Let’s recap people:
*Federal Reserve says they want to quit printing money
*Goldman Sacks cuts expectations on gold (forcing a sell off)
*500 tons of paper gold dumped on Friday (more pressure for sell off)
*DHS insider says collapse will happen in spring after metals get slammed (he’s right so far)
*Another insider says planned collapse to happen on April 25
*Those mysterious 100,000 put options expire on April 20 & April 25
The two-day crash in the price of gold is one of the most devastating asset sell-offs ever witnessed on Wall Street, right up there with the stock market crash of 1987. What makes it that much worse is no one is exactly sure why it happened.
And until investors get some answers, the selling may continue, they say.
“Unless you have a catalyst, ‘cheap’ gets a lot cheaper during a crash in price expectations,” said Keith McCullough of Hedgeye Risk Management. “Old Wall calls it ‘catching a falling knife’ for a reason.”
Gold posted its biggest two-day dollar drop ever and its biggest percentage drop since 1980 when the carnage settled Monday. Prices rebounded slightly in early trading Tuesday. It’s now down 26 percent from its 2011 high. (For the latest price, click here.)
“We are running out of superlatives to attach to the gold price move since last Friday,” Nomura analyst Tyler Broda wrote in a note to clients. “The rarity of a move like this is notable.”
Panic in the gold and silver pits of the Comex.
Gold and silver see the worst two day drop in 30 years.
“I think the last $20 has been margin selling. The market is falling like a knife. People are saying, Get me out now,” Phoenix Futures President Kevin Grady said. ”You’re also seeing people selling energy profits to pay for metals losses. You’re seeing a tremendous amount of gold liquidation today.”
Heavy outflows on global gold exchange-traded funds, which cut holdings to their lowest in more than a year, could also mark the end of a love affair between gold and investors.
“The fall in gold prices is reminiscent of some of the market capitulations seen during the global financial crisis when leveraged investors were required to sell assets to maintain balance sheets and preserve liquidity,” said Ric Spooner chief market analyst at CMC Markets in Sydney.
Apr. 10, 2013
With the precious metal inching closer to a bear market, the firm tells clients that now’s the time to short gold.
Goldman slashed its short- and long-term gold forecasts, a move that comes about six weeks after the firm had already turned even more bearish on the metal. Goldman now sees gold ending the year at $1,450, a forecast that came down from $1,600 at the end of February and $1,810 prior to that.
Goldman sees gold falling to $1270 by the end of 2014.
“We see risks to current prices as skewed to the downside as we move through 2013,” Goldman analysts Damien Courvalin and Jeffrey Currie told clients. “In fact, should our expectation for lower gold prices continue to prove correct, the fall in prices could end up being faster and larger than our forecast.
According to Business Insider, the recent purchase of 100,000 put options by a mystery investor has a lot of people on Wall Street talking…
According to Barron’s columnist Steven Sears,someone made a big bet against the financialsETF yesterday (ticker symbol XLF), and it has everybody buzzing.
The trader bought 100,000 put options on the ETF (a put option increases in value when the price of the underlying asset, in this case, the ETF, goes down).
To put that number in perspective, Sears writes, “Few investors ever trade more than 500 contracts, so a 100,000 order tends to stop traffic and prompt all sorts of speculation about what’s motivating the trade.” According to Sears, the trade “has sparked conversations across the market.”
Reportedly, those put options expire in April.
And as Art Cashin of UBS has noted, there was also another extremely large bet that was placed recently that is banking on a financial crash within the next two months…
A Very Big Bet In A Somewhat Unlikely Instrument – My friend, Jim Brown, the ever-alert consummate professional over at Option Investor pointed us to a rather unusual trade. Here’s what he wrote in last night’s edition of his valuable newsletter:
In past years I have reported on trades that were so large it appeared someone had inside knowledge of a pending event. Sometimes those were massive put positions on the S&P. A new trade just appeared that suggests there will be a market event in the near future. Last week somebody put on a call spread on the VIX using the April 20 and 25 puts. They bought 150,000 contracts for a net of $75 per contract. That is an $11,250,000 bet that the VIX will move over 20 over the next 60 days. You would have to be VERY confident in your outlook to risk $11 million on a directional position with the VIX at five year lows and the markets trying to break out to new highs.
DHS Insider – Watch The Metals, When They Dip Things Are About To Happen – The Next Economic Shock Was Coming And The Metals Would Be Taken Down In Advance Of That Event. Are We Getting Close?
The last update from DHS insider said things would be begin to break down around the spring time frame. The next economic shock was coming. He didn’t know exactly when but a source told him the metals would be taken down in advance of that event. Are we getting close?
DH: How soon do you see things taking place?
RB: They already are in motion. If you’re looking for a date I can’t tell you. Remember, the objectives are the same, but plans, well, they adapt. They exploit. Watch how this fiscal cliff thing plays out. This is the run-up to the next big economic event.
I can’t give you a date. I can tell you to watch things this spring. Start with the inauguration and go from there. Watch the metals, when they dip. It will be a good indication that things are about to happen. I got that little tidbit from my friend at [REDACTED].
Here is the series from DHS insider where he lays it out pretty clearl:
The latest from “DHS Insider”
More from DHS Insider
DHS Insider: Obama’s cyber warriors & preparing for collapse
And I forgot about this update after his update mentioning to “watch the metals”
DHS Insider update: It has begun
DHS Advising Local PD’s of General Economic Collapse by the end of April
Spot gold prices fell to a fresh two-year low in Tuesday’s Asian trading, dropping to $1322 per ounce, before rallying back above $1386, as stock markets extended yesterday’s losses.
Silver dropped to its lowest level since September 2010 at $22.10 an ounce before it too recovered some ground. Oil was down on the day by lunchtime in London, while copper ticked slightly higher.
Since Friday morning, the value of total above-ground stocks of gold bullion, estimated by metals consultancy Thomson Reuters GFMS at around 174,000 tonnes, has fallen by more than $1 trillion.
Based on PM London Fix prices in Dollars, gold on Monday was down 9% from the Friday afternoon fixing, the biggest one-day drop since February 28 1983, when gold dropped 12% in a day. That in turn was the biggest single day drop since January 1980, when gold fell more than 13% one day after hitting its then all-time high of $850 an ounce.
Amazingly, on Saturday 41-year market veteran Bill Haynes warned King World News that we were already on the verge of seeing major shortages of available retail bullion products. Well, there are already massive shortages of bullion products. Haynes also updates KWN readers globally on the stunning margin which gold and silver buyers are outpacing sellers. Below is what Haynes had to say in this extraordinary interview.
Haynes: “Eric, on Monday there was such chaos in the markets that some of the larger wholesale dealers had to shut down at various times because of the massive demand on the buy side. These wholesalers simply had to quit taking orders not only because of the demand, but also because of the enormous price volatility….
if the Fed, as I suspect, is closer to the bottom of their monetary magic toolbox than currently believed – it would put the economy, & the financial markets, into potential jeopardy.
Given the almost-record-breaking drop in gold in the last few days, we wonder what is coming?
This is what it looked like in Q3 2008…
and in 2011…