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15 Apr 2013
Gold does it again... comical bloodbath II
FXstreet.com (Barcelona) - The major theme in global markets, after the major sell-off in metals last Friday, has not deviated at all, with the continuous liquidation in gold keeping the asset in all the front covers.
The yellow metal dove again more than $50 along the open of markets in Asia - kick-started in Shanghai futures open -. The metal has so far printed its lowest level at $1,427, lows from April 2010.
Large sectors of the market appear on agreeing to call an official new bearish era in gold, from a mid-term perspective. However, the moment you start to see the gold’s ‘plunge’ being headline news day in and day out, be wary that the bear run may have run its course, as it usually means a bullish signal from a contrarian perspective. We may not quite there though.
According to Sean Lee, founder at FXWW: "Hedge funds were the big sellers on Friday, bailing out of longer-term long positions once the spot price broke below $1515", with the analyst adding that "I expect this trend to consolidate over the next few months and we should now track lower towards $1250 perhaps."
There has been more credible talk along Asian hours that below $1,500, which represented a turning point for the fate of the yellow metal, a growing number of long-held positions were forced to liquidate on margin-calls.
Back in December, well ahead of the ferocious bear moves seen, even bull commodities-fund manager Jim Rogers, said to CNBC: "Gold on any kind of historic market basis is overdue for a nice correction. It's been correcting for 15-16 months now, which is normal in my view. It's possible that gold's correction is going to continue for a while longer."
The sell in gold comes on the back of last Wednesday's Goldman Sachs sell call for the yellow metal around the $1590 mark, with Reuters, as explained in an earlier report, noting that "Cyprus was to sell $400M worth of Gold reserves, later on denied by Cyprus central bank..."
In view of proprietor for TF Metals Report Website Mr. Turd Ferguson: "Bullion bank traders are gleefully lapping up the paper metal being created and sold by the greedy spec shorts and the pathetically-crushed spec longs. The Gold Cartel has likely seen it's net short position fall to the lowest ever recorded. Maybe even to 1.5:1 or further."
Soon, Turd adds: "This craziness will reverse in breathtaking fashion and price will rebound nearly as quickly as it has collapsed. Of that, I'm 100% certain. Shanghai and London are going to see record physical days on Monday and that real metal will shortly have affect a dramatic turnaround in price."
What has many sensible strategists like Turd irritated after seeing with perplexity the sharp falls in Gold, is the total disconnect
between the ongoing expansion of central bank balance sheets - Fed, ECB, BoE, and BoJ - all around the world and gold. Besides, there is a well-documented trend indicating how real supply in gold is going down as demand continues on the rise.
Many continue to argue that when/if the economic financial system starts to, as a result of central bank policies, show higher rates of inflation, the metal will remain the a heavy demanded asset to offer inflation-proofed returns. Time will tell.
The yellow metal dove again more than $50 along the open of markets in Asia - kick-started in Shanghai futures open -. The metal has so far printed its lowest level at $1,427, lows from April 2010.
Large sectors of the market appear on agreeing to call an official new bearish era in gold, from a mid-term perspective. However, the moment you start to see the gold’s ‘plunge’ being headline news day in and day out, be wary that the bear run may have run its course, as it usually means a bullish signal from a contrarian perspective. We may not quite there though.
According to Sean Lee, founder at FXWW: "Hedge funds were the big sellers on Friday, bailing out of longer-term long positions once the spot price broke below $1515", with the analyst adding that "I expect this trend to consolidate over the next few months and we should now track lower towards $1250 perhaps."
There has been more credible talk along Asian hours that below $1,500, which represented a turning point for the fate of the yellow metal, a growing number of long-held positions were forced to liquidate on margin-calls.
Back in December, well ahead of the ferocious bear moves seen, even bull commodities-fund manager Jim Rogers, said to CNBC: "Gold on any kind of historic market basis is overdue for a nice correction. It's been correcting for 15-16 months now, which is normal in my view. It's possible that gold's correction is going to continue for a while longer."
The sell in gold comes on the back of last Wednesday's Goldman Sachs sell call for the yellow metal around the $1590 mark, with Reuters, as explained in an earlier report, noting that "Cyprus was to sell $400M worth of Gold reserves, later on denied by Cyprus central bank..."
In view of proprietor for TF Metals Report Website Mr. Turd Ferguson: "Bullion bank traders are gleefully lapping up the paper metal being created and sold by the greedy spec shorts and the pathetically-crushed spec longs. The Gold Cartel has likely seen it's net short position fall to the lowest ever recorded. Maybe even to 1.5:1 or further."
Soon, Turd adds: "This craziness will reverse in breathtaking fashion and price will rebound nearly as quickly as it has collapsed. Of that, I'm 100% certain. Shanghai and London are going to see record physical days on Monday and that real metal will shortly have affect a dramatic turnaround in price."
What has many sensible strategists like Turd irritated after seeing with perplexity the sharp falls in Gold, is the total disconnect
between the ongoing expansion of central bank balance sheets - Fed, ECB, BoE, and BoJ - all around the world and gold. Besides, there is a well-documented trend indicating how real supply in gold is going down as demand continues on the rise.
Many continue to argue that when/if the economic financial system starts to, as a result of central bank policies, show higher rates of inflation, the metal will remain the a heavy demanded asset to offer inflation-proofed returns. Time will tell.