Gold, Acting Like A Commodity, Plummets In The Face Of A Rising Dollar

goingbroke

Global markets have broken down after the FOMC said the economy faces significant downside risks. Interestingly, gold plummeted along with other risk assets, despite its traditional “safe-haven” status, which generally benefits from bouts of fear and volatility. The underlying reason? A rallying U.S. dollar.While gold has been sold as a risk-free asset where investors can safeguard the value of their capital in the face of global gloom and doom, the yellow metal has tumbled along with risky assets, behaving more like a commodity than a currency.



gold continued to fall, losing $71.70 or 4%

MsMorrisine

this and greece are just providing buying opportunities.

Coinsponge

I am suspicious that some big player is dumping gold like a country. Any insight?

Coinsponge

Could this be Europe big boys selling gold to raise capital to back up banks in preparation of a Greek default?

pf70collector

Whatever happened to Chavez wanting its $11 Billion in gold bullion delivered. Maybe JPG Morgan has something to do with it.

carew4me

I would say its the massive hedge funds dumping their Gold plays to preserve profits.

I see this a the opportunity to buy on sale.

I can buy Canadian Cougars for %25 LESS than they were going to cost me 3 days ago!

Coinsponge

This move in gold just seems counterintuititive to me. General instability should drive gold up, not down. This smells of some government involvement. Just galls me that there is such a lack of transparency so we are left to guess and speculate. At least I am. But I guess it does make sense that if a sovereign wanted to sell they would not make any grand announcements which would undermine the price while they sold.

TheCoinGeezer

Gold and silver are in a free fall now. It could be a terrific buying opportunity, it could be time to bail out. Who knows? Not me!
Like others, I suspect one or more central banks in Europe are selling off a large amount of their reserves in order to finance the Greek bailout and the general instability of the Eurozone.

500Bay

With the large ETF's having huge positions of physical gold (bigger than many countries), the stock market sellers are influencing the gold market more than ever.
It seems that people want green cash now.

Coinsponge

It seems that people want green cash now. >>



And the ink hasn't hardly dried yet. Could be messy.

RedHerring

$1600 here we come. My buy price is almost here!

57loaded

<< <i>With the large ETF's having huge positions of physical gold (bigger than many countries), the stock market sellers are influencing the gold market more than ever.
It seems that people want green cash now. >>



yup many hedge funds had long positions and GOT out.

Kip

We are all Doomed!!!!!!!!!!!!!!!!!!!!!!!!!!!

jmski52

many hedge funds had long positions and GOT out

If that's the case, it's a good thing. Same for the ETFs.

Volatility is a direct result of the high velocity paper & electronic markets. It's exactly the same for all markets, and precious metals are vulnerable in the same way.

Gold's now down -$103.80 for the day.

It's got nothing to do with the physical market or the underlying values. I'm not impressed. When the fast money wants back out of cash, they'll eventually want back into metals. Not my issue.

cohodk

Physical PM prices would never have gone so high without the paper markets. SLV and GLD made it easy for J6P and institutions to buy. Without this buying, I dont believe we would have seen the moves we did.

Even in 1980 it was the Hunts in the futures markets that drove prices high.

Taking these buyers out of the paper market will not move them to physical. Once burned, twice shy.

BigE

<< <i>This move in gold just seems counterintuititive to me. General instability should drive gold up, not down. This smells of some government involvement. Just galls me that there is such a lack of transparency so we are left to guess and speculate. At least I am. But I guess it does make sense that if a sovereign wanted to sell they would not make any grand announcements which would undermine the price while they sold. >>




I agree--------BigE

jmski52

Taking these buyers out of the paper market will not move them to physical. Once burned, twice shy.

Those guys? Timmy's followers? Bennie's bunnies? Oh, they'll be back when the greedy and scared little bunnies can't find any other places to hide on the yield curve. They will want to be bailed out, and there won't be a bailout because there won't be a middle class to do it. That's a little on the dramatic side, yeah I know - but that is where we are pointed.

Nothing has changed, and I don't see the dollar as a safe haven. I have some dollars, and I may accumulate more of them, but I'm not selling metals in order to do that.

roadrunner

The greatest clearing of gold occurs on the LBMA (London). In a way, the NY Comex futures and gold ETF's are sort of side show.

And how about today's after market (leaked) CME rate hikes in gold, silver and copper? Sheesh, poor copper! It's been correcting since February
and got obliterated since end of July. It didn't need a rate hike with the way the markets were already trending. Gold has been acting like a monetary
substitute that had a hit called on it a couple days ago. The hit man couldn't wait though and started beating up the poor guy 2 days ago. Today they
completed the hit and put the guy out his misery. The dollar has been acting like a currency that wasn't subject to impending rate hikes/"contract hits."

So when the dollar falls against gold as it has done for 24 months out of the last 240 months (10 yrs), does that mean the dollar is not acting like a currency?

roadrunner

cohodk

<< <i>Taking these buyers out of the paper market will not move them to physical. Once burned, twice shy.

Those guys? Timmy's followers? Bennie's bunnies? Oh, they'll be back when the greedy and scared little bunnies can't find any other places to hide on the yield curve. They will want to be bailed out, and there won't be a bailout because there won't be a middle class to do it. That's a little on the dramatic side, yeah I know - but that is where we are pointed.

Nothing has changed, and I don't see the dollar as a safe haven. I have some dollars, and I may accumulate more of them, but I'm not selling metals in order to do that. >>




I know you are being dramatic, but perhaps things have changed. Perhaps it is as simple as the best cure for high prices is high prices. As far as hiding on the yield curve, a .01% yield is great in a deflation.

johnny9434

<< <i>$1600 here we come. My buy price is almost here! >>




i hope ya get it