Is good news bad for prices of precious metals?
Baley
Posts: 22,660 ✭✭✭✭✭
If metals prices rise in times of fear, uncertainty, and doubt, then,
Would a series of good news events in the economic, geopolitical, and social realms allow metals prices to continue to decline?
And would some folks view these good news events as bad news for them financially?
Would a series of good news events in the economic, geopolitical, and social realms allow metals prices to continue to decline?
And would some folks view these good news events as bad news for them financially?
Liberty: Parent of Science & Industry
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<< <i>If metals prices rise in times of fear, uncertainty, and doubt, then,
Would a series of good news events in the economic, geopolitical, and social realms allow metals prices to continue to decline?
And would some folks view these good news events as bad news for them financially? >>
Q1. Yes or maybe, it depends
Q2. Rhetorical, if yes; maybe, iit depends otherwise
Caveat: Definitions of 'good' and 'bad' are presupposed
+1 for lunch break
a wishy washy +1
The only exception I can think of is when the "good news" is strong economic growth combined with galloping inflation, as we seem to have currently in China. (I say "seem to" because who really knows whether the financial numbers they report are accurate). The strong economic performance and credit expansion in China has been a huge driver of commodities prices across the board.
If it's not truly that good or for such a long time, then probably not so much. The answer also kinda depends on which assets are seen as most valuable, but also the safest or most stable.
I knew it would happen.
However, in general, bad econo/political news is good for precious metals. This is why they are referred to as a safehaven.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
1) If metals prices rise in times of fear, uncertainty, and doubt, then
Actually that sounds just like what's happening in the current US stock market and the climbing of the wall of worry. Metal prices don't always rise in times of fear, uncertainty and doubt. Sometimes they get thrown out with the baby and the bathwater as well
2) Would a series of good news events in the economic, geopolitical, and social realms allow metals prices to continue to decline?
Depends entirely of what this good news is comprised of. If it's a new zoning ordinance in Baleyville then well, no. If you said 5% unemployement, a meaningful dent in the defecit, moderate inflation, a healthy real housing market and maybe a US regime change then I would say metal prices would probably take a hit to actually most folks satisfaction. However, can one really see such a thing happening anytime soon?
3) would some folks view these good news events as bad news for them financially?
I guess this stetement is just an extention of the hypothetical series of good news scenario as I've read this question ten times and I still don't know what to make out of it.........???
MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Now if I heard that Congress passed a Balanced Budget Bill, Dear Leader backed off his Trillions in spending, and the Dollar strengthened then I would reconsider my holdings in PM's.
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Maybe this dive has NOTHING to do with anything but normal market spike and the subsequent shaking things loose from weak hands....it might have a little more to go. I think there are a lot of weak hands holding lots of silver. Some will ride this move all the way down and then repurchase on the way up.
Still not much physical in SoCal shops I frequent.
I guess this stetement is just an extention of the hypothetical series of good news scenario as I've read this question ten times and I still don't know what to make out of it.........???
it also implies the reverse: Are there some holders of precious metals rooting for bad news for the USA, so that it would be good news for the value of their metal holdings?
one hopes not
Liberty: Parent of Science & Industry
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Liberty: Parent of Science & Industry
<< <i>3) would some folks view these good news events as bad news for them financially?
I guess this stetement is just an extention of the hypothetical series of good news scenario as I've read this question ten times and I still don't know what to make out of it.........???
it also implies the reverse: Are there some holders of precious metals rooting for bad news for the USA, so that it would be good news for the value of their metal holdings?
one hopes not >>
I will only answer for me. No. As stated ad nasuem my core holdings are for insurance only. My defacto pm insurance premiums can fall and I would be ok with that.
Interestingly the economical news has been terrible recently and PM's have moved down with this news in spades. Bad news had been bad for pm's. Without the proping up of the stock market and the economy with QE2 secure plus + there is surely worse news on the horizon. The day QE3 is announced let the good imes roll. I actually think we are worse off now as a nation then we were in 2007-08. JMHO.
MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Others and myself had mentioned that the pause between QEII and QEIII would result in the stock market going down as well as PM.
What i think eventually will happen is we will see QEIII only bolster stocks temporarily or not at all and then, possibly QEIV, only to see PM's rise.
i agree with MJ.
things are worse off now, with many things coming to a head later this year.
<< <i>...
it also implies the reverse: Are there some holders of precious metals rooting for bad news for the USA, so that it would be good news for the value of their metal holdings?
one hopes not >>
You still haven't defined 'good' or 'bad.' and you ask the question, expecting "yes" as the answer. And 'bad news for the USA' is so general and all-encompassing... ?economic, political, social, etc., that 'one' knows where hardly to begin.
Rabid individualists (anti-altruistic folk) on the order of Howard Roarke or other Ayn Rand characters are looking out for number one, including their investment portfolios and that is defined as 'good.'
However, I bet there are more American citizens rooting for 'bad news for the USA' in the all encompassing sense (do you need some examples?) that DO NOT own precious metals, than there are American precious metals holders 'rooting for bad news for the USA' in an all-encompassing sense, not just economically speaking.
Look, to use a medical analogy, America needs to vomit in a bad way. She has been eating bad food and staying nauseated for years now, (some people call this 'blowing bubbles') and instead of getting it over with and vomiting (it is 'bad' to vomit, you see), she keeps on eating bad food, accumulating the toxins and taking anti-nausea medication to keep on going, instead of letting the natural 'good' of vomiting get the toxins out and stop eating the tainted food. The vomiting will produce some 'bad' for a time, yes, but then she can get on the road to good health. Let's get it over with already, because the longer we keep doing this, the worse the consequences. I am still an optimist because Americans can vote the representatives in to do what is necessary, but since we get whom we vote, it appears right now, Americans want to keep this sickness going like it is.
Some PM owners (paper > physical) are 'investing' during this time of toxins, taking advantage & making 'money' on the continued sickness and all the remedies thrown at it. Maybe they're the ones you want to expose, happy to see their net worth increase whilst the engines of the USA economy are coming apart? Is that it? Or, just to have the forumites here to do some introspection?
MJ made some great points above. US$ and PMs are no longer Type and Anti-type, moving inversely to each other. They decoupled years ago, and esp. gold, really showing it is functioning as a bona fide currency for the time being.
Some PM owners see the big hurl at the end and are just trying to protect themselves, if there is any chance of that. PMs are more 'insurance'.
Some PM owners just enjoy watching the stack grow, and there many other reasons under the sun and colors of the rainbow, that there are any PM owners who continue to buy.
My analogy skills are not great and all analogies break down somewhere, but that is the way I chose to spend my lunch break today
But the only things that really affect PM prices longer term are increasing sovereign debt, negative real interest rates, and currency debasement.
All the news printed hasn't yet altered the direction of those 3 items. In the end, news is irrelevant.
roadrunner
Fred, Las Vegas, NV
Interesting observation, and quite possibly true. The Tom Daschle-types in Congress who get thrown out and form "consulting firms" who make big money curring favor and providing "access" for the Jeff Immelts of the world - are part of the crony-capitalistic system that is a malignancy in our midst. And for the record, the Denny Hasterts (self-serving legislation for real estate properties) and Neil Bushs (Lincoln Savings & Loan) and Dan Quayles (Carlyle Group, 2008 Chrysler bailout) of the other party are no different - malignancies in our midst.
I knew it would happen.
When are we going to see something out of this new congress? I'm not talking about rehashing old bills either
hints in the news that "crisis" may be able to be resolved? gold down
Liberty: Parent of Science & Industry
Gold was also going up when 9/11 , katrina, oil spills , republicants were in power, democrats came back ..etc.
Gold reacts to the underlaying realities....or maybe it was just due ...who knows
Groucho Marx
"it's a blend, like the metals mixed to make a good sword"
Liberty: Parent of Science & Industry
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<< <i>It's not good to cheer for metals to continue shining and stocks sinking. This is a sign of a bad economy. Stocks are tied to business. I couldn't imagine cheering for gold and rooting against stocks since stocks are tied to the businesses you buy your shoes, clothes, geroceries, etc. Even if you love PMs you should still cheer for the govt' to wise up, businesses to prosper, and stocks to remain healthy. >>
If I bet against my hometown football team because the opponent has a better team, shouldn't I root for the team I bet on?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I didn't make the rules, but it seems to me that if you are cheering for stocks, you are cheering against my gold & silver investments. Is that not true? Again, I didn't make the rules, and I am definitely not going to follow a bunch of lemmings off the cliff just because they want me to believe in their fantasy.
You don't get many chances in a lifetime to do it right, and this is one of them.
I knew it would happen.
Sure. But don't expect to be popular in the stands
it is a totally rigged game "totally"?
Liberty: Parent of Science & Industry
I would say "yes". I didn't say that someone like you or I can't still come out ahead. But rigged, yeah I really do believe it.
I knew it would happen.
If its bad news Gold goes up, and there is always credible arguments for it to do so.
It seems to go down more when there is no news, or just ho hum news.
I guess we buy at or near the end of the ho hum news cycle and sell at the peaks or near the end of the highly charged exciting high
news cycle, rather good or bad.
daily throughout the world. Gold is a World wide traded, highly recognized alternative store of value, and has an extremely long history to back it up.
Liberty: Parent of Science & Industry
<< <i>What if Washington announced all social security payments would start being paid in silver. Good news for Social Security recipients (sound money), good news for silver holders (increase in demand).
However, in general, bad econo/political news is good for precious metals. This is why they are referred to as a safehaven. >>
Sounds good in theory, but in reality that would be about the dumbest thing they could do. Who is gonna pay the postage to ship it all out? Every month would be a different amount because silver fluctuates. How many packages would get stolen? Would they give you a voucher for so many ounces? So if you wanna go out to eat you gotta hie your ass down to the local B & M and sell an ounce [most likely at a loss to you]. Who wants to do business with something whose value varies by the hour? If I was a merchant, I'd charge a 10% fee just for handling the stuff. If you got the stuff on Friday, it would be worth considerably less right now.
<< <i>
<< <i>It's not good to cheer for metals to continue shining and stocks sinking. This is a sign of a bad economy. Stocks are tied to business. I couldn't imagine cheering for gold and rooting against stocks since stocks are tied to the businesses you buy your shoes, clothes, geroceries, etc. Even if you love PMs you should still cheer for the govt' to wise up, businesses to prosper, and stocks to remain healthy. >>
If I bet against my hometown football team because the opponent has a better team, shouldn't I root for the team I bet on? >>
Well yeah if you wanna make money. As a fan, I never pick my team to lose even tho my head says that there are times when they will.
"bad" news stories also sell 10 times as many newspapers, magazines, TV commercials, newsletter subscriptions, and internet adverts as good new stories.
Bad new is inherently more interesting to people than good news.
Liberty: Parent of Science & Industry
Knowledge is the enemy of fear
<< <i>What is "bad" news and what is "good" news? Is a report of housing prices at 2002 levels "bad" news? Is the DOW at 13,000 "good" news? >>
Depends on if one is buying or selling.
<< <i>
<< <i>What is "bad" news and what is "good" news? Is a report of housing prices at 2002 levels "bad" news? Is the DOW at 13,000 "good" news? >>
Depends on if one is buying or selling. >>
Exactly my point. One man's trash is another's treasure.
Knowledge is the enemy of fear
Liberty: Parent of Science & Industry
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Party on!!!
This country and the world have suffered "massive" economic shocks in the past. The human race is a resiliant.
Party on!!!
Knowledge is the enemy of fear
Liberty: Parent of Science & Industry
<< <i>This country and the world have suffered "massive" economic shocks in the past. The human race is a resiliant. >>
This time the world is as the mercy of central banks who are coordinating their horrific money supply and interest rate policy and at times countering each others currency weakness policy. Resiliancy will depend on free, unadulterated markets taking back control. But yes, it can be done but time is running out.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>
<< <i>This country and the world have suffered "massive" economic shocks in the past. The human race is a resiliant. >>
This time the world is as the mercy of central banks who are coordinating their horrific money supply and interest rate policy and at times countering each others currency weakness policy. Resiliancy will depend on free, unadulterated markets taking back control. But yes, it can be done but time is running out. >>
Time is as old as the universe. It never runs out.
People can live without money. Stop being so dramatic.
Oh, and free markets always reign. Markets are ALWAYS bigger than any Govt.
Knowledge is the enemy of fear
<< <i>...............
Oh, and free markets always reign. Markets are ALWAYS bigger than any Govt. >>
We are seeing that happen today. Iran's exports of oil, prohibited by the U.S., have now reached 2/3'rds of pre-embargo levels. Both the Chinese (whom we dare not provoke) and our purported 'ally' Turkey pay for their prohibited purchases with, you guessed it, gold. Thus circumventing 'our control' of the international banking system. The markets are over-riding the dictates of politicians.
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It would also seem to me that China would prefer a high gold price so as to be able to exchange it at more favorable rates for oil.
<< <i>Oh, and free markets always reign. Markets are ALWAYS bigger than any Govt. >>
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>What is "bad" news and what is "good" news? Is a report of housing prices at 2002 levels "bad" news? Is the DOW at 13,000 "good" news? -Tuesday March 06, 2012 9:46 AM >>
I dunno! What about housing prices at 2004 levels and DOW at 15,000?
Liberty: Parent of Science & Industry
US Bonds being in a bull market for something like 30 yrs is a free market....and bigger than the govt?
Seems to me that when otc interest rate contracts were added to the mix in 2000, the guys writing those contracts became bigger than the market itself.
It may take 35-50 years to end the bond bull market.....but it will eventually end. I don't know if I'll be around to see that.
What remains to be seen is will they take my gold (and yours) to meet their needs?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey