Somebody pulled the plug on PMs again...

I guess this is the part of the roller coaster where we all put our hands up in the air and scream.

Gold's down almost 4%? Maybe everybody will just move some money into stocks. Stocks are down almost 5%? Okay, maybe oil -- no, that's down almost 5%, too. So, it looks like everybody is just grabbing cash and running around in circles.

On the bright side, if gold is the true measure of wealth, I just got a 4% raise, however transient...

 

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To help calm the nerves, this is worth reading.

http://kingworldnews.com/kingworldn..._Still_Bullish_Gold_&_Silver,_Not_Stocks.html

 

Based on what I could gather yesterday, the Fed's 'Operation Twist' (selling short term Treasuries and buying longterm Treasuries to flatten the yield curve) is deflationary according to Peter Schiff. So I was expecting a drop, but not quite like this. Maybe something else is going on too, since that was announced earlier in the day yesterday, I'm not sure. I don't think we can blame it on the Euro because gold is dropping like a rock over there too. I think you are right about 'grabbing cash' Jeff which makes sense with the dollar index at recent highs, and people running for the safer haven of the moment (note that there is no longer any limit on FDIC insured cash of $250,000 for non-interest bearing accounts thanks to the Dodd-Frank Act) in light of no QE3 to prop up the bond bubble.

 

It looks to me like all the Fed is doing is increasing the risk on their own balance sheet. Until interest rates increase to enable investors to earn a return on their capital, it is difficult to see how the economy can prosper. But we're breaking new ground.

 

Look......The PM market is very underfunded, so it's subject to wide fluctuation. Much of that is through sheer manipulation. Banks and others often sell off huge blocks to drive the price downward. Then start buying after a price drop. when they buy large amounts, the prices start to rise. It's a vicious cycle. The computer driven trading programs are helping with this type of transaction and the brokers make money only when the market moves. So they keep it moving.

I watch the graph of the lows for a 12 month period, and you can see the line is always upward.

But remember, none of the boys make money with a flat market. They NEED the fluctuation. And I happen to think they make that happen.

gary

 

This is correct, as if they were to ever unwind these positions they'll be taking a greater loss than prior to yesterday's actions. Essentially what this does is reduce the profit margins for banks holding Treasuries which actually makes lending more difficult since they typically buy up the short term which the Fed has now sold and thus reduced the price of. It goes against their mandate of price stability (although this unstable move could be construed is returning to a more stable price due to recent inflation), discourages lending, and has basically the opposite effect of QE so it makes me wonder what exactly they are thinking. Maybe they are more worried about inflation than they're letting on. Again I will defer to Peter Schiff since I really have no firsthand knowledge of these things, in that in his Schiff Report video on YouTube yesterday where I got this information from he postulated the goal here may be consolidation of banking power.

 

I think that the Asians and Europe did it by leaving everything for the safety of the USD. Since the Swiss pegged to the Euro, The USD has increased it strength to over 79.0 after being proclaimed "dead" by the bullion pushers. And it is more the non-US problems that is causing this. One has to consider ( whether you accept it or not) whether the stories of people and commercial firms of Asia and Europe preferring gold as a safe haven and a preservation of wealth than the USD or Swiss Francs ( before the pegging) are true. When ( and no one really knows, 2 months or 20 years) things swing, I suspect world stocks will be the big gainers other than PM. Today, stocks world wide are down some over 7% and yet gold is down $70. Be cautious about buying PMs or stocks based on expectations of rebounds or seasonal buying, we are in a world financial problem that ( IMO) will get worse before better.

Jim

 

I bought a metal detector the other day... it's bound to go back to $400.

 

Even worse for them, it's come to light that the Swiss central bank sold 1500 tons of the nations 2500 tons of gold. They only have 1000 tons left. No word on where this gold went. (somewhere there is a lot of gold with mercury in it)

 

Silver is getting pummelled right now after hours. It went from 36 to 35 in less than an hour, then just hiccuped down to 34.65 from 35 in a single refresh.. saw as low as 34.31, but back up about 30 cents from there. Crazy moves.

 

There is no "safety of the USD" here in Japan-- the dollar's down 25% in just 3 years, with no prospects of making any meaningful recovery any time soon.

 

Wow, I'm willing to call this a correction, especially in the case of silver, it's down to almost $32 now. I bought yesterday at betw $36 & $37 and thought I was getting a deal. Might have to buy some more today, or wait and see if it cracks $30 on the down side.

 

And now at $32.86. That's almost a 25% drop in just a few days. Something manipulative going on here (but of course, we all know that).

 

What we could be seeing here is an increase in interest but instead of a rate hike it is being implemented in the form of a premium on the dollar.

 

Silver is swinging more widely than other commodities, as usual. I don't pretend to understand what causes widespread flight from silver AND gold AND all other commodities AND equities AT THE SAME TIME, but I think this is a bit bigger than Someone trying to stick it to the plucky small-time silver investor.

 

I'm not convinced of manipulation, especially with the CFTC [finally] paying attention to silver. PMs are very volitile in the best of circumstances, but perhaps moreso when there is a wiff of deflation in the air due to the unsustainable debt levels around the world. As of now it still looks like a normal sharp correction in a bull market for gold, but silver is looking a bit more scary unless we see a quick rise back to recent levels. Time will tell. It's all opinion for now.

 

Same here, thankfully I only bought a little at 36. Sitting on hold as we speak. If it gets below 30, I'll just get more. Still in small amounts though.

http://www.marketwatch.com/story/jp-morgan-hsbc-sued-for-silver-manipulation-2010-10-27

It's hard to say whether this is manipulation right now, but there is no doubt that manipulation has occurred. The CFTC's lawsuit against JP Morgan was finally filed a 2 weeks ago for this reason. Whether or not it's a legitimate drop, I highly doubt anybody is liquidating enough physical silver to account for this. The fractionally leveraged paper market is what's taking a hit right now.

 

Just checking the charts...

The gold bull market still looks ok, but silver has broken some pretty important support levels, and may be in trouble.

What does everyone think?

 

Buying opportunity sometime in the future, will be time to lower my cost basis.

 

The way I see it is the rise in PM’s was based on fear and the decline will be based on fear as well. If this is the crash, the scared “sheep” won’t be able to run fast enough to avoid getting fleeced. Hate to be negative, but history has pretty much shown this to be true. Speculation is a risky business where a few make a fortune, but most lose.