Something's off.
Something doesn't make sense. On the one hand, you have rampaging gold demand, manic gold buying, an interest in the investment so intense that shortages of the precious metal are now actually commonplace around the globe.
On the other hand, what's the price of gold doing? Not much. Not much at all. Mediocre is what comes to mind. Gold seems inexplicably mired in a dull trading range while fireworks are going off in the rest of the financial world.
There's a disconnect going on some place.
Isn't the old law of supply and demand still in effect? Isn't it still true that when people want more of something, its supply decreases and its price heads north?
Or did the law get revoked, and we just never got the memo?
ARMAGEDDON ON WALL STREET, A YAWNER ON GOLD STREET
You certainly don't need a refresher course on what's been happening on Wall Street, how stocks keep losing trillions in value and how the government keeps overstepping its already overstepped boundaries.
That memory will probably be forever branded on your poor brain.
What has gotten considerably less publicity, though, has been the subsequent panic buying of precious metals by average, everyday people around the globe, from Europe to Asia to America.
According to a story in London's Evening Standard, German gold dealers have been halting the sale of gold coins. "German gold dealers say demand has skyrocketed this past week to 10 times normal so no more orders can be taken for the foreseeable future."
In no way is Germany alone. Gold dealers everywhere echo those same complaints. According to http://www.ameinfo.com, "We have a similar rush in the souks of Dubai. Gold coins are selling at the highest premiums to spot gold price in 30 years, and (gold) stocks are running out."
Toni Straka of SeekingAlpha.com, reported that Muenze Osterreich, producer of gold and silver Philharmonics, has had to add a third work shift to make more coins, such has been the unprecedented demand.
What's more, for the first time since introducing gold Eagles twenty years ago, the Mint has been stopping the sale of these popular coins. Its plan is to re-commence a more reliable supply, but only on a rationing basis to dealers.
So widespread are the shortages, according to Paul Joseph Watson, that buyers are turning to Ebay. "Since buyers are finding it near impossible to get gold bullion from recognized dealers, many are turning to eBay where auctions for one ounce Krugerrands and Maple Leafs are fetching anything up to 150 ($260) over spot price."
Gold demand is absolutely boiling.
Gold's price is absolutely yawning.
What's going on here?
THE GAS TANK IS FULL BUT THE GAUGE SAYS IT EMPTY
Many experts believe gold should now have reached $1,100 an ounce by now instead of loitering in the mid-$800s/$900s range. And even that may be a conservative estimate, given the devastation to the economy.
Why the disconnect? The Market Oracle's Alex Wallenwein, believes he knows:
"Why is gold dropping right now when anyone in their sane mind would expect it to rise? The simple answer to this question is, 'because Comex-gold isn't gold' - and because it deceptively pretends to be 'the' price-setter for real gold.
"Gold is gold, paper is paper, and 'Comex gold' is nothing but paper masquerading as gold while simultaneously pretending to be the price-setting medium for actual gold in the world. Now, finally, Comex-gold is in the process of being unmasked."
Wallenwein went on to explain what this unmasking will reveal:
"The real supply and demand determinants for Comex gold are not actual gold investors but fund managers. Fund managers are inextricably intertwined with the world of contract-based credit instruments. They bet on Comex gold contracts to hedge their other (currently horrendously losing) bets with something they all, in their in-bred belief in paper markets, believe will 'go up' in value while everything else is going down."
Trader Dan Norcini from jsmineset.com took another perspective: When a fund gets redemption requests from desperate clients who now need cash (instead of being invested in, say, the commodity sector), its managers are forced to sell futures across the board to generate that money.
"If $20 million of cash is required to meet client redemption requests, then $20 million of commodity futures must be sold REGARDLESS OF THE FUNDAMENTALS IN THAT PARTICULAR MARKET. In other words, it is FORCED liquidation on account of redemption requests. That has NOTHING TO DO with the real physical gold market where demand remains at unprecedented levels, levels so high that it's producing serious shortages of bullion for would-be buyers."
This forced liquidation then takes part in driving gold prices down...at least in the eyes of Comex.
GOLD VS MANIPULATION: GOLD WINS
Is there a serious conflict-of-interest going on here?
Does the Comex version of the current gold price bear any resemblance to what's happening with dealers, both supply and demand, in the real world? Are funds really pouring water on red-hot precious metals with their forced redemptions?
At least from the anecdotal perspective of a gold dealer, whether the reason is a compromised Comex or something equally nefarious, it seems clear that precious metals are being shamelessly manipulated.
There's just too much demand. Too little price.
Sadly, governments and institutions have been known to distort statistics whenever the need arose. Witness the government's changing of the CPI to exclude such insignificant inflationary factors as food and energy.
Regardless of these contrived forces, the current grassroots pressure on gold will only keep mounting in this environment. Something will give and soon. When that happens, will you be happy you had the prudence and foresight to diversify your portfolio with precious metals?
Is the American Gold Eagle made of gold?
Something doesn't make sense. On the one hand, you have rampaging gold demand, manic gold buying, an interest in the investment so intense that shortages of the precious metal are now actually commonplace around the globe.
On the other hand, what's the price of gold doing? Not much. Not much at all. Mediocre is what comes to mind. Gold seems inexplicably mired in a dull trading range while fireworks are going off in the rest of the financial world.
There's a disconnect going on some place.
Isn't the old law of supply and demand still in effect? Isn't it still true that when people want more of something, its supply decreases and its price heads north?
Or did the law get revoked, and we just never got the memo?
ARMAGEDDON ON WALL STREET, A YAWNER ON GOLD STREET
You certainly don't need a refresher course on what's been happening on Wall Street, how stocks keep losing trillions in value and how the government keeps overstepping its already overstepped boundaries.
That memory will probably be forever branded on your poor brain.
What has gotten considerably less publicity, though, has been the subsequent panic buying of precious metals by average, everyday people around the globe, from Europe to Asia to America.
According to a story in London's Evening Standard, German gold dealers have been halting the sale of gold coins. "German gold dealers say demand has skyrocketed this past week to 10 times normal so no more orders can be taken for the foreseeable future."
In no way is Germany alone. Gold dealers everywhere echo those same complaints. According to http://www.ameinfo.com, "We have a similar rush in the souks of Dubai. Gold coins are selling at the highest premiums to spot gold price in 30 years, and (gold) stocks are running out."
Toni Straka of SeekingAlpha.com, reported that Muenze Osterreich, producer of gold and silver Philharmonics, has had to add a third work shift to make more coins, such has been the unprecedented demand.
What's more, for the first time since introducing gold Eagles twenty years ago, the Mint has been stopping the sale of these popular coins. Its plan is to re-commence a more reliable supply, but only on a rationing basis to dealers.
So widespread are the shortages, according to Paul Joseph Watson, that buyers are turning to Ebay. "Since buyers are finding it near impossible to get gold bullion from recognized dealers, many are turning to eBay where auctions for one ounce Krugerrands and Maple Leafs are fetching anything up to 150 ($260) over spot price."
Gold demand is absolutely boiling.
Gold's price is absolutely yawning.
What's going on here?
THE GAS TANK IS FULL BUT THE GAUGE SAYS IT EMPTY
Many experts believe gold should now have reached $1,100 an ounce by now instead of loitering in the mid-$800s/$900s range. And even that may be a conservative estimate, given the devastation to the economy.
Why the disconnect? The Market Oracle's Alex Wallenwein, believes he knows:
"Why is gold dropping right now when anyone in their sane mind would expect it to rise? The simple answer to this question is, 'because Comex-gold isn't gold' - and because it deceptively pretends to be 'the' price-setter for real gold.
"Gold is gold, paper is paper, and 'Comex gold' is nothing but paper masquerading as gold while simultaneously pretending to be the price-setting medium for actual gold in the world. Now, finally, Comex-gold is in the process of being unmasked."
Wallenwein went on to explain what this unmasking will reveal:
"The real supply and demand determinants for Comex gold are not actual gold investors but fund managers. Fund managers are inextricably intertwined with the world of contract-based credit instruments. They bet on Comex gold contracts to hedge their other (currently horrendously losing) bets with something they all, in their in-bred belief in paper markets, believe will 'go up' in value while everything else is going down."
Trader Dan Norcini from jsmineset.com took another perspective: When a fund gets redemption requests from desperate clients who now need cash (instead of being invested in, say, the commodity sector), its managers are forced to sell futures across the board to generate that money.
"If $20 million of cash is required to meet client redemption requests, then $20 million of commodity futures must be sold REGARDLESS OF THE FUNDAMENTALS IN THAT PARTICULAR MARKET. In other words, it is FORCED liquidation on account of redemption requests. That has NOTHING TO DO with the real physical gold market where demand remains at unprecedented levels, levels so high that it's producing serious shortages of bullion for would-be buyers."
This forced liquidation then takes part in driving gold prices down...at least in the eyes of Comex.
GOLD VS MANIPULATION: GOLD WINS
Is there a serious conflict-of-interest going on here?
Does the Comex version of the current gold price bear any resemblance to what's happening with dealers, both supply and demand, in the real world? Are funds really pouring water on red-hot precious metals with their forced redemptions?
At least from the anecdotal perspective of a gold dealer, whether the reason is a compromised Comex or something equally nefarious, it seems clear that precious metals are being shamelessly manipulated.
There's just too much demand. Too little price.
Sadly, governments and institutions have been known to distort statistics whenever the need arose. Witness the government's changing of the CPI to exclude such insignificant inflationary factors as food and energy.
Regardless of these contrived forces, the current grassroots pressure on gold will only keep mounting in this environment. Something will give and soon. When that happens, will you be happy you had the prudence and foresight to diversify your portfolio with precious metals?
Is the American Gold Eagle made of gold?
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