Gold "bloodbath" post-Fed, hits 2 1/2 year lows

[McDiggy]

Source: Wall Street Journal

Gold prices plunged below $1,300 an ounce to levels not seen in more than two years on Thursday, with investors stung after the Federal Reserve signaled it may reduce the amount of monetary stimulus it provides as early as this year.

“As a trader said to me a few minutes ago, it’s a bloodbath at the moment, with most technical support levels being broken, we could still see $1,280, then $1,265 being hit today,” said Austin Kiddle, director at Sharps Pixley, in emailed comments.

Read more: http://www.marketwatch.com/story/gold-prices-drop-as-fed-signals-stimulus-slowdown-2013-06-20?link=MW_latest_news

---

Gold just dipped its toe under $1300. If nothing else, watching the gold bugs jumping off of bridges should be fun.

[BumRushDaShow]

1. "Gold 'bloodbath'"

Oh for chrissakes. What a ridiculous hyperbolic term - "bloodbath". Where were they when it was $400/oz or even $35/oz? I suppose the schlock gold sellers in Glen BecKKKistan are suiciding themselves.

If anything, this is a sign that the dollar is gaining strength but it still has a long way to go.

[denbot]

9. Just looked at the charts.. Blood Bath covers it.

More then a hair cut, better than a crash.

[BumRushDaShow]

16. Down ~$60/oz from yesterday

But wish the damn speculated-on oil would go down at least $60/bbl already.

[denbot]

17. That $60 dollar move represents a 6k profit or loss per contract.

There is blood running down the trading floors.. Ah the memories.. Good times!

[westerebus]

2. And just why would I and my fellow DU gold bugs entertain that possibility?

For those who invest that's not our only avenue we peruse, but, by all means enlighten us.

[Javaman]

3. wait for glenn beck to rant about some sort of conspiracy. nt

[trusty elf]

4. .........

[IMG][/IMG]

[Yavin4]

5. Gold's plunge signals deflation

If the Fed pulls back on its stimulus plans, then a stagnant economy will start to recess. That means that more unemployed and lower wages.

That's the real story here.

[cstanleytech]

6. Hmm companies have already been keeping wages stagnant for years though for most workers

in order to divert the money to the stockholders and those at the corporate level so I really dont see how they can manage to make wages go any lower.
No, the way I see it is a lower gold price might mean a return to sanity might be on the horizon because lets face it the only ones making any money on gold are mostly already well off and are part of the end is near crowd and are also probably building secret bunkers to protect themselves from the government before it comes to get their guns.

[Yavin4]

12. "so I really dont see how they can manage to make wages go any lower"

Oh yes they can. American wages have a lot further to fall in order to be in line with world wages.

[meow2u3]

7. Gold was way overpriced

The sheer inflated value of an ounce of gold indicates, to me at least, that the gold peddlers were creating a bubble to make suckers investors buy at those hyperinflated prices, only for the price of gold to crash to earth, leaving them to eat a fortune in losses.

[Xolodno]

8. There was never a reason for it to be that high in the first place...

At the start of the recession we were under deflationary pressures...yet everyone was running around like a chicken with their head off screaming "Obama is going to print money by the tonnage!!! Everyone buy gold!!" And certain news outlets fed the fire to. And yes the fed did print money, but really to the rate every other central bank was, it was about maintaining a stable currency value.

Of gold course it went up, one being China and India wanting more gold in their currency reserves...they are afterall, developing nations and like all good developing nations, your currency reserves are mixed with foreign currencies and rare metals.

And then of course a lot of investors shoved their money because bonds weren't giving much of a return and putting it in other commodities and financial instruments was risky. They saw gold as stable and so long as you had fruit loops screaming "buy gold the country is going to tank" they figured a good return as well (personally, if I thought the country was going to collapse, I'd would do what every government official/military officer would do, grab all the rare gems I could get my hands on, they are small, can be hidden easily and store a lot of value)

Now that other financial markets are returning, companies starting to invest again, etc. they are pulling their money out...and so gold will go down to what it should be. And the doomsday gold horders will look like a bunch of idiots like the last time this happened.

[wordpix]

10. maybe the environmental bloodbath caused by gold mining will stop for awhile

That's one good thing that would come out of this.

[former9thward]

11. Real gold bugs boulght in the low hundreds.

I doubt they are jumping off bridges.

[roamer65]

24. Bingo.

[marble falls]

13. Glen Beck might be crying for real right now. Good.

[booley]

14. so that thing we all knew was going to happen.. happened

Gold was in a speculative bubble.

Bubbles eventually burst.

This was as inevitable as libertarians ignoring this to say we should be on the gold standard.

[Yavin4]

18. Or, this is a deflation signal brought on by the Fed removing stimuli

Given congress' inaction, the only thing boosting the economy has been the Fed's stimuli. Without that, we fall into a deflation hole.

Stocks are down as well.

[DCBob]

15. Idiots finally realizing "socialism" isnt going to destroy the American economy.

Stocks are plunging too.. btw.

[Mr. David]

19. Heh. I buy gold for a living..

And people are still *STINGY* on eBay on how much they want to sell their overvalued gold..

We have no gold in our inventory and haven't for the last two weeks. It'll be a bargain buy at this point...

What happened to the QE4 that was supposed to make the gold go up to 2000 by the end of the year... they're $700 off the mark today.

[Festivito]

20. The us economy is strengthening.

Under republican presidents the price of gold goes up under democratic presidents the price of gold goes down and for each dollar we can buy more gold.

[rucky]

21. So if we buy gold now, but a Republican is never elected again

I'd still consider that a great investment!

[Festivito]

22. Investments usually desire to make money.

You do not divulge your reasoning for calling it a good investment even if you lose money.

[Psephos]

23. Gold is sleeping. Fiat money is dying.

Gold is sleeping because the gold markets are being actively manipulated by central banks that do not possess the gold that's listed as assets on their books. When that becomes common knowledge, it's game over.

Earth's supply of gold is fixed. Earth's supply of fiat money goes up by millions of dollars per minute. Price law says the value of a useful good is proportional to its scarcity. More supply = less value. It's not hard to see how this predicts the future value of gold vs. fiat money.

Currency is supposed to represent the creation of value. Labor, creativity, effort, ingenuity, or a tangible asset.

When central banks and governments simply print fiat money that does not represent anything of value, they commit fraud. The government buys real goods and services - things that people worked to produce - with Monopoly money that they printed.

If you printed your own hundred dollar bills and tried spend them at Sears, you would go to prison.

[roamer65]

25. Gold still shows the degree of monetary debasement...

That has occurred since we left the gold standard. Gold was set at $20.67 an ounce until we left the gold standard in 1933. Now it takes around $1300 dollars to buy the same ounce of gold. That is fairly severe currency debasement for only 80 years time.

You need currency debasement to build an empire, just ask the Romans, British and now the USA.

[Warpy]

26. Latest gold price is 1298, up 20 from Friday's low

so the bargain hunter gold bugs out there still believe, I guess.

The dollar is up and crude spot market futures are sharply down.

I think we're seeing a headlong rush into t-bills now that they're paying a princely 2.35% per 10 year bond.

Since the dollar is up again, expect another equity sell off on Monday as profits are taken by foreign institutional investors.

Deflationary pressures still exist and they're getting worse every day the rich get richer and labor gets more desperate. However, the rich are terrified of inflation, any inflation, and will continue to exert pressure to keep these idiotically lopsided policies in effect.

[roamer65]

27. The QE won't stop.

The government cannot have the interest rate paid on treasury paper go much higher and stay solvent. The Fed will have to continue to buy bonds to force the interest rate down for many years to come. The money supply will go through the roof and we'll all pay for it through the tax known as inflation.

[Warpy]

28. Yes and no. Inflation benefits working people who spend everything

and take on debt to stay afloat since it whittles down that debt over time. Inflation is what will eventually save all the kids graduating with massive student loan debt hanging over them.

It hurts savers and investors, especially savaging retired people with modest savings that might have seen them through had the inflation rate not gone up again.

What we need to try to force by leaning on our Congresscritters is a wage structure indexed to inflation that is determined by a fixed market basket of goods and services that no future Greenspan can tinker with to hide the true inflation rate. Lack of these two things is what has absolutely killed us over the last 40 years.