{"id":6955,"date":"2013-04-14T20:45:25","date_gmt":"2013-04-15T00:45:25","guid":{"rendered":"http:\/\/www.pgm-blog.com\/?p=6955"},"modified":"2013-04-14T20:45:25","modified_gmt":"2013-04-15T00:45:25","slug":"what-happened-with-precious-metals-on-friday-april-12-2013","status":"publish","type":"post","link":"https:\/\/www.pgmcapital.com\/nl\/what-happened-with-precious-metals-on-friday-april-12-2013\/","title":{"rendered":"What happened with Precious Metals on Friday April 12 2013?"},"content":{"rendered":"

\"Gold\"<\/a>\u00a0\"Bear<\/a><\/p>\n

Dear PGM Capital,<\/strong> Blog readers,
\nLast Friday Gold sank more than five per cent, entering bear-market territory as institutional investors fled Gold amids of other safe-haven assets amid concerns about central bank sales and souring sentiment.<\/span><\/p>\n

In the table below we can see the damage done to Gold and other precious metals last Friday, April 12, 2013.<\/span><\/p>\n\n\n\n\n\n\n\n
Precious Metal<\/b><\/td>\n\n

Closing Price [USD]<\/b><\/p>\n<\/td>\n

\n

Change [USD]<\/b><\/p>\n<\/td>\n

\n

% Change<\/b><\/p>\n<\/td>\n<\/tr>\n

Gold<\/td>\n\n

1,477.00<\/p>\n<\/td>\n

\n

–84.00<\/span><\/p>\n<\/td>\n

\n

-5.54%<\/span><\/p>\n<\/td>\n<\/tr>\n

Silver<\/td>\n\n

25.85<\/p>\n<\/td>\n

\n

-1.81<\/span><\/p>\n<\/td>\n

\n

-6.54%<\/span><\/p>\n<\/td>\n<\/tr>\n

Platinum<\/td>\n\n

1484.00<\/p>\n<\/td>\n

\n

-47.00<\/span><\/p>\n<\/td>\n

\n

-3.07%<\/span><\/p>\n<\/td>\n<\/tr>\n

Palladium<\/td>\n\n

705.00<\/p>\n<\/td>\n

\n

-25.00<\/span><\/p>\n<\/td>\n

\n

-3.42%<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The extend of the sell-off will underline some expectations that gold\u2019s meteoric rally may end after 12 years of gains.<\/span><\/p>\n

The precious metal slid below $1,500 an ounce for the first time since July 2011. Gold posted its biggest weekly decline since December 2011.<\/span><\/p>\n

At moments like this it is worthwhile to take a step back to find out if the fundamentals for Gold are still present.<\/span><\/p>\n

In the past 18 months Gold has repeatedly tested the support at $1530, as can be seen from below chart, Thia resulted in considerable top-loss orders around these levels. Moreover there are quite some investors who automatically sell when such a support collapses.<\/span><\/p>\n

\"gold_2_year_o_usd\"<\/a><\/p>\n

And as a cherry on the cake, gold now sells at more than 20% less than the previous highs and all media hype that we really have landed now in a bear market.<\/span><\/p>\n

There were more elements that made the market players nervous. Just think of the \u201csell\u201d advice given by the big USA BANK some days ago, or the forced gold sales of approximately\u00a010 tons of Gold by Cyprus Central Bank in order to comply with ECB bail-out plan.<\/span><\/p>\n

Cyprus clings on to the gold reserves and fights like a lion for this. Nevertheless, 10 tons of gold has only a value of about 400 million of Euros. \u00a0For a\u00a0of 23 billion of Euros of<\/span>\u00a0financing need,\u00a0<\/span>this is just a drop in the ocean.<\/span><\/p>\n

Regarding the “Sell” advise of the Big USA Bank as mentioned here above, this is the same bank that advised its clients in 2007 to “buy” \u201cSubprime mortgages\u201d while the bank was shorting these securities in its own portfolio, which led to a profit of approx<\/span>imately<\/span>\u00a04 billion USB during the financial crisis of 2008.<\/span><\/p>\n

It would not surprise us, if they are doing the same at this moment. Advising everyone else to sell gold,\u00a0whereas they themselves are\u00a0taking advantage<\/span>\u00a0of the low prices to build up their positions.<\/span><\/span><\/p>\n

In brief, the ideal circumstances were created last Friday for a coordinated attack on gold, silver and other precious metals.<\/span><\/p>\n

At the opening it became clear that the purpose was the support at $1530 their target. If they could break that, the rest would almost be a matter of fact.<\/span><\/p>\n

\u00a0Stop-loss orders and technical analysts would make the sale wave win momentum.<\/span><\/p>\n

What we witnessed on Friday is nothing less than a precision bombardment to put the gold price at a deliberately\u00a0lower level.<\/span><\/p>\n

This game is played\u00a0in<\/span>\u00a0Future Markets. Here the gold price\u00a0is determined and is\u00a0susceptible of manipulations, as most buyers never request a physical delivery.<\/span><\/p>\n

In the\u00a0Future Market\u00a0it is possible for a party that wants to drop the gold price\u00a0to do so,\u00a0in order\u00a0to flood the market with paper sales\u00a0while not having\u00a0the gold at its disposal. On Friday April 12, 374,000 future contracts were sold for which each contract contained 100 ounces of gold, which\u00a0in fact\u00a0means that\u00a0on Friday,\u00a0\u00a037.4 million ounces of gold were sold. That coincides with about half of the year’s production.\u00a0So on a single day, just as much gold was sold as all goldmines together can produce in six months time!<\/span><\/p>\n

That people placed a large order on the market while knowing that you will not get a good price is not ‘normal’.\u00a0Thus this \u00a0should not\u00a0be seen as\u00a0a\u00a0normal\u00a0action.\u00a0Which\u00a0ultimately\u00a0means that last Friday someone deliberately wanted to depress the gold price!<\/span><\/p>\n

These manipulations are not new. They have been taking place for quite some time now, relatively\u00a0on crucial moments you cannot overlook them.<\/span><\/p>\n

Paul Craig Roberts<\/a> a former \u201cAssistant Secretary of the US Treasury\u201d has the answer: he is of the opinion that the \u201cFederal Reserve\u201d is behind this attack. According to Roberts the FED worries about the dollar. The central bank is printing quite some money to avoid the collapse of the system.\u00a0<\/span><\/p>\n

Source:<\/span><\/a><\/span><\/strong><\/p>\n

This will stop when large parties request delivery of the gold purchases. Do not only think of investors who then deposit it somewhere in a large safe. But especially of central banks, such as China and Russia, who profit from the relativly low prices to convert the dollar reserves into gold.<\/span><\/p>\n

Last month only China bought more than 100 tons of gold. According to Andrew Maguire<\/a> an independent bullion trader, last Friday non-western central bank used the drop in the price of Gold and bought for more than 100 tons of Gold, to be delivered physically of course.<\/span><\/p>\n

Source:<\/span><\/a><\/span><\/strong><\/p>\n

These attacks show the despair\u00a0and concern\u00a0of the central banks\u00a0and\u00a0the savers all over the world,\u00a0that\u00a0what \u00a0happened in\u00a0Cyprus can also occur in their\u00a0own\u00a0countries.<\/span><\/p>\n

A lot of that money will go in the direction of gold, so it is now of great importance to discourage this as much as possible.<\/span><\/p>\n

The deliberate\u00a0coordinated attack on the price of Gold last Friday by some big USA banks and western central banks can be seen as\u00a0an desperate attack\u00a0and that they have used one of their last bullets to discourage\u00a0people and institutional investors\u00a0to put their money in those precious metals\u00a0instead of\u00a0into\u00a0an account at\u00a0their\u00a0banks. The moment people\u00a0realize\u00a0that\u00a0the\u00a0money in their pockets\u00a0and\u00a0the\u00a0Deposit Insurance Companies\u00a0have\u00a0less that 2% assets\u00a0to\u00a0cover\u00a0their\u00a0insured deposit, people might\u00a0run\u00a0into Gold, Silver and precious metals\u00a0and ask for physical delivery.<\/span><\/p>\n

Due to that we believe that people should follow the example of China and Russia and other Fundamental Investors, to use the decline of the price of Gold and other precious metals of last Friday, solely to add more of these precious metals to their portfolios, which are in closed end ETF’s and stored in Safe Countries with a history of protecting investors and depositors.<\/span><\/p>\n

Before following any investing advice, always take your investment horizon and risk tolerance into consideration and keep in mind that the price of Precious Metals as well as the stocks of their producers can be very\u00a0volatile and that sharp corrections may happen in the short term.<\/span><\/p>\n

Yours Sincerely,<\/span><\/p>\n

Eric Panneflek<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

\u00a0 Dear PGM Capital, Blog readers, Last Friday Gold sank more than five per cent, entering bear-market territory as institutional investors fled Gold amids of other safe-haven assets amid concerns about central bank sales and souring sentiment. In the table below we can see the damage done to Gold and other precious metals last Friday,[…]<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7,9,10,11,19,20,13,15,16,1,17,18],"tags":[],"class_list":["post-6955","post","type-post","status-publish","format-standard","hentry","category-commodities","category-emerging-markets","category-eric-panneflek","category-euro","category-financial-news","category-general-information","category-market-volatility","category-pgm-capital","category-precious-metal","category-uncategorized","category-us-dollar","category-world-economic-outlook"],"_links":{"self":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts\/6955","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/comments?post=6955"}],"version-history":[{"count":0,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts\/6955\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/media?parent=6955"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/categories?post=6955"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/tags?post=6955"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}