It's never a good time to buy gold. Ever.

I may not be able to do adaptive formation equations or rebuild an engine block, but I have learned a few lessons in my time on this earth.  I’ve learned that no matter how thirsty you are, don’t try to open a beer bottle with your teeth.  I have learned that when your 4 year old looks pale and says “My throat feels funny” you better get her out of your car immediately then stand back.  You know…  life wisdom.

What I’ve also learned is that it’s never a good time to buy gold.  Ever.  Here’s why:

1. Central banks are always selling gold, and nobody is ever buying it.

The financial press loves it when central banks sell big hunks of the barbarous relic.  This is always Big News, and is given prominent play and headline status.  Apparently, the press believes that people love to read all about how their governments have so much of this dusty metal from a bygone age just lying around taking up valuable space that they practically give it away, and in huge batches too!

“The Bank of Spain has cuts its reserves by 108 tonnes from March to May, representing 25% of its total reserves. Finance Minister Pedro Solbes told to the Spanish parliament last week of his intentions "to sell gold, an unprofitable asset, to reinvest in bonds, which are more profitable." (Reuters, June 2007)

Funny thing, though- for any financial transaction to take place, don’t you need a seller AND a buyer?  Wouldn’t finding out who is buying all that gold be fully half the story, and just as big a deal as who is selling? Apparently not. It seems that the question of who is buying all that gold is irrelevant, because the press never mentions it!  This phenomenon was commented on 20 years ago by legendary Swiss banker and gold analyst Ferdinand Lipps: “Sellers of gold are always made known.  In some cases even three times: first, when the sale is announced; second, when the sale actually takes place; and finally, when the sale is completed.  The buyers, however, always remain anonymous.” (Lipps, Gold Wars, p.132)

The Swiss National Bank surprised the gold market on Thursday with plans sell 250 tonnes of gold reserves over the next two years. With major gold sales already this year from Spain, France and the ECB, some analysts believe higher gold prices could lead to more sales by central banks.” (http://www.resourceinvestor.com/2007/06/14/switzerland-central-bank-to-sell-250-tonnes-of-gol )

So I must conclude that if the brilliant economists running our central banks are selling their gold, then it is obviously a bad time to buy… and the press assures me that central banks are almost always selling gold.  And apparently, nobody ever buys it.

2. If gold is going up, it is too expensive and you shouldn’t buy.

When I first started wandering through some PM internet forums, I kept seeing the same refrain popping up over and over again.  I started to think of these posts as “Krugerrand guy”.  People would be talking about the pullback to $700 and discussing whether to buy or wait for lower prices, and someone would always chime in with some version of “I bought my Krugs at $300 ten years ago, no way I am buying at these prices”.  These sentiments, it seems, influenced quite a few people because you could always find posts saying that gold was too expensive “at these prices”, no matter what those prices were.  And the further it rose, the more expensive it became so I would think that every time price went higher, these folks found the idea of buying even more repellant.

The obvious conclusion is that you should never buy into a rising market, because if price is going up then gold costs more than it did just a little while ago, therefore you are paying too much.  The internet said so.
 

3.  If gold is going down, it could always fall further, or might even be entering a bear market, so you shouldn’t buy.

Not only is it ill-advised to buy into a rising market, it is a bad idea to buy into a falling market, too!  When prices are lower, it clearly means the market has already topped, so even lower prices must be on the way.  It might even be a bear market.  Heck, it might even be a secular bear market (which is just like an ordinary bear market but with huge fangs and enormous claws and… well, it’s just very scary).   Falling all the way from $1,900 to $1,300? No matter how far gold has fallen, at any given time it could fall even more. Remember, the trend is your friend and the trend is down, so when price is falling it’s a bad time to buy gold.  The internet said so. 

4.  A respected Citigroup (or Morgan Stanley, or Schwab, or Goldman) analyst doesn’t recommend buying gold right now due to ‘market conditions’.

Nov 29, 2007 (Reuters) - Investors should sell gold in 2008 to take advantage of falling prices as the dollar steadies, Goldman Sachs said on Thursday, naming the strategy as one of its top 10 tips for next year.  The bank expects an easing of the fears that have paralyzed credit markets. It also sees the dollar trading more steadily than it has this year. These trends would lessen the safe haven appeal of the precious metal.  "We would now use a short exposure in gold, expressed in US Dollars, to capitalize on a gradual relaxation of credit concerns in the financial sector over the coming months, and as an avenue to benefit from the prospect of a stabilization in the US Dollar," Goldman Sachs said. (link)

You can totally see what these guys were talking about in this chart:  look at how gold quickly shot up (clearly irrational exuberance by those stupid gold bugs), but THEN it topped out and lost all its momentum.  The “market conditions” were not going to be favorable to gold so it was a good time to sell, or maybe even go short:

Top Ten Tip indeed, telling clients to sell their gold in November of 2008 (and at that time, Goldman had some sweet Mortgage Backed Securities you could flip that money into, too). Here is the longer term chart showing the pain those clients would have had to endure if they had kept their gold, against Goldman’s recommendation: 

Wow, is it just me or do those two charts look strangely similar? Oh, never mind- it’s just coincidence, I’m sure. 

The point is, these analysts from the big Wall Street companies do this for a living, folks.  They are professionals and have access to the finest information and institutional resources available, so you would be well advised to do what they tell you.  They rarely mention gold at all but when they do, you will notice that they usually recommend selling it due to “market conditions”.  I must therefore conclude that “market conditions” are not favorable to gold.  Ever.

.     .     .

From all of this, I have learned is that it is never a good time to buy gold.  When price is rising, you don’t want to buy because it’s too expensive.  When price is falling, you don’t want to buy because the trend is down, and it could always fall farther.  Additionally, central banks are regularly selling their gold and apparently, nobody every buys it.  And the professionals, who manage investments for a living, do not recommend it because, well, “market conditions”.  When you really get right down to it, there is never EVER a good time to buy gold. 

But you know something else I’ve learned?  Whether price is rising or falling, if you don’t buy gold, well... you won’t have any.  Funny how that works, isn’t it? 

218 Comments

Sebi's picture

Hat tip

Hat Tip, Sir

TomMack's picture

tooth (2nd)

I thought i would have time to give it a good read but ... at work and ass getting kicked early.  Great post yesterday "...lies and liars..."

i may have to skip my minimal stacking the next couple of weeks to throw a few FRNs Craig's way.

good day to all and fight on

didier's picture

pining

.

sierra skier's picture

Fourth

Gold may be a barbaric relic but I will hold it.

My biggest issue is I like silver even better. My 2nd biggest problem is the wife thinks we already have too much.

Mantis's picture

Buy bonds

Pining you forgot. don't buy it because you can't eat it !

surprise

tyberious's picture

Well said P4

Its all a concerted effort to keep people out of real money. At the end of the day, and I know this has been said, this entire financial system has be morphed into a overly complex, gordian knot, with a quadrillion interlocking derivatives that none of the players want to see unraveled.

Gold and silver unravels. Fucking banker kryptonite!

murphy's picture

take the 5th

Since I usually can't add an original thought I would like to put forth these two enlightening posts from JY and Ivars. Seems to me that connecting these dots it might be time to buy some of these inert metals.

btw- Big hat tips to both you guys!

From JY

http://www.tfmetalsreport.com/comment/364422#comment-364422

Unless I am gravely mistaken, it seems to me #3 and #4 were ultimately combined, along with the establishment of the COMEX. Does this have anything to do with THIS:
"Oct 10 (Reuters) - The International Monetary Fund on Thursday said it had received approval from its member nations to transfer profits from gold sales to a fund to help low-income nations, freeing up about $1.9 billion a year in available aid. [...] The Fund last year agreed to distribute the windfall to its members in two parts, on condition the countries reinvested at least 90 percent of the money in a zero-interest loan program for poor countries."
Zero-interest is a great thing... unless one does not have the funds for the principal payments, either... But would this be one of the (last gasp?) stages of attempted demonetization of gold?
The memo itself represents official policy, the .gov policy position presented to everyone's favorite SecState, Dr. Strangelove himself, the 'original' Hank the Tank. Alas, it is missing what could be the next phase we might witness at some point:
"One option that is not included in the paper, but which should be for various reasons, is how to deal with thwarting the Europeans [ed. note: or anybody else] if they were to go ahead without us in a way which we felt was inimical to our interests. "
Go ahead with what, exactly? Implementing an SDR, or establishing a free market for gold? Or outright acting in a direction of REmonetizing gold?
Footnote to the memo was mentioned earlier today by someone else, can't remember who:
"Under the present IMF Articles of Agreement, a generalized gold price increase (uniform par value change) would require approval of countries representing 85% of the IMF weighted voting power. Thus we have the power to block any legal change. [Footnote is in the original.]" -- and there you have (part of?) the mechanism by which US reserves can still be valued at $42/oz, to this day, in IMF records.

From Ivars:

http://www.tfmetalsreport.com/comment/364434#comment-364434

And excerpt from Hedge book October 2013:

Quote:

The gold price saw a turbulent decline during the period and finished the quarter at below $1200/oz.

With the consensus market view bearish overall, and projecting further declines in the gold price over the coming years, it could be expected that present price levels (~$1350/oz) would prompt a moderate level of producer hedging to protect already slim margins. Evidence however, suggests this is not the case and that companies did not move to protect revenues when prices fell below the $1,200 level. Indeed, aside from Norton Gold Fields and Evolution Mining who have recently entered into hedge contracts, the existing delivery profile indicates net de-hedging will continue through year-end, with 27 tonnes of contracts scheduled for delivery in the second half of the year.
 
It seems gold producers do not believe in price fall much below 1200 USD if they do not hedge, but on the contrary, use low prices to exit hedging contracts being in the money there ( they have bought these hedges at higher prices and now are selling gold into them , pocketing the profit)- but what is important, NET hedging does not increase as gold moves lower-on the contrary.  
 
And this- an event not seen since 2002 (when bull market was just starting to acquire pace) in hedging:
 
Quote:

The end-June gold price, at $1,223.80/oz, was $371 lower than the end-March gold price (on the basis of Comex settlement). This sharp decline, along with a 9% decrease in the number of outstanding contracts, left the value of the marked-to-market hedge book at a net asset of $529 million, a $946 million quarter-on-quarter increase. This was the first time the outstanding hedge book had been a marked-to-market asset since our quarterly series began in 2002

http://commoditiesupdates.thomsonreuters.com/?p=8528

edit: oops, forgot to say thanks to Pining. As always an entertaining and enlightening read.

ag1969's picture

It is ridiculous on its face

The amount of resources being expended on suppressing gold and silver is breathtaking.  Desperation is in the air, can you smell it? 

I think China might maybe possibly could have bought an ounce or two of that central bank gold.  But, you know, someone had to buy it and they just happened to have all those dollars lying around so they  got stuck buying it!

treefrog's picture

ninth

on craig's list?

tyberious's picture

My Man Mike Maloney

The Most Important Video You Will Watch Today

from whygoldandsilver :

http://www.youtube.com/watch?feature=player_embedded&v=dUIGKTYwxd8

http://www.hiddensecretsofmoney.com Mike Maloney was recently asked to clarify his position on where the economy is headed – inflation or deflation? Check out the the video to hear Mike’s thoughts on how this will play out, and be sure to watch the next episode of Hidden Secrets Of Money…coming soon

tyberious's picture

Gold And Silver – Cognitive

Gold And Silver – Cognitive Disconnect Between Physical And Paper

by Michael Noonan, SilverBearCafe.com:

When one understands the widely pervasive but narrowly understood phenomenon of cognitive dissonance that permeates most of the Western world, it is not so difficult to put into context the disparity between demand for physical gold and silver and supply for the faux paper market. There is a growing sense for many that everything in the financial world is out of line, and way out of line for many others.

Cognitive dissonance: an inner need to maintain harmony in one’s attitudes and beliefs while avoiding disharmony, [dissonance]. When a conflict arises that produces a sense of inner discomfort about one’s beliefs or attitudes over something that promotes an alteration of those same beliefs and attitudes, there is a driving need to restore the inner balance or calm. In other words, it is easier to go along in order to get along.

Read More @ SilverBearCafe.com

tyberious's picture

BOMBSHELL: Sen. Rand Paul

BOMBSHELL: Sen. Rand Paul Reveals — BARACK OBAMA WROTE THE REGULATION TO CANCEL YOUR INSURANCE, AND EVERY DEMOCRAT VOTED FOR IT!!!

by SGT, SGT Report.com:

If you, like I, have brainwashed, intellectually dishonest, “liberal” friends who still insist on giving Barack Obama a pass for every horrible, often criminal thing he has ever done, you might want to make them aware of this additional fact.

According to Senator Rand Paul, who spoke at a luncheon in Charleston, South Carolina on Monday, November 11, the President of the United States himself wrote the regulation to cancel the health insurance of MILLIONS of Americans. And every single Democrat voted for it.

Rand Paul on Obamacare [Begins @ 5:40]:

“I’m still learning about it. It’s 20,000 pages of regulations. The Bill was 2,000 pages and I didn’t realize this until this week, the whole idea of you losing or getting your insurance cancelled wasn’t in the original Obamacare. It was a regulation WRITTEN BY PRESIDENT OBAMA, three months later. So we had a vote, this is before I got up there. The Republicans had a vote to try to cancel that regulation so you COULDN’T BE CANCELLED, to grandfather everybody in. You know what the vote was? Straight party line. EVERY DEMOCRAT VOTED TO KEEP THE RULE THAT CANCELS YOUR INSURANCE.”

As the now 20,000+ Obamacare pages come home to roost, remind those who have continued to support the Liar-in-Chief, regardless of his crimes, of this simple fact: The man who sits in the Oval Office (when he’s not on a golf course), and the Party to which they have pledged their unquestioning allegiance, has now wholly betrayed them. And their childre

Basil's picture

@Urban Roman (copied from previous post)

You said :

"The manipulation is obvious, there is no question of that. Any trader looking to sell and get the best price would not dump thousands of contracts in the middle of the night."

How many times have we read that ? It is high time that once and for all folks understood what is ACTUALLY HAPPENING HERE.  In a sense ,Urban, you are absolutely correct - any trader looking to get the best price  would not trade in such a way.  However, a skilled trader  looking to make the biggest profit could very well trade just like this.

As an example take a recent  "waterfall decline" where the Gold price plummeted from about 1350 to 1320  in just a few minutes, in a thin market in the middle of the night (USA night).  Firstly the trader was not selling , he was shorting, the important difference being that he fully intended to buy back at some stage.

If he had shorted to get the best possible fill , perhaps during a busy period on comex, he may have got an average fill close to 1350,  and the active market would have kept the price close to that level.

By shorting heavily in a thin market, needless to say the trader got a far worse average fill.  Who know exactly what that price was, but lets say in was right down at 1340.   However this sudden movement triggered a whole load of algo / black box selling which tumbled the price right down to 1320, representing a 20 point gain for the trader  ie) shorted at 1340 and the price fell to 1320.

Clearly the trader stood to profit more by shorting in thin market conditions, fully realising that his trade stood a good chance of triggering further selling.

It's nothing to do with manipulation. It's everything to do with traders  making as big a profit as possible.  And yes - these traders could well be sitting behind desks at JP Morgan or Goldman Sachs. Contrary to popular belief this guys aren't criminals - just good traders , handpicked for precisely the job they do.

tyberious's picture

Repost: because its that good

http://www.sovereignman.com/expat/this-one-chart-shows-you-whos-really-in-control-13119/

This one chart shows you who’s really in control

November 7, 2013
Bangkok, Thailand

Check out this chart below. It’s a graph of total US tax revenue as a percentage of the money supply, since 1900.

For example, in 1928, at the peak of the Roaring 20s, US money supply (M2) was $46.4 billion. That same year, the US government took in $3.9 billion in tax revenue.

So in 1928, tax revenue was 8.4% of the money supply.

In contrast, at the height of World War II in 1944, US tax revenue had increased to $42.4 billion. But money supply had also grown substantially, to $106.8 billion.

So in 1944, tax revenue was 39.74% of money supply.

11072013Chart1 This one chart shows you whos really in control

You can see from this chart that over the last 113 years, tax revenue as a percentage of the nation’s money supply has swung wildly, from as little as 3.65% to over 40%.

But something interesting happened in the 1970s.

1971 was a bifurcation point, and this model went from chaotic to stable. Since 1971, in fact, US tax revenue as a percentage of money supply has been almost a constant, steady 20%.

You can see this graphically below as we zoom in on the period from 1971 through 2013– the trend line is very flat.

11072013Chart2 This one chart shows you whos really in control

What does this mean? Remember– 1971 was the year that Richard Nixon severed the dollar’s convertibility to gold once and for all.

And in doing so, he handed unchecked, unrestrained, total control of the money supply to the Federal Reserve.

That’s what makes this data so interesting.

Prior to 1971, there was ZERO correlation between US tax revenue and money supply. Yet almost immediately after they handed the last bit of monetary control to the Federal Reserve, suddenly a very tight correlation emerged.

Furthermore, since 1971, marginal tax rates and tax brackets have been all over the board.

In the 70s, for example, the highest marginal tax was a whopping 70%. In the 80s it dropped to 28%.

And yet, the entire time, total US tax revenue has remained very tightly correlated to the money supply.

The conclusion is simple: People think they’re living in some kind of democratic republic. But the politicians they elect have zero control.

It doesn’t matter who you elect, what the politicians do, or how high/low they set tax rates. They could tax the rich. They could destroy the middle class. It doesn’t matter.

The fiscal revenues in the Land of the Free rest exclusively in the hands of a tiny banking elite. Everything else is just an illusion to conceal the truth… and make people think that they’re in control.

Motley Fool's picture

Pining

Fun post. :D

Pining 4 the Fjords's picture

Basil

I understand what you are saying - and that we need to be more precise in our words (selling vs. shorting), but you realize your post actually proves Urban Roman's larger point, right?  That only a huge entity intending to deliberately move the market with the sheer volume of their trades can pull this off, and that when they do it defrauds others in the market?  That this is the very definition of market manipulation, and is supposed to be illegal? 

You and I cannot move markets this way.  Even big hedgers within the industry cannot move markets this way (and are supposed to go to jail if they try).  So whether it is someone closing longs (Urban Roman's example) or someone taking out fresh shorts (your example) or someone who already owns a huge short position and makes it even more profitable through this type of action, the key point is the sheer volume used to overwhelm the bid at key levels. 

And Motley-  Thank you!  And before you note it, let me say that this post originally was written as "gold and silver" all the way through, but it read awkwardly so I simplified it.  Don't read too much into the choice of subject, is all I'm saying ;-)  When it comes to PM's, I happily bat from both sides of the plate!

ggnewmex's picture

classic

Thanks Pining

Very complementary to the TF website

gg

Markedtofuture's picture

Andrew Huszar: Confessions of a Quantitative Easer

WE WENT ON A BOND-BUYING SPREE THAT WAS SUPPOSED TO HELP MAIN STREET. INSTEAD, IT WAS A FEAST FOR WALL STREET.

Nov. 11, 2013 7:00 p.m. ET
I can only say: I'm sorry, America. As a former Federal Reserve official, I was responsible for executing the centerpiece program of the Fed's first plunge into the bond-buying experiment known as quantitative easing. The central bank continues to spin QE as a tool for helping Main Street. But I've come to recognize the program for what it really is: the greatest backdoor Wall Street bailout of all time.
 
Five years ago this month, on Black Friday, the Fed launched an unprecedented shopping spree. By that point in the financial crisis, Congress had already passed legislation, the Troubled Asset Relief Program, to halt the U.S. banking system's free fall. Beyond Wall Street, though, the economic pain was still soaring. In the last three months of 2008 alone, almost two million Americans would lose their jobs.
 
The Fed said it wanted to help—through a new program of massive bond purchases. There were secondary goals, but Chairman Ben Bernanke made clear that the Fed's central motivation was to "affect credit conditions for households and businesses": to drive down the cost of credit so that more Americans hurting from the tanking economy could use it to weather the downturn. For this reason, he originally called the initiative "credit easing."
 
My part of the story began a few months later. Having been at the Fed for seven years, until early 2008, I was working on Wall Street in spring 2009 when I got an unexpected phone call. Would I come back to work on the Fed's trading floor? The job: managing what was at the heart of QE's bond-buying spree—a wild attempt to buy $1.25 trillion in mortgage bonds in 12 months. Incredibly, the Fed was calling to ask if I wanted to quarterback the largest economic stimulus in U.S. history.
Phil Foster
This was a dream job, but I hesitated. And it wasn't just nervousness about taking on such responsibility. I had left the Fed out of frustration, having witnessed the institution deferring more and more to Wall Street. Independence is at the heart of any central bank's credibility, and I had come to believe that the Fed's independence was eroding. Senior Fed officials, though, were publicly acknowledging mistakes and several of those officials emphasized to me how committed they were to a major Wall Street revamp. I could also see that they desperately needed reinforcements. I took a leap of faith.
 
In its almost 100-year history, the Fed had never bought one mortgage bond. Now my program was buying so many each day through active, unscripted trading that we constantly risked driving bond prices too high and crashing global confidence in key financial markets. We were working feverishly to preserve the impression that the Fed knew what it was doing.
 
It wasn't long before my old doubts resurfaced. Despite the Fed's rhetoric, my program wasn't helping to make credit any more accessible for the average American. The banks were only issuing fewer and fewer loans. More insidiously, whatever credit they were extending wasn't getting much cheaper. QE may have been driving down the wholesale cost for banks to make loans, but Wall Street was pocketing most of the extra cash.
 
From the trenches, several other Fed managers also began voicing the concern that QE wasn't working as planned. Our warnings fell on deaf ears. In the past, Fed leaders—even if they ultimately erred—would have worried obsessively about the costs versus the benefits of any major initiative. Now the only obsession seemed to be with the newest survey of financial-market expectations or the latest in-person feedback from Wall Street's leading bankers and hedge-fund managers. Sorry, U.S. taxpayer.
 
Trading for the first round of QE ended on March 31, 2010. The final results confirmed that, while there had been only trivial relief for Main Street, the U.S. central bank's bond purchases had been an absolute coup for Wall Street. The banks hadn't just benefited from the lower cost of making loans. They'd also enjoyed huge capital gains on the rising values of their securities holdings and fat commissions from brokering most of the Fed's QE transactions. Wall Street had experienced its most profitable year ever in 2009, and 2010 was starting off in much the same way.
 
You'd think the Fed would have finally stopped to question the wisdom of QE. Think again. Only a few months later—after a 14% drop in the U.S. stock market and renewed weakening in the banking sector—the Fed announced a new round of bond buying: QE2. Germany's finance minister, Wolfgang Schäuble, immediately called the decision "clueless."
 
That was when I realized the Fed had lost any remaining ability to think independently from Wall Street. Demoralized, I returned to the private sector.
 
Where are we today? The Fed keeps buying roughly $85 billion in bonds a month, chronically delaying so much as a minor QE taper. Over five years, its bond purchases have come to more than $4 trillion. Amazingly, in a supposedly free-market nation, QE has become the largest financial-markets intervention by any government in world history.
 
And the impact? Even by the Fed's sunniest calculations, aggressive QE over five years has generated only a few percentage points of U.S. growth. By contrast, experts outside the Fed, such as Mohammed El Erian at the Pimco investment firm, suggest that the Fed may have created and spent over $4 trillion for a total return of as little as 0.25% of GDP (i.e., a mere $40 billion bump in U.S. economic output). Both of those estimates indicate that QE isn't really working.
 
Unless you're Wall Street. Having racked up hundreds of billions of dollars in opaque Fed subsidies, U.S. banks have seen their collective stock price triple since March 2009. The biggest ones have only become more of a cartel: 0.2% of them now control more than 70% of the U.S. bank assets.
 
As for the rest of America, good luck. Because QE was relentlessly pumping money into the financial markets during the past five years, it killed the urgency for Washington to confront a real crisis: that of a structurally unsound U.S. economy. Yes, those financial markets have rallied spectacularly, breathing much-needed life back into 401(k)s, but for how long? Experts like Larry Fink at the BlackRock investment firm are suggesting that conditions are again "bubble-like." Meanwhile, the country remains overly dependent on Wall Street to drive economic growth.
 
Even when acknowledging QE's shortcomings, Chairman Bernanke argues that some action by the Fed is better than none (a position that his likely successor, Fed Vice Chairwoman Janet Yellen, also embraces). The implication is that the Fed is dutifully compensating for the rest of Washington's dysfunction. But the Fed is at the center of that dysfunction. Case in point: It has allowed QE to become Wall Street's new "too big to fail" policy.
 
Mr. Huszar, a senior fellow at Rutgers Business School, is a former Morgan Stanley managing director. In 2009-10, he managed the Federal Reserve's $1.25 trillion agency mortgage-backed security purchase program."
 
Basil's picture

@Pining

Ok - I take your point.  These big traders are deliberately trying to move the market in their favour. I agree with that. However, I'm not certain that's it's necessarily illegal - these big traders aren't actually FORCING the algos to sell, even if they have a pretty good idea that they will.

In any case , that isn't the main point.  The main point is that the Gold price "suppression"   is simply big traders at work.  There most definitely IS NOT some  Government driven or  Fed driven deliberate policy to suppress the Gold price, whereby the  JP Morgans etc are actually instructed  to push the price down.  That's just conspiracy theory BS.

silver66's picture

Pining 4 the Fjords

Your first point about who the buyers are, is such an easy question to ask once someone else has asked it. Great point!!

Hidden right in front of us.

I have forwarded this article to several in my contact list

Silver66

I guess today is not the right day to visit my LCS

Mad5Hatter's picture

World

You got it from the fjord, sell your gold.

http://www.jsmineset.com/

Mannario thinks differently, he says buy gold. He said THIS CANT GO ON, the driving of the US into a socialist fascist state, that there will be a turn around. But with more people joining the free shit army and on the gov teets, how can that be?

Gold topped out 25 months ago in September of 2011. It has been 30 months since silver briefly bested the magical, mystical 50 dollar mark in April of 2011. To put it another way, Gold has been down for the last 759 days, while the high in silver took place 916 days ago.

argentus maximus's picture

Nine one Pining.  

Nine one Pining.  smiley

Urban Roman's picture

I was just reading about Paul Kruger

South Africa has an interesting history. And I was curious about this guy whose picture I see from time to time.

Kruger

He acknowledged in a memoir that the discovery of gold in the Witwatersrand was not really a good thing for the Republic.

https://en.wikipedia.org/wiki/Paul_Kruger

Pining 4 the Fjords's picture

Basil II (see what I did there?)

I hate to pimp my own stuff, but if you genuinely feel that way about manipulation, I would encourage you to read my article "The Golden Ostrich" posted some time ago.

http://www.tfmetalsreport.com/blog/4970/golden-ostrich

In it, I outline means, motive, opportunity, past proof of just such manipulation, and three separate examples of Fed chairmen stating outright that they either were manipulating gold price to support their policy, or stood ready to do so if necessary (the latter during sworn testimony to Congress).

I would encourage you to read this, and if you have a better explanation for the points I offer, I would be genuinely interested in hearing it!

tyberious's picture

@Basil

Really? Have you not reviewed all of the evidence FOR bankster manipulation presented here?

Here is the latest revelation.

What A Confidential 1974 Memo To Paul Volcker Reveals About America's True Views On Gold, Reserve Currency And "PetroGold"
Submitted by Tyler Durden on 11/11/2013 - 22:09

"U.S. objectives for world monetary system—a durable, stable system, with the SDR as a strong reserve asset at its center — are incompatible with a continued important role for gold as a reserve asset.... It is the U.S. concern that any substantial increase now in the price at which official gold transactions are made would strengthen the position of gold in the system, and cripple the SDR... Countries could give up their gold holdings to the IMF in exchange for SDRs. The gold could then be sold gradually, over time, by the IMF to the private market.... There is a belief among certain Europeans that a higher price of gold for settlement purposes would facilitate financing of oil imports... From the Arab point of view [gold] would have the advantages of being protected from exchange-rate changes and inflation, and subject to absolute national control. "

http://www.zerohedge.com/news/2013-11-11/what-confidential-1974-memo-paul-volcker-reveals-about-americas-true-views-gold-rese

Mr. Fix's picture

NOW is a great time to buy gold!

Okay, I read the article, and a big fat hat tip to Pining,  excellent job at satire, and pointing out the absurd by being absurd, but in the two scenarios (gold up and gold down) you left out a third option,

it is an important third option, because I believe it is where we are at right now.

For months now, gold has traded in a very narrow channel, it can't fall below the cost of production by very much which is exactly where it is at, and it is not allowed to rise until the existing gold that is available on the market has been removed.

Therefore we are stuck,

but are we?

What do you think is going to happen to the price of gold when there isn't any available anymore, and many of the big mines have gone out of business after a year or so of  unprofitability? 

This is even more true for silver, where it is clearly trading below the cost of production.

Of course the bankers will lie to us, it is part of their business model, they couldn't possibly earn an honest  dollar, and their entire franchise is based on fraud and theft.

The downside risk to gold and silver right now is negligible, but the upside potential is astronomical.

But more importantly, it may actually be the only safe place to park your savings, since Fiat currencies are being  debased in a coordinated global effort.

So in short, if you want to protect your wealth moving forward into the next paradigm, you have no choice.

Buy gold and silver now while you can, and never turn it in for dollars, you must wait patiently for the system to collapse, and wait for the next one.

You will be richly rewarded for your efforts!

That's all,

keep stacking! smiley

Dr Jerome's picture

Wow

That last thread brought everyone out of the woodwork.

Someone asked how gold could have gone to 1900 if it was manipulated. The answer is clear to me...

The cartel* was not breaking the law to manipulate it (other than market collusion) prior to those lofty days in 2011. At some point there, the desperation overcame their desire to appear law-abiding and they began to flaunt the law to keep the prices down: 

  • CFTC investigation called off, perhaps bought off.
  • Blatant price takedowns like we have never seen
  • Mainstream news scripted to the point of being ridiculous.
  • Falsified charts to accompany seemingly neutral news stories
  • Ron Paul's "hot" presidential campaign derailed. (did you see the enthusiasm on Leno?)
  • Occupy Wall Street pepper-sprayed and mugged.

No, no manipulation anywhere. "Can't see the forest for the trees" seems to be an apropos cliche here. Now the regulators are retiring. The markets are emptying of investors, and the Fed keeps printing with Janet Yellen taking over the reins.

God help us!

* Did anyone notice that former Fed official call them a cartel? "U.S. banks have seen their collective stock price triple since March 2009. The biggest ones have only become more of a cartel: 0.2% of them now control more than 70% of the U.S. bank assets."

Urban Roman's picture

Pining,

Thanks for that reply for Basil*. ... I didn't really mean to make a distinction between shorting and selling. They are pretty much the same thing when the TBTJs do it.

Remember when naked shorting was a big deal, because it was illegal fraud and counterfeiting? Yeah, neither do I.

59 to 1. That's a statistic worthy of tracking, right there.

AGAU's picture

Basil

Well how come these super traders never see an opportunity to make "honest" money by driving the price up?.
Its price fixing by any stretch of the imagination ,I would bet the govt would stomp them into the dirt if they ran the price up

That is the turd in the punchbowl that is the manipulation ,that is the illegal aspect in my opinion

It will continue until the Chinese and othe major US debt holders have enough cheap gold, then they will lower the boom on the whole show bye bye USA monopolies, hello war and famine

I am almost ashamed to look young folks in the eye we have ruined America for them!!! They will have their revenge I fear

AlienEyes's picture

@Basil

If you think the government has no vested interest in holding the prices of PM's down, then you must also think the government is not printing unbacked, near worthless money like a bat out of hell. It follows that you must believe that "the Full Faith and Credit of the United States" has real value that is not diminished or diluted by an avalanche of more fiat that is also unbacked.

I have no faith in the United States because they are up to their arse in credit.

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