Clive Maund: gold is about to pop

22 posts / 0 new
Last post
switters's picture
switters
Status: Platinum Member (Offline)
Joined: Jul 19 2008
Posts: 744
Clive Maund: gold is about to pop

"So what's going on? - why has gold withstood the torrent of selling in pretty much all other commodities and even rallied and succeeded in achieving net gains in recent weeks? Conversely some might ask why gold hasn't rallied even more given the acute crisis in the financial system. The answer to the first question as to why gold has held up so well and even rallied is that there has been a big increase in investment demand for it across the board, and most importantly there has been a massive increase in demand from buyers demanding physical delivery - so much so that supplies of gold available in physical form, such as ingots and coins, are rapidly becoming depleted. This takeup of slack has not been fully reflected in the paper Comex market so that a widening and increasingly untenable gap is opening up between the paper and physical price of gold, which if it gets much larger will trigger an arbitrage market that must drive up the price on the paper market. The surge of demand for gold coins has inevitably resulted in increased premiums, as this intelligence recently received illustrates...

Now, here is a very important point. People have been writing to me for years concerned about manipulation either muting the advance of gold or forcing or exaggerating selloffs. I have always responded by pointing out that whatever manipulation exists will be swept away once demand shifts substantially from the paper to the physical market - AND THAT IS EXACTLY WHAT WE HAVE BEEN SEEING IN RECENT WEEKS. This massive increase in physical demand is very bullish, and if it continues as is to be expected, any attempts to rig the price lower on the paper market will become futile, as buyers will simply outflank them by demanding physical delivery from whatever source will supply it."

GDon's picture
GDon
Status: Bronze Member (Offline)
Joined: Apr 2 2008
Posts: 86
Re: Clive Maund: gold is about to pop
Yes - and the "basis" is even more exaggerated on the silver markets - currently the physical is at about a 40% premium to the COMEX price! (if you can find it...). What I am wondering is - Are long silver and gold futures contract holders ready to start asking for physical deliveries? They could certainly arbitrage on it (but at the paper price and sell at the physical price). If this begins to happen as Clivee mentions, COMEX may be flirting with defaulting on futures contracts!
john50's picture
john50
Status: Bronze Member (Offline)
Joined: Sep 2 2008
Posts: 74
Gold - down before it goes higher

Hey, I am a gold bug, I have played bullion markets in the mid 1970s. One thing I learned is not to get hyped into "the train is leaving" stories. Buy gold, certainly, just do not pay too much for it. Consider buying the dips, and dollar cost averaging your bullion if you have a large amount in mind.

Gold hit its high on March 17th, the same day that the USD Index bottomed and major currencies took a reversal. It completed a 5 wave run from 1999 to 2007 in 5 waves large cycle waves, it is now digesting that through a retracement, and is about half way complete. The bottom has a confluence of levels around $600-650 that includes the bottom of the trend channel, the 38.2% Fibo, and the prior wave 4 low are all close.

The next move will be down again, while USD is gaining and commodities and assets are falling. It is because of deflation, credit contraction, and the liquidation of gold by banks and hedge funds under margin call. My retired Swiss banker wrote a book called Gold Wars, detailing the Fed need to desparage private bullion and hold prices down, but the market always wins over manipulations.

Clive sells gold, what do you expect him to say? Gold dealers say the same thing decade in and out, buy, buy, buy - not much better than stock cheerleaders. If you look at the silver chart for the 1920-40 period, bullion and shares all fell together for 3 years, there was a false rally at the bottom, and in 1933 it started to recover quickly. Copper moved higher first, as it does. Few had any savings after the collapse in stocks and real estate.Then of course, gold was confiscated by the US Government in 1933 during a 'bank holiday', and gold was pegged about 40% higher once America fleeced the population.

Personally, I'll be patient and wait. Laughing

Gold Weekly

 

 

DavidC's picture
DavidC
Status: Silver Member (Offline)
Joined: Sep 29 2008
Posts: 243
Re: Clive Maund: gold is about to pop - maniuplation?

Clive,

I'm sorry, but if there is any further proof of the futures market being manipulated, today's opening has proved it.

Three minutes after opening, Gold dropped $36 in less than 4 minutes and now continues to fall. What is going on here?  I don't believe in the Elliott theory - it ignores fundamentals. I do believe - if the anecdotal eveidence is true - that Gold is going to pop, particularly if the Chinese, with their dollar reserves,desire to change them into something more tangible.

BUT other than manipulation, what explains these VERY odd recent moves in Gold - it hasn't responded at all to the wild gyrations of the stock markets recently . It's NOT behaving ike other commodities, the precious metals ARE being hit although, for example, Copper has hardly moved today, neither has oil. And if one looks at when these odd moves started, it seems to have occurred after the $90 plus move up on the 17th of September, with a 'capping' effect at $920 to $930.

Something is going on.

switters's picture
switters
Status: Platinum Member (Offline)
Joined: Jul 19 2008
Posts: 744
Re: Clive Maund: gold is about to pop - maniuplation?

I agree that it is very strange and somewhat disconcerting.  Personally, though, I'm not that concerned because I am holding gold for the long term and I am quite confident that over the next five to ten years it will at least maintain its value and very likely appreciate.  

If I ask myself the question "what else would I do with my money if not buy physical gold and silver?", I can't come up with an answer that feels as safe as precious metals over the next ten years.  Buying productive land might be a better investment, but I think land and real estate is still overpriced and I can't really afford the mortgage payments yet anyways.

My hope/plan is to buy a home in 5 - 10 years when real estate prices come back in line with median incomes.  At that point if gold and silver are still down from when I bought it (a month ago), I guess I'll have to wait to buy a house.  But I tend to think that in 5 or 10 years gold and silver will both be up - rather than down. 

GDon's picture
GDon
Status: Bronze Member (Offline)
Joined: Apr 2 2008
Posts: 86
Re: Clive Maund: gold is about to pop - maniuplation?

The CTFC reported that in August 2008, "2 Large Holders" of silver futures contracts, were short nearly 25% of the total above-ground world supply!

Is that manipulation?  If not intentional, it certainly would suffice to push the paper-market around...

This level of concentrated futures market participation is absolutely unheard of in any other commodity.  Can you imagine only 2 "players" holding 25% of the world's wheat?  25% of the world's sugar?  25% of the world's copper?

Amazing that nobody at the SEC or CFTC is interested in "who" or "how" this is occuring.

It is this concentrated paper-trading in the gold and silver futures markets which is pushing the paper-price way lower than the physical.

AND, it is this concentrated market (manipulation?), that makes Technical Trading systems somewhat spurious, in my opinion.

Would it be hard to believe, that with this much "market-making" concentration in precious metals futures positions, that the price/volume/open interest couldn't be made to "fit" and "trigger" technical systems?

I agree with others, that fundamentals drive precious metals value, and this is a long-term valuation.

As a view into these fundamentals, the current "average" costs just to mine silver are now between $8.50 and $10.50 per ounce.  Silver miners are being shut-down at current levels.

That, plus the lowest "above-ground" world stock supplies in a very long time (on silver), makes one question the sustainability of the price at these levels, particularly for the physical.

jgreco's picture
jgreco
Status: Bronze Member (Offline)
Joined: Aug 9 2008
Posts: 31
Re: Clive Maund: gold is about to pop

I'll be the deflation contrarian here again.  I'm never very popular on these boards for it :) 

Gold and silver are going to be good long term, but in the short term you could be in for a world of hurt.  Especially if you are paying outrageous premiums for physical bullion.  You are just throwing away good money that could be used to purchase a lot more gold later.

Silver has crashed along with the rest of commodities.  Down more then 50% from its peak, 7% today alone.  Stop pretending because it is also used in jewlery - It is not viewed as a store of money!   Gold has held up well relative to the rest of commodities, sliding about 20%, but it's still way over what it was at the middle, let alone the beginning, of the decade.

In a deflationary environment that is long and pronounced - we are talking one that will rival the 30's here folks - I don't want to be buying any commodities in any significant quantities.  Cash is what wins here and the dollar will get a lot stronger before it gets weaker.  When we start to make our way out of this depression I'll start buying commodities again, but that isn't anytime soon.

djp169's picture
djp169
Status: Member (Offline)
Joined: Oct 9 2008
Posts: 4
Re: Clive Maund: gold is about to pop - maniuplation?

As to 2 entities being short 25% of the physical silver, a sensible explanation is that these entities are in fact mining companies that sold short to lock in favorable prices a few months ago, and they actually will deliver at the price they locked in guaranteeing their profit and the loss of the buyers of those contracts.

My own suspicion is that the FED may have started selling to hold the price down recently to help stem panic, but in reality it may be just hedge funds forced to close positions due to margin squeeze and redemption pressures.

High leverage when it collapeses can lead to all kinds of irrational behavior just because there is no option left.

DavidC's picture
DavidC
Status: Silver Member (Offline)
Joined: Sep 29 2008
Posts: 243
Re: Clive Maund: gold is about to pop - manipulation

Whilst I acknowledge all the comments I've read about the current gold prices, nonetheless with the panic in the markets over the last week and every attempt (thus far) by the authorities to keep the stock market up resulting in the stock falling, I would have thought that the 'safe haven' aspect of Gold (notwithstanding the continued strength of the dollar) would have provoked a move into it with a resultant large move up, and this hasn't happened.

I, too, am extremely bullish Gold medium to long term (I am NOT a Gold 'bug', lest anyone thinks so given my posts), but I still remain mystified by the recent moves.

Xflies's picture
Xflies
Status: Silver Member (Offline)
Joined: Aug 19 2008
Posts: 157
Hey Clive! I've got physical silver and gold to sell you!
I don't see any problem in getting in, so just for you because you're such a great guy, I'll sell it to you at only a 30% premium to spot. If you'd like more information just let me know, we can get lawyers involved to ensure delivery but I have no problem in getting physical from my good old Canadian bank. I won't be surprised if I don't see any reply... those people with soncpiracy theories don't seem to want to see the truth but I look forward to hearing from you. Oh, and I've posted on this before too... deflation is very bad for silver and gold, in fact I had a long silver, short gold trade on until I saw what happened to this relationship during deflation and it's no longer correlated and both drop. If there is deflation first, then you'll see gold fall and then maybe rise when they try and hyperinflate the economy out of depression. It's a lot easier to see if you just open your eyes.
jrf29's picture
jrf29
Status: Gold Member (Offline)
Joined: Apr 18 2008
Posts: 453
Re: Hey Clive! I've got physical silver and gold to sell you!

Were you able to redeem your certificates?  I missed that.  I think you should repost that information prominently on a future comments page, along with a repetition of how long it took you to receive delivery on the certificates.  If it is not true, then this rumor that gold and silver are somehow disappearing ought to be extinguished.

I tend to agree with the deflation argument, at least in the short term.  People who are heavily invested in commodities and gold really wish that it were not true, because they want to believe that their investments will protect them like a golden shield, and this skews their interpretation of facts.  Of course, the people holding AAA mortgage backed securities wanted to believe, too.

Xflies's picture
Xflies
Status: Silver Member (Offline)
Joined: Aug 19 2008
Posts: 157
Re: Hey Clive! I've got physical silver and gold to sell you!

I actually skipped the whole process of buying certs and converting them for physical.  I just asked the bank to quote me a 2 sided market and they gave me a decent spread of $10.  I said I'd buy 10, 1 oz bars at his offering and a week later I got them and I stuck them in my safety deposit box.  They're nice and shiny :)  ... If people believe that this physical to paper gold spread will widen, I was thinking of getting a ton more gold and shorting gold futures so that I'm hedged.  The only problem to this is that it takes up capital, capital of which I could be using to trade with... Any thoughts?

switters's picture
switters
Status: Platinum Member (Offline)
Joined: Jul 19 2008
Posts: 744
Re: Hey Clive! I've got physical silver and gold to sell you!

Even if deflation wins out for the next few years and the price of precious metals tanks, please explain to me why anyone who is invested in gold & silver will suffer unless they sell?  No selling, no suffering.  I don't know about others, but I didn't buy gold and silver as a speculative investment.  I traded my dollars for metal because I think, over the long term, that it is the safest way of preserving my savings.

On the other hand, if deflation happens for a short time and is followed quickly by hyperinflation, I'll be very glad I own some physical gold and silver.  I also happen to agree with almost every analyst that is mentioned on this site that inflation and a collapse of the dollar will be the long-term result of this economic crisis, even if there's a long period of deflation preceding it.

Therefore, for those of us invested long-term in gold & silver, it's probably a win-win situation.  Sure, I may not make as much money as I would have if I was able to time the bottom of the market, but I'm not too worried about that.

And what about those who wait for that market bottom and then try to buy physical, only to find that there isn't any available?If there's such a shortage at these price levels, do you think there is going to be a robust supply at lower prices?  What current owners of gold will sell at $650?  That's yet another reason I feel just fine about having some in my possession now.

I will once again repeat my challenge to those who doubt gold & silver's supply is extremely tight.  Very interesting how each time I've posted the challenge, no one responds.  It's getting old.

Find me a reputable online dealer with a reasonable supply of gold and silver and I will shut up.  The fact is that all of the largest online dealers who had abundant supplies of gold & silver just a few months ago now have almost nothing.  The fact that a couple of guys on this forum want to sell some physical and no one has replied doesn't prove a thing, for the reasons I mentioned elsewhere.

Xflies's picture
Xflies
Status: Silver Member (Offline)
Joined: Aug 19 2008
Posts: 157
Scoootttiaaaabaaaannnnkkkkk... not sure what other details

you want me to give... www.scotiabank.com ... they're a bank and they will sell physical gold.  I welcome your rebuttal.  If you call them and they tell you that they have no gold to sell you, then I will heed your words and covet the gold in my bank box... but until then you're grasping at just another conspiracy theory my friend.

switters's picture
switters
Status: Platinum Member (Offline)
Joined: Jul 19 2008
Posts: 744
Re: Scoootttiaaaabaaaannnnkkkkk... not sure what other details

Scotiabank is a Canadian bank.  I live in the U.S.  Not helpful to me.

Even if they do have supply, which I cannot check since I don't live anywhere near a branch, that doesn't change what I said in my previous email.  I am talking about the major online bullion dealers like:

http://www.amergold.com/

http://www.blanchardonline.com

http://www.investmentrarities.com

http://www.jeffersoncoinandbullion.com

http://www.kitco.com

http://www.usagold.com

http://www.apmex.com

Many of them list supply on their sites, but if you actually call them to see if they have stock, the answer is inevitably "no". At least it was last week.  I haven't called yet this week.

Sites like apmex.com are listing ship dates in mid-November for a limited quantity of certain coins.  

rmurfster's picture
rmurfster
Status: Bronze Member (Offline)
Joined: Apr 17 2008
Posts: 84
Re: Clive Maund: gold is about to pop
[quote=jgreco]

In a deflationary environment that is long and pronounced - we are talking one that will rival the 30's here folks - I don't want to be buying any commodities in any significant quantities.  Cash is what wins here and the dollar will get a lot stronger before it gets weaker.  When we start to make our way out of this depression I'll start buying commodities again, but that isn't anytime soon.

[/quote]

The problem I have with this view is that Silver and Gold are already almost impossible to purchase in any large quantity, so when it *finally* starts to move up, then good luck finding it.

I want to be prepared before the emergency strikes.

Richard

switters's picture
switters
Status: Platinum Member (Offline)
Joined: Jul 19 2008
Posts: 744
Re: Clive Maund: gold is about to pop
My thoughts exactly, Richard.
john50's picture
john50
Status: Bronze Member (Offline)
Joined: Sep 2 2008
Posts: 74
Gold Fell this week

Gold down from $930 to $780 this week.

Granted supply was a problem this month, and it may/may not get better in November. 

$650 is my number. Coins can be found still.

GR8TFUL's picture
GR8TFUL
Status: Bronze Member (Offline)
Joined: Oct 13 2008
Posts: 79
Re: Clive Maund: gold is about to pop

With all the economic uncertainty in every market today (regardless of country, currency, or sector), coupled with the fact that so many people are supposedly seaking safety, I simply cannot understand why gold & silver prices are going down! More confusing still is why the law of supply & demand doesn't seem to be holding! I know that demand is up here in the USA (ask any dealer) , but perhaps not with the average household in India, China, etc.?

Investing a percentage of one's net worth in metals as an "insurance policy" / hedge against inflation is fine, but since the average person is forced to buy at retail & sell at wholesale, the spot price has to increase dramatically for one to realize any significant profit, especially at the spread / margin dealers are asking these days! Most dealers I know of are selling silver Eagles at $5.00 + over spot, and gold Eagles (if they have them) at approx. 10% over! That's huge! So here's a question I'd love to learn the answer to:

 Does anyone know how (the steps required) a person can become a licensed gold dealer & therefore be able to buy at wholesale? What is the process / requirements?

 Doug

DavidC's picture
DavidC
Status: Silver Member (Offline)
Joined: Sep 29 2008
Posts: 243
Re: Clive Maund: gold is about to pop

Doug,

If you've read my previous comments, you'll see that you're not alone in your feelings about the price of Gold! Some thoughts going through my head (not all agreeing with regard to Gold price);

1) This time of the year, as I understand it, is 'wedding season' in India with a concomitant desire for Gold as wedding gifts. One would think this should have a positive impact on the price of Gold although it doesn't appear to be the case at present.

2) The move downwards in Gold (and Silver) prices are due purely to the recent rally/strength of the dollar. When the dollar goes, and it will, so will Gold and Silver.

3) The move downwards in Gold (and Silver) prices are due to big sellers trying to keep a cap on the price. This would explain the disconnect of the physical/paper prices. If there are any defaults on the paper market, this will drive the prices of Gold and Silver.

3) Gold and Silver really are part of a new paradigm where they are regarded just as any other commodity is. I don't, ultimately, believe this is so, I think it's just a matter of time. One can still buy the modern equivalent of a Roman toga, belt and footwear with a ounce of Gold!

4) Do I think Gold will retrace to $600 on the basis of Elliott Wave? As I've mentioned before I think this neglects the current fundamental situation. One cannot regard technical and fundamental analysis in isolation, they are both relevant and important acting as tools together. HOWEVER, Jim Rogers was on TV a couple of weeks ago (Bloomberg) and did say that even if Gold fell to $600 he would still be buying.

5) Here's another thought I've had, following Friday's drop of about $36 in 4 minutes just after 2 p.m. London time (7 a.m.New York). It hasn't happened every day, but I've noticed on several occasions recently that there's a drop in the Gold price around the same time. The US coming in pushing the price down before the markets open? Other markets lifting their long positions before the market opens?

What would I do if I had the market clout? I'd be waiting, come in big time just before the futures are due for delivery (and, checking on the COMEX site today, their Gold contract requires physical delivery) and then ask for that physical delivery. That would drive the price up a bit! I could be wrong but that would seem to be a way of getting round the anecdotal evidence of a lack of physical supply (well, at the ounce/coin level anyway).

babylon's picture
babylon
Status: Member (Offline)
Joined: Oct 12 2008
Posts: 3
Re: Clive Maund: gold is about to pop

I submit a theory that the price of gold is being manipulated by clever market techniques so as not to create a panic. If the market prices suddenly shoot upwards then people would lose confidence in the dollar making it go in the opposite direction.

perhaps this practice is being maintained as long as possible to try to avoid the inevitable crash.

john50's picture
john50
Status: Bronze Member (Offline)
Joined: Sep 2 2008
Posts: 74
Re: Clive Maund: gold is about to pop

Without disrespect, Clive (and other pundits), have not called gold right at all. The price fell over $200 in October alone, is a fact. It was not a hard call for me to make mid-March that gold topped, and would require a correction down to $600 level before moving higher. Markets are not democratic, collectivist, or any other type of majority is right enterprise; so being alone is part of calling turns.

I think it is unfortunate that Chris tipped his hat on his thinking that gold will be the universal answer, from a timing point of view. He should know that buying commodities during deflation is a way to lose value. I am not saying don't buy bullion, I am saying don't buy high. 

Silver likely put in a temporary bottom last week in the first wave of three. Prices are expected to rise to $14 range, then retun to set a new low a few months from now. When de-leveraging has dwindled, silver ought to return to normal values in the $6-8 range for a bottom. Gold is likely to set a bottom in a few weeks, so be patient if you have much to buy. 

The Kitco article was one of the most level headed I have read for a long time, especially coming from a gold seller, they are notoriously like used car salesmen, saying anything to make a gold sale.

Gold Posts Biggest Monthly Drop in 28 Years as Dollar Climbs 
http://www.bloomberg.com/apps/news?pid=20601012&sid=aEllg6XntfgY&refer=commodities

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments