Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - Part 2 - 3rd Dec 21
Stock Market Major Turning Point Taking Place - 3rd Dec 21
The Masters of the Universe and Gold - 3rd Dec 21
This simple Stock Market mindset shift could help you make millions - 3rd Dec 21
Will the Glasgow Summit (COP26) Affect Energy Prices? - 3rd Dec 21
Peloton 35% CRASH a Lesson of What Happens When One Over Pays for a Loss Making Growth Stock - 1st Dec 21
Stock Market Sentiment Speaks: I Fear For Retirees For The Next 20 Years - 1st Dec 21 t
Will the Anointed Finanical Experts Get It Wrong Again? - 1st Dec 21
Main Differences Between the UK and Canadian Gaming Markets - 1st Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - 30th Nov 21
Omicron Covid Wave 4 Impact on Financial Markets - 30th Nov 21
Can You Hear It? That’s the Crowd Booing Gold’s Downturn - 30th Nov 21
Economic and Market Impacts of Omicron Strain Covid 4th Wave - 30th Nov 21
Stock Market Historical Trends Suggest A Strengthening Bullish Trend In December - 30th Nov 21
Crypto Market Analysis: What Trading Will Look Like in 2022 for Novice and Veteran Traders? - 30th Nov 21
Best Stocks for Investing to Profit form the Metaverse and Get Rich - 29th Nov 21
Should You Invest In Real Estate In 2021? - 29th Nov 21
Silver Long-term Trend Analysis - 28th Nov 21
Silver Mining Stocks Fundamentals - 28th Nov 21
Crude Oil Didn’t Like Thanksgiving Turkey This Year - 28th Nov 21
Sheffield First Snow Winter 2021 - Snowballs and Snowmen Fun - 28th Nov 21
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21
Stock Maket Trading Lesson - How to REALLY Trade Markets - 26th Nov 21
SILVER Price Trend Analysis - 26th Nov 21
Federal Reserve Asks Americans to Eat Soy “Meat” for Thanksgiving - 26th Nov 21
Is the S&P 500 Topping or Just Consolidating? - 26th Nov 21
Is a Bigger Drop in Gold Price Just Around the Corner? - 26th Nov 21
Financial Stocks ETF Sector XLF Pullback Sets Up A New $43.60 Upside Target - 26th Nov 21
A Couple of Things to Think About Before Buying Shares - 25th Nov 21
UK Best Fixed Rate Tariff Deal is to NOT FIX Gas and Electric Energy Tariffs During Winter 2021-22 - 25th Nov 21
Stock Market Begins it's Year End Seasonal Santa Rally - 24th Nov 21
How Silver Can Conquer $50+ in 2022 - 24th Nov 21
Stock Market Betting on Hawkish Fed - 24th Nov 21
Stock Market Elliott Wave Trend Forecast - 24th Nov 21
Your once-a-year All-Access Financial Markets Analysis Pass - 24th Nov 21
Did Zillow’s $300 million flop prove me wrong? - 24th Nov 21
Now Malaysian Drivers Renew Their Kurnia Car Insurance Online With - 24th Nov 21
Gold / Silver Ratio - 23rd Nov 21
Stock Market Sentiment Speaks: Can We Get To 5500SPX In 2022? But 4440SPX Comes First - 23rd Nov 21
A Month-to-month breakdown of how Much Money Individuals are Spending on Stocks - 23rd Nov 21
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks - 23rd Nov 21
Like the Latest Bond Flick, the US Dollar Has No Time to Die - 23rd Nov 21
Cannabis ETF MJ Basing & Volatility Patterns - 22nd Nov 21
The Most Important Lesson Learned from this COVID Pandemic - 22nd Nov 21
Dow Stock Market Trend Analysis - 22nd Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Pure Media Bias

Commodities / Gold and Silver 2011 Aug 25, 2011 - 02:11 AM GMT

By: Andy_Sutton


Best Financial Markets Analysis ArticleBloomberg News has been cheered in recent months for several ‘movements’ in quasi-honest reporting, most notably a recent article on the $1.2 Trillion (at a bare minimum) that went to the global aristocracy from the US fed at the height of the 2008 financial crisis. The very fact that this slice of men without a country profited so insanely from the crisis should give most people are pretty good idea of how contrived the crisis was to begin with.

Bloomberg was also credited with filing various FOIA requests in an effort to force the US fed to disclose recipients of various emergency loans. These minor victories for the truth may have gone a long way towards giving this news outlet a clean bill of health in people’s minds and an A+ on the objectivity stress test. Nothing could be further from the truth.

On a day when gold has dropped over $100 or almost 5.5%, investors went looking for the reasons why the correction has been so severe. Certainly the market was due for a correction; it had come a long way in a very short time for some very good fundamental reasons. However, even the strongest bull market is not without pullbacks and this one was due. That is not, however, what caused the panic selling that has taken place. The overreaction was caused by another series of margin hikes, this time in the Chinese gold markets. Margins were raised to 12% starting this Friday. Rewind a few months and remember what CME did to silver with a series of margin hikes. The obvious fear is that margin hike fever will again spread back to US markets and CME will get back into the act.

However, what investors found on Bloomberg was an assortment of invectives against gold, how ‘stability’ in the global financial system – aka we haven’t had a crisis yet this week – and a strong US manufacturing report all contributed to the rout. Let’s take a look at some quotes from today’s ‘wall of shame’ article, which can be found by clicking the link. Bloomberg has a habit of updating and revising articles and as such I have saved the original version in PDF format for later reference if necessary.

“This is liquidation from a crowded trade,” <name redacted>, a senior market strategist at MF Global Holdings Ltd. in Chicago, said in a telephone interview. “In the short run, there’s more optimism and that doesn’t bode well for gold. Investors have been using gold more as a fear barometer than a proxy for inflation.”

Obviously senior market strategists aren’t required to know even the most basic workings of the market that they claim to have expert knowledge of. Certainly the latter half of this statement has some truth to it, but why no mention of the margin hikes? If this guy did mention it and it wasn’t printed, he’s got a good reason to be hopping mad about it, because the omission makes him look incredibly incompetent.

“This is just pure panic selling” <name redacted>, the head dealer at Integrated Brokerage Services in Chicago, said in a telephone interview. Before today, gold’s 14-day relative strength had been above 70 since Aug. 8, a signal to technical traders that prices are poised to fall.

Again, there is a nugget of truth here; there has been near panic selling, but again, no mention of the margin hikes. The comments allude to the fact that the decline is based on technical factors alone.

“Gold got pushed up on the idea that Bernanke will announce further quantitative easing,” <name redacted>, a commodity market specialist at Scotia Capital, said in a telephone interview. “Now people are not so sure whether that will happen and that is creating disappointment in the gold market.”

Funny, Big Ben slammed the door several times on the idea of further overt QE, albeit leaving it open on other occasions, yet gold has rallied anyway despite the general inconsistency of his comments and an unclear picture of how much more the central bank is willing to bury the dollar in the short term. The Jackson Hole meeting this week might provide some clarity in that regard, but odds are probably even that we’ll know about as much then about monetization plans moving forward as we know now.

To Bloomberg’s minor credit, there was one ‘contrarian’ viewpoint printed at the very end of the article, but long after the central point of the piece had been well established:

The decline may be a buying opportunity to some investors, said <name redacted>, who manages $200 million at TEAM Financial Management in Harrisburg, Pennsylvania.

“A lot of traders and investors who are long-term bullish on gold sold out hoping for a correction because of how much it went up,” said <name redacted>. “The drivers remain intact. The toughest thing to do is stay invested during the various parabolas and sit through the corrections.”

Again, through the entire piece, there was not a single mention of the Shanghai Gold Market’s margin hikes, which will take effect this Friday. I guess it is possible that Bloomberg journalists might not know about this supposed subtlety in the gold market, but they talked to a minimum of 4 market ‘experts’ and I simply refuse to believe that none of these folks knew about this. It would appear that this is nothing more than another thinly veiled attempt to shuck and jive the public into thinking that gold is not a viable alternative to eroding paper currencies and a safe haven from foolish monetary and fiscal policies that span the globe.

Getting away from the media bias for a second, there are some obvious reasons why the paper establishment would like to knock down gold prices. First, the establishment has been playing a losing game for a decade now, putting up battles at critical junctures until market pressures forced prices higher. This has been going on for more than ten years now. The argument regarding speculators is really getting tired and worn out. It is very likely that another round of public easing is about to take place (the covert easing never stopped by the way) and the central banks of the world would certainly prefer that gold launch from $1,750 as opposed to $1,950, for example. And finally, central banks, hedge funds, and all those people who bash gold love the actual metal and bought more of it in the first half of this year than they bought during all of 2010. They’d like more and if they can use paper charades to knock down the price of physical so they can accumulate, then that is exactly what they will do. The Chinese would certainly like more ounces for their flagging dollar reserves that they desperately want no part of.

So we have folks with means, motive, and opportunity. You might think the news is all bad. It isn’t. I talk to many people who complain that gold has gotten too expensive, which has hampered their ability to accumulate. Guess what? It just went on sale. What we don’t know is what the final discount will be or how long the sale will last. You again have an opportunity to trade in the ultimate wasting asset – the US dollar – for real money and get more ounces for your paper. Not a single fundamental has changed. So there hasn’t been a crisis in Europe this week. So what? Nothing has been fixed there – or here. So, Bloomberg and its shenanigans notwithstanding, today’s action is positive for buyers of physical precious metals and adds another chapter what I dubbed back in 2008 as the opportunity of a lifetime.

By Andy Sutton

Andy Sutton holds a MBA with Honors in Economics from Moravian College and is a member of Omicron Delta Epsilon International Honor Society in Economics. His firm, Sutton & Associates, LLC currently provides financial planning services to a growing book of clients using a conservative approach aimed at accumulating high quality, income producing assets while providing protection against a falling dollar. For more information visit

Andy Sutton Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in