Gold and Silver traders holding long positions have been through the worst nightmare in the last three trading sessions including today.
Bullion Markets are under stronger selling pressure today as fear among Gold and Silver traders has led to panic selling and a further crash in prices. Anybody who did some Bullion buying before this big drop is probably in an awful lot of pain. Money in a trader’s trading account, or lack thereof, is of paramount importance & any other logic goes out the window. Margin calls on mark to market losses add to the pressure as prices continue the downside onslaught. Averaging out wrong gone trades has & always will be the worst poison for the short term & intraday trader. The very same trader gets converted into a long term trader out of forced circumstances & also gets into heavy debts if he opts to contribute towards the margin calls or else is forced to abandon trades & thereby adding to the massive selling pressure. Then there is blood all over the streets. Gold Prices are now at their lowest price levels in over two years, after having lost more than $150.00 an ounce and Silver has shed more than $4.00 an ounce since last Thursday.
Why are Gold and Silver Crashing?
We have all been hearing stories that Gold money has been moving into US Equities & some into Silver. Silver has crashed even then, but the manipulation there is another saga by itself. Coming to US Equities, I wonder, why someone in the right frame of mind would want to exit Gold investment to enter US Stocks at this juncture. Gold Prices at $1575 were yet close to sold out conditions & the Dow, as all know, has been rising to new highs almost each day for quite sometime now. Does it make any logical or market sense to exit Gold, which is now in extreme over sold conditions & enter US Equities which are technically in a drastically more over-bought condition? But ask some one & pat comes the answer – Moving to greener US Equities! Wow. Moving out of liquid & totally debt free currency like Gold and Silver to get into something that is artificially bloated by the Fed’s non-stop & massive QE over 5 years seems like the shortest road to Doomsdom. Can you really buy this logic? Well! I cannot. There is definitely something more than that meets the eye. Manipulation must be peaking or may I dare say – in over done conditions? It’s always the darkest before the dawn. Their purpose now well served, the sellers may now well be the sole buyers after having convinced the die-hardest Bull in the Gold and Silver Market to now sell at all rises. After all, these manipulators will need sellers at all times now when they buy to shift from the Currency collapse that they all know – is Fast approaching.
No one knows for sure except that there has been huge selling triggered last Friday. Except that, there are only rumors. There has been no single fundamental catalyst for the panic selling in the Gold and Silver markets. U.S. Commodity Futures Trading Commission (CFTC) data shows that Gold Market investor’s increased net-long positions by 19% to 56,084 futures and options in the week ended April 9, the first gain in three weeks. The turn in the gold cycle is quickening and investors should sell the metal, Goldman Sachs said in an April 10 recommendation that returned 5.4% in three days. Gold Prices also fell last week on speculation Cyprus may sell gold. Commodities declined to the lowest since July as data showed China’s economy grew less than estimated. Futures trading volumes were four times the average in the past 100 days for this time of day, according to data compiled by Bloomberg. Gold futures for June delivery slumped over 9%, heading for the biggest drop since March 17, 1980. Gold Prices touched $1,356.60, the lowest since February 2011. Gold Prices may drop to $1,310 by June, Sterling Smith, a Chicago-based commodity futures specialist at Citigroup Global Markets Inc., said today. Silver futures for May delivery plunged 12% to $23.15 an ounce in New York. Earlier, it dropped to $22.92, the lowest since Oct. 22, 2010.
Gold looks attractive to some technically:
Gold’s plunge has pushed its 14-day relative strength index to 18.1, below the level of 30 that indicates to some analysts who study technical charts that a rebound may be imminent. “I love the fact that gold is finally breaking down because that will offer an excellent buying opportunity,” Marc Faber, publisher of the Gloom, Boom & Doom report, said on Bloomberg Television’s “Street Smart” on April 12. “The bull market in gold is not completed.”