Gold hits one-year low

[sixgun]

I received this in my email inbox. How do you analyse this?

https://seekingalpha.com/news/3377781-gold-hits-one-year-low-report-says-bullion-market-worst-start-since-2009

Gold hits one-year low; report says bullion market off to worst start since 2009

Aug. 2, 2018 2:59 PM ET|By: Carl Surran, SA News Editor

Gold slides to its lowest price in a year following a report that showed the bullion market suffered its weakest start in nearly a decade and as the U.S. dollar rose.

December Comex gold settled -0.6% at $1,220.10/oz., wrapping up its fifth loss in the past six sessions, amid questions about whether gold can retain any appeal as the Fed remains on track to continue a steady path of interest rate increases with inflation near target and the U.S. economy expanding.

The World Gold Council reports the bullion market is suffering its worst start to a year since 2009, as U.S. investors have been pulling money out of gold-backed ETFs.

“Gold has no story going forward,” says Ira Epstein, managing director at commodities broker Linn Group. "Gold is now fighting a rising set of interest rates in America and it saw the Bank of England raise rates today... it’s going to have to deal with the fact that if Europe stabilizes rates there will start climbing."

[Tn21]

Yh as of writing Au is 1208 usd been watching the movement of price on a chart (waste of time I know) but could not really break certain levels.
What do you make of the price level atm and the next few months for gold @sixgun ?

Would be good to know your thoughts and opinion on the matter.

[MancunianStacker]

When they tell you to sell or that it’s a bad buy it usually means it’s going to reverse and do really well. 

Nothing makes any sense these days. 

[sixgun]

This piece is garbage. It is typical controlled propaganda. It is devised to have a negative impact on gold sentiment.

 

Quote

"Gold has no story going forward,” says Ira Epstein, managing director at commodities broker Linn Group. Linn Group is a Chicago based commodity broker

They are paper traders and they specialise in grains. So the best they could do is to get a broker specialising in grains. http://www.linnllc.com/

Gold has no story going forwards? It has 1000's of years of backstory and it suddenly stopped now? This is an idiot statement.

Quote

"Gold is now fighting a rising set of interest rates in America and it saw the Bank of England raise rates today... it’s going to have to deal with the fact that if Europe stabilizes rates there will start climbing."

So the BoE after for ever and a day put rates up 0.25%. The Fed may put rates up 0.25% in September -

Quote

amid questions about whether gold can retain any appeal as the Fed remains on track to continue a steady path of interest rate increases with inflation near target and the U.S. economy expanding.

The Fed is struggling to increase rates a few points. The central banks are throwing out QE - the ECB stopped buying Italian government debt and those bonds collapsed. Deutsche Bank has trillions of bad derivatives and would bring the European banking system down if it went or should i say when it goes. The Fed is supposed to be shrinking it balance sheet but it isn't and can't b/c there is worldwide de-dollarisation - Russia is all but out of Treasuries and using the USD to buy gold. Outside the Anglo-American cabal countries are repatriating gold and buying more. China has instructed its large commercial property investors to get out of the US and now the Chinese are net sellers - this last happened before Lehman's collapsed.

The bullion market is all to its worst start since 2009 - do we remember what happened in 2010 and 2011 to gold prices?  Can someone remind them it is August, what is this 'start'? They must just be talking about the US bullion market b/c they certainly aren't talking about the rest of the world. I see the first oil-yuan-gold contracts will be maturing shortly - when yuan gets swapped for gold it will hurt the cabal.

These stupid articles give me more confidence in gold.

 

[KDave]

Normally things don't just fall straight down and when you look at the wider chart over a couple of years, you see that the falls have been slowly consistent for a long time now. We should expect a rally not further falls. Where we go after that, my money is on down unless the wheels fall off towards the end of the year. Either the wheels fall off or gold will be much cheaper again in December, as it has been for the past few years. All this is based on nothing in particular, just my thoughts which are biased to the downside, I want more gold, take with a pinch of salt. 

[sixgun]

i started this thread to highlight controlled propaganda nonsense in the precious metal sector, that is factual garbage set to destroy the last remaining positive sentiment in the gold market.

A little while ago @*tada*  posted how he had noticed how the Chinese yuan was tracking gold. The yuan is pegged to gold - further evidence gold is a currency. This peg has been the case for a little while. i know it is theorised that the Chinese are depreciating commodities in line with the yuan to combat the currency depreciation. This way they can continue to buy raw materials and gold for the same number of yuan. i am doubtful the PBOC is doing this but it is an interesting idea.

i see Andrew Maguire on King World News points out how the margins on yuan short trades got bumped up https://kingworldnews.com/andrew-maguire-gold-market-set-to-spike-violently-higher-crushing-hedge-fund-shorts/

That leveraged traders shorting the yuan got margin calls. A margin call occurs when the amount of cash/assets in their accounts does not cover the amount required to hold these short contracts. The margin requirement is set by the broker and the exchange. The result is the shorts have to be closed which means buying yuan futures and pushing the spot/future price up. At the same time we saw the gold price (pegged to the yuan price) spike up. The thrust of this is, this was a maneuver to push the dollar down against the yuan and if this continues this is bullish for gold.

A second article of King World News looks at the short position of the usual suspects and that they are covering their shorts. This is something we see when price is at a low extreme and they are planning to take price higher.

https://kingworldnews.com/bullion-banks-set-to-torch-hege-funds-in-the-gold-market/

 

[*tada*]

28 minutes ago, sixgun said:

i started this thread to highlight controlled propaganda nonsense in the precious metal sector, that is factual garbage set to destroy the last remaining positive sentiment in the gold market.

A little while ago @*tada*  posted how he had noticed how the Chinese yuan was tracking gold. The yuan is pegged to gold - further evidence gold is a currency. This peg has been the case for a little while. i know it is theorised that the Chinese are depreciating commodities in line with the yuan to combat the currency depreciation. This way they can continue to buy raw materials and gold for the same number of yuan. i am doubtful the PBOC is doing this but it is an interesting idea.

i see Andrew Maguire on King World News points out how the margins on yuan short trades got bumped up https://kingworldnews.com/andrew-maguire-gold-market-set-to-spike-violently-higher-crushing-hedge-fund-shorts/

That leveraged traders shorting the yuan got margin calls. A margin call occurs when the amount of cash/assets in their accounts does not cover the amount required to hold these short contracts. The margin requirement is set by the broker and the exchange. The result is the shorts have to be closed which means buying yuan futures and pushing the spot/future price up. At the same time we saw the gold price (pegged to the yuan price) spike up. The thrust of this is, this was a maneuver to push the dollar down against the yuan and if this continues this is bullish for gold.

A second article of King World News looks at the short position of the usual suspects and that they are covering their shorts. This is something we see when price is at a low extreme and they are planning to take price higher.

https://kingworldnews.com/bullion-banks-set-to-torch-hege-funds-in-the-gold-market/

 

It is puzzling, but I think this could be the explanation. Someone told me this has to do with the Chinese bank lending process, which now requires precious metals as collateral because dollar liquidity become scarce.

I think Chinese government wants yuan to depreciate but doesn't want to be termed "currency manipulator", hence occasional PBOC maneuvers to BURN the shorts as witches to teach them some lessons. In fact in 2017 China has made a lot of gesture in appreciating Yuan vs USD. Things have really changed and it will likely become personal soon.

The recent yuan depreciation vs. USD (6-8%) wiped out most tariff effects by Trump, and will def show the impact on US corporate earnings next quarter. However, yuan vs trade partner has a lot more room to depreciate if the government choose to do so.

China could also liquidate Treasuries, which cause US rate to surge and pop the US equity bubble, but that would put downward pressure on gold initially. But gold will do well in a higher inflation lower growth environment.

If China decides to penalize Apple (which just becomes a Trillion dollar company) by charging export tax or even ban sales in China, then yeah we'll see both US and China equity market crash along with the world markets, and in this tail case gold will shoot to the moon.

 

[dicker]

I think that markets go up and down, and I keep investing at regular intervals. Pound cost averaging. 

[caloundracats]

Perhaps gold is cheaper in December @KDave because of Christmas and holidays taken. Money spent on presents and the festive season rather than gold. 

I know what I would like for Christmas this year?

[KDave]

Some interesting potential here for silver and gold, some bull, some bear. My favourite kind of analysis is the one with a conclusion that says 'I don't know' ;

 

[Pipers]

Have we just seen one great big bear squeeze under disguise?    

On friday the bears had their necks throttled then today the price fell right back down.