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FT Alphaville on gold and its safe haven status in recent days.

 

http://ftalphaville.ft.com/blog/2008/09/16...s-cash-round-i/

 

Some more here from good old Nadler of Kitco

 

Fed Draws Lines

 

"More surprises came into an already clouded market picture today and only added to the confusion, frustration and fear that was omnipresent. First, let's cut to the chase. The Fed did NOT cut rates. Disappointed? Well, if you are among those looking for subsidies in the way of lower rates, sorry. Elated? Well, if you were long dollars, this might be a nice day to log some profits into the trading books. Confused? Well, if you are a mutual fund client or bank customer, you have your job cut out for you in trying to figure out who is safe and who may fail.

 

A gold bug? Well, there are good news and not so good news for you too. First, the good news. Gold did not melt down after the Fed decision. It did not fall beyond $775. Now, the less than good news. Unless it moves higher, and fast, the metal will lose part or all of its safe haven status - much like oil already has. We have to be blunt. Yes, it is a wonderful alternative currency, it can be an excellent hedge against many a thing. But the safe-haven attribute which has already come into question in February of 2007 could be at risk once again. And this time, investors may not be as forgiving.

 

Gold is currently failing to live up to its safe-haven billing. It is being overwhelmed by asset liquidations and the hoarding of cash. Oil is a big contributing factor, of course, but the most intense pressure is coming from funds and investors scrambling to get out of anything that bears any price risk. Russian stock markets just crashed hard on the back of oil and gas going up in smoke. Systemic risk has never been higher. In light of all of this, gold has no business no being at $1000 minimum. While bullion's resilience above $775 impresses some, the bigger question is why the metal is unable to get going. The answer may lie in the psychology of deflation that is currently gripping investors..........

 

............Nervous trading and wider swings will define the action tomorrow - much as they have in previous sessions. US CPI fell in August, driven by slumping energy values. Gold remains vulnerable to the asset liquidation trend and may not be able to overcome it, or the free-fall in crude oil as it heads to the $80's range. Then again, one really bad news item could have the $800 mark being taken out in a blink. Right now, a less likely probability in the wake of what we have seen thus far. Gold pundits/speculators beware of Mr. Fuld having lived in denial. Not a good example to follow.

 

Focused Trading."

 

 

 

 

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Some more here from good old Nadler of Kitco

 

Fed Draws Lines

 

 

Gold is currently failing to live up to its safe-haven billing. It is being overwhelmed by asset liquidations and the hoarding of cash. Oil is a big contributing factor, of course, but the most intense pressure is coming from funds and investors scrambling to get out of anything that bears any price risk. Russian stock markets just crashed hard on the back of oil and gas going up in smoke. Systemic risk has never been higher. In light of all of this, gold has no business no being at $1000 minimum. While bullion's resilience above $775 impresses some, the bigger question is why the metal is unable to get going. The answer may lie in the psychology of deflation that is currently gripping investors..........

 

Nadler gives a fair summation of where the market is at today. But he neglects the imbalances and pressures building up in the dollar which are only getting worse with each bailout. It is like someone who can only sees the superstructure and not the base on which it stands... a base which is rotten to the core with debt.

 

When it goes... it will come right out of left field and hit the mainstream unawares.

 

edited.

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sure.\

banks borrow it, sell it, and lend the money to gold miners

the gold miners repay gold

 

and /

Institutions that borrowed gold previously are seeing their borrowing costs rise,

and that will encourage them to buyback gold to cover their shorts

Yes, finally there is some movement. It's also amazing how well you can see the first wave striking in August last year, and then the new wave/leg down right now.

 

kitco3aulratessw4.png

w772.png

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Yes, finally there is some movement. It's also amazing how well you can see the first wave striking in August last year, and then the new wave/leg down right now.

 

kitco3aulratessw4.png

w772.png

It's looking extremely bullish.

getchartphplo1.th.png

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http://www.bloomberg.com/apps/news?pid=206...&refer=home

``We'd all forgotten that any investment comes with risk and we're learning it the hard way now,'' said Kiyoshi Ishigane, a Tokyo-based senior strategist at Mitsubishi UFJ Asset Management Co., which oversees about $61 billion. ``Even the safest investments, like the money-market funds, are starting to pose risks and that shouldn't be a surprise given the crisis in the financial industry.''

That's why he should have some gold.

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the resistance is clear - the resistance is near

aa2un2.gif

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Is that due to a VAT law or what?

...

 

Yes it is all about stopping the VAT Carousel Fraud.

 

The result is that if they go over the limit then they have to register with the VAT office in the country of delivery and pay VAT in that country. Up to a certain limit it makes they product look attractive in the delivery country against local imports so they can charge more and therefore get a greater profit.

 

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I've been reading QuadG's posts on kitco showing Elliot Wave counts in gold. If gold can't break $850 in this rally then he sees $665 in play. Have to admit this chart looks ugly and would follow the full retracements of silver, platinum and palladium.

 

goldfractal9-16.jpg

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Nice pretty pattern there... but can not see it happening myself. :)

 

Edit: Given the banking crisis, I think there is steady demand for gold.

 

I think it may be separating from commodities here and coming into its own.

 

When the currency crisis hits it will go through 1000.

 

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One for the morale. :lol:

 

Edit: I know if I was in paper, I would be a nervous wreck at the moment. :o

 

Edit edit: Oh, just noticed gold up $30 hence the rocket... and here was me all morose like. :)

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(from Advfn)

energyi - 17 Sep'08 - 14:49 - 47364

 

$799- howzat, D.?

============

Dummkopf - 17 Sep'08 - 11:18 - 47345

Silver pointing the direction for gold, gold looks to me like it`s testing the area around 770/790 which was support for about 11 months before a further plummet, still to many bulls itching to get back on board, including me, lol.

 

energyi - 17 Sep'08 - 11:41 - 47346

it needs to power thru $800 to make believers

those high lease rates may help

 

======================

 

(with reference to the TURN called with Gold touching $736):

This thread was the GOLD CALL OF THE YEAR-

No one on the RUG thread picked up on it, they simply didnt believe it.

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Just got back from 2 week holiday, bought more gold before I left - was unhappy about gold falling.

 

First day back - banking sector critical, made me feel better about my small stash , wish I bought more.

 

Gold, right now just blasted through $800, rocketing upwards!! WOW!

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GOLD 813 + 4.39% SILVER 11.13 + 6.11%

 

fireworks.jpg

 

 

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Good for gold stocks ???? :unsure::unsure:

 

http://www.sec.gov/news/press/2008/2008-204.htm

 

FOR IMMEDIATE RELEASE

2008-204

Washington, D.C., Sept. 17, 2008 — The Securities and Exchange Commission today took several coordinated actions to strengthen investor protections against “naked” short selling. The Commission’s actions will apply to the securities of all public companies, including all companies in the financial sector. The actions are effective at 12:01 a.m. ET on Thursday, Sept. 18, 2008.

 

“These several actions today make it crystal clear that the SEC has zero tolerance for abusive naked short selling,” said SEC Chairman Christopher Cox. “The Enforcement Division, the Office of Compliance Inspections and Examinations, and the Division of Trading and Markets will now have these weapons in their arsenal in their continuing battle to stop unlawful manipulation.”

 

In an ordinary short sale, the short seller borrows a stock and sells it, with the understanding that the loan must be repaid by buying the stock in the market (hopefully at a lower price). But in an abusive naked short transaction, the seller doesn't actually borrow the stock, and fails to deliver it to the buyer. For this reason, naked shorting can allow manipulators to force prices down far lower than would be possible in legitimate short-selling conditions.

 

Today’s Commission actions, which are the result of formal rulemaking under the Administrative Procedure Act, go beyond its previously issued emergency order, which was limited to the securities of financial firms with access to the Federal Reserve’s Primary Dealer Credit Facility. Because the agency's exercise of its emergency authority is limited to 30 days, the previous order under Section 12(k)(2) of the Securities Exchange Act of 1934 expired on Aug. 12, 2008.

 

The Commission’s actions were as follows:

 

Hard T+3 Close-Out Requirement; Penalties for Violation Include Prohibition of Further Short Sales, Mandatory Pre-Borrow

 

The Commission adopted, on an interim final basis, a new rule requiring that short sellers and their broker-dealers deliver securities by the close of business on the settlement date (three days after the sale transaction date, or T+3) and imposing penalties for failure to do so.

 

If a short sale violates this close out requirement, then any broker-dealer acting on the short seller’s behalf will be prohibited from further short sales in the same security unless the shares are not only located but also pre-borrowed. The prohibition on the broker-dealer’s activity applies not only to short sales for the particular naked short seller, but to all short sales for any customer.

 

Although the rule will be effective immediately, the Commission is seeking comment during a period of 30 days on all aspects of the rule. The Commission expects to follow further rulemaking procedures at the expiration of the comment period.

 

Exception for Market Makers from Short Selling Close-Out Provisions in Reg SHO Repealed

 

The Commission approved a final rule to eliminate the options market maker exception from the close-out requirement of Rule 203(B)(3) in Regulation SHO. This rule change also becomes effective five days after publication in the Federal Register.

 

As a result, options market makers will be treated in the same way as all other market participants, and required to abide by the hard T+3 closeout requirements that effectively ban naked short selling.

 

Rule 10b-21 Short Selling Anti-Fraud Rule

 

The Commission adopted Rule 10b-21, which expressly targets fraudulent short selling transactions. The new rule covers short sellers who deceive broker-dealers or any other market participants. Specifically, the new rule makes clear that those who lie about their intention or ability to deliver securities in time for settlement are violating the law when they fail to deliver. This new rule is effective immediately.

 

 

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(from Advfn)

energyi - 17 Sep'08 - 14:49 - 47364

 

$799- howzat, D.?

============

Dummkopf - 17 Sep'08 - 11:18 - 47345

Silver pointing the direction for gold, gold looks to me like it`s testing the area around 770/790 which was support for about 11 months before a further plummet, still to many bulls itching to get back on board, including me, lol.

 

energyi - 17 Sep'08 - 11:41 - 47346

it needs to power thru $800 to make believers

those high lease rates may help

 

======================

 

(with reference to the TURN called with Gold touching $736):

This thread was the GOLD CALL OF THE YEAR-

No one on the RUG thread picked up on it, they simply didnt believe it.

The force is with you lately B...

I was going to post around 2.30 how surprised i was that gold was rather lythargic today.... :lol:

Could this be short covering?

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Specifically, the new rule makes clear that those who lie about their intention or ability to deliver securities in time for settlement are violating the law when they fail to deliver. This new rule is effective immediately.[/i][/color]

 

"new rule" - eh? :blink:

 

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