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Golden Star Resources, Ltd. Message Board

  • studebaker1940 studebaker1940 Jun 27, 2013 2:32 PM Flag

    Who “murdered” the gold price? Ian Gordon

    Ian Gordon, chairman and founder of the Longwave Group, speculates on what happened to the gold price on April 15, the biggest one-day loss ever for the yellow metal.
    Author: Brian Sylvester
    Posted: Thursday , 27 Jun 2013

    The Gold Report -
    The gold price may have taken a tumble, but Ian Gordon, chairman and founder of the Longwave Group in British Columbia, is watching for a recovery. As bullishness in gold reaches some of its lowest levels, Gordon, in this interview with The Gold Report says he believes that is indicative of a turn.
    The Gold Report: On April 15, the gold price plunged about 9%—the biggest one-day loss ever for the yellow metal. Many gold investors got "murdered" that day. Has your personal investigation revealed any suspects?
    Ian Gordon: I suspect it was akin to what happened in 1999. The then-governor of the Bank of England, Edward George, supposedly said that "any further rise in the gold price would take down one or more trading houses." He said the rising price of gold was curtailed through the work of the Federal Reserve and the Bank of England. It appears that a bullion bank was caught offside on the short side and they had to take the price of gold down quite dramatically to allow it to cover.
    I think something similar happened in April. I think it was manipulated to the downside. Goldman, Sachs & Co. encouraged its clients to short sell gold two days before this occurred.

    Sentiment: Strong Buy

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    • Tied to this is the bailout of Cyprus banks, and then yesterday the European Central banks tying depositors money to bailing out the bank if it is going down. The powers to be wanted the price of gold low to buy, as why put your money in bank and risk getting less back and bailing out the bank to boot.
      We may see gold lower, but we are close to the bottom imho.

    • good news it will go now to $3.00 load up on GSS

    • TGR: Could it have just been an error?

      IG: I always suspect the worst. There's so much manipulation in all the markets as I see it.
      TGR: That one-day drop caught even long-time gold investors off guard and shook their confidence. Is being a precious metals investor at this point simply about having the resolve to stay the course, or should even the ardent investors make adjustments to their gold portfolios?
      IG: I'm extremely bullish on gold. Bullishness in gold, according to the website Market Vane, is at 40%, the lowest it has been since 2001. Bullishness in the stock market is at 70%, which is almost the highest it has been since Market Vane began tracking it. I see a reversal occurring here, for the gold price to the upside and the stock market to the downside.
      TGR: There's no way to sugar coat the disappointing performance of gold and silver in 2013. But has the current global economic backdrop provided some new and compelling reasons to own gold and precious metal equities?
      IG: There are compelling reasons to be bullish on gold particularly, simply because there is a real worldwide crisis in fiat money. The unfolding crisis is similar to the 1930s, when the whole monetary system collapsed. We're envisioning something quite similar to that collapse is now occurring.
      We can see that there's this huge move to gold, not only by countries like China and Russia and even the small "-stan" countries, but major investors are also taking up the physical metal because they can see this crisis unfolding.
      TGR: Most of what I'm reading says that there just aren't a lot of bids in the market right now for precious metals. Investment demand has waned, with gold falling consistently lower since its high in 2011.

      Sentiment: Strong Buy

      • 1 Reply to studebaker1940
      • :IG; Investment demand is huge. The output of American Eagle gold bullion coins by the U.S. Mint is at record highs. Demand by the small investors for gold and silver is at unprecedented levels. The amount of gold that's being imported through Hong Kong into China is at a record level.
        TGR: Yet, at the same time, India, which is the world's biggest gold consumer, increased the royalty from 6% to 8% on gold imports.
        IG: It has, but India is notorious for gold smuggling. Most people are going to look for a way to go around those taxes. I suspect that there will be the same amount of gold imported into India through Dubai, but most of it won't be declared.
        TGR: You say you're seeing strong demand for the physical metal, but investors have been getting out of exchange-traded funds (ETFs) and equities in mass numbers.
        IG: With regards to the gold ETFs, I suspect that many investors are cashing in their paper claims to take possession of the physical. Yes, gold stocks, particularly the juniors, have been slaughtered, but once bullishness returns to gold, bullishness will return to gold equities. When you get this overly bearishness in markets, it's usually indicative of a turn. I'm confident that we're going to see a turn to the upside. I also believe that the turn in the stock market to the downside is about to begin.
        TGR: I get the sense that there's a prevailing sentiment that we haven't hit a bottom yet in the mining equity space and that there's another leg down before we see a move to the upside. Do you see that as well?
        IG: That is always a possibility and it can't be ruled out, but the precious metals' fundamentals are as compelling today as they have ever been.
        TGR: Could it be seasonality due to the summer?
        IG: I don't think so and anyway I am a long-term investor and I am essentially not concerned by short-term price machinations. As I have said, the most compelling reason to own gold is the crippling debt crisis, which has brought about the probability

        Sentiment: Strong Buy

 
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