Monday, May 17, 2010

How Can ANYONE Claim A Top In Gold

when the masses are just hitting their stride in selling the gold and silver they own?  Sears and Kmart are now marketing a service that allows customers to sell their gold and silver jewelry to help pay for purchases: Sears, Kmart and Pro Gold To Help Separate People From Their Gold

Remember, the classic signal that a bull market has reached its bubble-ified zenith is when the masses can't get enough and chase prices into the stratosphere.  Think:  Dutch tulip bulbs, internet/tech stocks, Florida swam real estate...The gold market is not only NOT exhibiting ANY of the classic topping signs, the above program being rolled out by Sears/Kmart, the ultimate middle class heaven, is indicative more of a bull market still in its early stages.  In fact, while watching the Rockies/Cubs game tonight, cash for gold ads ran several times.  Classic early bull market characteristic:  the smart money accumulates what the masses happily sell, waiting for several years and several multiples higher to re-sell it back to the same dopes who sold it years earlier at much lower prices.  If anything can be said right now, it's that the bull market in mindless American consumption is still intact, albeit running on fumes.

Just as telling is the fact that big, supposedly smart, hedge fund money has barely scratched the surface in the metals/mining stock sector.  There's no telling how high gold, silver and mining stocks will be by the time the hoi polloi want in.

18 comments:

  1. Great Post Dave. I Look forward to buying a New home with them useless relics. /snicker/

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  2. The corporations have stolen our jobs and sent them to the third world. NOw they are stealing our (real) money. What parasites.

    It took a while for the dolts claiming a gold bubble to stop saying that the CASH FOR GOLD commercials were a sign of a top. What morons. As you say, that's not a sign of atop, but it is a sign of accumulation.

    A fool and his money are soon parted. Butr in defence of these people, I am sure some have no choice BUT to sell anything they have of value. Too bad its to sheisters and the like.

    Another bombing of AU & AG. All hail fiat paper, the true safe haven.

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  3. Yep. They will take the last bit of wealth from the sheople. And the sheople will be fleeced, as usual, as the price climbs skyward.

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  4. It is option expiry week so which price for paper gold will be targeted?

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  5. Hahaha silly Noobs.

    Gold Price Slides, Gartman Says “Sell”

    http://www.goldalert.com/stories/Gold-Price-Slides-Gartman-Says-Sell

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  6. @Anonymous: actually comex options on june gold expire next Tuesday. Typically equity options expiry does not affect gold/silver.

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  7. LOL Hopium - Gartman is usually a pretty good contrarian indicator

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  8. http://www.24hgold.com/english/contributor.aspx?article=2892657428G10020&redirect=false&contributor=Jason+Hommel&mk=1

    Great read

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  9. Perhaps i have some language difficulties and misunderestood, but options' expiries are cause of wild swings in price of subjected equities.

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  10. stibot: options expiry in equities is generally associated with higher volatility and manipulation during the expiry week. In the metals you have to look at the put/call open interest distribution. Typically the cartel will try to get gold/silver to close below the strike area that has the highest net call o/i. In the case of June gold calls, that would be 1200, which has over 18,000 open calls vs. over 5,000 puts, for a net call o/i of over 13k contracts. If the bullion banks, who typically "write" the contracts, if they can get gold to close belwo 1200 as of next Tues' Comex close, they'll keep the premiums on over 13k call contracts. The surrounding strike levels above and below 1200 barely have any open o/i, so 1200 is for sure the target level for next Tues. It's pure manipulation that the CFTC has completely ignored for a decade.

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  11. Dave I have question for you. What is the best way to buy physical gold. I mean there are tons of different 1 oz bars that sell at different prices which I just don't understand. I mean if the purity is the same .999 then why is there so much difference based on perth mint/johnson mathey/ etc etc. I mean I want to buy with the lowest premium possible. What is the best way for me to achieve that. If shit hits the fan and prices explode I see very little value in having the extra premium bars over any of the others personally. Where is the best place to buy for the best price. I am a small buyer by the way. I usually only buy 1 oz at a time and just continue to build up my reserves. Please advise on what you think is the best way for me to achieve this at the best price. Thanks for your insight and love your blog! Keep up the good work!

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  12. Hey dave, the gartman sold his gold position yesterday...lolz

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  13. Dave, question: "Just as telling is the fact that big, supposedly smart, hedge fund money has barely scratched the surface in the metals/mining stock sector."

    Why is that? I thought they had been assisting in the price manipulation. Why all of a sudden would they stop?

    Do you seen any pull backs in the next few months in the spot price? Planning to liquidate (I mean liberate) retirement funds from Wall Street and purchase coins. Wondering if you see any good entry points.

    As to the other posters, you know when the top is coming when the CNBC crew start touting to buy bullion.

    My local coin dealer is paying pennies for jewelery. Doesn't seem to stop him from having higher premiums on coins though. According to him, people are still buying, but when I ask some of the people I know if they would buy, they look like I'm a alien from space.

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  14. Anonymous: thanks for the feedback on my blog. Good question re: metals. The problem with buying bullion is that, especially now with prices here and where they're going, there's going to be a growing counterfeit problem. My best advice is to stick with sovereign minted bullion coins (eagles, maple leafs, philharmonics, etc) and comex-deliverable bars that have serial numbers and associated paperwork. Sovereign-minted bullion coins trade at the highest premium because they are the most reliable and most difficult to counterfeit (if not impossible. Simple JM bars are easily counterfeited and if someone here doesn't believe me, I can put you in touch with a long time coin expert/dealer who was brought in by the FBI to help with the prosecution of a Philly bullion dealer in the 1980's who was selling counterfeit JM bars.

    You get what you pay for in the bullion market. Do yourself a favor and pay the premium for sovereign coins (philharmonics are my favorite). Eventually the premiums will be A LOT higher anyway. When I first started this stuff, I was paying $6 over spot for 1 oz. philharmonics. You think I care now? LOL.

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  15. I see your point. Thanks for the feedback. I personally prefer the bars over the coins but that's just me. So sovereign minted is the way to go. Any specific websites or companies you can recommend for buying sovereign bars?

    Thanks again!

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  16. Bars are good for storing larger sums of wealth. Coins are for "fungibility." Silver coins for even more fungibility.

    www.tulving.com is the most trustworthy and has the lowest premiums but he has purchase minimums. www.apmex.com is next, but more expensive. If you buy bars, make sure they are "comex deliverable" and at least come with some sort of documentation.

    One day there will be huge premiums paid for anything that can be authenticated by paperwork, serial numbers, etc or if they are sovereign minted bullion coins. Numismatic crap is for people who like to speculate in art "premiums." I don't plan on hanging this shit on my wall and I don't care about bragging rights for scarcity or collector's value LOL.

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  17. Personally anything I buy Gold related I buy Assayed only. That is just me..I will pay the extra dollars for it.

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  18. don't forget to get product for gifts, ie wedding gifts. Several years ago I gave 1/2 gold eagles--now I give 10 oz silver bars--now the kids of friends whom we gave the PM to ask "don't forget to tell me when we should sell".

    I wanted them to add to the collection....oh well.

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