I think you have hit the nail right on the head here. When it comes to world gold prices there is no substance and it is all conjecture.

The factoid about one troy oz. of gold being worth one barrel of oil was the standard for many years. Then that came apart when the price of oil fell so quickly during the 80's and has never been back together. Why? Well, there was no substance to that price to begin with is likely the best answer.

But when one big trading house starts to conjecture on the price of something for which is there is no fixed rate of supply and demand anything can happen.

And right now, whatever it is and for whatever reason, it is happening.

Yup. And as long as this has been coming on and considering the players....

Which leaves the average person in the position of playing the game without knowing all the rules. But then, I think that is the way the big guys like it to be.

Looks like you know the rules. How is that possible?

Is Goldman Sachs Lying About Gold?
Go ahead and trust them. I'll be just as happy as they are to buy your gold up.

Today might be a great day to start buying, but tomorrow might be even better. It is just a little past noon and gold has dropped again.

Electronic trading is starting to kick in now, so unless the large Brokers and Funds step in and override their systems the fall is just going to get worse.

Currently the price is $1355 and still headed down. The Cyprus bank trouble is also fueling this in that gold funds are worried Cyprus might sell a big bunch of gold at one time to cover for their banks' troubles.

Complicated stuff. That's why I don't invest in Gold.

I never said I trusted Goldman Sachs.

But a lot of folks do, and those folks are selling their gold.

I do know a bit about human nature, and when a panic sets in you never want to start buying if you are a buyer.

I have never been smart enough to know where the bottom of a price trend is, but I am smart enough to know when the price is headed back up. That is when you buy.

I also know that ready cash talks louder then anything that has to be converted into ready cash. During the 80's I was in a position to wave a few hundred million dollars at the right people if they could deliver a supertanker full of oil to the right place, and since I could pay with dollars on the spot I moved to the front of the line and got the best price from some scared sellers. Having a reputation of being able to back up what I was offering was also important in these deals.

The time to buy is when blood is running in the streets, and the blood seems to be running. Yesterday I said that oil would continue to drop and today it is doing just that. It will drop further before this is over to I would guess a futures price of $85 per WTI, but that is just a guess. I have been retired too long to really speak with any clarity on this matter.

But in the spot market, where cash rules and deals are still made on a handshake, I am betting oil will hit $70. The cheapest way to buy oil is when it is still in the ground and someone else is on the hook for delivery, so unless a firm has the money and the reputation it is impossible to work a deal like this.

But if you have both it is better than money, or gold, in the vault.

So Gold just had its' biggest one day drop since 1983. Now, why is that date important?

Because it was in 1983 that everyone figured out that Reagan really did have inflation under control and Gold, which was seen then and now as a hedge against inflation, was just worth less since all it does is sit there.

I am beginning to think that the market is finally seeing that inflation is not going to take off like a lot of folks have predicted, so goodbye Gold and hello liquid assets.

The real question is.... What to move into next?

Good -- if it scares some property specuvestors out of the market, more for me. Here's hoping for a "spring asset crash" as has happened for the past 3 years or so. Right on schedule, too.

Since when is gold not a liquid asset?
Oh, USD down 0.58 on the indicator today.

Just try to spend it. You will get nothing but funny looks. Ask anyone who tried to spend Gold coins after Hurricane Sandy.

And yes, the US Dollar is down .58 of one percent against the Euro and the Pound, but that also has pushed down the price of Gold in Asian trading by .86 of one percent, which is a fall of about $11.25 US an oz. The Euro and Pound both rose on speculation that France and Germany are going to start dumping Gold to shore up their banks, so if that rumor takes holds it looks like Gold is headed for another bad day. Or not; when a market is driven by fear who knows what it is going to do?

By the way... The Yen got killed today against the US Dollar and the Indian Rupee dropped so much that folks there are worried. I don't think it dropped that much, but it sure has them concerned.

" The market, like the Lord, helps those who help themselves. But, unlike the Lord, the market does not forgive those who know not what they do."
~~ Warren Buffett

Exactly.

:laughing:

So Gold is now at $1241. If this year's rate of decline keeps up it will hit $950 in four months.

And refined products are going down as well. Two massive refineries have just come back on line in the midwest and they are selling into a market that currently is 2 million bbls. higher in inventory than is normal.

Gasoline in Tulsa is currently $2.92 a gallon.