http://www.figanews.com/dan-dicker-bets-on-gold/
Dan Dicker, Merc Bloc president, explains why he’s buying gold
for the first time in four years.Dan Dickers : I think what is going on
is the possibility, and I hate to say this, I think that it ends up in
the in the end with the monster bazooka courtesy of the IMF coming in
and financing it. and that’s the event that I’m sort of shooting for
here and then the moment it comes out is the time to sell the metals
somewhere around 2200.
Fair Weather Dan....No?
Wednesday, June 26, 2013
Gold Is Unsafe at Any Price: Dicker
http://finance.yahoo.com/blogs/breakout/gold-unsafe-price-dicker-135904756.html;_ylt=AndmZE4ShaG97FhmYNZQSlmiuYdG;_ylu=X3oDMTN1YjE3dTVrBG1pdANGaW5hbmNlIEZQIE1lZ2F0cm9uIDIEcGtnA2IxN2RhNzY1LWM0ZTYtMzQ2MS05MjUzLWZjZjM4N2FkMzk1OARwb3MDMQRzZWMDbWVnYXRyb24EdmVyA2MwNmI1ZjgwLWRlNmQtMTFlMi05ZmRlLWI5ODY4ZDZiODIzYg--;_ylg=X3oDMTFkcW51ZGliBGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDBHBzdGNhdANob21lBHB0A3BtaA--;_ylv=3
Retail investors are scared for good reasons. Gold is an investment that should have worked when the inflation which was supposed to run rampant due to currency devaluation kicked into high gear. As the inflation thesis gets debunked gold is getting mercilessly hammered. There just isn't a compelling fundamental reason to own gold and the chart is broken. The only thing left to do is hope and panic; usually in that order.
Another day another beating for gold. The yellow metal fell another 3.5% overnight bringing it to prices unseen for almost three years. The SPDR Gold Trust ETF (GLD)
is now down over 25% year-to-date as retail investors find themselves
on the wrong side of what is suddenly looking like one of the great
boom-bust cycles in precious metal history.
As for what's driving the plummet, MercBloc president Dan Dicker
says it's all about Main Street coming to the sudden realization that
there is no safety whatsoever in gold. "When the retail customer gets
frightened, they get frightened in a hurry and they get frightened for
big numbers," Dicker says in the attached clip.Retail investors are scared for good reasons. Gold is an investment that should have worked when the inflation which was supposed to run rampant due to currency devaluation kicked into high gear. As the inflation thesis gets debunked gold is getting mercilessly hammered. There just isn't a compelling fundamental reason to own gold and the chart is broken. The only thing left to do is hope and panic; usually in that order.
Dicker makes the point that the
GLD, as a massive ETF, is forced to buy and sell physical gold holdings
as the size of the fund fluctuates. When sellers start dumping the GLD
it forces banks to go into the market and sell physical gold
into a weak market. The result is what Dicker calls a "cyclical death
spiral" that makes calling a bottom an exercise in futility.
Those
looking to buy the dip in gold are fighting the trend, a tide of so
called "weak-hand" sellers and a broken fundamental investment thesis.
The market doesn't give out badges for bravery; hundreds of years of
gold trading history suggests there are better places to put your money
right now.
Bernanke was “a little puzzled”
Question: Mr. Chairman, you've always argued that it’s the
stock of assets that the Federal Reserve holds which affects long-term
interest rates. How do you reconcile that with the very sharp rise in
real interest rates that we've seen in recent weeks? And do you think
the market is correctly interpreting what you think is most likely to be
the future path of the Federal Reserve's stock of assets? Thank you.
Bernanke: We were a little puzzled by that. It was bigger than can be explained, I think, by changes in the ultimate stock of asset purchases within reasonable ranges, so I think we have to conclude that there are other factors at work, as well, including, again, some optimism about the economy, maybe some uncertainty arising. So I'm agreeing with you that it seems larger than can be explained by a changing view of monetary policy.
Bernanke: We were a little puzzled by that. It was bigger than can be explained, I think, by changes in the ultimate stock of asset purchases within reasonable ranges, so I think we have to conclude that there are other factors at work, as well, including, again, some optimism about the economy, maybe some uncertainty arising. So I'm agreeing with you that it seems larger than can be explained by a changing view of monetary policy.
Richard Russell Turns a Gold Bear
I woke up last night, and realized that the facts have changed drastically, and it was high time for me to change my stance, and my opinions, and I mean change them across the board.
I believe we are in a period of world deflation and deleveraging. Why kid myself, gold after eleven years of successively higher year-end figures, has lapsed into a bear market. The huge rise from 200 to 1900 has never been corrected, and the rise is over. We are now seeing a correction of the entire gold bull market. To make it more dramatic, neither the public nor the funds have been participants in the gold bull market, and they are smarting and angry at having missed out on the greatest bull market of the postwar period. Thus, they are publicly gloating and gleeful as the dollar price of gold sinks.
The new "bargain" price of gold is giving China and Russia exactly what they want -- large, available quantities of "cheap" gold. The movement of huge quantities of gold from West to East is not comforting to Richard Russell. History tells us that gold and international power move hand-in-hand together. Basically, large quantities of gold are moving from the US, Britain and Europe to China, Russia and Asia. The implications of this massive transfer of wealth are not pleasant to contemplate, at least from what I know about history.
Who Killed the Gold Price -Ian Gordon
http://jutiagroup.com/20130626-ian-gordon-who-killed-the-gold-price/
The Gold Report: On
April 15, the gold price plunged about 9%—the biggest one-day loss ever
for the yellow metal. Many gold investors got “murdered” that day. Has
your personal investigation revealed any suspects?
Ian Gordon: I suspect it was akin to what happened in 1999. The then-governor of the Bank of England, Edward George, supposedly said that “any further rise in the gold price would take down one or more trading houses.” He said the rising price of gold was curtailed through the work of the Federal Reserve and the Bank of England. It appears that a bullion bank was caught offside on the short side and they had to take the price of gold down quite dramatically to allow it to cover.
I think something similar happened in April. I think it was manipulated to the downside. Goldman, Sachs & Co. encouraged its clients to short sell gold two days before this occurred.
TGR: Could it have just been an error?
IG: I always suspect the worst. There’s so much manipulation in all the markets as I see it.
TGR: That one-day drop caught even long-time gold investors off guard and shook their confidence. Is being a precious metals investor at this point simply about having the resolve to stay the course, or should even the ardent investors make adjustments to their gold portfolios?
IG: I’m extremely bullish on gold. Bullishness in gold, according to the website Market Vane, is at 40%, the lowest it has been since 2001. Bullishness in the stock market is at 70%, which is almost the highest it has been since Market Vane began tracking it. I see a reversal occurring here, for the gold price to the upside and the stock market to the downside.
TGR: There’s no way to sugar coat the disappointing performance of gold and silver in 2013. But has the current global economic backdrop provided some new and compelling reasons to own gold and precious metal equities?
IG: There are compelling reasons to be bullish on gold particularly, simply because there is a real worldwide crisis in fiat money. The unfolding crisis is similar to the 1930s, when the whole monetary system collapsed. We’re envisioning something quite similar to that collapse is now occurring.
We can see that there’s this huge move to gold, not only by countries like China and Russia and even the small “-stan” countries, but major investors are also taking up the physical metal because they can see this crisis unfolding.
TGR: Most of what I’m reading says that there just aren’t a lot of bids in the market right now for precious metals. Investment demand has waned, with gold falling consistently lower since its high in 2011.
IG: Investment demand is huge. The output of American Eagle gold bullion coins by the U.S. Mint is at record highs. Demand by the small investors for gold and silver is at unprecedented levels. The amount of gold that’s being imported through Hong Kong into China is at a record level.
TGR: Yet, at the same time, India, which is the world’s biggest gold consumer, increased the royalty from 6% to 8% on gold imports.
IG: It has, but India is notorious for gold smuggling. Most people are going to look for a way to go around those taxes. I suspect that there will be the same amount of gold imported into India through Dubai, but most of it won’t be declared.
TGR: You say you’re seeing strong demand for the physical metal, but investors have been getting out of exchange-traded funds (ETFs) and equities in mass numbers.
IG: With regards to the gold ETFs, I suspect that many investors are cashing in their paper claims to take possession of the physical. Yes, gold stocks, particularly the juniors, have been slaughtered, But once bullishness returns to gold, bullishness will return to gold equities. When you get this overly bearishness in markets, it’s usually indicative of a turn. I’m confident that we’re going to see a turn to the upside. I also believe that the turn in the stock market to the downside is about to begin.
TGR: I get the sense that there’s a prevailing sentiment that we haven’t hit a bottom yet in the mining equity space and that there’s another leg down before we see a move to the upside. Do you see that as well?
IG: That is always a possibility and it can’t be ruled out, but the precious metals’ fundamentals are as compelling today as they have ever been.
TGR: Could it be seasonality due to the summer?
IG: I don’t think so and anyway I am a long-term investor and I am essentially not concerned by short-term price machinations. As I have said, the most compelling reason to own gold is the crippling debt crisis, which has brought about the probability of a catastrophic end to fiat currencies.
TGR: Sean Boyd, the chief executive of Agnico-Eagle Mines Ltd. (AEM:TSX; AEM:NYSE), recently told Bloomberg that gold could reach about $1,800/ounce ($1,800/oz) within a year. What’s your medium-term outlook for gold and silver?
Ian Gordon: Who Killed the Gold Price?
Ian Gordon: I suspect it was akin to what happened in 1999. The then-governor of the Bank of England, Edward George, supposedly said that “any further rise in the gold price would take down one or more trading houses.” He said the rising price of gold was curtailed through the work of the Federal Reserve and the Bank of England. It appears that a bullion bank was caught offside on the short side and they had to take the price of gold down quite dramatically to allow it to cover.
I think something similar happened in April. I think it was manipulated to the downside. Goldman, Sachs & Co. encouraged its clients to short sell gold two days before this occurred.
TGR: Could it have just been an error?
IG: I always suspect the worst. There’s so much manipulation in all the markets as I see it.
TGR: That one-day drop caught even long-time gold investors off guard and shook their confidence. Is being a precious metals investor at this point simply about having the resolve to stay the course, or should even the ardent investors make adjustments to their gold portfolios?
IG: I’m extremely bullish on gold. Bullishness in gold, according to the website Market Vane, is at 40%, the lowest it has been since 2001. Bullishness in the stock market is at 70%, which is almost the highest it has been since Market Vane began tracking it. I see a reversal occurring here, for the gold price to the upside and the stock market to the downside.
TGR: There’s no way to sugar coat the disappointing performance of gold and silver in 2013. But has the current global economic backdrop provided some new and compelling reasons to own gold and precious metal equities?
IG: There are compelling reasons to be bullish on gold particularly, simply because there is a real worldwide crisis in fiat money. The unfolding crisis is similar to the 1930s, when the whole monetary system collapsed. We’re envisioning something quite similar to that collapse is now occurring.
We can see that there’s this huge move to gold, not only by countries like China and Russia and even the small “-stan” countries, but major investors are also taking up the physical metal because they can see this crisis unfolding.
TGR: Most of what I’m reading says that there just aren’t a lot of bids in the market right now for precious metals. Investment demand has waned, with gold falling consistently lower since its high in 2011.
IG: Investment demand is huge. The output of American Eagle gold bullion coins by the U.S. Mint is at record highs. Demand by the small investors for gold and silver is at unprecedented levels. The amount of gold that’s being imported through Hong Kong into China is at a record level.
TGR: Yet, at the same time, India, which is the world’s biggest gold consumer, increased the royalty from 6% to 8% on gold imports.
IG: It has, but India is notorious for gold smuggling. Most people are going to look for a way to go around those taxes. I suspect that there will be the same amount of gold imported into India through Dubai, but most of it won’t be declared.
TGR: You say you’re seeing strong demand for the physical metal, but investors have been getting out of exchange-traded funds (ETFs) and equities in mass numbers.
IG: With regards to the gold ETFs, I suspect that many investors are cashing in their paper claims to take possession of the physical. Yes, gold stocks, particularly the juniors, have been slaughtered, But once bullishness returns to gold, bullishness will return to gold equities. When you get this overly bearishness in markets, it’s usually indicative of a turn. I’m confident that we’re going to see a turn to the upside. I also believe that the turn in the stock market to the downside is about to begin.
TGR: I get the sense that there’s a prevailing sentiment that we haven’t hit a bottom yet in the mining equity space and that there’s another leg down before we see a move to the upside. Do you see that as well?
IG: That is always a possibility and it can’t be ruled out, but the precious metals’ fundamentals are as compelling today as they have ever been.
TGR: Could it be seasonality due to the summer?
IG: I don’t think so and anyway I am a long-term investor and I am essentially not concerned by short-term price machinations. As I have said, the most compelling reason to own gold is the crippling debt crisis, which has brought about the probability of a catastrophic end to fiat currencies.
TGR: Sean Boyd, the chief executive of Agnico-Eagle Mines Ltd. (AEM:TSX; AEM:NYSE), recently told Bloomberg that gold could reach about $1,800/ounce ($1,800/oz) within a year. What’s your medium-term outlook for gold and silver?
Gartman on Gold (will he be wrong)
http://finance.yahoo.com/blogs/talking-numbers/gartman-three-things-gold-investors-now-173247500.html
“Gold is still probably going to head lower,” says Gartman. “So, you’ve got to do something.”
Here are Gartman’s three tips on what gold investors should next:-
Reduce the size of your position:
Gartman says: “You always have to own some gold, but you don’t have to own as much as you have. - Sell call options against your gold:Gartman says: “That might be a way to mitigate your risk. If you have an account that allows you to trade options, take a look at the gold ETF (such as GLD). I think you have to sell some at-the-money calls to protect yourself on the downside. At least take in a little bit of income. Volatility levels have been rather high in the last several weeks. The price of an option is predicated upon how volatile the underlying instrument has been. Gold has been unbelievably volatile and it has been on the downside. Option premiums are going to be little bit higher. So, sell some options.
- Sell mining shares against your gold:Gartman says: “Sell the gold ETF short if you can take a short position. Or, if you can’t do that, sell short some of the mining stocks. The mining stocks have been horribly underperforming bullion itself. That might be a way to do it.
For those who think now is a good
time to average down their investment, Gartman warns, "Averaging down
is the carcinogen of investment. You have no idea how far down can be.
When you average down, you're averaging a losing trade. Try to do more
of that which is working and less of that which is not."
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