gold price spike

[eric_cartman]

pretty big spike up in gold price... not caused by a fall in the US dollar. any explanation?

http://www.kitco.com/charts/livegold.html

maybe finally some short covering?

EDIT: i made this post after gold went up $30... we are now over $100 in one day. It went up about $80 an ounce in a 4 hour period. so the "pretty big spike" turned out to be an understatement

amazing... amazing...

[Dr.3D]

New rules on shorts go into effect tomorrow.

[pacelli]

The SEC just announced that starting tonight at midnight (i.e. 9/18) they are taking actions to prevent naked short selling, and this applies to ALL public companies. I wonder if that is related. Also Russian stock market trading was halted again today after a huge plunge, and they have injected $44 billion into 3 banks. Bloomberg reporting that the $85 billion AIG loan failed to calm interbank markets, and therefore the banks are hoarding cash.

I think all of these are related to what is happening with gold.

[Bruno]

New rules on shorts go into effect tomorrow.

do you have a prediction on the effect this will cause? Are we going to see a larger trend upward over the new few weeks?

[Dr.3D]

do you have a prediction on the effect this will cause? Are we going to see a larger trend upward over the new few weeks?

Too hard to tell. I'm still thinking London will pull it down some today.

[Bruno]

Too hard to tell. I'm still thinking London will pull it down some today.

thanks. I, for one, would like to see it remain low so more people can get into the market. Seems like there is a lot more interest from newcomers to pm's like myself these days.

[tmosley]

Yeah, I'm waiting on a $1000 check to clear so I can buy a $100 face value bag of 90% coins from APMEX. I hope it will stay down long enough for me to get it ordered...

[Dr.3D]

thanks. I, for one, would like to see it remain low so more people can get into the market. Seems like there is a lot more interest from newcomers to pm's like myself these days.

Well, it it makes it past 11:00 EST and has not dropped, then London probably won't pull it down. (at least not today) We will just have to wait and see.

My hunch is the 4 banks doing the manipulation are in the United States, European Union, London and Australia.

Edit: Wow, gold is up 6.35% and silver is up 8.04% right now.

[FrankRep]

[pacelli]

Oh my god!

[eric_cartman]

and the US dollar index is virtually unchanged.

what's gonna happen when the currency starts falling again?

[Dr.3D]

Oh my god!

Well, it's not my god.... but I like what I see so far.

[slacker921]

I still haven't seen anything that clearly explains this.. maybe the drop in stocks is causing people to run to gold, but if that's the case it should have shot up several times over the last week. ? It's looking more like the manipulation of the market has taken a break.

[pacelli]

I still haven't seen anything that clearly explains this.. maybe the drop in stocks is causing people to run to gold, but if that's the case it should have shot up several times over the last week. ? It's looking more like the manipulation of the market has taken a break.

They're running from stocks to treasuries at the moment.

[Thrashertm]

Silver is up .80 to about 8% at the moment. Glad I bought another 100 ounces yesterday

Good grief! Gold up $55 an ounce!!!

[Thrashertm]

Haven't heard the twits on CNBC mention the activity on precious metals. They haven't had Rick Santelli (the man) on yet.

[Bruno]

Haven't heard the twits on CNBC mention the activity on precious metals. They haven't had Rick Santelli (the man) on yet.

I haven't seen anything on CNN either. Probably completely ignoring it, because it is a signal of lack of confidence in the dollar.

[Dr.3D]

Haven't heard the twits on CNBC mention the activity on precious metals. They haven't had Rick Santelli (the man) on yet.

Rick would say something about it and that is probably why he has not been on. (yet)

[eric_cartman]

I still haven't seen anything that clearly explains this.. maybe the drop in stocks is causing people to run to gold, but if that's the case it should have shot up several times over the last week. ? It's looking more like the manipulation of the market has taken a break.

naked short covering

http://www.businessweek.com/ap/finan.../D938H9U00.htm

[theoakman]

I still haven't seen anything that clearly explains this.. maybe the drop in stocks is causing people to run to gold, but if that's the case it should have shot up several times over the last week. ? It's looking more like the manipulation of the market has taken a break.

don't try to analyze to find a reason why the price of gold is moving on a day to day basis. You can't make any sense of it. Just buy some and hold on to it.

[muh_roads]

So does this mean gold/silver manipulation just got a bit harder for those that were doing it? Will it put an end to these fictional prices which feel like they should be a lot higher?

[jonahtrainer]

don't try to analyze to find a reason why the price of gold is moving on a day to day basis. You can't make any sense of it. Just buy some and hold on to it.

Something weird is going on because the PPT does not allow this to happen. Until recently there has been the '$6 rule'. It appeared the new rule was about $25.

[jclay2]

The reason why the price of gold is spiking is because of a large amount of uncertainty. Whenever people start thinking of financial doomsday, people start flocking to safety. There is nothing more safe, as far as retaining its value, than precious metals and gold.

[raystone]

don't try to analyze to find a reason why the price of gold is moving on a day to day basis. You can't make any sense of it. Just buy some and hold on to it.

gft

[davver]

Gold is the ONLY asset with no counterparty.

[Dr.3D]

Gold is the ONLY asset with no counterparty.

Umm... how about silver?

[theoakman]

So does this mean gold/silver manipulation just got a bit harder for those that were doing it? Will it put an end to these fictional prices which feel like they should be a lot higher?

manipulation can't work forever. If it could, gold would have dropped back to 35 bucks an oz in 1981. And it would be at $350 on oz. now. They can keep it undervalued temporarily. What will probably end up happening is that it explodes upwards and gets waaaaaaaaaay overbought, just like it did in 1980. It will find a nice new target to stay flat at once the financial system is stabilized (I'm talking 10 years down the road). Where is that? No one knows. That all depends on how long they run the printing press. It could be $5000. It could be $500000. Doesn't matter if you are holding gold. They haven't been able to expand the supply of gold more than 2% a year for decades.

[Cowlesy]

No, the reason why gold spiked is that the Treasury is setting up a new loan program to pump some cash to the Fed, because the Fed is running on "E".

From the Treasury:

The Federal Reserve has announced a series of lending and liquidity initiatives during the past several quarters intended to address heightened liquidity pressures in the financial market, including enhancing its liquidity facilities this week. To manage the balance sheet impact of these efforts, the Federal Reserve has taken a number of actions, including redeeming and selling securities from the System Open Market Account portfolio.
The Treasury Department announced today the initiation of a temporary Supplementary Financing Program at the request of the Federal Reserve. The program will consist of a series of Treasury bills, apart from Treasury's current borrowing program, which will provide cash for use in the Federal Reserve initiatives.

Announcements of and participation in auctions conducted under the Supplementary Financing Program will be governed by existing Treasury auction rules. Treasury will provide as much advance notification as possible regarding the timing, size, and maturity of any bills auctioned for Supplementary Financing Program purposes.

[Cowlesy]

Here's a link to the Federal Reserve Bank of NY's site with the announcement.
http://www.newyorkfed.org/markets/statement_091708.html

September 17, 2008

Today, the Treasury Department announced the initiation of a temporary Supplementary Financing Program. The program will consist of a series of Treasury bill auctions, separate from Treasury's current borrowing program, with the proceeds from these auctions to be maintained in an account at the Federal Reserve Bank of New York. Funds in this account serve to drain reserves from the banking system, and will therefore offset the reserve impact of recent Federal Reserve lending and liquidity initiatives.

And the link to the Treasury statement I posted before.
http://www.ustreas.gov/press/releases/hp1144.htm

[Dr.3D]

No, the reason why gold spiked is that the Treasury is setting up a new loan program to pump some cash to the Fed, because the Fed is running on "E".

From the Treasury:

So now who is going to bail out the treasury?