Precious metal drops $26, still dropping in Asia

Gold dropped $26.16 on the New York Exchange  yesterday (Thursday). The descent began at opening, made a minor fightback early afternoon, and then collapsed back to $1646 at the close. In just 10 minutes of Asian trading today (5.11 am GMT) the metal dropped a further $4.68, then reversed. It is currently at $1641.87

Gold dropped back far through its 200 day moving average yesterday, in a plunge that shows once again how no market on the planet is currently behaving naturally. The intuition would always say that the US teetering on the verge of a fiscal cliff – Congress having just withdrawn a voted compromise – would get gold on the up. Not in 2012.

I don’t have the numbers or the graphs to hazard a guess at what’s going on here: but the primary long-hold trend in gold is still very much UP.

I’m not qualified to offer advice, but the conclusion for anyone paying attention is obvious…Asia is buying already.

Stay tuned.


  1. Usually roll on here to get a different take on EU banking…. CAN YOU please take Piers Morgan back…. guy needs to leave my country. What a tool !!!!!

  2. Can’t have Gold looking good at years end.
    Shake out the weak hands and put off people taking a serious look at Gold for real wealth protection.
    For those with a strong feeling in Gold as a wealth protector, this is a buying opportunity.
    I am talking about physical Gold in your possession.
    I might add that, Silver is a good buy too.
    This is my opinion as things stand.

  3. If you buy gold metal, beware of tungsten electroplated with gold. There is now more “gold” in circulation than has ever been mined. It’s very difficult to be sure, (except with X-rays): they have almost exactly the same specific gravity.

  4. Annoying stuff but a carbon copy of last December’s snack down. Designed to shake out nervous private holders. Oddly, Central banks are continuing to stack physical. I wonder why…

  5. Most of what is in circulation is paper certificates. The tungsten stuff is mostly in the bank of England and the Fed in new York. For photo ops about how everything is “a-ok, carry on, nothing to see here etc”

    I’d be far more concerned about owning paper gold and trying to exchange it for the real thing. Own it in your hand or not at all.

    Then lose it in a “boating accident” ;)

  6. My view has always been that Gold would drop sharply before it rocketed.

    Why ?

    Because ‘paper’ gold is distorting the market. Investors start to sell their gold contracts and physical gold falls with it.

  7. The drop in prices for physical in the last month seems almost non existent in comparison to the paper price.

    If the physical and paper markets diverge, that is not just a signal to buy but also a signal to get ready, something big and bad is coming.

  8. …year-end close on equities/new year closing to take of advantage of tax breaks also relevant. Anyone notice the almost 100 point drop on the S&P around midnight last night? Some slick hands quickly saw it pushed back up, but I’m inclined to think someone big closed their position. I’m also inclined to think that the capital released from any exit from equity will have to go somewhere… I’d rather my fiat reserves was transferred into something a little more tangible – such as gold – now that we have all survived the Mayan mayhem, yet await the fall off the edge our fiscal futures.

  9. You don’t check Gold with X-Rays, you use ultrasound. This spots gaps, inclusions and other metals very quickly. About £100 for the machine.

  10. @Loafer: I too have been cashing in some modest gains and putting them into physical. Capital in paper tems retained. We shall see.

  11. Given the amount of paper gold that is being traded and the fact the no one is really sure how much rehypothecation has occurred it is entirely feasible that a malign government could ‘create’ enough paper gold to allow the market to be beaten down in the way we see here.

    Physical gold is the only way to go it seems, although you can be creative here. Why not rent a village hall and run a ‘we buy your gold’ day and buy scrap gold from the public – as long as you know what you’re buying you can buy well below the market price and still give people a better deal for their scrap than the high street rip off merchants.

  12. Fiscal cliff higher taxes and spending cuts is bearish for gold price. End of year money managers book profits in precious metals,every year. Next stop for gold is 1550 with a few bounces thrown in along the way. That’s the technical picture. Never try to rationalise financial markets for they are manipulated by the gang at the top. Set aside your own beliefs and watch gold sold down to 1550 in no time!

  13. Why should it stop at 1550? There is a huge amount of profit in there for the taking so take it while it’s there and enjoy the fruits. Oh and don’t forget the vat, the capital gains tax and the high dealer margins.
    For the time being Gold has had its day, but the greedy are still trying to talk it up by persuading others to buy. My advice is stay away or you’ll wake up one morning soon with a very short haircut.

  14. This golden ventriloquism makes people like me who have, so far, controlled their urges nnnnervous. All of history and theories of value support the idea that it’s the real deal in this cinerama of currency debasement, and yet….. think I’ll just hold on a little longer…

  15. Asia is buying…. i am still looking for the seller ! ( not China, not Russia )…

    Do you know the seller? NOBODY KNOWS THE SELLER OF GOLD TO ASIA…

    PONZI/GOLD… ETF;s… Central Banks… THE NEXT WAR.


  16. Al ways remember what the Rothchild’s did at the Battle of Waterloo. The market was watching to see what they did. When they started selling they precipitated a panic in gilts. ‘The Rothchild’s are selling, we have been beaten by Napoleon. Sell!’. The Rothchild’s calmly bought into the panic with both hands and made a fortune. Why? Because they had carrier pigeons coming over from Flanders that told them Wellington had won. They had a plan on how to profit and they did!

    Same game with gold today. Am I seliing? Am I hell. I have sovereigns thta cost me as little as £3/10 shillings 50 years ago. I am content!

  17. Pingback: John Ward – Breaking : Gold Falls Off its Own Cliff – 21 December 2012 | Lucas 2012 Infos

  18. When it falls to those levels…china steps in to buy…forceing price back up…so don’t expect much below 1550

  19. I note one large dealer was out of 5kg and 1kg silver bars and virtually no stock of 1oz gold coins.
    I bet the Chinese are laughing their heads off when they see these paper falls and hoover up the physical.

  20. Who’s selling? The mines are selling!
    Almost as much new gold is mass produced annually in opencast mines as there is paper money printed and it’s sold to idiots who think the value is going to double every year. Whereas the top was c1 year ago since when it has lost c18%!

  21. Like every other market today the gold market is manipulated. The days of free markets and true price discovery are long gone. The US, EU, UK and Japan are all in a race to the bottom with fiat money. Their central banks printing trillions. Gold is the barometer of what’s going on with fiat debasement so it stands to reason that its smacked down. Where all this will end I certainly don’t know but you can bet your boots it won’t be the elites getting the short end of the stick…

  22. A tool is useful my friend, in whatever sense you use it. Moron is not a tool: an anagram of his name is Romping Arse. That nails it.

  23. X-ray back-scatter units will reveal thin dissimilar-metal layers, such as gold over tungsten, very reliably. But it’s very expensive equipment (I know, I use it), so it’s good to know cheap ultrasound’s effective too.

  24. So the visit to a Bank of England gold vaults by the Queen and Duke of Edinburgh was a PR exercise (by the BoE)?

    “The Queen and the Duke toured vaults piled high with gold bullion worth billions of pounds and briefly inspected some of the slabs”

  25. No need for all this fancy technology- the queen has now inspected it so that’s good enough for me.

    Like she ‘inspected’ the Cabinet recently.

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