Theories continue on rapid gold price plunge

Originally posted by Schillinger
Gold doesn't rise or dip in price, currency does.

I agree. Inflated money causes the gold to rise in price. Supply and demand, of course, effects the price, but these kind of gold prices are due mostly to inflation. Star for you Schillinger

The price of gold is being artificially kept low because their isn't enough physical gold to backup all of the ETF's currently in circulation. So, what you saw is it's price get monkey hammered as those with the ETF's rotated out of those leaving only the suckers holding ETF's.

They got to keep the scam going as China just opened it's doors to it. It might be able to work their as demand is still high. For some reason (weak currencies) everyone wants their gold not tomorrow but now.

The word is out on the street that certain entities don't own any physical gold.

People seem to think banking and fiance is legit.

Did Germany ever get it's gold back yet? If not, that might be a pretty good clue as to what's going on.

I'm sure there's somebody around here has more information in regard to whether or not it relates to this.

market manipulation through and through.

All the cats are buying up the gold purchased at 1600+ numbers, at a 25% discount. It'll only rise later in time, whenever the dollar decides to lose value again. (likely when we see QE3 end)

Dont you See how stupid this is?
paper money use't to say (and in england it still dos)

that it promises to pay the bearer on demand the sum of

so they have got you to Fall for the same Con again!!!

Originally posted by Ameilia

Here is an explanation of paper gold which may clarify some things for you and everyone else.

The term paper gold means you have a piece of paper acting as a substitute for the physical gold. With paper gold, you don't own the gold; you own a promise to receive physical gold. In plain English, it means you are a creditor of the corporation issuing the paper gold certificate, thus subject to counterparty risks. Owning the physical gold has no counterparty risk and is fully under your control. Examples of paper gold are gold certificates issued by banks and mints, pool accounts, futures accounts and the NYSE listed exchange-traded fund. With these products you own a piece of paper rather than physical gold. These paper products give you exposure to the gold price; you can make a profit by selling them to someone wishing to own paper gold, however when the music stops and nobody wants to purchase paper anymore, it becomes worthless since you may not able to redeem your metal.

Source: iGolder

This is why intelligent investors hold the METAL ITSELF and do not bother with things like offsite storage or EFT gold funds, or gold mining stocks.

Resembles fractional reserve banking, it isn't money now, it's worthless certificates for gold that doesn't exist in any real sense.

One would think somebody would have learned more and knew better than to fall for the same old scam.

Wait!, that's right, the whole damned thing is a great big fake scam!.

Originally posted by Cinrad


... As the snippet above notes, "paper gold" may be the culprit. Paper gold?!?! You can't trust anything anymore. I believe gold is being used to dupe the more savvy investor.

the gold price, paper or physical is not immune from the manipulations of big money ';Speculators'

that is exactly whats going on.... do you think that Gold or PMs price is a pristine, totallly honest consensus?


the big money players and the Fed proxy TBTF banks will keep having gold get whiplashed for various reasons
not the least being to strengthen-the-USD, secondly to make-a-market in speculating that "paper gold" moves up-&-down which translates into fees & profits...






at the moment the gold players of ETFs could be likened to the game of musical chairs.... Everyone knows that when the music stops somebody loses their stake in the game

it has been suggested that there are 100 times more ETFs out there than there iare ounces of physical gold...but as long as the game keeps new players in it... the longer it will go on, heck the TBTF JPMorgan has the insider info that their ETF position is assured profits and losses will be socialized, so they will continue their proxy position for the Fed & Treasury until the Fed/Treas decide to Quit the game

I have no knowledge of economics but something I have discovered shows me that the US government is trying to SECURE all the gold on the planet because it has a purpose that people aren't aware of... From what I have seen recently it supports this IMO... but again I don't know much about economics.. can anyone refute my assessment?

Physical gold has decoupled from paper gold. The decrease in "market" price relates to paper gold. Banks have oversold paper gold and do not have the physical gold supplies to deliver on paper gold.

Some have said that the decrease in gold prices is caused by market manipulation by the federal reserve shorting the paper gold market. This drive by the fed to short the market, would be an effort to bailout the fed's cartel of banks by lowering the price of physical gold for them. The banks have oversold paper gold in relation to their physical stocks of gold and now banks have to buy physical gold from the market in order to make delivery on requests to convert paper gold to physical gold. This has resulted in the price of physical gold decoupling from paper gold as people smell a rat and refuse to take less money for their physical gold.

Another theory out there is that the BRICs (Brazil, Russia, India and China) are setting up a new reserve currency to rival the failing US dollar. The BRICs nation have already agreed to an international clearing house, and China has signed several bilateral agreements with other nations to by pass the petro dollar and to trade directly in Chinese currency. What does this mean, gold prices are up in relation to the failing US dollar, but should a new stable world currency arrive, and the petro dollar fail then people will leave the US dollar and gold in favor of the new currency. Both the US dollar and gold prices would plummet. If true, then people in the know would have already moved from US currency to gold and the current decrease in gold prices is being caused by these people moving from gold to something else in anticipation of the new reserve currency and the collapse of the US dollar and the popping of the gold bubble. But for those people living in the US, you're trapped with worthless currency so if you are in the US and experience a simultaneous currency collapse and a popping of the gold bubble, then gold would still be a hedge against petro dollar failure. But with the dollar you would have a worthless currency and with the pooing of the gold market bubble, you have a severe devaluation of gold. In either case you're screwed, but with gold you would still save some value. If this happens then the price of gold versus the US dollar is completely meaningless. Gold at $10k per ounce means nothing, gold could be $1 million an ounce, but if the US dollar is worthless, then the price of gold in US dollars would be both exponential and valueless.

Before the end, the US will flail about like a wounded animal trying to save the petro dollar.

“We can ignore reality, but we cannot ignore the consequences of ignoring reality.”

― Ayn Rand

Originally posted by pauljs75
Did Germany ever get it's gold back yet? If not, that might be a pretty good clue as to what's going on.

I'm sure there's somebody around here has more information in regard to whether or not it relates to this.

no the fed will only give it back over 7 years and the queen of england made a big thing of visiting the gold vaults in london that belong to other countrys but you have to wonder are they tungsten cored

Originally posted by cenpuppie
The price of gold is being artificially kept low because their isn't enough physical gold to backup all of the ETF's currently in circulation.

Evidence? The ETFs have known bullion accounts which do get physically audited.

Was the price of gold being kept artificially high for ten years then? Just as everybody and their dog were buying gold ETF's?

So, what you saw is it's price get monkey hammered as those with the ETF's rotated out of those leaving only the suckers holding ETF's.

In other words, people who owned gold previously sold it.

They got to keep the scam going as China just opened it's doors to it. It might be able to work their as demand is still high. For some reason (weak currencies) everyone wants their gold not tomorrow but now.

Why is the price going down if 'everybody wants their gold' now?

The word is out on the street that certain entities don't own any physical gold.

You mean they invest in something else?

People are unwilling to believe the simplest explanation. Gold went down because some of the people who previously bought it decided to sell in a short period. The reason is simple too.

Gold is a currency which pays slightly negative interest, and is not in high demand for use in trade or investment. The overwhelming contributor to macroscopic movements of currencies is anticipated changes in relative interest rates. Gold is economically like a zero-coupon infinite duration bond in a hard currency. Guess what, the exchange rate between gold and other currencies can change with time, and in both directions. Gold is frequently traded along with other currencies on a FX trading platform to show you what the market thinks gold is.
The one really key difference is that there are almost no loans with terms in gold as opposed to other currencies and that further limits gold to be a trading vehicle.

Well, at the time the gold went down vs dollar, the Federal reserve indicated that it was starting to thinking about reducing quantitative easing, which means that there will be fewer dollars printed to buy and sit on bonds, so thus the market interest rate on bonds went up and bond prices went down. Gold followed since it was an obvious QE trade which works up to the point interest rates went up. US Dollar went up against many other 'risk' currencies as well simultaneously, like AUD.

Guess what else tanked at the same time gold did? US dollar-denominated bonds. My treasury TIPs were whacked. The largest bond fund in the world (PIMCO total return) was whacked.

Was there some giant conspiracy? Are investors in PIMCO total return only owning "paper bonds" instead of physical bonds and there is no real actual bond behind the shares of the fund? No. It was just economic cycles playing out exactly as predicted, and gold and bonds responded as expected.

If there is some large scam why do it with gold which can be audited physically instead of bonds which are numbers in a computer.

Some gold bugs don't want to acknowledge that much of the reason for gold's rise was on account of people making a trade, not an investment, and there were buyers of gold who had very different attitudes than the gold bugs do.

Originally posted by dieseldyk
Physical gold has decoupled from paper gold. The decrease in "market" price relates to paper gold. Banks have oversold paper gold and do not have the physical gold supplies to deliver on paper gold.

Some have said that the decrease in gold prices is caused by market manipulation by the federal reserve shorting the paper gold market. This drive by the fed to short the market, would be an effort to bailout the fed's cartel of banks by lowering the price of physical gold for them. The banks have oversold paper gold in relation to their physical stocks of gold and now banks have to buy physical gold from the market in order to make delivery on requests to convert paper gold to physical gold. This has resulted in the price of physical gold decoupling from paper gold as people smell a rat and refuse to take less money for their physical gold.

How does this work?

Banks are buying physical gold at a low price to cover shorts. But somehow the price of physical gold has decoupled (is there evidence?), so this means that the banks aren't actually covering their shorts at a low price, right? If the banks somehow have to buy large quantities of gold then the price wouldn't be going down. But it is.

Think about it this way. Mining companies deliver physical gold, not paper gold. Not one of them has said "our future is bright, we are getting physical prices far in excess of the paper exchange-traded futures price, the two markets have decoupled." This, in the face of even more rapidly plummeting stock prices and declining wealth of CEO's---they'd have every incentive to say something like this if there were a shred of truth. There are gold miners all over the world in many jurisdictions and they can't all be "silenced" or some such nonsense.

In reality the Fed has everything to do with it, and without any conspiracy. The Fed cares nothing about gold, it is irrelevant---it cares about bonds. Banking and money is about the bond market 95%. Fed signaled a change in monetary policy which hit the bond market, and gold went along for the ride. With the new interest rates upcoming people are OK at owning it at $1200 but not at $1800.

Look at the prices here. This is a service of the world gold council, offering allocated bars and audited daily.

www.bullionvault.com...


Gold was very useful once, in the days before global telecom networks, because that's how you could do money transfers reliably across long distances. Now with banking wire transfer it is no longer necessary or very useful.

If you really want to know the behind-the-scenes goings-on for the precious metals markets you have to spend some time reading the collection of financial news articles that are posted on the BrotherJohnF website, otherwise known as “Silver For The People” and Jesse’s Cafe Americain. Granted, many articles on Silver For The People are by precious metals dealers that are trying to stir their markets but they don’t have to put much effort into it due to the fact physical demand has gone through the roof since the first part of this year.

The big beat-downs on the silver and gold markets this year have been accomplished by the sale into the market of paper instruments that, in the case of silver, represent more silver than is mined world-wide in a single year! This has happened more than once this year and, given the fact that silver is as much an industrial metal as it is a precious metal, I’ve read multiple times where there is probably less silver above ground than there is gold making it, in fact, more rare than gold. The traditional relationship between gold and silver is just that – tradition!

The U.S. Treasury’s sales of Silver Eagles has broken new ground for increased sales in every single month of 2013! They’ve had to halt production to acquire more coin blanks to keep up with orders back in January, I believe, if not other months besides. If you are interested in buying either type of U.S. Treasury Eagle coins take into account the fact that the Treasury buys its rounds, its slugs ON THE OPEN MARKET! That means the only thing “special” about them is the artwork stamped on the reverse and obverse of that precious metal slug so take that into consideration when you’re thinking of paying the 18% premium over spot for them.

All of this put together, and so, so, sooo much more, means that the markets are so skewed no one can make any sense out of them except to simply follow along with the buying and selling of J.P. Morgan’s market makers. There is no “price discovery mechanism” in place any more! Wag The Dog has been in place probably since the 80s when the advent of workable computers met a sufficient amount of capital to form a perfect storm of command and control in virtually every market out there.

reply to post by mbkennel

There's ample evidence of increasing gold premiums. Here's just one of them.

China's gold premium, while admittedly noisy, jumped from a long-run average of around $7 to over $32! As one analyst notes, the gold "premium is a function of demand and supply, and right now you could interpret the high premium in Shanghai as a sweetener to entice the overseas gold supply to flow into China."

China's Demand For Physical Quadruples Gold Premium

I'v said it before and once again I will emphasize it........ where is this GOLD you all say you own?????????? Do you have it at your residence, or in your safe deposit box? OR is it on paper only and supposedly held in trust by some broker half way across the world. Do you have it in possession once you buy it.... or is it just some piece of email or receipt? And if the stuff hits the fan can you access it and begin trading.......... or have you been HAD?

Originally posted by mbkennel

Originally posted by dieseldyk
Physical gold has decoupled from paper gold. The decrease in "market" price relates to paper gold. Banks have oversold paper gold and do not have the physical gold supplies to deliver on paper gold.

Some have said that the decrease in gold prices is caused by market manipulation by the federal reserve shorting the paper gold market. This drive by the fed to short the market, would be an effort to bailout the fed's cartel of banks by lowering the price of physical gold for them. The banks have oversold paper gold in relation to their physical stocks of gold and now banks have to buy physical gold from the market in order to make delivery on requests to convert paper gold to physical gold. This has resulted in the price of physical gold decoupling from paper gold as people smell a rat and refuse to take less money for their physical gold.

How does this work?

Banks are buying physical gold at a low price to cover shorts. But somehow the price of physical gold has decoupled (is there evidence?), so this means that the banks aren't actually covering their shorts at a low price, right? If the banks somehow have to buy large quantities of gold then the price wouldn't be going down. But it is.

Think about it this way. Mining companies deliver physical gold, not paper gold. Not one of them has said "our future is bright, we are getting physical prices far in excess of the paper exchange-traded futures price, the two markets have decoupled." This, in the face of even more rapidly plummeting stock prices and declining wealth of CEO's---they'd have every incentive to say something like this if there were a shred of truth. There are gold miners all over the world in many jurisdictions and they can't all be "silenced" or some such nonsense.

In reality the Fed has everything to do with it, and without any conspiracy. The Fed cares nothing about gold, it is irrelevant---it cares about bonds. Banking and money is about the bond market 95%. Fed signaled a change in monetary policy which hit the bond market, and gold went along for the ride. With the new interest rates upcoming people are OK at owning it at $1200 but not at $1800.

Look at the prices here. This is a service of the world gold council, offering allocated bars and audited daily.

www.bullionvault.com...


Gold was very useful once, in the days before global telecom networks, because that's how you could do money transfers reliably across long distances. Now with banking wire transfer it is no longer necessary or very useful.

edit on 9-8-2013 by mbkennel because: (no reason given)

edit on 9-8-2013 by mbkennel because: (no reason given)

edit on 9-8-2013 by mbkennel because: (no reason given)

edit on 9-8-2013 by mbkennel because: (no reason given)

Here is an interesting page with nice graphs. Physical gold is trading at a premium. Paper gold is over sold and has decoupled.
www.zerohedge.com...

You're right that the Fed is signaling higher interest rates and that would traditionally affect gold prices downward. But there is much more at play right now and I don't put anything past the Fed regarding its willingness to protect the banking cartel from its own stupidity. The Fed has all but guaranteed the death of the dollar with the printing of trillions of dollars to give to the banks to buy hard assets to survive the crash. in fact the banks are not just going to survive, they going to make a killing. here's how that will work.

We will witness a simultaneous US currency collapse and gold bubble pop as people rush from gold and the US dollar to the new BRICs's reserve currency.

The Fed's QE infinity and the manipulation of the paper gold market is meant to buy some time for the banksters. Right now the banks are buying up hard assets, like aluminum, and other things as a hedge against the impending currency collapse. The banks have over sold the paper gold market in anticipation of the gold bubble popping and the banks are probably pulling money from all the retirement accounts and other deposits and putting the money in to hard assets. This scam will represent the greatest transfer of wealth from the American people to the banks, ever. First, when the currency collapses and the gold bubble pops, the banks depositors, retirement accounts will be zeroed out so the banks won't have to repay those people anything. The assets bought with that money will be the banks property. Second, the banks have oversold the paper gold contracts and pocketed the money. They will buy gold after the bubble pops, to satisfy the oversold paper gold contracts, that's if the US doesn't nationalize gold first and just give it to the banks to "save" them

Withdrawing Gold and Silver

In normal use you will receive your money paid directly to your bank account after you sell.

You can withdraw bars at any time. The fees vary according to the circumstances:

1. Where you cannot reasonably be paid safely by bank transfer you can withdraw physical gold for the reduced fee of 1%, plus transport and insurance costs.
2. Where the normal exit route to your bank remains viable, but you elect a physical withdrawal, then the cost is 2.5% for withdrawing whole gold bars, with a further 5% surcharge for withdrawals below 400 oz – to cover the cost of sourcing the necessary small bars or coins.

The fee for silver (whole bars only) is 10%.

BullionVault gold and silver are both VAT (sales tax) free - for as long as they are held in our vaults. Upon physical withdrawal gold remains exempt, but 20% VAT then applies on silver.
*****************************************************************************************************************************

WELL YOU CAN SEE.... it's BS, always has been

Originally posted by Bassago
reply to post by mbkennel

 

There's ample evidence of increasing gold premiums. Here's just one of them.

China's gold premium, while admittedly noisy, jumped from a long-run average of around $7 to over $32! As one analyst notes, the gold "premium is a function of demand and supply, and right now you could interpret the high premium in Shanghai as a sweetener to entice the overseas gold supply to flow into China."

China's Demand For Physical Quadruples Gold Premium

OK, that's believable and a sign of a functioning market. It's $32, not $600. And it is June 2nd, not now. What is it now?

You're right that the Fed is signaling higher interest rates and that would traditionally affect gold prices downward. But there is much more at play right now and I don't put anything past the Fed regarding its willingness to protect the banking cartel from its own stupidity. The Fed has all but guaranteed the death of the dollar with the printing of trillions of dollars to give to the banks to buy hard assets to survive the crash. in fact the banks are not just going to survive, they going to make a killing. here's how that will work.

Is there evidence that banks are investing trillions in "hard assets"? Any physical commodity market is far too small to support this. So far, the Fed has been buying mortgage bonds like crazy. They are buying mortgages from Fannie & Freddie. The printed money is ultimately going to the people selling homes.

Fan + Fred have cash. They buy mortgages from banks which originated them, now they have less cash and more mortgages. They make bonds out of groups of them, and sell them to the Fed. Now they have cash again. They repeat.

It is the 30 year conforming mortgage, not the price of gold, which the Fed is manipulating.

We will witness a simultaneous US currency collapse and gold bubble pop as people rush from gold and the US dollar to the new BRICs's reserve currency.

That doesn't happen in an instant, it happens over decades. Most importantly, you need an open capital account, and a large and deep bond market, and banks which take unrestricted deposits.

And when it happens, there is a new currency to add to the mix, not an obliteration of the old one. To this day, GBP (great britain pounds) are still used internationally much more than Chinese renmibi especially for banking because there is not as much of a totally open bond market. GBP used to be the most used reserve currency until 1945. Now it is USD + EUR + GBP. Later it will be USD + EUR + CNY + GBP.


Can any bank in London deposit $10 billion in renmibi overnight or for 30 days? No, not generally, that's the type of thing which has to happen. The Chinese government is preventing that; it will happen over time, 30 years.

The B R and I in th BRIC's are too small or bureaucratically inept (I) to be deemed a reserve currency, which is a market judgement of usefulness.

A rush into yuan/renmibi in a freely tradeable currency would severely hurt Chinese exports, which is why the Chinese government isn't allowing it.