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Fraulein
04-04-2012, 12:53 PM
Bernanke announces there will be no (at least for now) QE3 and all of a sudden Gold/Silver holders rush a massive sell-off?

So what now, the dollar is all of a sudden "rallying"?


Mid-Day Gold & Silver Market Report 4/4/2012
by Brandi Brundidge April 4, 2012

GREEK OFFICIALS TO MEET WITH HOLDOUTS OVER BOND SWAPS

Precious metals are following morning trends with a fall in prices across the board, following yesterday’s news that further quantitative easing from the Federal Reserve is unlikely. “The market has decided that yesterday’s statement is probably the final nail in the coffin,” Frank Lesh of FuturePath Trading said. “Gold is reacting to the strength in the dollar.”

Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, is predicting a 3 percent increase in U.S. economic growth for 2013. Lacker said if the economy develops successfully, the benchmark interest rates that the central bank has in place will increase. In a Bloomberg Television interview, Lacker said, “The logical time to raise rates is going to be sometime next year. That’s based on my sense that growth is going to pick up enough by then in order to warrant raising rates to keep inflation pressures under control.”

The Greek government is preparing to meet today with investors who hold 2 to 3 percent of Greece’s privately held debt to determine if they will swap their bonds for new long-term securities and take a 75 percent loss. Investors have until April 18 to decide.

At noon (CDT), the APMEX precious metals spot prices were:

Gold - $1,619.20 – Down $52.30.
Silver - $31.35 – Down $1.97.
Platinum - $1,598.30 – Down $61.20.
Palladium - $634.10 – Down $26.50.
http://www.apmex.com/Commentaries/1108/Mid-Day-Gold-Silver-Market-Report-4-4-2012.aspx


Look i'm as long as anyone else here, but for cryin' out loud if people have this much faith in the dollar we may be in for some major setbacks. I'm starting to believe $50 Silver will not happen in 2012. 2012 may actually be a terrific buying opportunity and I hereby expect to pick up some more Silver when it drops below the $30 threshold. It will happen and it will happen soon. Thanks shaky Gold/Silver holders and Bernanke worshipers!

Zippyjuan
04-04-2012, 01:08 PM
Possibly due to future expectations. If they were anticipating bad news on the economy or the Fed to announce a new round of QE3 which would have lowered the value of the dollar and caused people to head for alternatives like gold and were disappointed, then the possiblity of higher gold prices in the future were weaker so those holding sold. Just speculation on my part though. Bad economy is good for the price of gold. The Fed forcast higher growth (three vs two percent a year) and hinted the possiblity of higher interest rates if growth continues. These are negative for future gold prices.


Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, is predicting a 3 percent increase in U.S. economic growth for 2013. Lacker said if the economy develops successfully, the benchmark interest rates that the central bank has in place will increase.

I would not expect any sharp rises in interest rates when they do occur but a gradual raising if the economy continues to grow. When this may happen I certainly could not say. They will not stay near zero forever.

Domalais
04-04-2012, 01:24 PM
The longer the Fed goes without suggesting a QE3, the lower gold and silver will drop. This is just the beginning.

ctiger2
04-04-2012, 01:55 PM
It's called M.O.P.E. ( Management of Perspective Economics ) You control the perception to create the reality you want. It works when the market is going up, it stops working when the market goes down. The Fed members spend 90% of their time in the FOMC meetings discussing HOW TO WORD their junk so as to manipulate people.

Zippyjuan
04-04-2012, 02:07 PM
Expectations are an important part of what happens in the economy. People make their decisions based on what they expect to happen tomorrow. If they are not worried about tomorrow, they spend more today. When the economic crisis hit, not just people who were laid off or faced declines in their housing values cut back on spending- nearly everybody did. It is also true that not all of the companies who cut labor when it hit did so because they faced declines in sales. They all cut back becasuse they either feared or expected that things might be worse for them- even if their own situation had not changed at all.

But you cannot simply go out and say things are great or getting better without supporting evidence and expect them to improve. It can have a small effect but not a major one unless people actually see that things are no longer getting worse.

Black Flag
04-04-2012, 06:09 PM
Do not fret over short term ups/downs of gold market.

Remember 98% of the trade of gold is not gold, but paper - and not based on deliverable goods (as is all commodities).

Gold price is the inverse of the trust of government.

The more it appears government has a handle on things (or a government boondoggle collapsing, as is Obama's Healthcare), gold will fall.

The more it appears government is out of control, gold will rise.

Right now, the collapse of the Healthcare idiocy is seen as a reduction of a threat of government default - hence, gold goes down.

But analyze this yourself - do you see any long term change of the fundamentals of government expenditures or debt?

I don't. I see both getting worse and larger.

Thus, the long term outlook = gold going up, waaay up, for a long time.

Buy on the long term and laugh at the short term.

Zippyjuan
04-04-2012, 06:12 PM
http://enews.earthlink.net/article/bus?guid=20120404/6df4f331-08f7-4867-9c3c-c27ef81e13af
Is this the end of the gold rush?


BERNARD CONDON
From Associated Press
April 04, 2012 6:47 PM EDT
NEW YORK (AP) — The price of gold, which has climbed for years like a blood pressure reading for anxious investors, plunged Wednesday to its lowest level in three months.

Gold fell almost $58 to $1,614 per ounce. It has declined 15 percent since September, when it hit a peak of $1,907. It had more than doubled since the financial crisis three years earlier.

Surprisingly, the fall came on an ugly day in the stock market — the Dow Jones industrial average lost 125 points. Last year, a day like Wednesday would have caused fearful investors to buy gold as a protective investment.

"It's difficult to forecast, but I think the gold bull market is over," said Cetin Ciner, a professor of finance at the University of North Carolina-Wilmington. He likened the surge in gold to dot-com stocks before they collapsed.

Some investors buy gold as a hedge against inflation, and minutes from a Federal Reserve meeting that came out Tuesday afternoon suggested that the central bank believes inflation remains under control.

Gold's attraction as an asset of refuge during crises also seems to have diminished. The economy has picked up, and worst-case scenarios in the United States and Europe have faded.

"Fear has been gold's best friend, and so to the extent that fear is dissipating, gold should fall," said Jim Paulsen, chief investment strategist at Wells Capital Management. "We might look back at these Fed minutes as the line in the sand."

Gold has been hit in recent weeks by striking gold sellers in India, the world's largest buyer of physical gold, who are upset over government tariffs. Another bearish sign was a surge Wednesday in the dollar, which tends to rise when gold falls.

Gold fetched only $300 to $400 an ounce during the 1990s but climbed steadily last decade. By late 2008, it was near $900. It took off that fall when prices for stocks and corporate bonds plunged, wiping out years of savings. Even money market funds looked suspect. Investors bid up prices for the safest of assets, like U.S. Treasury bonds. Others turned to gold.

"During our bout with Armageddon, people ran to it for safety," said Abraham Bailin, a commodity analyst at Morningstar. "It might sound silly now, but that's where it started."

Demand for gold also surged as the Federal Reserve bought bonds, starting in the spring of 2009, to push down borrowing costs and stimulate the economy, a move known as quantitative easing.

The Fed's efforts to pump money into the banking system and avert a deep recession led to fears of runaway inflation, a concern shared by both the tea party and big-shot investors.

Buying gold soon became a political statement. For those who didn't trust financial institutions or were wary of the government, it was the investment of choice. The television personality Glenn Beck advised viewers to stock up on gold bars.

"Gold became a symbol of your political leanings," Bailin said. "It became a way to speculate on the solvency of the economy."

Or perhaps to speculate that the price would continue to rise, whatever the reason. Some analysts, like Ciner and Wells Fargo's Paulsen, said that as the price climbed ever higher, everyday investors may have been trying to catch the wave.

Gold was named the "best investment" in CNBC's quarterly survey of investors released last month, topping real estate and stocks by a wide margin. Nearly half of those surveyed considered it a bad time to buy stocks.

One popular vehicle for buying gold, the SPDR Gold Trust, a fund that trades on the open market like a stock, has attracted hundreds of millions of dollars of investor money each month since its launch in 2004.

It now holds $67.3 billion worth of gold. That makes it the largest ETF except for the SPDR S&P 500, which tracks stocks, according to Morningstar's Bailin.

Ciner noted that the price of gold dropped Wednesday despite news that Spain had to offer unexpectedly high interest rates to attract investors to buy new government bonds. That suggested that a solution to the European debt troubles is far from over — normally a trigger for buying gold, not selling it.

"It's pretty obvious that gold's character has completely changed," Ciner said. "If it was a real safe-haven asset, you would have expected investors to flock to gold."

Bulls pointed out that gold's popularity reflects a widespread skepticism of the financial system and of national currencies — and that investors are fools to feel confident about them.

John Manley, chief equity strategist for Wells Fargo Advantage Funds, said that gold's role as a sort of fourth currency to the three big ones — the dollar, euro and yen — is unlikely to diminish because of those currencies' troubles. Those include the U.S. debt, Japan's aging population and dissent among European countries about how to solve the debt problem there.

Nicholas Colas, chief market strategist at ConvergEx Group, said he thinks gold's popularity reflects the anxiety of our age. The price may change, he said, but an ounce of gold is always bound to be worth something. Old stock certificates, he said, may wind up worth no more than toilet paper.

"The gold rush isn't over," he said. "It's just on pause."

legion
04-04-2012, 06:31 PM
I know somebody that just got an 4 year auto loan at 1.6 percent. Why would a bank make such a loan if interest rates were going up? Doesn't look very good for gold investors.

Zippyjuan
04-04-2012, 07:16 PM
The loan was made at what rates were this week- not what they might be next month or next year. If the bank (or financial services company) doesn't make that loan today they don't get any revenue from it and the borrower may go someplace else. They lose more money by not loaning today and waiting until rates are higher before they start lending out money.

Great rate by the way!

kuckfeynes
04-04-2012, 07:53 PM
This is great for gold investors. It's just an extended clearance sale. Nothing has changed long-term. As long as interest rates are suppressed, the money supply will eventually inevitably have to be expanded. It's either that or bankruptcy. Some even think it's going on behind closed doors, now that the inflation-smacked public is wising up to the whole "QE" jargon just like "bailout" and "too big to fail." What worries me most is that, instead of a nice clean predictable linear (er, parabolic) depreciation of QE1-2-3-4-etc., the dollar is being set up for a true sudden correction. The lower gold goes/higher the dollar soars, the firmer I hold on to my hat for the big event...

Black Flag
04-04-2012, 07:56 PM
I know somebody that just got an 4 year auto loan at 1.6 percent. Why would a bank make such a loan if interest rates were going up? Doesn't look very good for gold investors.

It is because they only earn 0.25% from the FED, so it pays to lend it.

PaulStandsTall
04-04-2012, 08:43 PM
Bernake knows he can't keep interest rates low forever and print forever. Therefore he needs to drum up some confidence in order to turn his "recovery" (www.Recovery.gov -which cost taxpayers $18M to make...) into a self fulfilling prophecy.

Gold and silver are commodities mined out of the ground using hard human labor. Unless you think that science is about to give us alchemy (hah!), buy gold and silver to protect your wealth against stupid politicians spending money we don't have.

Seraphim
04-04-2012, 09:23 PM
What? lol.

NEgative real interest rates are THE reason why gold are going up.


I know somebody that just got an 4 year auto loan at 1.6 percent. Why would a bank make such a loan if interest rates were going up? Doesn't look very good for gold investors.

Paul Or Nothing II
04-05-2012, 12:40 AM
It shouldn't take a lot of intelligence to realize that something whose supply grows at about a couple of percent a year is going to hold purchasing-power better than something that's controlled by a coercive monopoly & has potentially unlimited supply with a strong history of misuse :rolleyes:

Let others hold onto their toilet-papers, I'd rather have the "useless pieces of rocks"! Let's see where we'll be in a few years or even decades' time!

Short-run is only relevant for those who are trying to "invest" in gold but for those who are looking at it as a method of preserving their purchasing-power in the long-run, needn't bother much about the short-run & think only about the long-term & trust the governments' ability to screw up, to devalue & destroy currencies, history repeats itself because the majority is too dumb to learn history (anything for that matter :rolleyes:)!


This is great for gold investors. It's just an extended clearance sale. Nothing has changed long-term. As long as interest rates are suppressed, the money supply will eventually inevitably have to be expanded. It's either that or bankruptcy. Some even think it's going on behind closed doors, now that the inflation-smacked public is wising up to the whole "QE" jargon just like "bailout" and "too big to fail." What worries me most is that, instead of a nice clean predictable linear (er, parabolic) depreciation of QE1-2-3-4-etc., the dollar is being set up for a true sudden correction. The lower gold goes/higher the dollar soars, the firmer I hold on to my hat for the big event...

+1


Bernake knows he can't keep interest rates low forever and print forever. Therefore he needs to drum up some confidence in order to turn his "recovery" (www.Recovery.gov -which cost taxpayers $18M to make...) into a self fulfilling prophecy.

Gold and silver are commodities mined out of the ground using hard human labor. Unless you think that science is about to give us alchemy (hah!), buy gold and silver to protect your wealth against stupid politicians spending money we don't have.

+1

The interest-rates aren't going anywhere, this is just propaganda, just like Bernanke & others were idiotically lying about the economy before the collapse. They can't raise rates because the debt & spending is completely unsustainable & there's no end in sight to that, so Fed is going to have to continue devaluing (holds true for many countries) to dilute the debt. Currency-wars, here we come!


http://www.youtube.com/watch?v=9QpD64GUoXw

back2basics
04-05-2012, 01:17 PM
^ funniest video, he's like a cheating gf....
First: tells you what you want to here
Second: then you catch them in a lie,
Third: repeat.

Jordan
04-05-2012, 10:57 PM
Deflation. The US is doing great; Europe, not so much.