Home › 6a) Gold & Monetary Metals › 6a.) GoldCore › Is The Bull Market Over For Gold?
Permanent link to this article: https://snbchf.com/2021/04/flood-bull-market-gold/
Donate to SNBCHF.com
Donate to SNBCHF.com Via Paypal or Bitcoin To Help Keep the Site Running
Please consider making a small donation to Snbchf.com. Thanks
Bitcoin wallet: bc1qa2h6hgd0xkuh7xh02jm5x25k6x8g7548ffaj3j
Receive a Daily Mail from this Blog
Live Currency Cross Rates
On Swiss National Bank
-
SNB Sight Deposits: Reversal after Walmart Results
6 hours ago -
SNB-Entscheid treibt Hypozinsen auf Zehnjahreshoch
4 days ago -
Business cycle signals: SNB regional network
1 day ago -
Quarterly Bulletin 2/2022
2 days ago -
Confederation and SNB facilitate exchange of Ukrainian currency at Swiss commercial banks
3 days ago
Main SNB Background Info
-
SNB Sight Deposits: Reversal after Walmart Results
6 hours ago -
The Secret History Of The Banking Crisis
2017-08-14 -
SNB Balance Sheet Now Over 100 percent GDP
2016-08-29 -
The relationship between CHF and gold
2016-07-23 -
CHF Price Movements: Correlations between CHF and the German Economy
2016-07-22
Featured and recent
-
Das plant die Regierung mit unserer Rente!
-
“DAX Long oder Short?” mit Marcus Klebe – 27.06.22
-
US Opening Bell mit Marcus Klebe – 27.06.22
-
Trading Wochenanalyse für KW 26/2022 mit Marcus Klebe – DAX – DOW – EUR/USD – Gold #Chartanalyse
-
ZERSTÖRUNG der deutschen Energiepolitik! (Notfallplan ausgerufen)
-
Episode 756: *Throwback* Jeff Deist And Pete Discuss Their Post-Election Predictions from Nov 2020
-
Energie-Krise: Daniel Stelter über dramatische Lage in Deutschland
-
The Dollar: Don’t Get too Far Ahead of the Story
-
Russell 2000 Futures (RTY) Technical Analysis for 27 June, 2022, RTY1! 1769.3 ▲ +0.43%, Bullish
-
Nasdaq Futures (NQ) Technical Analysis for 27 June, 2022
More from this category
Die Zentralbanken sind schachmatt
27 Jun 2022
Markets Promote Real Equality Much More Than Progressive (and Conservative) Critics Claim
27 Jun 2022
Unit of Account and Current Valuations by Paul Belanger
27 Jun 2022
Nasty Number Five, Not Hawk Hiking CBs
27 Jun 2022
SWISS plans more flight cancellations into autumn
27 Jun 2022
Higher federal tax deductions for health insurance announced
27 Jun 2022
The Dollar: Don’t Get too Far Ahead of the Story
26 Jun 2022
The Everything Data’s (Z1) Verdict: Not Inflation, Only More Of The Same
26 Jun 2022
Wholesale Prices Rise More than 10 Percent, Pointing to Continued Price Hikes
26 Jun 2022
The Return of the Anguish of Central Banking: Why the Fed and Inflation Go Hand in Hand
26 Jun 2022
Business cycle signals: SNB regional network
26 Jun 2022
Gesunkene Mining Einnahmen lassen Ethereum Hashrate abstürzen
25 Jun 2022
The End Game Approaches
25 Jun 2022
Our No-Win "Kobayashi Maru" Economy
25 Jun 2022
Back to the Future: Progressives Imagine the Good Old Days of Price Controls
25 Jun 2022
Switzerland details revenue split for global corporate tax rate
25 Jun 2022
US Household Saving Rate Vanishes, Credit Card Debt Soars
25 Jun 2022
Quarterly Bulletin 2/2022
25 Jun 2022
Risk Appetites Improve Ahead of the Weekend
24 Jun 2022
Confederation and SNB facilitate exchange of Ukrainian currency at Swiss commercial banks
24 Jun 2022
Is The Bull Market Over For Gold?
Published on April 3, 2021
Stephen Flood
My articles My videosMy books
Follow on:
Gold has not made new highs in many months. Gold peaked last year at US$2067 on August 6. The 7 month down leg of more than 18% as been deep enough and long enough that some commentators are now saying that the bull market has now turned to a bear market for gold. Losing faith is understandable because falling prices feel bad. But this week we want to show that current prices may not reflect reality. We will review the story of Archegos Capital Management which proved that prices often are false signals, a picture painted by others who have their own agenda. Then we can relate that story back to gold and silver by making the point that 7 months of down leg means nothing.
OFTEN WHAT WE SEE IS JUST WHAT OTHERS WANT US TO SEE
Archegos is something almost no one heard of until last week. Its founder has had past run ins with stock market regulators for breaking the rules. Regardless giant global banks like Mitsubishi, Credit Suisse and Nomura loaned billions of dollars to Archegos. Importantly those loans appear to have been on the scale of about 10 to 1. For example, if Archegos started with one billion, they then borrowed ten billion against that one billion, making a total of eleven billion available for ‘investing’. So its basically a hedge fund but since all money comes from the owner, its called a ‘family office’.
Apparently, Archegos investment strategy was to keep pouring money into the same few stocks so that the resultant rising price action would draw other investors into those same stocks at higher prices. Presumably Archegos intended to spark a rally and then sell into that rally near the top for a nice profit. Today’s main lesson is: Price action does not always tell the truth.
Instead of selling at the top, Archegos suffered a huge margin call for many billions of dollars. Apparently, they had borrowed so much money, from many different banks, that once all the banks came realize the size of the debt, faith was lost in Archegos. The giant banks will all lose billions and Archegos itself may even have the original billion wiped out to zero. Thus, today’s second lesson is: Banks have a simple business – they rent out umbrellas on sunny days but need umbrellas back when it rains to keep themselves dry. Sometimes, as in the case with Archegos, they get stuck in the hurricane without any cover.
Watch this video on GoldCoreTV
For months on end, to an outsider watching the upward progress of stocks bought by Archegos with ‘borrowed’ money from major banks, there was no sign of trouble whatsoever. Many investors were enticed to buy shares by rising prices. Those investors now wish they had not as prices declined dramatically as the scheme broke up, leaving banks to sell for whatever could be recouped. Until something broke, the price action was a beautiful picture painted by Archegos. Once the break happens [the reason for the break barely matters] that leverage goes into reverse.
Here is another proof of the main lesson. It turned out that once the banks recognized that rain was coming, they argued over the umbrella, as there was not enough protection to go around. Calling for a ‘bailout’ early on, some of the banks tried to prevent all banks from selling shares so quickly that the beautiful rising price picture would be revealed as a forgery. So once again we see that price action does not always tell the truth. Once that bailout conversation failed, it was each bank for themselves.
To recap the story what we see everyday over a very long period of time can very easily be a picture painted for us by someone else who is not displaying the entire truth. Once the truth cannot be hidden, everyone including sophisticated bankers worry about themselves only.
SHOULD I SELL GOLD NOW?
Let’s apply the main lesson to gold which has been falling for months. The picture painted certainly looks grim. Yet as we learned up above maybe the picture is not the entire truth. Is there some levered ’investor’ whose method is betting against retail buyers that used stimulus checks to buy gold and silver? Nothing in the Archegos story confirms or denies this. If there is one, we will not know until prices spike higher. We will not know until its too late for buying the metals. We will not know until after the global banks know.
Given the above story, should people sell metals because they have fallen in price for months? NO. Maybe the story above raises a vital question, when Central Banks lower interest rates and ensure liquidity, whom do those actions help the most?
Watch the video to learn more…
Follow on:
You Might Also Like
2022-03-24
Dave Russell of GoldCore TV welcomes back Gareth Soloway of InTheMoneyStocks.com where we ask if the bull market for stocks is back and if $2,500 on gold is still on the cards for 2022?
2022-03-09
Dave Lukas of Misfit Entrepreneur invites Stephen Flood, CEO of GoldCore, to the show. Dave and Stephen talk about what people should know before investing in gold and silver, the present state of inflation, central banking, and the monetary system.
Further, he explains why gold is still your safe-haven asset and how it provides you with personal sovereignty. They also talk about cryptocurrencies and their future.
Stephen also discusses some of the lessons he’s learned along the route to being a successful entrepreneur.
Click Below to Listen to the Podcast
Download Your Essential Checklist
The Truth About The National DebtWatch David M Walker Only on GoldCore TV
GOLD PRICES (USD, GBP & EUR – AM/ PM LBMA Fix)
07-03-2022 1999.25 1980.95 1520.63 1505.52
2022-03-04
As part of the sanctions against Russia, seven Russian banks have been cut off from SWIFT.
We start by discussing what SWIFT is, and then the implications of completely cutting Russia out of SWIFT.
What is SWIFT and Why Russia is Being Excluded
SWIFT – The Society for Worldwide Interbank Financial Telecommunication is a messaging system that links more than 11,000 banks in 200 countries.
The system doesn’t move actual money between the banks but transmits messages between banks with instructions to settle transactions.
Additionally, this system is crucial to the international trade system – without it, countries wouldn’t be able to settle trade transactions between countries.
The bar charts in the graphic from the Wall Street Journal below illustrate the growth
2022-01-30
The ‘Fed put’ – gone until there’s blood in the streets
Well, it’s happening. Bitcoin (and other cryptocurrencies are sharply down, along with equity markets in many advanced economies.
And the Federal Reserve (the U.S. Central Bank) statement and press conference on Wednesday didn’t indicate any backing down from raising interest rates, maybe as soon as the March meeting.
The Fed’s stance pivot from ‘the economy needs additional stimulus’ to ‘it is time to start tightening policy’ came at the end of 2021 when Fed officials changed their view that 40-year high readings on consumer price inflation was due to transitory factors and will subside on its own.
Their new stance that high inflation is permanent and is what ensures tighter policy. The Fed has already started
2022-01-23
European Energy Crisis: 4 Reasons You MUST Know! European households are facing rising prices on many goods and services, but one particular standout is electricity and gas bills.
2022-01-09
Gold price fell to $1,808 an ounce in the wake of the release of the minutes of the December Federal Reserve meeting, having hit an intra-day high of $1,829. Silver price fell to $22.72 an ounce from an intra-day high of $23.26.
Tags: Commentary,Daily Market Update,Featured,Gold,gold price,investing in gold,newsletter,silver price