Gold Plunges as U.S. Pledges Support for Some IMF Bullion Sales

[formercia]

Source: Bloomberg




By Pham-Duy Nguyen

Feb. 25 (Bloomberg) -- Gold fell the most in almost two weeks, erasing earlier gains, after the U.S. said it would back ``limited'' sales of bullion reserves held by the International Monetary Fund, the third-largest holder of the precious metal.

Some of the IMF's $98 billion in gold reserves should be sold to cover a revenue shortfall, said David McCormick, the Treasury's undersecretary for international affairs. The price of gold has more than doubled in the past five years, including a 12 percent gain this year and a record high last week.

``Anytime there's more supply coming into the market, the price goes lower,'' said Ron Goodis, the futures trading director at Equidex Brokerage Group Inc. ``There's a fear that the large speculators who've been pushing this market higher might step back and wait to buy.''

Gold futures for April delivery fell $6.20, or 0.7 percent, to $941.60 an ounce at 10:12 a.m. on the Comex division of the New York Mercantile Exchange. The most-active contract rose above $950 for the first time ever and reached a record $958.40 an ounce on Feb. 21.

Read more: http://www.bloomberg.com/apps/news?pid=20601012&sid=akBWsp0Vj6RQ&refer=commodities

---

I wonder who sold short and made a killing today.

[benld74]

1. The same ones who decided to sell the IMF gold!

[Ian David]

2. Can IGF Trading still afford to be the primary sponsor of The Air America Cruise now? n/t

[ReformedChris]

3. There goes half of Right WIng Radio Advertising..

Seriously, Gold is almost ALWAYS a commercial on every talk radio show on the radio. Just shows the RW hypocrisy: pimp Gold and then get on the air and say "America has a great and vibrant economy"!

[LiberalEsto]

5. Left-wing too

Progressive Talk 1260 in Washington DC runs buy gold ads all the time. Hosts like Ed Schultz and I think even Thom Hartmann hawk gold on the air.

[ReformedChris]

7. No Progressive Talk in Orlando Florida so I wouldn't know

Its depressing that I have no options at all outside of streaming or getting a paid service.

[ReformedChris]

4. Self Delete

[OKthatsIT]

38. Don't forget SILVER...buy coins, not bars.

If all hell breaks loose, we'll need to trade 'coin' for goods.

[bagrman]

39. Kind of ignored and low priced considering the last high gold to silver ratio.

In the last year gold has gone up 65% + - and silver has gone up 154% + -. You shouldn't pay over $.50 per round over the spot market. As inflation goes up the money under your bed goes down in value and the silver and gold value goes up, not a bad thing to have around.

[formercia]

45. Make sure they're eagles

Bullion has a 28% capital gains tax applied on selling. Gold Eagles and Buffaloes and Silver Eagles are exempt.

You might get away with not paying the tax but it's one way to go to jail.

[jordi_fanclub]

6. Kind of "plunge"...

It's so normal as like last Friday (note: live chart)

[formercia]

8. Time for a stampede

The price of being on the cutting edge. :rofl:

[bagrman]

9. There is a history of that happening.

[slackmaster]

10. Yes indeed - It's a mechanism for wealth transfer on a massive scale

Small investors who jumped on the bandwagon late lose. Institutional investors and other big players win.

[formercia]

12. Pump and Dump.

Guess who wins.

[bagrman]

13. Insider trading at it's best. I wonder what the Puts were like on the days before Katrina hit.

Full story. http://www.hereinreality.com/insidertrading.html


A September 21 story by the Israeli Herzliyya International Policy Institute for Counterterrorism, entitled “Black Tuesday: The World’s Largest Insider Trading Scam?” documented the following trades connected to the September 11 attacks:

- Between September 6 and 7, the Chicago Board Options Exchange saw purchases of 4,744 put options on United Airlines, but only 396 call options… Assuming that 4,000 of the options were bought by people with advance knowledge of the imminent attacks, these “insiders” would have profited by almost $5 million.

- On September 10, 4,516 put options on American Airlines were bought on the Chicago exchange, compared to only 748 calls. Again, there was no news at that point to justify this imbalance;… Again, assuming that 4,000 of these options trades represent “insiders,” they would represent a gain of about $4 million.

-

- No similar trading in other airlines occurred on the Chicago exchange in the days immediately preceding Black Tuesday.

- Morgan Stanley Dean Witter & Co., which occupied 22 floors of the World Trade Center, saw 2,157 of its October $45 put options bought in the three trading days before Black Tuesday; this compares to an average of 27 contracts per day before September 6. Morgan Stanley’s share price fell from $48.90 to $42.50 in the aftermath of the attacks. Assuming that 2,000 of these options contracts were bought based upon knowledge of the approaching attacks, their purchasers could have profited by at least $1.2 million. Merrill Lynch & Co., with headquarters near the Twin Towers, saw 12,215 October $45 put options bought in the four trading days before the attacks; the previous average volume in those shares had been 252 contracts per day . When trading resumed, Merrill’s shares fell from $46.88 to $41.50; assuming that 11,000 option contracts were bought by “insiders,” their profit would have been about $5.5 million.

- European regulators are examining trades in Germany’s Munich Re, Switzerland’s Swiss Re, and AXA of France, all major reinsurers with exposure to the Black Tuesday disaster.

[joeglow3]

21. Snopes says that site is wrong

http://www.snopes.com/rumors/putcall.asp

[bagrman]

25. One investor, caused a 12 fold up tick in puts on 2 stocks. Then why was there $5M left unclaimed.?

[joeglow3]

27. What do you mean by "unclaimed?"

Regarding the trades by one company, that is not at all uncommon in the world of stock options. Many hedge funds specialize in exactly this. Plus, it is VERY easy to trace who buys and sells stocks and options. If what you were saying was true, it would be VERY easy to track the people down.

[bagrman]

36. Theres plenty written on this subject, $2.5m was unclaimed and is still sitting

waiting to be claimed, And yes it should be quite easy to tell who made the purchases.

[bagrman]

11. IT'll take about a week for these stocks to be eaten up., Lots of over seas

investors looking for some place to put all those dollars they have.

[YankmeCrankme]

14. I thought this was more interesting.

"Some of the IMF's $98 billion in gold reserves should be sold to cover a revenue shortfall, said David McCormick,..."

Is this normal? Does the IMF routinely have revenue shortfalls?

[formercia]

20. When they pay enormous slaries to executives who do nothing.

There are people there who cover countries that no longer have debt with the IMF. Do they play solitaire all day long?

They need to get rid of staff and cut back on perks.

The whole World Bank/IMF has been a cash cow for the elites since the end of WWII.

[Javaman]

15. This is why I waited till I invested in gold.

I knew there would be a dumping of it. It happened in the past, it will happen again.

I will wait till the smoke clears and buy some.

Still those who bought early, like 6-8 months ago, still did reasonably well on a gold investment.

[Eurobabe]

16. Buying commodities scares the crap out of me

We had a chance to buy gold in late 2005 when it was 486oz. Said no. Wish we had, but when I read this stuff, I am glad that we don't have any precious metals.

[NashVegas]

17. Buy Low Sell High

I'm sort of surprised to see all the negative speculation in this thread. Have we not been watching the price of gold rise steadily since 9/11? Have we not watched it skyrocket as the real estate bubble grew and grew and burst?

Smart (or nervous, if you prefer) got in at or under $400 per, IIRC. If I were one of them, I'd sell a small portion for a tidy profit right about now, myself.

[EstimatedProphet]

18. Some "plunge"

Gold futures for April delivery fell $6.20, or 0.7 percent, to $941.60 an ounce

Gold is STILL 941.60 an ounce. As recently as 5 years agon it was $350 per ounce.

[Tempest]

19. And seven years ago it was under $275

The "plunge" will be temporary.

Once the IMF sells the gold the market will stabilize and start to climb again as inflation, the declining U.S. dollar, world instability and other real world factors take effect again.

[Phx_Dem]

22. My thoughts exactly

Gold (GLD) is down less that 1% from Friday, this is a plunge? Silver (SLV) is up a hair from friday.

[khaos]

24. it's still a great buy..

gold and real estate; the only way to protect wealth if you have have it.

[EstimatedProphet]

26. Really? A great buy?

What if you buy gold now, we get some sensible people in government, begin to repair the economy, and gold drops down to $500? Same thing with real estate - the values are imploding as we speak. It's only a great buy if it holds value, and at the levels it's at, it likely won't.

[khaos]

28. the dollar is not going to recover; the economy is beyond repair

numbers don't lie; people do.. the word to key on in my last post was "protect"

economic policy is not going to change w/ a new admin.. even if they wanted it to.

[EstimatedProphet]

29. Then there's no point in even hanging around

If the dollar is never again going to be worth having, we might as well spend it all now and get what we can out of it.

Gold in ordinary times is a very good investment, but these aren't ordinary times. I can't bring myself to believe that everything is over, period.

[kelligesq]

35. well instead of buying more crap, buy gold....NOW - cause when junior

gets out of office and the true numbers come out of how much we're in debt...not 9 trillion...like something between 30 and 50 trillion.... gold is going to go
wayyyy uppppppp.

Seems to me if this country had any confidence in bama or mc cain, gold would not be hitting $950 +++

[khaos]

37. bingo - gold is a bargain

the US has been looted and when the peasants find out they are going to be pissed.

[bagrman]

40. The peasants are just worried about how to hold on to their crap that they are in hock 4.

[BB1]

23. Are you allowed to take gold out of your safe deposit box

after an nation wide emergency is declared? (I read on DU it is supposedly not...)

If you are not allowed, then bying gold won't do the trick. Unless you keep it at home, but who does that?

[formercia]

30. The Feds will confiscate it if it's in a bank.

All Junior has to do is declare a national emergency, and it's history. Of course, they will pay you for it, in worthless scrip.

[bagrman]

41. How would they know what you are taking out of you s. box?

[roamer65]

42. Delete.

[formercia]

47. They won't

but if they think you're hiding Gold in your box, a National Security letter is all it would take to have it opened.

[Javaman]

31. I have mine buried in my garden.

I'm not kidding. Only my wife and I know where it is.

[BB1]

32. pretty please???

Just tell me the location of the garden. I'll sell it saying it contains a hoard of gold!

[Javaman]

33. Aye, matie, you must wait till the moon is twixt wane and wax...

for it's shine will reflect off old long johns monocle and hit the spot to which me and me lads buried the treasure. arrrggggggg....

[BB1]

34. to err is human,

to arr is pirate!

[roamer65]

43. I'm sure the Chinese and Indians will buy most of this gold.

Perfect opportunity for them to dump even more dollars.

[pinniped]

44. It didn't 'plunge' enough to make me buy more maple leafs.

.

[sendero]

46. Plunges?

Not according to my Kitco chart. It cracks me up when a .7% move on a volative commodity is a "plunge".

Nonsense.

[khaos]

48. $944/oz today ..some plunge

makes you wonder why that article was published.. suckers ;)