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Gold Loses Its Shine


20MillionDinar
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By Francesca Freeman and Rhiannon Hoyle

OB-QY757_gold_E_20111212065343.jpgBloomberg

Gold has taken another dramatic tumble, sliding below the key $1,700 a troy ounce level amid a toxic mix of technical selling, risk aversion and a weaker euro. Indeed, commodities overall have

taken a battering.

At gold’s lowest point, the yellow metal was languishing at $1,676.56/oz, its lowest level in two-and-a-half weeks. It was down 4% on the start of the previous week and 2% lower on the day.

While investors market-wide cast a skeptical eye over the fruits of last week’s European Union summit, gold received an extra shove to the downside by technical-selling around $1,700/oz, as a blanket of automated selling-orders were triggered around the key support level, according to traders.

The yellow metal now sits precariously above another band of support at $1,680/oz to $1,660/oz, making it vulnerable to another wave of selling, should this level be broken.

“Gold could be in for a grilling,” said a London-based trader. “The market is going to look as bearish down here as it was bullish on its way up through $1,650/oz.”

Liquidity is also quickly thinning ahead of the year-end–which tends to make price movements all the more volatile, as there are fewer buyers left to pick up scoop up the metal when others decide to sell.

“For now, it appears market participants are happy to wind down for the end-of-year holiday season,” UBS analyst Edel Tully said in a daily note.

Couple the thin trading volumes with the muddy outlook for Europe and the environment in the market at the moment is “quite conducive for jerky price movements,” Ms. Tully added.

“The market from here until the end of December is most probably going to be dominated by short-term range players. We doubt any of the key market participants would opt to take any important strategic positions here.”

All risk markets have been tumbling Monday as the latest measures by policymakers to address the euro zone’s debt crisis are questioned. Economists say that while there were few surprises from last week’s closely-watched EU summit, there remain some key issues unresolved; like a credible lender of last resort, the lack of firepower in the European Financial Stability Facility, and measures to promote growth.

Although gold is traditionally considered a hedge against economic insecurity, its behavior in recent weeks has been more closely aligned to traditional risk-related assets such as base metals and equities, as nervous investors seek solace in cash rather than bullion.

While dips below $1,680 an ounce should draw some physical buyers–gold’s traditionally more price-sensitive investors–into the market, so far their response to the decline has been muted. Still, given a day is a long time in financial markets, particularly at the moment, that could soon change and help to spur the market back toward the $1,700 an ounce mark.

At 1119 GMT, spot gold was 1.8% lower on the day at $1,680.90

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Allow me to be the first. Gold is only of value if people attach worth to it. To me, it is worthless. Oil, on the other hand, is priceless in our day and age. Iran is preparing to perform military drills to cut off oil to this country while our Government stands by and waits. You can't see on the networks, you just have to know stuff and listen. By the way, the drone captured by Iran did have a delete device installed. Uncle Sugar elected not to use it. No links today. It's out there for all to see. Minor research is all it takes. Have a good 1 DV!! Merry Christmas. Slay.

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Allow me to be the first. Gold is only of value if people attach worth to it. To me, it is worthless. Oil, on the other hand, is priceless in our day and age. Iran is preparing to perform military drills to cut off oil to this country while our Government stands by and waits. You can't see on the networks, you just have to know stuff and listen. By the way, the drone captured by Iran did have a delete device installed. Uncle Sugar elected not to use it. No links today. It's out there for all to see. Minor research is all it takes. Have a good 1 DV!! Merry Christmas. Slay.

Slaydadea----Dude nice BUCK!

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From Silverfire.. over at the Kitco silver Forum...

"Why are metals crashing? There are some significant confluence of events/forces that are happening simultaneously. I haven't seen a number of these points mentioned here, so I thought I'd share some:

1.) MF Global Bankruptcy

1.2 Billion dollars of customer accounts stolen. The CME has stated that they will not backstop these losses even though they are responsible insuring against losses. Confidence is going downhill on trading futures contracts. Are clients everywhere liquidating their paper positions, thus contributing to the drop in metal prices?

2.) Bank Runs

Latvia, Greece, and all across Europe. Confidence is being lost in the financial banking system. There are lines wrapped around banks in Latvia. Greece has seen massive amounts of money leaving their banking system. Are Europeans flocking to the dollar/treasuries?

3.) Strength in Dollar

This is the perceived safe haven of 98-99% of the world populace. Let's not kid ourselves. Sheeple are just unaware of the major issues with our debt based reserve currency. The Euro zone financial collapse will put the dollar in a bull market through most of 2012. Strength in dollar = reduced prices of dollar based assets. It also means our exports will be too expensive for other countries. This cannot last as it's safe to assume the US will devalue it's currency to remain competitive. It will also be teetering on systemic financial collapse through contagion with the Euro-zone. What's the only solution? Print money. Devalue the currency AND bail out the banks. Win-win.

4.) CFTC Position limits

Not too up to date on this, but I think the idea was that they would begin enforcing position limits in January 2012. Who knows if this will actually hold up. This may be a final smackdown before these rules are in place to discourage metal investments and reduce short positions.

5.) Recent FOMC meeting. (aka 'The Bernanke')

No mention of QE3 = bearish for metals

Now, having talked about this confluence of forces, where do we go from here? In my estimation the Euro collapse willl bring about a VERY strong dollar. This means we will be entering a deflationary period for 2012. Metals, real estate (yes even further drops), DOW / S&P, etc.. will see some major drops. Now is the time to be in cash. This might be 2008 all over again, but on a global scale.

So should we sell our metals? In my opinion, no. (unless you need to pay rent!) I'm looking to accumulate more, but be careful here folks.. don't want to catch the falling knife. I will most likely start adding to my stack with silver in the mid-twenties.

In addition, my crystal ball says that since the US has no choice but to print we will see very high inflation after this dollar temp. bull market. Perhaps 30-50% in 2013. From there, it will exponentially increase and silver/gold will then truly skyrocket.

The only way silver and gold will go "to da moon" is when the US dollar hyperinflates and the masses move to it as a safe haven. No, not double or quadruple the demand we are seeing today. Look for demand X 100 fold.

This will most likely happen in late 2012- 2014."

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From Silverfire.. over at the Kitco silver Forum...

"Why are metals crashing? There are some significant confluence of events/forces that are happening simultaneously. I haven't seen a number of these points mentioned here, so I thought I'd share some:

1.) MF Global Bankruptcy

1.2 Billion dollars of customer accounts stolen. The CME has stated that they will not backstop these losses even though they are responsible insuring against losses. Confidence is going downhill on trading futures contracts. Are clients everywhere liquidating their paper positions, thus contributing to the drop in metal prices?

2.) Bank Runs

Latvia, Greece, and all across Europe. Confidence is being lost in the financial banking system. There are lines wrapped around banks in Latvia. Greece has seen massive amounts of money leaving their banking system. Are Europeans flocking to the dollar/treasuries?

3.) Strength in Dollar

This is the perceived safe haven of 98-99% of the world populace. Let's not kid ourselves. Sheeple are just unaware of the major issues with our debt based reserve currency. The Euro zone financial collapse will put the dollar in a bull market through most of 2012. Strength in dollar = reduced prices of dollar based assets. It also means our exports will be too expensive for other countries. This cannot last as it's safe to assume the US will devalue it's currency to remain competitive. It will also be teetering on systemic financial collapse through contagion with the Euro-zone. What's the only solution? Print money. Devalue the currency AND bail out the banks. Win-win.

4.) CFTC Position limits

Not too up to date on this, but I think the idea was that they would begin enforcing position limits in January 2012. Who knows if this will actually hold up. This may be a final smackdown before these rules are in place to discourage metal investments and reduce short positions.

5.) Recent FOMC meeting. (aka 'The Bernanke')

No mention of QE3 = bearish for metals

Now, having talked about this confluence of forces, where do we go from here? In my estimation the Euro collapse willl bring about a VERY strong dollar. This means we will be entering a deflationary period for 2012. Metals, real estate (yes even further drops), DOW / S&P, etc.. will see some major drops. Now is the time to be in cash. This might be 2008 all over again, but on a global scale.

So should we sell our metals? In my opinion, no. (unless you need to pay rent!) I'm looking to accumulate more, but be careful here folks.. don't want to catch the falling knife. I will most likely start adding to my stack with silver in the mid-twenties.

In addition, my crystal ball says that since the US has no choice but to print we will see very high inflation after this dollar temp. bull market. Perhaps 30-50% in 2013. From there, it will exponentially increase and silver/gold will then truly skyrocket.

The only way silver and gold will go "to da moon" is when the US dollar hyperinflates and the masses move to it as a safe haven. No, not double or quadruple the demand we are seeing today. Look for demand X 100 fold.

This will most likely happen in late 2012- 2014."

They did slide in a mention of QE3 today as a means of we may have to do it. Gold currently down $78 silver down $2.28. It is going to get exciting folks!

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Today - Gold down another $75 or so!

Gold Buyers should be watching gold for the next few weeks for another good "entry" price.

This link might help you decide "entry" price.

http://www.the-privateer.com/chart/g-multi.html

Gold In Euro, $US, $A, And Yen

Weekly bar chart - semi-log scale

Gold in Euros, U.S. Dollars, Aus. Dollars, and Yen.

All charts with 20 week (100-day) Moving Averages.

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Seetrader I am on board with your idea. I am currently in cash in my brockerage and have changed over to a firm that will vault physical precious metals in my case this is my IRA I don't beleive that that Euro crisis and subsequent Us dollar failure will occur. But indeed the buying opportunity is heading in the direction I predicted. I aggre the botom is yet to be revealed. A novice investor will be disapointed if he can not enter into physical gold and silver at the absolute bottom. Experienced traders are savy to know how to make the main "meat" of the trade and be happy. Although at this time I do not beleive gold will drop to the $1000 level, there appears to be additional decline in the near future. The big picture is I beleive gold will very easily hit $5000 a ounce within a 2 to 5 year period and the ratio of gold to silver could reach 15:1 making silver the better pick of the two. There are no more mother loads of silver and gold and production has been declining for several years now. Hopefully nobody will not ask me for links on that one. Do your own research of gold and silver production just like I did and make your own deceision. In the event that The US dollar crashes, the new currency, call what you may, could be based on a basket of currencies, which those currenceis will be based on that countreis output of GDP and the amount of gold and silver they posess. In short the stock market may crash but gold and silver will not, ever.

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