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undgrd
19th April 2010, 10:24 AM
Goldman Worries Weigh on Gold Price (http://finance.yahoo.com/news/Goldman-Worries-Weigh-on-Gold-tsmf-658532547.html;_ylt=AgnmNx5d1HCY.8LjreIz5AK7YWsA;_ ylu=X3oDMTE1ZW1sc29xBHBvcwM3BHNlYwN0b3BTdG9yaWVzBH NsawNnb2xkbWFud29ycmk-?x=0&sec=topStories&pos=5&asset=&ccode=)


ByAlix Steel, , On Monday April 19, 2010, 10:00 am EDT

NEW YORK (TheStreet) -- Gold prices were slipping Monday as fraud charges against Goldman Sachs curbed investor risk appetite.

Gold for June delivery was falling $2.10 to $1,134.80 an ounce at the Comex division of the New York Mercantile Exchange. The gold price Monday has traded as high as $1,138.50 and as low as $1,124.30. The U.S. dollar index was rising 0.49% to $81.22. The spot gold price today was slipping over $5, according to Kitco's gold index.

Potential Costs of the Goldman Mess (Forbes)

The Securities and Exchange Commission Friday charged Goldman Sachs with fraud which dragged down gold. Prices have been looking to make a move past the $1,160 area to $1,175 an ounce as momentum buying increased gold's appeal as an alternative asset. However, after fraud charges were brought against Goldman, investors lost their risk appetite and dumped all commodities in favor of the U.S. dollar. Worries that more charges could be brought against other banks that participated in mortgage backed securities as well as the fear of even stricter regulations from Washington kept the gold price lower on Monday.

"Investors appear to be cutting back on riskier assets, including commodities, in the wake of the U.S. government's decision to sue Goldman Sachs," says Anthony Rizzuto, Jr., managing director of Dahlman Rose & Co. in his daily metals report. Prices could look to $1,100 as a new support level as many investors keep money on the sidelines to determine if this sell-off is part of a deeper correction.

Also weighing on gold prices was China's new rule regulating its real estate market after house prices popped almost 12% in March. China now requires homeowners to put 50% down on second homes and told banks to stop lending money to homebuyers trying to get a mortgage for their third home. China reported explosive economic growth in the first quarter and investors are expecting the country to restrict money lending even further to curb expansion. Gold prices could see short term downside if China ends its flow of free money and investors stop buying gold as an alternative asset. The price of silver was up 1 cent to $17.69 while copper prices were losing 2 cents to $3.48.

Most Recent Quotes from www.kitco.com

Mining stocks, a more leveraged way to invest in gold, were slipping. Barrick Gold was down 1.43% to $38.55 while Newmont Mining was down 0.67% to $51.80. The company is reportedly in talks to take over Lihir Gold, which previously rejected an $8.45 billion offer from Newcrest Mining. Lihir has hired advisors to work out options. The stock was down slightly at $36.22.

Other large-cap miners Kinross Gold and Goldcorp were trading down over 1% at $17.33 and $38.35, respectively. Shares of Freeport McMoRan Copper & Gold were slipping 1.22% to $80.19.

The popular physically backed ETF, SPDR Gold Shares was down 0.44% to $110.75. Paulson & Co. is the largest holder of the GLD and some analysts are worried that if the hedge fund comes under any SEC pressure it may have to unload some of its gold position to store up liquidity.

Horn
19th April 2010, 10:38 AM
Thank goodness Silver's still got float.

Sorry for stating that in the "Gold" section...;)

gunDriller
19th April 2010, 11:37 AM
if there was any cram-down (market manipulation) today, I think it happened about 5 AM Eastern time, when there was an abrupt run down to $1125.

http://www.kitco.com/images/live/gold.gif

i'm used to this happening when NYMex is open.

i was wondering if the market manipulators would use the Goldman-Paulson investigation as a reason to cram down gold and silver. world stock markets were down a lot today, and they took gold with them.

in the past few months (November 2009 to February 2010) this has been the exact background setting for 15-20 cram-downs, always during NYMex hours.

If there is market manipulation going on now, and I think there is, it looks like they have changed their tactics & timing. Possibly to make it harder to counter the effects of the manipulation. With the market opening at $1125, with mixed economic news, gold has slowly floated up to $1135.

JohnQPublic
19th April 2010, 12:27 PM
Goldman guts gold, but radical bugs calm (if cynical) (http://www.marketwatch.com/story/goldman-guts-gold-but-bugs-still-calm-2010-04-19?dist=countdown)
Commentary: For some, gold pullback is further evidence of manipulation
April 19, 2010

By Peter Brimelow, MarketWatch
NEW YORK (MarketWatch) -- Gold's freaky Friday has a lot of commentators puzzled. But not the radical gold bugs -- my name for the "bug" subset who have long argued that the gold market is manipulated.

I reported last week that the radical bugs suspected that their traditional enemy, the Large Unknown New York Seller, had returned. ( See April 12 column.)

After gold spent last week ineffectually trying to advance above the previous week's 2010 closing high, the Seller sent it reeling mid-morning Friday, down $25 in a few minutes. The Nyse Arca Gold Bugs /quotes/comstock/10t!hui.x (HUI 426.72, -1.27, -0.30%) lost 4.4%.

The immediate cause of Friday's air pocket: news of SEC civil fraud charges against Goldman Sachs /quotes/comstock/13*!gs/quotes/nls/gs (GS 162.51, +1.81, +1.13%) .

Since gold is supposed to be a hedge against financial-sector risk, traditional gold bugs find this action outrageously counterintuitive and absurd. ( See Mark Hulbert's First Take of April 16.)

But radical gold bugs, cynical charter members of the Goldman Sachs unfan club, are not puzzled.

As a writer on Bill Murphy's Lemetropolecafe site put it:

"Guess what gold did this morning the second this INCREDIBLY GOLD BULLISH NEWS about Goldman Sachs came out?"

"Yep, it soared."

"No, wait, sorry, it plummeted $30 in MINUTES. ... The Cartel made sure that the traditional safe haven asset was not turned to in times of crisis ... making sure that a sheer tsunami of unbacked (naked short) paper contracts were thrown at gold and silver instantly."

"The Cartel" is of course the radical bugs' synonym for the syndicate of financial intermediaries that they allege conspire to manage the gold price.

And allegations of conspiracy are of course the substance of the SEC's complaint against Goldman Sachs. The concept is becoming mainstream. Hmmm. ( See April 5 column.)

As it happens, the technical damage done to gold on Friday does not impress some chart readers.

Dow Theory Letters' Richard Russell shrugged it off: "The daily chart of gold ... shows a head-and-shoulders bottom. More recently, an upside breakout from the pattern. Today we have a pull-back to the breakout or resistance ... line. If gold can hold at 1,100 or above, it will be impressive."

Even the much-more-nervous Dan Norcini at JSMineset.com found some comfort: "Price collapsed down past the initial support line ... before finding some buying at the second level near $1,130. This level is strong support, and the fact that it held is encouraging."

But the new conventional Wall Street bear case against gold -- that now only the U.S. dollar is a hedge against financial-system risk -- was expressed with uncharacteristic forcefulness by the HSBC gold analyst on Friday:

"Further bullion liquidation likely as risk sentiment may drop more in the wake of the Goldman news. In the near term, we expect the developments surrounding Goldman to overshadow all other issues that previously dominated gold trading. Near-term market sentiment looks bearish, and further losses are likely, in our opinion."

Contradicting this are a series of interesting posts by dot-com litigation veteran Henry Blodgett on his Business Insider Web site. Blodgett thinks that Goldman will make the SEC threat go away inexpensively (by Goldman standards).

If true, of course, this means the new conventional Wall Street risk-aversion gold-bearish thesis is null in this case.

Or there's Lemetropolecafe's long-standing benchmark, Indian gold-market premiums.

The concept is that India and the Eastern physical market generally are little influenced by Wall Street concerns, but are responsive to lower prices. India is the world's largest gold importer. Indians actually consume gold, as jewelry for brides. And they were importing Friday morning -- even before gold's down gap.

After the Goldman news, Lemetropolecafe drily predicted: "Indians toast Goldman Sachs."

Neuro
19th April 2010, 02:31 PM
Absurd! GS are sued for manipulating the gold price down and we see even more down manipulation.

gunDriller
19th April 2010, 03:46 PM
Thank goodness Silver's still got float.

Sorry for stating that in the "Gold" section...;)

doesn't bother me. maybe we should have an "electrum" section

http://en.wikipedia.org/wiki/Electrum

where you can talk about either. Electrum is an admixture of silver & gold that sometimes occurs naturally.

undgrd
19th April 2010, 03:54 PM
I hope this trend continues.

Goldman gets crucified and the "radical" gold bugs get to pick up more at a better rate.