Arrogant Gold Bears Press in the Market and in Print

An example of extremely bearish commentary out there, in this case from Dubai, with a few comments from GGR inserted for a different take. 

Bullion bloodbath: 125-ton sell-order sets gold price for plunge

It may no longer be ‘safe’ to hold on to the
‘safe haven’ precious metal

“The price for gold is now at par with the
price for platinum. This is a very difficult report to write,” he penned at the
beginning of his gold report.

Well, if rumours are to be believed, it’s
going to be tougher still for him to write next week’s report.

(Ed. Tone setting remark. Reveals bias.) 

For, Euro Zone’s troubled economy Cyprus is
all set to add to that chaos by reportedly putting its €400 million (Dh1.93
billion) worth of gold on the block, in a bid to shore up its financial health.

(Ed. About 10 tonnes of gold by itself.  GLD offloaded about 47 tonnes this week alone in fear.)

In what analysts are terming as a
make-or-break moment for the precious metal, gold has failed all safe haven
tests and, for the first time in about two years, plunged below the $1,500
mark.

(Ed. Gold bears celebrating gold moving below $1,500, but it took gold 19 months to give back what it put on in 10 weeks in 2011.)

Indeed, it doesn’t seem too good for the
gold bull. Gold last saw these levels in July 2011, after which it began its
very fast and very steep incline to breach the $1,920/oz mark in September
2011.

Since then, however, the metal is now down
by a quarter (23 per cent) – officially in a bear market. It was already,
technically speaking, in a recession as the price of gold had shown negative
growth for two consecutive quarters (Q4 2012 and Q1 2013).

With this most recent plunge, gold has wiped
off almost two years of gains for its loyal investors, with those who pledged
their hard-earned money in the safe haven precious metal now in negative
equity.   

(Ed. Translation: “Gold itself betrayed you, you stupid idiot.”  The selldown last week has nothing to do with the paper metal markets or very large hedge funds who also happen to be big supporters of the current U.S. president and somehow managed to escape the 2008 crisis unharmed and unprosecuted.  Nothing at all.)

To be fair, just last week we suggested that
with the global economy getting back on track, and in the absence of a global
shock like the Korean war, gold is set to fall back closer to levels that it saw
before the 2008 recession took hold (read: Gold recovers to $1,581, but here’s why it may crash to
$1,000).  

(Ed. Global ecomomy getting back on track?  Only a shock of the magnitude of the Korean War will save gold's plunge to pre 2008 levels.  Really?  Believe the illusory improvement in equity markets  if you wish, but when the stimulus is withdrawn or no longer
works,  it won't be long before the world is focused once again on competitive fiat currency debasement (currency wars), impossible to repay enormous soveriegn debt and public loss of confidence in irredeemable, under backed fiat currency, which is a primary driver of the gold price.)

“The gold market has, more or less,
officially slid into a bear market. The popular definition of a bear market is
when the commodity in question not only trades but closes at a level of at least
20 per cent under its all-time highs. The reverse psychology indicates that only
a close above $1,776 would re-establish the bull market,” wrote
Schubert.

(Ed. Schubert's price symbolism does not go unnoticed here.)

That level, for one, looks more elusive than
ever. “It appears that any price rally in the near future can and will only be
described as short covering rallies,” says Schubert.

(Ed. Therefore do not believe gold rallies going forward. They would only be short covering, not real demand.)

“I do expect the market to see some short
covering next week, as the market closed on the multi-year low. The former
support area of $1,526 will become now a formidable resistance area. However,
technical selling can be expected on Comex opening on Monday, based on models,
which have received sell signals based on last Friday’s close,” he
says.

So what happened last
week?

While there are many reasons, a couple of
factors were the most overbearing on gold price.

One, Cyprus seems set to offload €400
million (Dh1.93 billion) of its gold reserved in a last-ditch attempt to save
face – and its economy. And if Cyprus does so, there is no reason why other Euro
Zone economies in the same dire straits – Italy, Portugal, Spain, Hungary,
Slovenia… there are plenty in line – won’t do it.

(Ed. Hyperbolic fear mongering.  If anyone believes the Italians would sell their gold at the behest of the E.U. think again.  They would more likely tell the E.U. to take a flying, uh, … leap at the moon.)

In addition, if they really ‘have’ to sell
their family silver, it will make sense for other beleaguered European economies
to sell it now rather than after the Cyprus sell-off has pushed gold further
down. That is going to see a scramble among European nations as to who sells
earlier, and that can’t be good news for the price of gold. In fact, it will be
very bad for it.

(Ed. Don't you love the reference to Cyprus selling a measly 10 tonnes of metal as being able to drive the market down, after one ETF (GLD) has sold more than 200 tonnes since this gold pullback began in December and 46.75 tonnes this week alone?  Right, like it is going to start a panic sale among E.U. countries, each trying to hit the bid before the others.  … That our collective inteligence is under assault here does not go unnoticed.) 

“It [The Cyprus sell-off] is a make-or-break
moment for gold… if the market can’t handle the reallocation and Cyprus, then
there is really a need for a bear market,” Milko Markov, an investment analyst
at SK Hart Management, has been quoted as saying.

And it isn’t just Cyprus and other euro Zone
nations’ potential dumping of the yellow metal that is putting negative pressure
on gold prices.

On Wednesday, leaked minutes of the latest
US Federal Open Market Committee (FOMC) meeting showed that several members of
the committee now believe that the benefits of quantitative easing programme are
diminishing, and that costs of the $85 billion per month bond purchases outweigh
the benefits.

(Ed.  That really was an 'odd coincidence.'  When was the last time the Fed minutes were released early to way short gold hedge funds?  As Don Corleone might have said, “I don't believe in coincidences.”  With so many former Goldman execs now in government, with one important Goldman expat heading up the Commodity Futures Trading Commission, we need not fear any inquiry into that, um, … cluster-blunder.) 

This means that this flow of surplus dollars
into the market – quite a few of which found their way into gold investments –
will stop, leading to demand drying up for the yellow
metal.

The US Federal Reserve has, so far, poured
more than $3 trillion of easy money into the US since December 2008, when the
first round of quantitative easing program was unleashed.

Now that the US Fed is making noises about
cutting off that lifeline, gold price will get a nasty shock when – not if – the
QE programme comes to a logical end.

(Ed.  Q.E. is what is creating the illusion of improvement.  If it is removed, even briefly, the improvement will quickly recede, leading to more Q.E.  That's why some are calling it “Q.E. Infinity.”)

Additionally, a number of analysts including
investment banks Goldman Sachs and UBS have recently further slashed their
average gold price forecast for 2013. Goldman Sachs has cut its 2013 average
gold price forecast for a second time within just six weeks, this time from
$1,610/oz to $1,545/oz. UBS seems to be a gold price optimist, but it too has
slashed its forecast from $1,900/oz to $1,740/oz.

(Ed.  Vicky, you left off the modifiers “heavily short” and “book-talking” in front of Goldman Sachs.  An oversight?) 

These downgrades are linked to the
possibility of an early end of the US Federal Reserve-funded QE programme, which
comes with gold-negative factors such as investment flowing into equities, low
inflation, improving economic growth, and a stronger US
dollar.

(Ed. As J. Kyle Bass might say, “It's all unicorns and rainbows and all is well in the world.”  Never mind the $13t explosion to the four largest central bank balance sheets and Japan's one-quadrillion yen debt bomb about to detonate, and so on. Right now the future looks as bright as the flash over Hiroshima on 6 August, 1945 as “Little Boy” literally atomized.)

With loads of investors dumping paper gold (ETFs) in record numbers during
the first three months of 2013, the writing is on the wall for the future of
gold.

(Ed. Nice job, Vicky.  In a tomahawk sort of way.  Ursa Major greetings from a skeptical Texan, should you happen to read this time wasting response. No one would welcome a return of the gold price to “pre-2008 levels” more than I, but I just do not share your “optimism” the price of gold will get there. But do keep the pressure on, please.  For those of us now on the sidelines (with short term trading), you are working for us! … Longer term:  Got gold?)

(Images added, including the wheelbarrow full of Marks.)

Source for the Emirates story:  Emirates247.com

Original story at this link. 

http://www.emirates247.com/markets/gold/bullion-bloodbath-125-ton-sell-order-sets-gold-price-for-plunge-2013-04-14-1.502385

2013-04-14 08:16:23

Source: http://www.gotgoldreport.com/2013/04/arrogant-gold-bears-press-in-the-market-and-in-print.html