gold equity investors: tossed in the towel yet?

[metalman]

Re: gold equity investors: tossed in the towel yet?

i think the moves here are technical, driven by the unwinding of crowded cross trades like long gold-commodities/short banks-financials. the big funds are being forced to delever and unwinding is the result. thus all these very sharp moves counter to the long-established trends. this, too, will pass.

goldman must have made a fortune on this trade. imagine having the head of your firm run the treasury and set up a dollar intervention via purchases of treasury and agency debt and tip goldman traders on the other. never be able to prove it but i'd like to see a detail of goldman's trades the past two weeks compared to the q2 flow of funds data :eek:

[phirang]

Re: gold equity investors: tossed in the towel yet?

goldman must have made a fortune on this trade. imagine having the head of your firm run the treasury and set up a dollar intervention via purchases of treasury and agency debt and tip goldman traders on the other. never be able to prove it but i'd like to see a detail of goldman's trades the past two weeks compared to the q2 flow of funds data :eek:

In the long-run, fundamentals will dominate.

[Judas]

Re: gold equity investors: tossed in the towel yet?

I don't mean to be contrary ( ;) ) but I don't see gold (and silver) as investments at all, but long-term insurance. Every time gold rises crazily I'm bummed out because I can accumulate less. When it falls I feel happy because I can get more.

This month I'll pick up two more tenth gold maples.

If gold goes way low that means there is plenty of currency sloshing around for me to get my hands on, and then I don't need gold! Save it for later...

I know this thread is for equity investors, but I always feel remarkably serene when investors are freaking out, and it causes cognitive dissonance. I feel like I should be freaking out too!

[Guest]

Re: gold equity investors: tossed in the towel yet?

US MINT SUSPENDS GOLD COIN SALES: FUTURES PRICE IS A FICTION

Submitted by cpowell on Fri, 2008-08-15 04:27. Section: Daily Dispatches
12:25a ET Friday, August 15, 2008

Dear Friend of GATA and Gold:

The U.S. Mint has suspended sales of American eagle gold coins and is refusing orders from dealers, two coin and bullion dealers confirmed Thursday.
The mint's suspension of gold coin sales follows its tight rationing of sales of silver eagle coins, begun in May, when sales to the public were terminated and sales to the mint's 13 authorized dealers were tightly limited.

Word of the mint's suspension of gold coin sales came from the American Precious Metals Exchange in Edmond, Oklahoma, (http://apmexdealer.blogspot.com/2008/08/news-alert-us-mint-suspends-sale...) and from Centennial Precious Metals in Denver, Colorado.

The suspension is overwhelming evidence that the futures contract price of gold on the commodities exchanges is substantially below the physical market price and that, indeed, the commodities exchanges are being used as GATA long has maintained -- as part of a massive scheme of manipulation of the precious metals, currency, and bond markets.

Michael Kosares, proprietor of Centennial Precious Metals and host of its Internet bulletin board, the USAGold Forum (http://www.usagold.com/cpmforum/), explained Thursday:

"The U.S. Mint buys direct from the refiners, and this suspension of gold eagle sales may be an indication that the supply line is already backing up, or that the mint expects that it will back up for the rest of the year. I wonder who would give up physical metal at these prices and under these circumstances except distressed sellers. The central banks are in a hunker-down mode as far as I can determine, and it's the mines that supply the refiners. So if the mint, which buys from the refiners, is having a difficult time locating metal, what does that tell you?

I keep saying that we may get a surprising rubber-band effect later in the year when the pre-holiday/festival season kicks off in September/October. It may happen sooner. One of our indicators of approaching a bottom in gold is how many calls Centennial Precious Metals gets from our U.S.-based Indian clientele. Here's a quote from my office's report to me at the end of the day today: 'Today was a good day. ... There must have been an Indian convention where someone was handing out USAGold business cards.' That may give you a clue as to thinking in India proper and probably the rest of the Asian rim."

That is, through their agents the bullion banks the Western central banks, desperate to prop up a corrupt and totteringt financial system, have put gold so much on sale that even the U.S. Mint can't find any now. The price reported from the commodities markets is a fiction -- a scary one, perhaps, but a fiction no less.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

___________

The Danger of A Retail-Led Silver Revolution

( http://silveraxis.com/todayinsilver/ )

August 15th, 2008
[I wrote this a couple of days ago but did not have a chance to finish and post it. It is even more relevant today].

This week pretty much every bullion dealer is sold out of silver, and some are even sold out of most of their gold. Sold out, of course, doesn’t mean that nobody has a single ounce–just that nobody is willing to sell anything at this price. Speaking of which, this could be an extremely perilous time to buy despite the impressions to the contrary. Not because silver prices could crash even further (the fact they touched $12.50 today, however, would indicate there is no point in trying to fish for a bottom, it will come when it comes). Rather, because silver prices could violently snap back. After such a huge drop, a very strong bounce could leave dealers reeling as they seek to fill orders made at lower prices after already having taken losses on sales of existing inventory on the way down. So, make sure you absolutely trust your dealer and they absolutely have the bullion you are buying.

As an aside, to those who say there is not a bullion shortage, that it’s just dealers holding back all their inventory until prices rise, I’d ask why then are the fabricators, the U.S. Mint and other primary suppliers sold out for several months forward?

In any case, bullion dealers going bankrupt isn’t the danger to which this commentary refers. Instead, it’s this: if nobody is selling and nobody is buying, then there is effectively zero demand.

Let’s examine this in a bit more detail. Gurus have been telling all of us that the only way to buy silver is to buy physical while offering up sage warnings about all the risks of other forms such as SLV, CEF, Perth Mint, etc. What they haven’t done is talk about the fact that retail bullion demand has practical limits as a result of refinery and fabricator capacity and available supply. In other words, retail bullion represents only a small fraction of the annual silver supply. Refinery and fabrication capacity is not something that can easily grow. That creates a natural throttle on retail investment demand for retail bullion. As a result, retail demand has a diluted influence on the global silver market.

The idea that it is dangerous to focus investment demand purely on retail silver is being vividly demonstrated this week. The retail silver shortage hasn’t done anything for the silver price (quite the contrary, it couldn’t stop the worst slide of the century); the premiums have just increased.

That we should find it difficult to find silver to buy just as the price of silver is taking its biggest dive in many years is not merely a cruel irony of an enigmatic silver market but a clear presentation of the danger I’m warning you about.

Here is the bottom line. Retail bullion demand does not easily or quickly transfer pressure to wholesale bullion demand, consisting of the 1,000 oz. good delivery bars that dominate the spot market worldwide.

I haven’t heard a single person mention any interest in 1,000 oz. bars over the past few days. Absent investors stepping up to buy these huge bricks of shiny metal, the main source of investment demand would be the silver ETFs and precious metal funds. Barclays’ iShares ETF, SLV, is the biggest among them. So we must ask ourselves, with all this running around to buy physical silver, why isn’t the frenzy spilling over to SLV? The trading volume over the past few days has been good but nothing to write home about. Even well known technical analysts are getting stopped out of SLV at these ridiculously low prices. Where are all the fundamentalists who know that silver at $12.50 is a huge value, if for no other reason but that the marginal production cost of many silver mines is now probably higher?

Here’s the deal. Every good revolutionary knows that upending the status quo often requires going for the head (and sometimes cutting it off). Well, the head of the silver market is the wholesale bullion category consisting of 1,000 oz. bars. Everything else is a foot, finger, nose, ear or other extremity.

Is the full extent of this danger becoming obvious to you yet? The silver revolutionaries have been frenzied up by their gurus to essentially inflict paper cuts (buying retail silver) instead of carrying out a simple if brutally effective plan to cut off the king’s head (buying wholesale silver). Until they do, the revolution will be in danger of viciously getting driven back by the reactionary forces that take comfort in the fact that the king’s noggin is off limits.

This week should serve as a lesson, but it will probably be used by many silver investors as a sign to become even more entrenched and paranoid about the evil forces out to get them. They will keep exclusively buying silver Eagles, 10 oz. bars, rounds and other paraphernalia of the masses while totally ignoring the main prize. At least the Hunt Brothers knew to go for the head, even if their executioner’s ax (COMEX silver) was too dull to do the job. I suspect there’s somebody out there in this world of almost 7 billion people and hundreds of billionaires who knows how to do it right. Indeed, if my recent speculation is right about what enabled this violent sell-off in silver, such a somebody may already be at work.

Tom Szabo - SILVERAXIS

[LargoWinch]

Re: gold equity investors: tossed in the towel yet?

Wow...Rhodium is down $1 - 2 - 4 - 0 in a single day.

Rhodium

5,190.00

-1240.00

[phirang]

Re: gold equity investors: tossed in the towel yet?

Wow...Rhodium is down $1 - 2 - 4 - 0 in a single day.

Rhodium

5,190.00

-1240.00

Rhodium: the junior of metals.

Keep away from illiquid, shallow markets!

[we_are_toast]

Re: gold equity investors: tossed in the towel yet?

Lukester;

After seeing your post, I thought I'd take a look at KITCO to see if they're selling coins without any problems, and saw this posted at the top of their page.

"
IMPORTANT NEW NOTICE: Due to market volatility and higher demand in the entire industry, we are anticipating delays in supply of all bullion products. Please note that you can continue to place orders and prices will be guaranteed; however, cancellation fees will still be applicable regardless of the length of the delay. Consequently once inventory is received there may also be delays in processing and shipping by our vaults.

"


I'm not sure what to think of this, but something strange is going on. I continue to believe the fundamentals for gold are still strong and added to my positions today. Although at times lately I keep getting this picture in my mind of Slim Pickens riding the H-bomb to the ground in the movie Dr. Strangelove.

[phirang]

Re: gold equity investors: tossed in the towel yet?

Lukester;

After seeing your post, I thought I'd take a look at KITCO to see if they're selling coins without any problems, and saw this posted at the top of their page.

"
IMPORTANT NEW NOTICE: Due to market volatility and higher demand in the entire industry, we are anticipating delays in supply of all bullion products. Please note that you can continue to place orders and prices will be guaranteed; however, cancellation fees will still be applicable regardless of the length of the delay. Consequently once inventory is received there may also be delays in processing and shipping by our vaults.

"


I'm not sure what to think of this, but something strange is going on. I continue to believe the fundamentals for gold are still strong and added to my positions today. Although at times lately I keep getting this picture in my mind of Slim Pickens riding the H-bomb to the ground in the movie Dr. Strangelove.

It could also be clever marketing...

[Guest]

Re: gold equity investors: tossed in the towel yet?

When in doubt, we could do worse than defer to Bart. I understand he's been in the futures markets for a while. Bart tends to understate (conspiracy suppressing the gold price probably seems a bit too "colorful") and in other respects he also affects the wearing of a tinfoil hat, but I suspect when it comes to issues like manipulation he redoubles his skepticism before concluding anything. These days he's saying the gold/silver markets are manipulated.

Some people here may be thinking "well of course they are, why do you even need to argue the point?", but others of us hesitate a long time before going wholesale along with the price suppression conclusions. But take a look at your typical Soviet Bloc economies through the 1970's and 1980's. Price controls and "shortages" went so thoroughly hand in hand as to be considered self-evident. A corrolary of that is it's reverse, that the very sign of a price controlled market is the appearance of shortages.

Another example - non silver coins in the 1960's. Non silver money is introduced, and the silver coins promptly "disappear" into the pockets of the general public in short order. We see worldwide reports of "long delays" to get silver (and now gold too?), and right alongside that event we see the price taking the biggest plunge in 7 years. So you have a conundrum. With all this metal supposedly getting liquidated, why the tightness in the distribution chain from refiners to mints to metal dealers?

It would appear there is a "discrepancy" between the plunging spot price and the willingness of a lot of people to clean out the remaining stores of metal from the market. Just like the silver coins soon disappeared from circulation when the non silver coins came out, a percieved value discrepancy gets "arbitraged" away by natural process. "Joe and Jeannette Sixpack" are apparently not nearly as stupid as has been rumored.

The price control = shortages thing seems to have so many straightforward precedents that it is a given, and it becomes difficult to ignore that here. An interesting corrolary might be: "anomalous shortages can also suggest price controls". We do know one thing here, and it's easy to observe in late summer 2008 - the price action is starkly contradictory to the availability. Those guys over at GATA claim to have an explanation for all this, don't they?

[Andreuccio]

Re: gold equity investors: tossed in the towel yet?

It could also be clever marketing...

Perhaps, but APMEX didn't have any Krugerrands available at all. I've been to their website frequently over the last couple of years and that's the first time I've seen that.