Gold:longest bull run in 90yrs- demand manipulation for the bulls

[tmarket]

This is the best article on gold demand price manipulation and general market condition that I have read. Nothing sensational or maniacal or conspiratorial, just the description of the stated goal of holders and producers of gold to keep up the demand and keep the gold rush going. There is often a claim made by gold bugs that there is a giant conspiracy to keep down the price of gold that they often neglect the reality of the other side of the equation:

As much as half of the gold in exchange-traded funds may be held by individual investors, according to BlackRock, the world’s largest money manager. “Your little guy is going to get hit by the doorknob on the way out,” Williams said.

“Our primary mission was to find every button we could push to stimulate demand,” Burton, 59, said in an interview in London.
While the World Gold Council was not first in the world to develop an exchange-traded product backed by gold, bringing it to the U.S. market was crucial, Burton and Thompson say.
A malleable metal, gold isn’t really consumed. Virtually every ounce of gold that’s ever been mined is still around: an estimated 165,000 metric tons. Peter Bernstein, the late economic historian, cited a calculation that all of the world’s gold could be melted to fit into a single oil tanker in his 2000 best-selling history of the precious metal, “The Power of Gold.”
From its inception in 1987, the World Gold Council had concentrated on promoting gold jewelry, the industry’s traditional anchor. Very little was done to push gold as an investment, according to Kelvin Williams, executive director of marketing for AngloGold Ashanti Ltd. until 2006.

One of the council’s highest-profile investment campaigns involved a Turkish television game show aired in 2000. Contestants competed to win their weight in gold as two women paraded in skirts and bikini tops covered in coins.

Other promotions encouraged Muslims to use gold as a way to save for their once-in-a-lifetime pilgrimage to Mecca. The council also lobbied India and Italy to sell gold over the counter at post offices and banks.

The World Gold Council hired consulting firm Bain & Co. to review its operations. The mission grew by early 2002 to include a plan that would be dubbed “Project Sun” to study how to create an ETF, according to Thompson.

http://www.bloomberg.com/news/2010-...iners-push-every-button-in-tale-of-tears.html

 

[nazzdack]

Quote from tmarket:
----This is the best article on gold....that I have read.

?....then the "top" must be here and now. The article summarizes the market. It can't "divine" higher prices. :eek:

 

[clacy]

I was in and out of GLD for much of the run up, so it worked pretty well for me. I got out around 1,220, so I've missed the last leg up. I feel like it still might have a way to go, but the top isn't too far off. When it comes down, it's going to be nasty, IMO.

Of course, my opinion isn't based on a lot more than gut instinct and the fact that parabolic rises are always followed by a huge crash.

Also, timing is everything of course, so I think the traders will get out quick and be fine. John Q public, who has been listening to Glenn Beck and hearing gold commercials on AM radio for the last 6 years and finally moved a fair amount of his assets to gold recently, will likely get crushed.

 

[Hydroblunt]

Quote from nazzdack:

?....then the "top" must be here and now.

So from what price are you short gold?

Interesting article but I question the validity of GLD. Its gold bullion is constantly lent out to cover shorts and frankly I doubt that they have the physical to cover their shares. IMO, it's paper gold.

 

[Hydroblunt]

Quote from clacy:

and hearing gold commercials on AM radio for the last 6 years and finally moved a fair amount of his assets to gold recently

Gold commercials for the last 6 years? Really? It's only the last 2-3 years that Cash for Gold launched, let alone any seller of bullion made a marketing push.

I know it's cool to be bearish on anything going up but there is no need to tell fairy tales. Go ask around the average public, stick to middle class and up. Vast majority have not bought gold and think it's not a worthwhile investment. They would rather stick their money into CDs.
A small minority actually gets involved in bullion. If it became a craze for even 30-40% of the retail investing public to buy Gold Eagles and such, that would be a sign to get out.

 

[nazzdack]

Quote from Hydroblunt:
----Cash for Gold....
----the average public....Vast majority have not bought gold....
----a craze for even 30-40% of the retail investing public to buy Gold Eagles and such.....

1) Ironically, the higher prices are attracting supply from the "USA public" who have been SELLING at the Cash-4-Gold stores.
2) The "Asian and European public" are continuing the "dumb buying" now..... I hope.

 

[clacy]

Quote from Hydroblunt:

Gold commercials for the last 6 years? Really? It's only the last 2-3 years that Cash for Gold launched, let alone any seller of bullion made a marketing push.

I know it's cool to be bearish on anything going up but there is no need to tell fairy tales. Go ask around the average public, stick to middle class and up. Vast majority have not bought gold and think it's not a worthwhile investment. They would rather stick their money into CDs.
A small minority actually gets involved in bullion. If it became a craze for even 30-40% of the retail investing public to buy Gold Eagles and such, that would be a sign to get out.

You might not listen to as much AM talk radio as I do, but I can assure you that there have been dozens of companies advertising gold as an investment since at least 2001. I've heard them. Cash for Gold buys gold, if I'm not mistaken. Is it possible that there are plenty of companies that sell gold that have been around longer than them?

I'm not telling fairly tales, I'm just giving my opinion that this market is getting close to a top. You have your opinion and I have mine.

Of course most people don't own gold. In fact, most people have hardly any assets, most of which is probably a little cash, some home equity and a small 401k through work. With that said, I know that gold gets a lot more play today than it ever has in my lifetime.

 

[olias]

Quote from tmarket:

This is the best article on gold demand price manipulation and general market condition that I have read. Nothing sensational or maniacal or conspiratorial, just the description of the stated goal of holders and producers of gold to keep up the demand and keep the gold rush going. There is often a claim made by gold bugs that there is a giant conspiracy to keep down the price of gold that they often neglect the reality of the other side of the equation:

As much as half of the gold in exchange-traded funds may be held by individual investors, according to BlackRock, the world’s largest money manager. “Your little guy is going to get hit by the doorknob on the way out,” Williams said.

“Our primary mission was to find every button we could push to stimulate demand,” Burton, 59, said in an interview in London.
While the World Gold Council was not first in the world to develop an exchange-traded product backed by gold, bringing it to the U.S. market was crucial, Burton and Thompson say.
A malleable metal, gold isn’t really consumed. Virtually every ounce of gold that’s ever been mined is still around: an estimated 165,000 metric tons. Peter Bernstein, the late economic historian, cited a calculation that all of the world’s gold could be melted to fit into a single oil tanker in his 2000 best-selling history of the precious metal, “The Power of Gold.”
From its inception in 1987, the World Gold Council had concentrated on promoting gold jewelry, the industry’s traditional anchor. Very little was done to push gold as an investment, according to Kelvin Williams, executive director of marketing for AngloGold Ashanti Ltd. until 2006.

One of the council’s highest-profile investment campaigns involved a Turkish television game show aired in 2000. Contestants competed to win their weight in gold as two women paraded in skirts and bikini tops covered in coins.

Other promotions encouraged Muslims to use gold as a way to save for their once-in-a-lifetime pilgrimage to Mecca. The council also lobbied India and Italy to sell gold over the counter at post offices and banks.

The World Gold Council hired consulting firm Bain & Co. to review its operations. The mission grew by early 2002 to include a plan that would be dubbed “Project Sun” to study how to create an ETF, according to Thompson.

http://www.bloomberg.com/news/2010-...iners-push-every-button-in-tale-of-tears.html

I wouldn't call this 'manipulation' at all. They just sold the idea of gold as an investment rather than just a nice piece of jewelery, and created new ways for investors to get involved. I'm not convinced that gold is even near a top. We've seem some sharp spikes down lately, but it's proving to be pretty resilient.

 

[Larson]

Quote from Hydroblunt:

Gold commercials for the last 6 years? Really? It's only the last 2-3 years that Cash for Gold launched, let alone any seller of bullion made a marketing push.

I know it's cool to be bearish on anything going up but there is no need to tell fairy tales. Go ask around the average public, stick to middle class and up. Vast majority have not bought gold and think it's not a worthwhile investment. They would rather stick their money into CDs.
A small minority actually gets involved in bullion. If it became a craze for even 30-40% of the retail investing public to buy Gold Eagles and such, that would be a sign to get out.

I would suspect the dude (OP) is a broker, as they all are constantly calling for the end of the gold market right here and now. There are a couple other of these clowns on this site also, tossing bullshit. Gold will drop when Central Banks get their house in order, so do your own due diligence and cast a jaundiced eye at the top callers with an agenda.

 

[Hydroblunt]

Quote from nazzdack:

1) Ironically, the higher prices are attracting supply from the "USA public" who have been SELLING at the Cash-4-Gold stores.

Yes they have been selling, at 1/3rd of spot. That's not just dumb, it's retarded. So if the masses are selling, at an absurd discount, where is the bubble coming from?

2) The "Asian and European public" are continuing the "dumb buying" now..... I hope.

Europeans are more active in bullion than the Americans. As for the Asians, who knows. They are flooded with dollars and out of places to put them into.