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The Bullion Report For September 28, 2011: Finding Bottom

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  • The Bullion Report For September 28, 2011: Finding Bottom

    Precious metals sold off and sold off hard last week. Gold saw one of the worst price declines in recent memory. Silver shed a large percentage of recent gains, echoing losses seen in the 1980s and sales from earlier this year. Is this the end of the road for these markets? Will this finish the gold and silver bulls? I think the answer is no.

    [center]
    [i]Past performance is not indicative of future results.
    ***chart courtesy of Gecko Software[/i][/center]

    I see many reasons for a potential rebound in gold and silver, but first let's dispense with the key points that likely led to last week's plunge. Things are still a mess across the globe. There have been ongoing attempts to put the brakes on economies that are headed right over the cliff, Greece being the first name that comes to mind. All the chaos in the Euro zone and US spells trouble for investors as confidence plummets. Unfortunately, the tug-of-war between the currencies left many commodities as the real losers last week.

    The financial uncertainty caused by debt issues is far from over. The long term picture remains really cloudy in most investors' eyes. How will exports be affected? Will the weakness in developed nations destroy demand for basic commodities? Will this latest round of bailouts and bargaining become a sticky mess that will stall recovery? These proverbial straws are piling up on the backs of equities and other markets and that weight finally pushed things lower last week. Confidence plummeted in markets both at home and overseas. The selloff in the Dow and S&P were just the tip of the iceberg.

    Doom and gloom over Greek default led to the drop in the unified currency of the European Union - the euro. The US dollar benefits from that perceived weakness as investors shift into "less risky" foreign currencies. For that time, the US dollar was considered the best of the worst. Its strength was a red "x" on commodities, leading to a sector-wide liquidation of longs. That was only the start of trouble for precious metals.

    The overall plunge in markets last week had a secondary effect. Investors and funds that lost money when things nosedived needed to get liquid fast to cover margin calls. Since some precious metals holdings are likely still up year-on-year, they become the go-to asset for selling when someone needs to raise cash. This was the probable cause behind one of the sharpest declines in gold prices since the 1980s. The same thing has happened on a micro level with consumers. Things have been so bad for so long, in terms of a delayed recovery from the initial collapse in 2008, that really only one place has stood as a temple in which to try to preserve assets. In my eyes, people are tapping into their final bastion of investment to hold on and cover other losses as financial chaos continues.

    The other monkey wrench in the works was another round of margin rate hikes, one from the CME Group and at least one other on the Shanghai Gold Exchange. These performance bond increases can do two things: they can shake out smaller investors or weak longs, and they can serve as a potential motivator for profit taking, since the return-on-margin calculations might paint a less desirable picture. This is especially true when there are other clouds on the horizon - some funds and bigger investors might just want to sit on the sidelines as everyone works on their balance sheets.

    [b]Summary[/b]

    Whatever the motivating factors, there seem to be more than a few people looking to dip their toes back in this week. Bargain hunting will be the name of the game and that is where markets like gold and silver can hope to find support. The weakness in both markets was not due to fundamental factors like a large gold sale from a central bank or a weakening demand scenario for physical bullion - they were just caught in the same downward spiral as other commodities. Has the gold haven been breached? I don't see it that way. In fact, the continuing volatility and bailouts and uncertain future make me think this is just another bump in the road - a healthy correction, if you will. The idea that most investors were pulling out to get cash to cover other losing assets just reinforces this notion. Gold and silver are probably going to recover from this, and that is more than I can confidently say about certain economic issues at the moment.

    [i][b]For your FREE gold trading kit, call (888) 472-7188.[/b][/i]

    [b][i][u]Disclaimer:[/u][/i][/b] The prices of precious metals and physical commodities are unpredictable and volatile. There is a substantial degree of a risk of loss in all trading. Past performance is not indicative of future results.
    [url="http://mintcollc.com/newsletter/"]Weekly Bullion Report[/url]

  • #2
    The war between the rich and the poor, the only two classes in the US, is now on. If the rich few, 1 or 2 percent hoard all the wealth, their is no reason for the other 98% to seek work or capitalistic adventure, none so what ever, the economy is defunct, and 1 or 2 percent have to carry the entire government is the reality check, by tax being taken off the slaves wages, and put on the weatlh of the rich alone... gold now has to be taxed, as the trading of gold.

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    • #3
      you tell him azzido

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      • #4
        bullion ****, that looks like a double top to me.

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        • #5
          cant eat gold, two million children in africa are being left to die, starvation. if they had all the gold/diamonds, as they have lots, its not any good to them..

          isnt africa were the diamond hoarders chop off arms if they take one of their own diamonds, slaves to the diamond traders. what religion is that, that hoards diamonds?
          Last edited by joe_alzado; 09-29-2011, 06:43 AM.

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          • #6
            azzido, they need to trade their gold for food.
















            roll my eyes

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            • #7
              hard to trade what is stolen from them, what religion is it that steals their diamonds?

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              • #8
                Oh, that's the Muslim religion.

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                • #9
                  Hahaha, ok... you just set yourself up for that one... Get the crayons out... Your grasp on Economics is a little flawed Alzado. How can you steal diamonds when you OWN the diamond mines from which they are mined. Maybe Africans should be more wise with the rights to harvest their country's natural resources.

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                  • #10
                    Poor little dicordianist gave him self away to the superstition of ignorance to the World.
                    Who owns the mines little discordianist, when countries soo often had NO (europian) ownership rules of land ownership, but then people come in and make deals with corrupt political leaders and suddenly own land that nomades tranversed over for thousands of years. Land is taken from people by, the simple signing of a paper, and the diamonds are then taken, often with slave labor of the people who once tranversed over the land as nomades.

                    Isnt israil one of the biggest trading nations of diamonds, even though they have NO mines, they trade diamonds? Tell US discordianist, where, where does israil the terrorisitic state, get its dianmonds that it trades?
                    The natives of south america dont own their own land, it was taken from them by others, and they are now strangers in their own land. People of the Middle east dont own their own oil, its now owned by foriegn interests, they are strangers in their own land. People of Asia dont own their own gold, its now owned by foreigners, they are strangers in their own land.

                    Its much the same, the people of the United States dont hold their own national debt, but they owe it, its on their heads/backs.
                    they are strangers in their own land themselves.

                    The say now, at the onslaught of the great depression in the United STates, only 50% of the farmers, owned their own land, a bad deal as most were only share croppers and cash rentors, but we would say if that was bad then, is it worse today. they are only strangers in their own land, or are they, slaves.


                    WE dont think, your as smart, as you want to think you are, discordinist. your lurking to make a point, but we doubt it to be, valid.
                    Last edited by joe_alzado; 09-30-2011, 06:06 AM.

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                    • #11
                      Its much the same, the people of the United States dont hold their own national debt, but they owe it, its on their heads/backs.
                      they are strangers in their own land themselves.


                      All true in 1913 the fed came in a now we have to buy our country back.

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                      • #12
                        Originally posted by joe_alzado View Post
                        Poor little dicordianist gave him self away to the superstition of ignorance to the World.
                        Who owns the mines little discordianist, when countries soo often had NO (europian) ownership rules of land ownership, but then people come in and make deals with corrupt political leaders and suddenly own land that nomades tranversed over for thousands of years. Land is taken from people by, the simple signing of a paper, and the diamonds are then taken, often with slave labor of the people who once tranversed over the land as nomades.

                        Isnt israil one of the biggest trading nations of diamonds, even though they have NO mines, they trade diamonds? Tell US discordianist, where, where does israil the terrorisitic state, get its dianmonds that it trades?
                        The natives of south america dont own their own land, it was taken from them by others, and they are now strangers in their own land. People of the Middle east dont own their own oil, its now owned by foriegn interests, they are strangers in their own land. People of Asia dont own their own gold, its now owned by foreigners, they are strangers in their own land.

                        Its much the same, the people of the United States dont hold their own national debt, but they owe it, its on their heads/backs.
                        they are strangers in their own land themselves.

                        The say now, at the onslaught of the great depression in the United STates, only 50% of the farmers, owned their own land, a bad deal as most were only share croppers and cash rentors, but we would say if that was bad then, is it worse today. they are only strangers in their own land, or are they, slaves.


                        WE dont think, your as smart, as you want to think you are, discordinist. your lurking to make a point, but we doubt it to be, valid.
                        Poor little Alzado has yet to look up the definition for superstition. You continue to use words that you don't understand in an attempt to make "valid" points. In no part of your response do you make a "valid" anything. Also, you hide behind anonymity in a media that already allows for plenty. How many of you are there that use your alias? You say my point is lurking but allow me to hold a mirror...

                        In the first part of your response, you tell me about land ownership. By your tone, I can infer that you deem it to be unjust. However, the very word you use (steal) [I]implies[/I] ownership. Those nomads wondering about would never have any kind of need for diamonds or gold. Like you say, you can't eat gold. It is the very system you despise that allows for trade to make their own nation wealthy or destroy them depending on how they use trade. Without the demand from foreigners, your struggling countries would be worse off. Trade can increase any nation's economy. What that country does with that tool is ultimately of their own creation. But why should I expect you to know the implications of a word when you don't even know their definitions.

                        What exactly is [I]your[/I] point here? You're arguing against the way of the world... I never said this was just, but I did say they weren't "stealing." My point was clear. Yours, however, isn't.
                        Last edited by Discordianist; 10-02-2011, 08:28 AM.

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                        • #13
                          Which one of you Alzados will respond this time? Do you play rock, paper, scissors? Flip a coin? Choose a number? Draw straws?... Or is there some divine choosing for which one of you responds?

                          What happens when your religious teachings hold no answers for modern questions? Do you use logic when divinity fades? Why not just use logic [I]all[/I] of the time superseding religious constraints? How can you expect to be a freethinker arguing concepts outside of the box when you only use your logic part of the time?

                          You call me ignorant (poorly, trying to use superstition with it?) yet you lack the ability for free thought. If ignorant I be, I came there on my own. You arrived at your ignorance from understanding a corrupt source of history. That history will always be corrupted, but one's logic can only grow through DISCORD. In ten years, you will be arguing with that same corrupted history while my logic has progressed. Tell me again who the grasshopper is and always will be?

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                          • #14
                            Originally posted by Discordianist View Post
                            Poor little Alzado has yet to look up the definition for superstition. You continue to use words that you don't understand in an attempt to make "valid" points. In no part of your response do you make a "valid" anything. Also, you hide behind anonymity in a media that already allows for plenty. How many of you are there that use your alias? You say my point is lurking but allow me to hold a mirror...

                            In the first part of your response, you tell me about land ownership. By your tone, I can infer that you deem it to be unjust. However, the very word you use (steal) [I]implies[/I] ownership. Those nomads wondering about would never have any kind of need for diamonds or gold. Like you say, you can't eat gold. It is the very system you despise that allows for trade to make their own nation wealthy or destroy them depending on how they use trade. Without the demand from foreigners, your struggling countries would be worse off. Trade can increase any nation's economy. What that country does with that tool is ultimately of their own creation. But why should I expect you to know the implications of a word when you don't even know their definitions.

                            What exactly is [I]your[/I] point here? You're arguing against the way of the world... I never said this was just, but I did say they weren't "stealing." My point was clear. Yours, however, isn't.
                            One of the best respones to aziddo in a long time.

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                            • #15
                              Discordianist I feel for you man is you can figur Alzados out you"l be one up on us good luck--------------------------------dave
                              Last edited by davidm479; 10-03-2011, 08:17 PM.

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