Is Gold's Plunge an Opportunity in the Making?

[frankq]

With gold in an obvious downward spiral after falling in excess of 20% off of it's highs, where do start to pick at the edges and maybe start picking up some GLD as gold continues to plunge? At this rate, gold should break $1500 soon and I'm thinking that once below that mark it could actually be worth buying a little GLD in small increments on the way down. What says you boys (and girls)?

[mrsdutt]

In my job I had to watch the gold and silver market.  My department had metals that needed to be reclaimed and purified.

The market goes up quickly and goes down very low quickly, then evens out for years and years. 

So if you're young and wait a while you can buy gold at a cheap price.  Then sell 15 years later at a high prices.

This observation is based on past performance only.

[usaone]

GS is now very bearish on Gold. I'll jump back in if we go below $1200.

[frankq]

usa,

Heard that too regarding GS. Also lots of talk of hedge funds liquidating because of all of the redemptions. I guess the money is going into equities... It is hard to pick a number though. It will be interesting to see what happens if something substantial gets done on the budget.

[frankq]

Idut,

Do you have a number in mind?

[frankq]

This is interesting. "Survive and Prosper", a Publication of the "Boom and Doom" family offers up as you see below:


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Disclaimer: Personally, I don't think much of these guys. However, they do share some view with others out here that have an opposing stand on gold. Interesting how the same relative info can be interpreted.....

[sunrnr]

Gold is a house of cards .....

Understanding Paper Versus Physical Gold

It has been said that as much as 99x as much “paper” or digital gold is bought on commodities exchanges such as COMEX, as there is traded in actual delivery of physical gold.

What does this mean? Simply that if all parties “stood for delivery” that it would be impossible for the warehouses and the short players to actually meet their obligations, and “someone” would be left standing without a chair.

The article goes on to explain the futures market for gold versus actual physical delivery. 

Through the use of futures markets, the Commodities Futures Trading Commission (CFTC) has granted bankers a mechanism to perform alchemy and turn paper into gold on the COMEX by allowing them to establish obscene short positions that represent 25% to nearly 40% of annual gold production at times while simultaneously allowing them to renege on their fiduciary responsibility to actually physically possess the gold represented by their short positions. In other words, the CFTC has allowed gold to operate under the principles of the fractional reserve banking system on the COMEX futures markets.

However, tens of billions of dollars of gold exist only in digital form on the COMEX and the CFTC has allowed bullion banks to indeed achieve alchemy with gold (and silver) in the futures markets. By allowing these mechanisms to persist that have absolutely zero to do with physical supply and demand of gold and silver, bullion banks can suppress the price of paper gold and paper silver in futures markets.

  

"Everything is a business model" - George Ure

[frankq]

Gold just can't seem to get any traction.....we'll see what happens....

[frankq]

I think it might be time to pick up some GLD if gold nears the 1550 mark.

[frankq]

Giant meteor may have huge deposits of gold! Gold may drop 90% !!

[frankq]

Asteroid 2003 qq47 has a diameter of approximately 1.24 km, and an approximate mass of 2.0×1012kg. It is thought to be traveling through space at 30 km/s and weighs in around 2.6 billion tons.

Read more: www.universetoday.com/37210/asteroid-2003-qq47/#ixzz2Nphkl9z9

So if gold weighs in at .01% of the meteor weight, isn't that about 2 million tons? Wait until that baby hits the market.......SELL GOLD NOW!!!!!!!!!!!!!!!!!!

[Aman A.K.A. Ahamburger]

Seems like a lot of people are looking at a drop from today's prices, even the Chinese have openly stated that they are waiting for a better price.

[frankq]

Yeah, they may get it sometime in the spring of 2014.....hehehe....

[Aman A.K.A. Ahamburger]

  Buy Gold at $900-$1100. 

[frankq]

"Looks like that 160 indeed will hold. Now to get that new silver market cranking and bye,bye Ponzi?

Gold & Silver Going Higher! Way Higher!


Are you kidding me? Holy Cow!!!! It's a gold rally! Another 20% and you'll be even for the last 2 years! LOL!!!!

[mmhmm]

Gentlemen, please.  I'm sure you have more valuable information to offer.  I'm just sure! 

[frankq]

mmhmm,

Ok, I'm looking......hehehe

[damnotagain]

Gold like everything else runs in cycles . We have an up side for the next 7 years. Since 2003 was a good year to get in.... 

[Aman A.K.A. Ahamburger]

Mar 18, 2013 17:20:11 GMT -5 mmhmm said:

Gentlemen, please.  I'm sure you have more valuable information to offer.  I'm just sure! 

 I hear what you're saying mmhmm, honestly though Q may have a point here.  If you look at when he started the thread,where the price is right now, and what could happen this summer, there could be an opportunity here to make some money off the last leg of this bubble.  I in no way endorse this move, it's one of those gutsy gambler moves, but still Q could be right on here.    If he's not, he's still is that's what's really funny about it.. 

[mmhmm]

That's not exactly to what I was referring, aham.  I think frankq knows what I meant. 

[frankq]

I think mmhmm is referring to the "are you kidding me" post. In all fairness, I was referring to the usual "Ponzi" nonsense more than anything else. Aham is right though. I think gold has gotten a temporary bump from the usual Eurozone issue du jour. It will fade and gold will revert back to below $1600. How far back is the question. There will be no $3000 gold ......not for a very long time...

[Virgil Showlion]

Mar 7, 2013 16:10:42 GMT -5 sunrnr said:

Gold is a house of cards .....

Understanding Paper Versus Physical Gold

It has been said that as much as 99x as much “paper” or digital gold is bought on commodities exchanges such as COMEX, as there is traded in actual delivery of physical gold.

What does this mean? Simply that if all parties “stood for delivery” that it would be impossible for the warehouses and the short players to actually meet their obligations, and “someone” would be left standing without a chair.

The article goes on to explain the futures market for gold versus actual physical delivery. 

Through the use of futures markets, the Commodities Futures Trading Commission (CFTC) has granted bankers a mechanism to perform alchemy and turn paper into gold on the COMEX by allowing them to establish obscene short positions that represent 25% to nearly 40% of annual gold production at times while simultaneously allowing them to renege on their fiduciary responsibility to actually physically possess the gold represented by their short positions. In other words, the CFTC has allowed gold to operate under the principles of the fractional reserve banking system on the COMEX futures markets.

However, tens of billions of dollars of gold exist only in digital form on the COMEX and the CFTC has allowed bullion banks to indeed achieve alchemy with gold (and silver) in the futures markets. By allowing these mechanisms to persist that have absolutely zero to do with physical supply and demand of gold and silver, bullion banks can suppress the price of paper gold and paper silver in futures markets.

  

"Everything is a business model" - George Ure

I have to agree.

There are gold ETFs that sit 50%+ backed by actual bullion, however.

[frankq]

That still leaves 50% .....the fact is, you can buy gold for 1% over cost with dollars..hmmm....

[Virgil Showlion]

Mar 21, 2013 17:36:27 GMT -5 frankq said:

That still leaves 50% .....the fact is, you can buy gold for 1% over cost with dollars..hmmm....

Anybody I know who owns gold owns physical gold, held in private safes.

Skeptics talk about cost of carry as though gold owners somehow aren't aware of it. They're completely missing the point. Gold is an insurance policy. Physical holders are perfectly aware that insurance is a notoriously bad investment. Yet most reasonable people will insure their home, their car, their lives precisely because they don't live in a world where disasters are unthinkable. Likewise, physical holders don't live in a world where the stability of a currency can be taken for granted.

Look at Cyprus melting down for the latest example. They say the value of Bitcoins has gone up something like 30% over the past week alone by Europeans desperate to preserve their wealth in some way.

I know you, Ahamburger, usaone, and others live in a world where the US dollar cannot and will not melt down in one sudden cataclysmic move, but I don't understand your contempt for people who do see this as a possibility and are willing to hold on to some gold as an insurance policy.

[frankq]

but I don't understand your contempt for people who do see this as a possibility and are willing to hold on to some gold as an insurance policy.

We don't have contempt for anybody who understands the concept of holding gold. We have contempt for those who insist that the markets have no value and expound such nonsense, that the markets are bad investments, are "Ponzi" schemes, etc, and that those of us that do invest are morally bankrupt, irresponsible, heartless, brainless fools that can't see the forest through the trees.

Skeptics talk about cost of carry as though gold owners somehow aren't aware of it. They're completely missing the point. Gold is an insurance policy. Physical holders are perfectly aware that insurance is a notoriously bad investment.

I'm glad to hear you acknowledge this. None of us "Rat packers" have said that gold has no place in a portfolio from time to time, in fact, I think just about all of us has stated that we have owned gold at one time or another and have even stated when and at what prices we made our transactions in and out. Apparently, in the eyes of some, if we disagree and hold others accountable for their statements, it must be out of contempt. If they do the same with us, it is the apex of responsible interaction.

[Deleted]

silver was my buy

and most of us have indeed purchased precious metals at one time or another

i bought from a tip at the old msn boards....at 19 (one of the metal guys made a VERY convincing argument)

sold 75% at 43...rest at 37....in and out in a relatively short time (drftr tracked the whole thing, and thought i was crazy at the time)

took those profits...bought more GE, SYY, and DOW

and because i no longer think gold/silver are good investments, we are labeled as morally corrupt for supporting the "ponzi" market

[frankq]

Yeah, driftr is still pissed at me because I made more on T than he did on V.....LOL.....we had a little telecom war going.

[frankq]

Interesting....The worse news anti-everything types could hope for in Cyprus........and gold hardly moving.......I'm starting to think that even 1550 would be too high an entry point......

[frankq]

I seriously can't believe that more gold bugs haven't hit the panic button in the last week or so. Are we seeing a new attitude towards the shiny metal? I'm thinking this horse has run it's last race for a while...

[frankq]

It looks like gold broke back through $1600 to the downside again. There doesn't seem to be a whole lot of support to drive it higher, even with the events in Cyprus. I guess most people have concluded that a bunch of rich Russians losing some dough does not a crisis make.....