Federal Reserve is preparing a trap, a golden trap to lower price of gold

Discussion in 'Trading' started by Labor, May 24, 2012.

  1. Labor


    Hello peers

    I smell a trap, after reading countless articles about naked short selling of JP morgan and other vestigial organs of the Fed throughout the years.

    I came to conclusion that Fed wants price of gold and silver as low as it can be and rumors are they largely succeeded because gold would be 3000+ if it wasn't for Fed efforts

    Now that none of the fiscal problems are fixed, on the contrary we have even more problems and bigger debt. How do you explain a drop in gold?

    Consider this, regular people are not into buying gold. Gold is NOT a bubble. Fiscal problems are not fixed.

    So why is Gold dropping?

    I believe that through magic of naked short selling, Fed will manage to bring price of gold even lower. In order to try and force natural selling of gold holders. All of this will work until it completely blows up and gold shoots to 3000+

    Market manipulation short and simple, and I personally believe this will blow up by end of 2012.

    I am not going to sell my gold bullion which I bought at 1600, not for at least 2 years, until I see how this mess will end.
  2. The basic premise is wrong: gold is, in fact, in a bubble.

    Any asset where the intrinsic value is < 10% of the current selling value is, by definition, bubbling.
  3. Labor


    No your are wrong because numbers can't be trusted anymore.

    Consider this, there is a well established theory that holding gold bullion will not in fact make you money, nor lose you money.

    There was a study that shows that an ounce of gold in Roman Times will buy you a high quality Toga, pretty decent sandals, and a good feast with overnight room shelter.

    Today 1 ounce of gold buys you exactly the same thing.

    What does all of this mean.

    Even if you are correct and gold is a bubble, or if Fed manages to lower the price permanently or for very long long time.

    That means price of house, food, oil, life in general, has to come down appropriately and stay down.

    I don't see that happening by the way.
  4. Labor


    For gold to come down and STAY down means your dollar in your pocket will have to buy you more.

    And I don't see that happening.

    I don't see dollar growing in value for long term. I just don't see it.
  5. In ancient Rome, a loaf of bread and a litre of wine (1 meal) cost .5 denarii (silver) There are 25 denarii in 1 gold Aureus. There are 3.89 aureus in 1 oz of gold.

    So at $1600 per oz for gold divided by 3.89 divided by 25 times .5 = $8.22

    So a loaf of bread with litre of wine cost $8.22 in ancient rome. Today, in your local grocery store, a loaf of bread is about $3 or $4 and a bottle of wine is about $4 or $5, so basically in ancient times 1 oz of gold would buy you about 182 loaves of bread and 182 bottles of wine. Today, that same gold will buy you exactly the same amount. So how are you getting the intrinsic value is less than 10% of its selling value?
  6. The intrinsic value of the USD doesn't have come down, other currencies have to, which will cause gold to plummet.
  7. Why the he'll does the Fed care enough to drop the price of Gold. Why do paranoid conspiracy theorists always keep harping that their SPOUSE...(married to Goldie-till bankruptcy do we part) is so wanted by everyone?
    Nobody wants your ugly wife goldie! You can keep her. She's old and wrinkly. You are delusional.
  8. Get your facts first, and then you can distort them as much as you please.
    -Mark Twain


    At no point when you started this thread did you point to a single number or report or statistic on PA in gold this last year. Had you come here with a deep analysis of COT, Bank Participation Reports, LME warehouse numbers I would have more respect for this argument. But no you came here as a Holder in an asset that is falling and justify it's decline with theory's that it is being manipulated. You claim that the dollar rise is not sustainable and you could be right but short term and for this last year dollar has been king.

    Here are facts and not opinions.

    Dollar and Gold are correlated Inversly

    India is a big comsumer of Gold and if you look at USD/INR chart and their economy at the moment cost are high domestically and the demand for Gold is subdudded

    Jewellery demand in India is very poor because prices are high and wedding season is almost ending

    Gold has broken several technical supports over the last two months that warrents a temporary consolidation or decline.

    The rupee, which plays an important role in determining the landed cost of the dollar-quoted yellow metal, hit a record low against dollar for the seventh straight session on Thursday

    QE and Inflation have been a major driver for Gold and as long as we don't come in with more Easing Gold will not show the massive return it has been giving investors these last 5 years

    And last but not Least look at a simple chart to see why gold is going down in relation to the currencies RIGHT NOT IT'S BECAUSE DEMAND FOR DOLLAR WANTED MORE THAN GOLD. (simple gold/Eur/Dollar chart attached)

    Gold has a nice support here because of a triple bottom but if EU continues to deteriorate and multiple countries leave deposits will continue to flee to the dollar. I have a price target on gold of 1450 but If EU gets their house in order or we along with other central banks steps in with easing than you got in near a bottom for another run.
  9. Subdued*

    Apologies, Just in case we have those type of people hear who miss the post but look for a new line of argument like the lack of spelling comprehension

    I come in peace :)
  10. Labor


    You think fed and others never lie or have hidden agenda

    that's cool brother all the power to you

    I think that kind of thinking is moronic, but I respect the fact that you can have your own opinion
    #10     May 25, 2012