Gold Bottom Is In! India Now In A Gold Buying FRENZY!

[mamboni]

I'm calling the gold bottom at the Fibonacci retracement at $1330. More importantly, this drop in gold has ignited a buying frenzy in India, the world's biggest gold consumer. Folks, the bankers would have to be absolutley suicidal to conduct another raid thinking Indians will stop buying gold to wait for a bottom - it ain't gonna happen. The bottom is in. And I think gold could easily end the year up. Damn straight!


India's Response To The Gold Sell Off: A Massive Buying Frenzy


http://www.zerohedge.com/sites/defau.../picture-5.jpg
Submitted by Tyler Durden on 04/16/2013 22:35 -0400

• Bank of America
• Bank of America
• BLS
• Bureau of Labor Statistics
• Central Banks
• Fail
• Greece
• India
• Portugal
• Reality

Panic, depression, rage, suicidal ideations: watching the US mainstream media, one would think that these are the prevailing sentiments among those who unlike the prevailing "developed world" speculative class, are invested most heavily in physical old - Indians, who collectively comprise the largest end-demand consumer segment for gold products. One would be very wrong.
Because while apparently it is incomprehensible to the "sophisticated" financial crowd in the US that someone may have conviction in their beliefs, and not just lunge from extreme to another, merely riding momentum and technicals like so many "professional" investors, Indians are doing precisely what a buyer should do when the price of the desired product plunges: doubling down, literally.


Bloomberg reports of the immediate aftermath to the past few days' gold plunge: "Gold buyers in India, the world’s biggest consumer, are flocking to stores to buy jewelry and coins, betting a selloff that plunged bullion to a two-year low may be overdone." Wait, so instead of jumping out off high buildings, Indians are being cool, calm and collected and... buying more? Unpossible. Do they not get CNBC in Mumbai? Apparently not: "My daughter is just six months old, but I think it is never too early to buy gold,” said Sharmila Shirodkar, a 28- year-old housewife, while displaying a new pair of earrings she bought from a store in Mumbai’s Zaveri Bazaar. “I had been asking my husband every day if prices will go down more. I couldn’t wait anymore.”


Indeed - the buying frenzy in India has been unleashed:

While the drop in gold prompted investors worldwide to pare holdings in exchange-traded products, surging physical demand in India may help stem the 17 percent slide in prices this year. The plunge after rallying for 12 straight years may make bullion more affordable to Indians, according to Mehul Choksi, chief executive officer of Gitanjali Gems Ltd. (GITG), the nation’s biggest retailer of jewelry and diamonds by sales.


“This is a perfect time to buy as prices will only go up from here,” said Vishal Mehta, a 33-year-old garment dealer, while ordering coins from Choksi V. Naginchand & Co. in Zaveri Bazaar. “I usually buy one gold coin a month, but this time I am buying two.”

Hence the true value of the word "double down". Here is another word US "investors" can learn from the Indians - value.

“It has been very hectic in the last two days,” said Deepak Tulsiani, owner of Dwarkadas Chandumal Jewellers in Mumbai as he surveyed his 11 employees, who were busy with customers. “There has been a rush to buy gold because now people are getting jewelry 15 percent cheaper than before. It’s value for their money.”


Zaveri Bazaar, the largest bullion market in the country, buzzed with customers, who were browsing through collections of bangles, bracelets, necklaces and rings displayed in trays ahead of the wedding and festival seasons. Most buyers were women in groups of two or more, accompanied by a male who paid the bills.


“Whatever be the price, Indians buy gold because it is an age-old tradition,” C.P. Krishnan, a director at Geojit Comtrade Ltd., said by phone from Kochi. “It has become an unavoidable expense during weddings and festivals. With the sudden crash in prices a lot of buying is happening across India as people are thinking of it as a golden opportunity.”

Yes: tradition! That's what the Chairman said too. And the chairman is never wrong. Even when he is selling the synthetic paper representation of that tradition and in the process allowing all those who trade on "value" and not "moment" to average down in terms of infinitely dilutible fiat paper.


Back to India:

“Some customers are still scared to buy now as they feel the price will go down more,” Chetan Ranka, owner of Choksi V. Naginchand, said after answering a call from a prospective customer on one of the four phones at his desk. “I have received more than 250 calls on Monday inquiring about the prices. Normally I get maybe 50 calls a day.”

The lower gold drops, the more people will buy.

“I had been keeping a tab on gold prices daily by reading the newspapers,” Sakshi Jain, a 39-year-old housewife, said as she held an intricately designed necklace against her neck in front of a mirror in Zaveri Bazaar. “I had some wedding purchases to make and as soon as prices dropped I came to buy.”

And the rub: once the correction is over, and prices resume their inexorable rising, the double down will become a buying frenzy, as everyone will realize one simple thing. Just because the BLS says inflation is has not arrived, it merely means the central banks, who are laboring under some $40-50 trillion in excess debt, will have no choice but to also double down. And one of these days not even the BLS' best efforts at fudging reality will fail.


Incidentally, they are already are. As the MIT's Billion Prices Project shows, there is just a slight disconnect between reality and what is being spoonfed.
http://www.zerohedge.com/sites/defau...013/04/BPP.jpg
Finally, for some actual numbers, we go to Bank of America which has calculated that the disconnect between the paper selloff and physical buying spree can only last so long before gold shoots right back up to $2000 as the surge in buying overwhelms the paper selling.

With prices now below $1,500/oz, we expect a pick-up in jewellery demand in the medium term and see considerable pain for miners should prices dip below $1,200/oz. As such, we believe the downside to gold prices may be limited to an additional $150/oz. In fact, we estimate that jewellery demand may become so pronounced by 2016 that prices could trade above $1,500/oz even if investors remain net sellers. Looking at sensitivities from a different angle, investors would need to buy merely 600t of gold to sustain prices at $2,000/oz by 2016, compared to non-commercial purchases of 1,798t in 2012.

And some more thoughts from BofA:

Cyprus’ announcement to sell nearly 14t of gold reserves was a key trigger behind the recent collapse in gold prices, as it raised concerns that other peripheral nations may follow suit. Given our estimate that every $45/oz represents a net sale of 100t, the move over the last two days would suggest net sales of 480t, or about 20% of yearly mine supply. In short, the market seems to have discounted the combined future gold sales of Portugal and Greece. As we believe additional gold selling in the European periphery is highly unlikely, we find it hard to fully justify the sell-off.

So please go ahead and sell. All we can say is, well, thanks.

[optionT]

Is this the response that TPTB wanted or are they losing control?

[Shami-Amourae]

Is this the response that TPTB wanted or are they losing control?

I can never tell if they are winning or losing either. I don't get what their actual goals/plans all are.

[Glass]

I don't think you can draw a line on the score board and say we (TPTB) won!

I think it's a rinse repeat process. We are dealing with people here and it's an imperfect science. You have to work on percentages that are < 100% and be prepared to repeat the process to hoover up more and more of those people on the other side, the counter party.

so if you said your aiming for say 70% first time round you get 7 out of every ten. Next time around there is only 3/10 ths the number of people still holding out. You go for 70% of them which then gives you 91% of all people in just 2 goes around. 7 out of ten and then 70% of the remaining 30% which = 21% of the total people.

Diminishing returns when we talk about QE but that's how I think the process works. Go around 3 times and you have > 95% of the people. 70% might be a big starting number. Maybe its way less. Don't know. Of course the more idiots you have the bigger the numbers can be. Once over 90% it's a done deal. You can forget the slops (remaining ~5%) because they don't matter.

The other thing is that the US is really just a small portion of the whole world and what goes on in the US is completely different to what goes on out here. What the US hears about what goes on out here is also extremely limited. Central Asia is booming. Going deeper into the central asian region there are phenomenal development plans coming on stream over the next few years. These countries will not see the sorts of declines that the US and Europe will see over the next few years. In fact it will be the opposite IMO.

[Shami-Amourae]

Repost from a year ago for those who haven't seen it:

[Glass]

Not sure if anyone has posted this one here. Do we remeber Axel and the Silver Rockets?

Merk Gold and Currency Outlook

Axel Merk, Merk Investments

April 16th, 2013

Anyone who’s ever had a brick fall on one’s feet knows how much it can hurt. It’s little consolation if that brick is made of gold. What’s happening to the price of gold? And has our outlook changed, be that for gold, the U.S. dollar or currencies more broadly?

With regard to gold, the primary change is in its price. That’s not a very good reason to be more positive or negative on the fundamentals of the yellow metal. Since the market appears to be in a “glass half-empty mood”, let’s list some of the negatives:

• China’s GDP growth has slowed to 7.7%, ushering in an era of more modest growth. In the past, disappointing growth numbers out of China have, on occasion, been a negative for the price of gold, as well as broader “risk sentiment”.
• Indeed, as European Central Bank (ECB) President Draghi has recently pointed out, the reason the ECB isn’t printing more money is because other central banks have shown that it doesn’t work. For the time being, the market appears to agree: the printing presses have not achieved a great deal, as exemplified by lackluster growth in the developed world. Indeed, we have pointed out many times that the biggest threat we might be facing is economic growth. That’s because once the money that’s been “printed” starts to “stick”, then deficits start to matter as bond markets throughout the world might sell off.
• The Eurozone has not fallen apart, and rampant inflation has not taken hold. Sure, certain prices have skyrocketed, but overall, the market as a whole is rather complacent. As such, it’s only reasonable for gold to take a breather.
• There’s a lot of “exit” talk at the Federal Reserve (Fed) with even doves calling for a phasing out of purchases towards the end of the year. Never mind that a “phasing out of purchases” is not an exit. As we discussed in our recent analysis “Fed Exit - What Exit?”, much of this talk might be wishful thinking. Surely the Fed would like to go back to a more normal environment, but recent disappointing data, such as disappointing nonfarm payroll and retail sales reports show that such talk might be premature. Still, forward looking markets might start to price in that “at some point” there may be an exit from the highly accommodative monetary policy.

In the past, we have cynically indicated that there’s never been a Eurozone crisis; instead, there’s a global crisis. It is naïve to think that Japan’s problems are all solved with the one time salvo of the Bank of Japan. Similarly, the Bank of England is about to get Mark Carney as their governor, suggesting that a higher inflation target and/or nominal GDP targeting is in the cards. And in the U.S., Bernanke’s term is ending early next year; the last time we checked, Paul Volcker was not the most likely candidate to succeed Bernanke, but super-dovish Janet Yellen was the frontrunner. Taken together, there are plenty of reasons to believe that we haven’t seen anything yet with regard to the price of gold - and with that, we mean on the upside. However, investors were reminded of the fact that gold is historically rather volatile, even if recent volatility is on the high side even by historic standards. We also have to keep in mind that a lot of technical damage has taken place: many investors that bought gold in the past 2 years have paper losses and might be eager to sell on rallies. From our point of view, volatility is your friend, as it shakes out weak holders of gold, making price appreciation ultimately more sustainable.

More here. The link has some stuff about currencies which is interesting.

The message hasn't changed much. Shaking the weak hands etc

[mamboni]

The FED cannot stop printing for many reasons. The bottom line is that printing (QE) is the only tool and the only leverage the FED has. If they stop printing then they cease to be a force of any significance - they render themselves irrelevant. In any event, if they did stop QE interest rates would rise. If this happened the entire derivative structure would implode. I don't want to contemplate the kaos that would ensue worldwide. I do believe that amidst the anarchy and suffering, the peoples of the world would demand a stable money, having had their fill of Keynesian games and financial tricks. They have turned to gold every other time this has happened. Why woudl this time be any different?

[mamboni]

“(Reuters) - When he woke up to news of a collapse in gold prices, Yujiro Yamashita, 63, made his way to Tokyo's posh Ginza district to buy the precious metal for the first time in 20 years.”

http://www.reuters.com/article/2013/04/16/us-japan-gold-idUSBRE93F18I20130416

[mamboni]

I think the FED and JPM cut their own financial throats with this latest gold and silver takedown paper rape. They will fail becuase of their arrogance and myopia. They still think America is the master of the world and the heart of finance. Well the world isn't playing that tune anymore and is moving to it's own tune now. They have unwittingly ignited the physical gold and silver markets into an international buying frenzy, in India, China, Japan, Russia and elsewhere.

(physical silver prices are exactly where they were just beofre the paper short raid by the banksters, showing what a fraud the COMEX price is. If you buy silver from the dealers today, you will get a modestly discounted price because premiums have all but compensated for the spot price discount; and you will wait 4-5 weeks for delivery. So physical silver in in literal backwardation. Which begs the question: how sure are you that the metal you buy todays will be delivered? A lot can happen in 4 weeks).




Gold Buying Frenzy Continues: China, Japan, And Australia Scramble For Physical


http://www.zerohedge.com/sites/defau.../picture-5.jpg
Submitted by Tyler Durden on 04/17/2013 08:47 -0400

• Australia
• China
• Japan
• National Debt
• Reuters
• Yen
• Yuan

We noted here that the plunge in the paper price of gold (and silver) had prompted considerable renewed demand for physical and now it seems the scramble among the "more stable investor base" is increasing. The shake out of ETFs and futures has left the Australian mint short of deliverables and Japanese and Chinese gold retailers seeing a "frenzied" surge in demand. The customers are not just the 'rich' or 'elderly'; in China "they tend to wear water shoes and come directly from the market...;" in Australia, "the volume of business... is way in excess of double what we did last week,... there’s been people running through the gate," and Japanese individual investors doubled gold purchases yesterday at Tokuriki Honten, the country’s second-largest retailer of the precious metal. The panic selling by a weaker 'imminent inflation-based' investor base has sparked physical shortages - "there’s been significant sales made as people see this as great value." It seems our previous discussions of a rotation from paper to physical were correct and this physical demand will eventually leak back into the paper markets.
Australia (via The Age):

Gold sales from Perth Mint, which refines nearly all of the nation’s bullion, have surged after prices plunged, adding to signs that the metal’s slump to a two-year low is spurring increased demand.


“The volume of business that we’re putting through is way in excess of double what we did last week,” Treasurer Nigel Moffatt said, without giving precise figures. “There’s been people running through the gate.”
...

“There’s been significant sales made as people see this as great value,” Mr Moffatt said. “Gold owners are very reactive to significant market movements.”
...

The Perth Mint’s sales of gold coins climbed 49 per cent to 97,541 ounces in the three months ended March 31 from a year earlier

China (via China News):

Beijing gold store two hours to sell 20,000 grams of gold bullion trading volume of nearly 200 million

and (via YCWB):

People have to rush to buy gold, ... gold bullion out of stock yesterday, investors yesterday to spend as much as 600 million yuan to buy 20 kilograms of gold bars
The mad pursuit gold insufficiency is not just a game for the rich. Yesterday, the Yangcheng Evening News reporter learned from the East flowers to Bay store, many growers, pork traffickers, fishmonger recently put down his job went straight to the mall to buy gold.

Japan (via Reuters):

Some Japanese also harbor fears that the expansionary monetary and fiscal policies dubbed "Abenomics", coupled with a national debt more than twice as large as annual economic output, could trigger a crisis down the line.


Skeptics about the radical attempt to reflate the economy -- or those simply worried that a slide in the yen that began in anticipation of Abe's election victory last December will continue unabated -- are still buying gold, dealers say.
"Investors in gold are convinced that Japan's fiscal position will get worse," said Wakako Harada, general manager of Japan's top bullion house, Tanaka Kikinzoku Kogyo.


"What I see at our counter is that more people are getting worried about Japan. That's why we are seeing a lot of buying."
...

"In contrast this time, we are seeing interest to buy on dips to take exposures to gold,"
...

"Investors are using this opportunity to buy gold to diversify beyond bonds, stocks and the yen currency as Japan's fiscal situation could deteriorate."

(via The Age):

Japanese individual investors doubled gold purchases yesterday at Tokuriki Honten, the country’s second-largest retailer of the precious metal.

[joboo]

It doesn't matter where people try to run and hide if you can just print up the control you need.

Theoretically the best strategy is to zag from the herd assuming the shepherd's don't have spares waiting on the sidelines.

I'm guessing it's all one big illusion at this point, as they're messing with everything, and just stealing it outright when the time comes.