Quote:
Originally Posted by Houdini
Actually not dumb or illogical at all. Hedge funds need cash to cover margin calls and redemption requests. What's one of the few winners all year? Gold. Gold doesn't follow the market, it follows the dollar. The market going down over the past few months, just happened to have a falling dollar at the same time and that's why gold shot up. The reason gold dropped over the last few days with the market, is because the Fed bought long term bonds, and viola, the dollar went up. Liquidation stats for August are meaningless because no serious investor, especially hedge funds, are going to liquidate immediately when the market drops a few hundred points. As the the broader picture comes into view, investors do want secure their profits, redemption requests come in, then hedge funds are forced to liquidate winning positions.
John Paulson is perfect example. http://www.etftrends.com/2011/09/pau...offset-losses/ |
Ok so what is it going to be next week if it keeps going down, or has another drop. it will be still because of "Fed bought long term bonds" or the dollar went up. etc... Why didn't gold explode in the past couple years when the dollar dropped low??? if you look hard enough you can try to associate just about anything at any give time as a cause but if you take the same event in the recent past, it doesn't always have the same outcome. It just fits your reason for the day. When gold goes back down to 1500 then 1300 then 1200 and even back down to 1000 at some point in the not so far off future, you guys are all going to have all of these reasons why, when in reality the bottom line was that hyped fizzled and bubble burst. As simple as that.
Gold is being bought up to ridiculous levels over the last couple months mainly because of hype. Everyone is turning to it because its on fire and all the experts are saying it will go up to 2,000 or more. So you can't lose right??? Everyone is jumping on board. Now when something starts going down, the people fueled by hype will stop buying and most will start selling because hype to make a quick buck will get in you, fear of actually losing all of your money will get you out just as fast.
You guy can try to explain it off and blame other events and try to over complicate it all you want, when it really busts and goes back down to realistic, sustainable levels it will be hype that got it up and panic that got it back down. Classic bubble just like all the rest over the last 10 -12 years.