of the price of paper gold on Monday has unleashed an unprecedented global frenzy to buy physical gold and silver. All over the planet, people are recognizing that this is a unique opportunity to be able to acquire large amounts of gold and silver at a bargain price. So precious metals dealers now find themselves being overwhelmed with orders in the United States, in Canada, in Europe and over in Asia. more...
Paulson Tells Clients Central Bank Purchases to Back Gold, Bloomberg
John Paulson, the hedge-fund manager who's lost money this year after a 16 percent decline in gold, told clients that purchases by central banks and demand in Asia will support the metal in the near term. more...
Traders Split on Outlook as Asian Jewelers Buy, silveristhenew
Gold traders are divided on whether bullion will extend declines after the biggest plunge in three decades generated buying from investors and jewelers. more...
Sinclair- The US Will Be Cyprused & We Will See $50,000 Gold, Jim Sinclair on KingWorldNews
There is no gold there to deliver. What first gave rise to this was the German situation, but then when ABN AMRO shut gold deliveries down it accelerated. The reason they blasted the gold market was to camouflage the fact that the fractional reserve gold system, which is very important to financing and to the government, failed.
The truth is that when we take out these futures markets on a failure, gold is going to $50,000. Not $3,500. $50,000. We are in the midst of a failure right here, right now. That's what this is all about. This takedown has been the ultimate can-kick. more...
Refiners Can't Keep Up With Massive GLobal Gold Demand, Egon von Greyerz on KingWorldNews
Greyerz: "I will tell you some very important reasons why investors should not worry about the recent turbulence in the gold market. First of all it was a smash in paper gold. If you look at our company, as just one example, we did not have one single seller in the last few weeks." more...
Slump in gold price releases years of pent-up retail demand, moneycontrol.com
"My sales are 50 percent more than last year ... and we expect good business to continue as weddings will last till July," said Kumar Jain at his shop in Zaveri Bazaar, India's biggest gold market, in Mumbai. more...
Gold imports to rise by 20% in Apr-June to about 183.6 ton, The Financial Express
India's gold imports are likely to go up by 20 per cent to around 183.6 tonne in April-June quarter due to rise in demand triggered by weak prices, a trade body said. "There is very good demand and the footfall has increased multi-fold following weakness in gold price. The demand will be supported by the wedding season, which is extended till July unlike last year.... We expect up to 20 per cent rise in demand to around 183.6 tonne in the April-June quarter," Bombay Bullion Association president Mohit Kamboj told PTI. more...
China Hasn't "Seen This Gold Rush In 20 Years", ZeroHedge
As the FT reports, from Shanghai and Hong Kong to India, one dealer noted, "Older members who have been in the business for 50 years haven't seen such a thing." The feverish buying has left many of Hong Kong's banks, jewelers, and even its gold exchange without enough gold to meet demand. Record volumes on Shanghai's exchange, lines outside Beijing jewelry stores, and the proximity of Hindu festivals drove "Indian physical demand and premiums," higher as the worlds two largest gold buying nations prompted one exchange CEO to note that we hadn't, "seen this kind of gold rush in over 20 years." It would seem the concerted effort to collapse paper prices in London and New York has provided the rest of the world a multi-decade buying opportunity. more...