Friday, February 22, 2013

Why Gold is down

The Fed released a statement that they might discontinue quantitative easing (i.e., money printing).  Even though nobody believes the Fed would do this, somehow this supposedly caused a panic of gold selling, which was not at all market manipulation.   Not at all.  ;-)

Take a look at that 16 trillion dollar national debt number ticking to the right . . . there is NO WAY the Fed can let interest rates rise, because then the government would have to actually pay interest on that debt.

Gold pushed through a technical level called the "death cross" when the 50 day moving average went below the 200 day moving average at about 1,660.  That is about as reliable as Tarot Cards, but weak hands that bought gold recently would have set stop-loss orders there at and also at 1,600.

If you look at a ten year chart, gold has been going sideways for about a year.  look what happened last time it went sideways for a year (2008)  it then went from 800 to over 1900 in three years.  I think the third big wave is coming.


Anonymous said...

Tron, are there any stocks or funds breaking out from the rest? Have you had any lucking purchasing physical gold?

Gerard said...

I'm looking into buying some farmland. It's not easy. Buying gold is easy. Try kitco or europac precious metals. Avoid "rare" numismatic coins; they have a huge markup.

Twitch said...

Voltron - I have been watching with interest as the GLD got crushed, yet bullion purchases are skyrocketing. This leads me to a few conclusions, that contradict each other: 1) Actual gold is in extremely high demand, thus the price will go up; 2) Institutional owners, and to some extent, central banks will always be able to manipulate the price of gold through the GLD ETF. It is in the best interest of central baks to keep the price of gold lower, and this will give the illusion that the US Dollar is actually worth something. I am curious as to your thoughts on this. Who will win this battle?