Theories continue on rapid gold price plunge

Theories continue on rapid gold price plunge

www.abc.net.au

A mining company CEO says there's not enough transparency in the gold trading market.

Les Davis says industry remains concerned that the millions of ounces of gold that were dumped on the market and caused the drop was so-called 'paper gold'.

Paper gold is the name given to exchange traded funds, ETFs, that are shares issued against physical gold bullion.

That bullion should be stored in vaults, but Mr Davis says the numbers don't seem to 'add up'.

(visit the link for the full news article)

There was a thread about why the gold price was dropping a few months ago but I cant seem to find it. Basically what this CEO says corroborates what the author of that thread said. 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.

www.abc.net.au
(visit the link for the full news article)

reply to post by Cinrad


What "rapid" plunge? I am curious as what constitutes as a "plunge". Unless outside forces interject, the price of gold will be directly tied to ts supply and its demand.

To the facts, it had a 4% drop; how is that a plunge?

reply to post by Cinrad


Isn't that what you do to make lots of money? Buy up the market in mass raising prices then quietly sell as the price continues to rise, and then at a point flood the market crash the price and then buy it back up again.. Assuming you have lots of gold of course.

Originally posted by ownbestenemy
reply to post by Cinrad

 

What "rapid" plunge? I am curious as what constitutes as a "plunge". Unless outside forces interject, the price of gold will be directly tied to ts supply and its demand.

To the facts, it had a 4% drop; how is that a plunge?

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

To the facts, it has actually fallen from $1800 to $1200 in less than a year. Quite a bit more than 4%.

Gold 1 Year Chart

Study up, then you might be able to respond appropriately to what the original post is referencing.

Originally posted by Cinrad


There was a thread about why the gold price was dropping a few months ago but I cant seem to find it. Basically what this CEO says corroborates what the author of that thread said. 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.

www.abc.net.au
(visit the link for the full news article)

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.

Originally posted by ownbestenemy
reply to post by Cinrad

 

What "rapid" plunge? I am curious as what constitutes as a "plunge". Unless outside forces interject, the price of gold will be directly tied to ts supply and its demand.

To the facts, it had a 4% drop; how is that a plunge?

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

Don't have time for the resources now but outside sources have always manipulated gold. I have followed it for nearly 20 years.

Consider Germany wants their gold and we say they have to wait 7 years. Drop the price of gold so you can buy it back lower. Many believe the drop was by a gov cause no one else has that much gold to sell that fast.

It's no mystery that the gold buying market has exploded recently. Just look at all the commercials for the gold buying businesses. I think it's completely possible that the market is just getting flooded. People are selling their gold more because of the current state of the economy and rising debt.

The gold price drop seems to be being caused by an "unprecedented Demand For Physical Gold And Silver."

The crash of the price of paper gold on Monday has unleashed an unprecedented global frenzy to buy physical gold and silver.

10 Signs The Paper Gold Crash Unleashed An Unprecedented Demand For Physical Gold And Silver

Additionally there is speculation this is being caused by the central banks trying to drive the prices down as their physical gold positions seem to be in distress. Obviously they don't want people to bail on their fiat money. Western banks appear to have little gold left as it has been moving east at a frightening pace to China, Russia, India and Pakistan.

Just What Is Going On With The Gold In JPMorgan's Vault?

China: Ten Thousand People Waiting In Line To Buy Gold

Pakistan Bans Gold Imports for 30 Days

India's Response To The Gold Sell Off: A Massive Buying Frenzy

Eric Sprott Asks "Do Western Central Banks Have Any Gold Left?"

reply to post by Cinrad

The general consensus is that TPTB were not able to keep up with the physical demand for gold.

If a true audit of GLD or the Comex (like this would ever happen) was to show that there is not enough physical, it would crash the gold exchange and send gold prices skyrocketing.

So the story goes that they had to induce selling.

The easiest and fastest way to do this was to trigger stop loss orders at certain price levels.

With a little bit of market manipulation and automatic sell orders, the price quickly fell.

With all the selling, they were no longer under pressure to accumulate physical.

About 3 years ago, I called PAMP in Switzerland. At that time they told me that demand for physical was unprecedented and that they had just enough supply to meet demand...

And then theres the whole issue of fake gold. Gold plated tungsten is increasingly prevalent. Who knows, maybe they've already run out of real gold...

i have read for every bar of gold there is a hundred idiots with a bit of paper saying that they own that bar of gold makes you wonder

reply to post by ownbestenemy


4 percent? It went from around 1600 to 1200 in a few short months.

reply to post by geobro


Without a doubt. If your gold isn't in a safe ib your house you don't own it

Originally posted by Ameilia

Originally posted by ownbestenemy
reply to post by Cinrad

 

What "rapid" plunge? I am curious as what constitutes as a "plunge". Unless outside forces interject, the price of gold will be directly tied to ts supply and its demand.

To the facts, it had a 4% drop; how is that a plunge?

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

To the facts, it has actually fallen from $1800 to $1200 in less than a year. Quite a bit more than 4%.

Gold 1 Year Chart

Study up, then you might be able to respond appropriately to what the original post is referencing.

That is a snarkey response.

Looking at the 10 year price of gold tells a story almost opposite of what is in the OP. It shows gold prices steadily rising at around a 50% increase each and every year. That is not market forces at work, that is price manipulation.

It seems to me that the 50% per year growth was not pure market growth and now the market has to find its natural level again.

There has not been a gold crash, there has only been a market correction.

P

reply to post by pheonix358


That would be correct if the fed wasn't printing up insane amounts of dollars. Its really hard to say what's the real price should be.

Gold doesn't rise or dip in price, currency does.

Originally posted by ownbestenemy
reply to post by Cinrad

 

What "rapid" plunge? I am curious as what constitutes as a "plunge". Unless outside forces interject, the price of gold will be directly tied to ts supply and its demand.

To the facts, it had a 4% drop; how is that a plunge?

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

i almost fell out of my chair, thank you for the laugh. the market, nor even gold, has been about supply and demand for a very long, long time.

paper gold has been leveraged to the hilt and there isn't that much gold in supply, ask JPM why they are borrowing gold like it's going out of style, because they sold paper and now the people want the real gold, which JPM nor any of the rest actually have.

i guess if gold paper backed by hopium was worth something, there wouldn't be a problem.

reply to post by LittleBlackEagle

i guess if gold paper backed by hopium was worth something,

It makes me feel better to know that hopium isn't worth much....
Because I'm running out of hopium. I am seeing a lot of changium, though not for the better.

Originally posted by butcherguy
reply to post by LittleBlackEagle

 

i guess if gold paper backed by hopium was worth something,

It makes me feel better to know that hopium isn't worth much....
Because I'm running out of hopium. I am seeing a lot of changium, though not for the better.

changium you can believinium is the new precious metals market, i have noticed.

The people who caused the super inflation of gold walked a way with huge profits. Gold has value because it has been used for trade for a long time but I think the value should be about a thousand an ounce based on the economic stance of the world.

I see it dropping to this point before stabalizing. Silver should be at around 25 bucks an ounce, I think that went a little too high also. Copper should be at about six to seven bucks a pound in reality. The cost of mining and processing copper should dictate it's value. Copper is way more of a necessary metal than gold .