This Gold Report was compiled to those investors who lost a lot of money with their gold investments. People are desperate to get out of gold to avoid further losses. There are a lot of sell-offs from individuals, mutual funds, Hedge Funds, and organizations. Is there another way to invest in Gold?. I have tried to give different assessments, and to make a point where to invest in gold. Your comments, opinions

1. Gold Knowledge & Tips by Pierre A Pienaar
Gold Is Plunging -- or is there
still Good News?
Dear Reader,
There is so much confusion, those that panic, and those that are buying gold. Others,
short-sell as well. I feel sorry for those who lost money the last couple of days, but really,
we must start learning from our mistakes.
Shares are paper money, You need something physical, solid to have real value. Again,
as I said before, you should learn from it: “Do what they do, not what they say”. The
they are the Big guys holding gold, like the Moguls from Russia, India, China, USA,
Canada, Germany, Switzerland, and many others, and throw the various central banks
into this bag you sit with the most gold reserves. They wont part of their gold so easy.
People are selling gold at a frantic pace, why, because some “experts” tell them gold
loses it’s value. The Gold does not lose it’s value, but the USD becoming weaker or
stronger. Currently the dollar is strong because of the printing money, Keep the dollar
high, gold lower, and then we can buy more gold. There are thousands of sellers, but to

2. sell something, somebody has to buy, and those that buy are big Governments,
speculators, big investors, and Central Banks.
The following articles are for you to read thoroughly and then act on it.
In an article: Precious Metals Prices: THE BATTLE OF THEORY AND REALITY
By Al Doyle on April 16, 2013 11:06 AM I wish to use a very important point that make
the difference between paper and solid investors: “Anyone with even a marginal interest
in precious metals is aware of the brutal beatdown in gold and silver spot prices over the
past four days. From its April 12 London close of $1535.50, gold fell off the cliff to $1395,
with an even lower close of $1352.60 in New York.
Silver was a case of “second verse, same as the first.” The April 15 London close of
$23.54 on April 15 represents a $3.86 decline from the April 12 figure of $27.40. It was
worse in New York, with silver finishing the day below $23.
As anyone who tried to check web sites for bullion sellers will attest, the public caught on
to falling spot prices in a big way. Six attempts to view the Silvertowne web site were
completely unsuccessful. So what caused this one-day plunge? Were precious metals
investors dumping their holdings by the boxful? Not a chance.”
A veteran of the bullion trade, Degler advised buyers not to place excessive faith in spot
prices.
“There are two markets – paper and physical,” he said. “”Guys pushing buttons are
selling naked shorts, or or metal they don’t have. The chickens will come home to roost
on paper trading. The bounce back will be big.”
I advise you to read this article in full: Precious Metals Prices: THE BATTLE OF THEORY
AND REALITY
Gold market development organization the World Gold Council has argued that
governments should consider using gold to back bond issues, and last month
commissioned a poll that found 91% of Italian business leaders and 85% of citizens
agree that the country’s gold reserves should play a part in economic recovery.
--
Gold Is Plunging -- Which Commodities Are Joining It?

3. Gold falls as much as 2.7%; investors flee
* Gold to revisit low of $1,321.35 -technicals
Aapril 17, 2013
By: Street Authority
Although the U.S. stock market has generated a healthy glow this year,
the commodity complex appears to be entering into a growling bear market. Just
consider these stats:
After a sharp drop on April 15, gold has plunged nearly 20% since the year began and
nearly 30% since hitting an all-time high of around $1,900 per ounce in the autumn
of 2011.
West Texas crude oil has slipped from $97 per barrel to $87 in just the past two
weeks.
Copper has slid roughly 12% this year and is off roughly 27% since the summer of
2011 peak.
If aluminum breaches the 80 cents per pound mark (it's currently at 82 cents),
it will see its lowest levels since the summer of 2009.
Unless these commodities quickly stabilize, they will all start to break
key resistance levels and head even lower. Yet it's unwise to lump all commodities
together, and the factors affecting one of them is quite distinct from all others.
The sliding yellow metal
Perhaps the most vulnerable commodity of all is gold, which has no supply-and-demand
mechanisms to help establish a fair value.
The price of gold has always been based
purely on sentiment, mostly as a
perceived hedge against eventually
ruinousinflation.
Yet an April 10 report by Goldman Sachs
has led even the most avid gold bulls to
question their inflation-protecting stance.

4. Goldman's analysts took note of the fact that as the recent crisis in Cyprus unfolded,
gold prices barely budged, which stands "in sharp contrast to the larger USD gold moves
observed during the last quarter of 2011, when fears that Greece would leave the euro
area were at their highest," Goldman's analysts note.
The key conclusion: The notion that gold is a valued hedge in these complex economic
times is no longer applicable. And it's time for gold to start trading on the fundamental
dynamics of supply and demand. Although Goldman's analysts see gold remaining above
$1,400 this year, they expect the yellow metal to move below $1,300 next year. Their
long-term forecast for gold: $1,200 an ounce.
Why that price?
"Inflation expectations remain well anchored, and our economists expect subdued
inflationary pressures in coming years," Goldman's analysts say.
They figure $1,200 an ounce for gold is fair value if inflation remains tame. And gold
investors are now realizing that the longer it takes for any inflation to appear, the less
patience even the most avid inflation hawks will have to stick with this trade. So the
exodus in gold is a sign that some investors are heading for the exits before even more
do so.
Central banks are still buying gold and have accelerated their purchases during the past
three months. Goldman's analysts say that trend will continue, but they figure gold
would likely move even lower than their forecast of $1,200 per ounce were it not for the
central banks' purchases. On the other hand, consumer demand for gold in China and
India appears to be slumping, which is why gold has been hit especially hard in the past
few trading sessions.
"Gold investments are increasingly looking like a bubble ... and long-term investors will
look to book their profits in the current market environment," said Mohit Khamboj,
president of the India-based Bombay Bullion Association, in an interview with the
The Wall Street Journal.
The fact that many gold producers, such as Barrick Gold (NYSE: ABX), are beset by
their own company-specific mining problems right now just adds pain to gold investors.

5. What about other commodities?
The simultaneous sell-off in other commodities may be somewhat coincidental. The price
drops in oil, copper, aluminum and other commodities is more closely tied to global
economic demand, especially from China. In this column from late March, I noted that
weak economic data in China thus far in 2013 appears to be driving the commodity sell-
off. China's gross domestic product grew a reported 7.7% in the first quarter, below the
consensus forecast of 8%. And as long as the possibility remains that the
Chinese economy will slow yet further in current quarters, commodity prices could keep
falling.
That's the view of Citigroup's economists, who just lowered their price forecasts for
several commodities. For example, they see copper sliding to $3.07 per ounce by next
year (from a recent $3.24), which would be the lowest level in nearly three years.
And whereas Citi's economists expected to see aluminum prices rebound to 99 cents per
pound in 2014, they've just revised that figure to 88 cents.
Still, these are the kinds of commodities you need to keep tracking, because lower prices
counterintuitively set the stage for the next bull market in commodities. For example,
consider iron ore.
Iron ore surged from $60 per metric ton in the summer of 2008 to nearly $190 per ton
in February 2011, thanks to firming global demand in places like China and the United
States. Trouble is, iron-ore producers took note of the firming prices and aggressively

6. boosted their mining activities. It soon became clear that too much supply was heading
to the market, and iron ore prices slumped below $100 per ton by the summer of 2012.
That led major producers such as Cliffs Natural Resources (NYSE: CLF), Vale
(NYSE: VALE) and others to start cutting back on their production plans. As a result of
reduced supply forecasts, iron ore prices have rallied by roughly 40% since last summer,
to around $140 per ton.
We've seen a similar supply-induced relief rally in natural gas during the past year as
well.
Action to Take -- And that's precisely the dynamic you will see play out with other
commodity producers. Today's pain will bring supply discipline, and as supply falls to --
or even below -- the levels of demand, then the stage will be set for the next commodity
upturn. We're not there yet, but it pays to track the production plans of the top
producers of copper, aluminum and other key commodities. Although analysts are
bracing for a prolonged slump, they'll change their tune as soon as they see a change in
production.
Risks to Consider: Trying to bottom-fish these commodities can be perilous. The global
economy remains unhealthy, and China and the United States in particular could start to
feel the gravitational pull of weakness in Europe and elsewhere.

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Article
source: http://feedproxy.google.com/~r/StreetauthorityArticles/~3/Txu2xJuNN_s/gold-
plunging-which-commodities-are-joining-it-465476
Reckless Gold Investment
When did Wall Street "market" gold...?
IS IT the end for the bull market in gold? asks Daily Reckoning founder Bill Bonner.
Everybody says so. Here's The New York Times:
'...in Pocatello, Idaho, the tiny golden treasure of Jon Norstog has dwindled, too. A
$29,000 investment that Mr Norstog made in 2011 is now worth about $17,000, a loss of
42 percent.
'"I thought if worst came to worst and the government brought down the world economy,
I would still have something that was worth something," Mr Norstog, 67, says of his
foray into gold.
'Gold, pride of Croesus and store of wealth since time immemorial, has turned out to be
a very bad investment of late. A mere two years after its price raced to a nominal high,
gold is sinking — fast. Its price has fallen 17 percent since late 2011. Wednesday was
another bad day for gold: the price of bullion dropped $28 to $1,558 an ounce.'
And this was before gold tumbled on Friday.
We can barely stop laughing.
This sad sack 'investor' thought he would make money by putting $29,000 into gold
stocks.

8. Ha ha ha...wrong on all counts. He thought gold was an 'investment'... he thought an
amateur speculator could make money in gold stocks... and The New York Times thought
he was an investor.
And now, The New York Times thinks gold is going down. Why? Let's let the NYT tell us:
'Now, things are looking up for the economy and, as a result, down for gold. On top of
that, concern that the loose monetary policy at Federal Reserve might set off inflation —
a prospect that drove investors to gold — have so far proved to be unfounded.
'And so Wall Street is growing increasingly bearish on gold, an investment that banks
and others had deftly marketed to the masses only a few years ago,'
Ha ha...do you remember Wall Street deftly marketing gold a few years ago? Show us
the ads! Give us the brokers' phone logs! Prove it!
The fact is, the masses never got anywhere near gold. Not even close. Most people have
never seen a gold coin... and few are as reckless as the aforementioned Mr Norstog.
Most are even more reckless! They'll wait for gold to hit $2,000... or $3,000 before they
buy.
Which is why we think we're nowhere close to the top. Wall Street never marketed gold,
deftly...or any other way. Not even in its usual greedy, heavy handed fashion. And the
masses never bought it.
Just the opposite. As the price of gold rose, we saw ads in the paper soliciting people to
SELL gold. The masses held gold parties... in which they sold their golden heirlooms at
preposterously low prices.
And about those reports telling us that money printing by central banks would cause
trouble...they have 'so far proven unfounded'. Well stay tuned!
And get this. More good news:
'On Wednesday, Goldman Sachs became the latest big bank to predict further declines,
forecasting that the price of gold would sink to $1,390 within a year, down 11 percent
from where it traded on Wednesday. Société Générale of France last week issued a
report titled, "The End of the Gold Era," which said the price should fall to $1,375 by the
end of the year and could keep falling for years.'

9. Why good news? Because the more bearish on gold Wall Street becomes, the more the
rubes and pumpkins sell. The more they sell...the cheaper it is for the smart money to
buy.
Yes, dear reader, we hope Goldman and SocGen are right. We'd like to see the gold price
crash down lower.
First, because this would mark a real correction in the bull market. It's been going on for
12 years without a serious correction. Not a healthy situation. We'd like to get the
correction out of the way...shaking out the Johnnies-come-lately and the two-bit
speculators. Then, the final stage in the bull market could begin.
Second, because it gives us a chance to buy more. Because no matter what noise you
hear in the press or in the street, central bankers are far more reckless than Mr Norstog.
The monetary authorities are convinced that they can revive sluggish economies by
printing money...and they'll continue printing until all Hell breaks loose.
Then, when the dust settles...when pounds, Pesos, Yen, Euros and Dollars have all been
beaten and bruised...there will be one money still standing tall. That will be gold.
Bill Bonner, 16 Apr '13
Bill Bonner is founder and owner of Agora Inc., one of America's largest consumer
newsletter publishers. Editor of free The Daily Reckoning email – now read by more than
500,000 worldwide – he is also the author of three best-selling investment books, most
recently Mobs, Messiahs & Markets (John Wiley, 2007).
Why Some People Hate Gold - 18 April 2013
Gold's price drop has been greeted with glee in some quarters...

10. GOLD'S swoon has triggered a good deal of schadenfreude, some subtle, some less
so, writes Ingolf Eide for the Cobden Centre.
It's hardly a surprise after eleven years of gains and often tiresome crowing from its
more partisan supporters. Question is, apart from the emotional satisfaction of putting
the boot in, are these critics justified?
Their complaints seem to revolve around four principal themes:
1. Gold isn't an investment. It produces no income and should therefore, at best, be
regarded as a trade.
2. It can't be valued properly. With no income, and no shortage of existing stocks,
the bull case is entirely reliant on an unending supply of greater fools.
3. Gold's supporters are true believers, more akin to members of a cult than rational
economic actors.
4. In any case, it's way too volatile to ever be a proper currency, even if that were
theoretically possible or desirable. All the fools who bought the "gold is money"
pitch are going to get buried.
Well, maybe.
In any case, let's consider them one by one.
1. No argument: gold isn't an investment. If it's anything (monetarily speaking), it's
base money, or currency. To believe otherwise is a category error. Most serious gold
bulls understand that even if the word "investment" is sometimes bandied about
carelessly.
Whether "trade" is the right descriptive term is a bit trickier. For some, it certainly is. For
others, however, those who categorise gold as money, it's a precautionary holding, likely
to do tolerably well if most other things financial are going down the tubes.
2. Can gold be valued properly? Seems more like a zen koan than a question with a
clear answer, doesn't it? At one level, the critics are undoubtedly right: with no income
stream and superabundant existing stocks, gold is entirely at the mercy of perceptions.
Still, it's also true that greater fools have shown up with reassuring regularity for the last
few thousand years. Is that likely to change any time soon? We're probably each obliged
to answer that question individually. And to accept the consequences.

11. By the way, while gold doesn't yield anything, nor does physical currency. To earn
anything on either, you have to lend them out.
3. It's certainly true that there's a sizeable subspecies of goldbugs who are cultlike in
the intensity of their beliefs. They have their demons, their gods, their sacred texts, and
see this crisis as the final scene in a battle between good and evil. Gold for them is a
symbolic lightning rod, not to be subjected to dispassionate analysis, much less ridicule.
Thing is, stripped of this emotional baggage (which is in any case rooted in politics and
often religion), their monetary beliefs aren't without foundation.
There is, after all, a long history of gold as money. Not as the reflection of some quasi-
religious belief, but as a matter of cool, pragmatic, bottom-up agreement. It's what the
markets chose and for all its intermittent problems, the (real) gold standard worked well
for a long time. Even today central banks all have gold on their radar screens
(unaccountably or otherwise) and quite a few are busy acquiring more. Indeed, much of
the non-Western world continues to view gold as real money.
Foolish? Perhaps, although I don't think so. In any case, ignoring that possibly
uncomfortable fact is even more foolish. After all, right now these are the guys and gals
with the savings.
4. And yes, it does fluctuate, sometimes a lot. It's hardly alone though, is it? US
stocks fell 23% in one day in 1987 and some 30% in a few weeks in 2008; the yen
tumbled 18% in under a week in 1998. And so on.
Did this lead to their dismissal as an asset class? Of course not. These things sometimes
happen in markets where speculation has run rife. When the stars then align and players
from every time frame suddenly find themselves on the same side of the market, weird
stuff happens. Sensible people understand that and form their views accordingly.
Certainly, drawing far reaching conclusions from such structural aberrations is plain
foolishness.
Time alone will provide the answers to most of these vexing issues. We'd probably be
wisest to pay no more attention to the (often amusing) fulminations of the more extreme
critics than to those of their targets.
So, has gold bottomed?

12. Well, nobody knows of course. Short-term, it depends on whether the weak hands are
finally out. FWIW, I think most of them probably are. Longer term, what matters are the
policies governments and central banks run in years to come. If fiscal and monetary
prudence took centre stage, gold would almost certainly go into a long-term nominal
bear market. If, as seems to me more likely, the current activist extravagance persists,
or intensifies, then the nominal (and probably real) upside still beckons, perhaps with
even greater volatility. And, quite possibly, for years to come. We may as yet have only
seen Act I.
In any case, caveat emptor.
Cobden Centre, 18 Apr '13
Built on anti-Corn Law radical Richard Cobden's vision that "Peace will come to earth
when the people have more to do with each other and governments less," theCobden
Centre promotes sound scholarship on honest money and free trade. Chaired by Toby
Baxendale, founder of the Hayek Visiting Teaching Fellowship Program at the London
School of Economics, the Cobden Centre brings together economists, businesspeople and
finance professionals to better help these ideas influence policy.
Gold, Shale Oil and the Rise of the Dow - 18 April 2013
US shale oil could enable the Fed to print for longer...

13. FINANCIAL HISTORY is marked with times when populations took collective leave of
their senses and succumbed to delusions of ever-expanding wealth,writes Gary Dorsch
at SirChartsalot.com.
Times of rampant speculation have been enthralled by the introduction of new
technologies, that are used to justify pumping-up market valuations – not just for the
present, but also for the near future, and far over the horizon as well. Quite often, the
new found wealth is nothing more than a mirage. The wild enthusiasm for the stock
market is often overtaken by speculative froth and emotional mania. As such,
spectacular rallies deliver massive gains for one generation of lucky investors, but also
create massive overvaluations that plague the next generation.
In the case of central banks, they usually ignore stock market bubbles that expand as a
result of liquidity conditions that have been "too easy for too long." In today's markets,
central bankers in England, Japan, and the US have jettisoned the principles of free
markets, and instead, are working overtime at the behest of the ruling politicians, to
artificially inflate the value of their local equity markets – deploying unorthodox tools
such as massive liquidity injections and locking borrowing costs near zero%.
"The tools we have involve affecting financial asset prices, to the extent that consumers
feel wealthier, they'll feel more disposed to spend," Fed chief Ben Bernanke explained.
Never mind that 82% of US-listed equities are owned by just 10% of the US population.
The Fed's theory of "trickle down" economics – that is to say, inflating the money supply
in order to inflate the stock market, will somehow enrich the lives of greater society – is
nothing more than a pipedream at best, or rather an act of purposeful deceit at its
worst.
"By this means government may secretly and unobserved, confiscate the wealth of the
people and not one man in a million will detect the theft. And while the process
impoverishes many, it actually enriches some," observed John Maynard Keynes, in 1920.
In other words, the US central bank's policy is strictly designed to enrich the fortunes of
the ultra-wealthy.
Last week, the Dow Jones Industrials soared to as high as 14,850, its highest level in
history. The Dow's four year advance "has prompted plenty of catcalls and profound
skepticism about whether equities have gone too far, too fast in what is the least-loved
bull market in history." Moreover, the rally highlights the vast disconnect between the
bleak economic and social conditions facing working people and the staggering rise in

14. corporate profits, inflated stock and bond prices, and the rapidly rising wealth of the
corporate – financial elite in the US and around the world.
Even as national and international bodies have issued one dismal report on the global
economy after another, the US-bankers and CEO's have celebrated ever-rising stock
values. The rise in corporate profits is chiefly the result of an unrelenting drive to lower
workers' wages and benefits, while ratcheting up workers' output.
Nowadays, there is widespread understanding that the Fed's ultra-easy money policies
(dubbed QE) have gotten a lot of bang for the buck. By increasing the quantity of the
high-octane MZM money supply in circulation, by $1.1 trillion since the start of 2012, the
Fed was able to engineer a powerful rally – increasing the market value of the shares

15. listed on the NYSE and Nasdaq by $3.7 trillion. Today, the value of the US-stock market
stands at a record $20.5 trillion in April, and it would require a steady stream of QE-
injections into the future to support today's lofty valuations, and to lift the stock market
into higher ground.
Yet at the same time, gold bugs are licking their wounds, and asking why the vast
money printing operations of the bank of Japan and the Fed aren't have the same
beneficial effect on the price of gold or silver. Instead, to the extreme contrary – the
price of gold suddenly collapsed in recent days, suffering its worst rout in 30 years. The
"Black April" Crash of the gold market comes on the heels of a 19-month roller coaster
ride, in which the price of the yellow metal swung widely, but eventually landed at the
border line of bear market territory at $1,560 /oz. However, once this key horizontal line
of support was penetrated – huge sell orders kicked-in. The gold market was suddenly
thrust into a panicked free-fall, spiraling 13% lower until finding support at $1,320 /oz,
where bargain hunters emerged.
Still, there were advance warning signs of trouble for the gold market. Since mid-
November, the market value of the Dow Jones Industrials – compared to the price of
gold (the Dow-to-Gold ratio), was moving steadily higher. Traders figure the best way to
profit from the Fed's QE schemes, is through purchasing US stock market index futures
and ETFs. Today, one share of the Dow Jones Industrials can fetch 10.7-ounces of gold,
compared with only 7.35-ounes last November. Given that the Dow peaked at 42 ounces
of gold in 1999, there's still plenty of room for the Dow to regain lost ground against the
yellow metal.
When speaking of the Dow-to-Gold ratio – no matter which way the wind blows on Wall
Street, the Dow is likely to gain further ground compared to the price of gold. One big
advantage that the US stock market has over the precious metals is the widespread
perception that the Fed will always ride to the rescue of Wall Street whenever risky bets
go sour – dubbed the "Bernanke Put". Yet there's another underlying dynamic at work
that might explain why the Dow is soaring while at the same time, the price of gold is
unable to sustain a sizeable rally and worse yet – sliding sharply lower. There is a new
technology at work in the global economy that might explain these diverging trends.

16. In the view of the Global Money Trends newsletter, the "Shale Oil" Revolution – still in its
infancy, might be the catalyst that's fueling the Dow's spectacular gains versus the price
of gold, and more than just another mirage. Two new innovative technologies – called
horizontal drilling and "fracking" – can provide the US economy with an abundant source
of relatively cheap energy for decades to come. As such, the Shale Oil Revolution has the
potential to hold down the US inflation rate, and at the same time, enable the Fed to
continue printing money for longer periods of time, thus inflating equity prices.
US oil output has already risen for four straight years, and last year was the biggest
single-year gain since 1951.The boom has surprised even the experts. The Energy
Department forecasts that US production of crude and other liquid hydrocarbons, which
includes bio-fuels, will average 11.4 million barrels per day (bpd) this year. That would
be a record for the US and just below Saudi Arabia's output of 11.6 million barrels.
Citibank forecasts US production could reach 13 million to 15 million bpd by 2020,
helping to make North America "the new Middle East." Increased drilling is fueling an
economic boom in states such as North Dakota, Oklahoma, Wyoming, Montana and
Texas, all of which have unemployment rates far below the national average of 7.6%.
The major factor driving domestic production higher is a newfound ability to squeeze oil
out of rock once thought too difficult and expensive to tap. Drillers have learned to drill

17. horizontally into long, thin seams of shale and other rock that holds oil, instead of
searching for rare underground pools of hydrocarbons that have accumulated over
millions of years. To free the oil and gas from the rock, drillers crack it open by pumping
water, sand and chemicals into the ground at high pressure, a process is known as
hydraulic fracturing, or "fracking," that has unlocked enormous reserves of shale oil and
natural gas.
Production from US shale formations is expected to grow from 1.6 million bpd this year
to 4.2 million bpd by 2020, according to Wood Mackenzie. That means these new
formations will yield more oil by 2020 than major oil suppliers such as Iran and Canada
produce today. Given that US oil output had been in decline for more than two decades,
this is a remarkable turn of events. And in another stunning turnaround, by the end of
this year, US crude oil imports will be lower than at any time since 1992, at 41% of
consumption. The US imported nearly 60% of the oil it burned in 2006, meaning the US
could soon become a net exporter of energy.
Should the potential of "fracking" materialize, it could have the most significant long-
term impact on oil prices of any supply event in recent decades. Until recently, the
growth in US shale oil output wasn't sufficient to meaningfully weaken global oil prices.
However, it's had a notable impact on long-term price expectations. For instance, the
futures price of North Sea Brent, for delivery in December 2018, has been holding fairly

18. stable at around $92/barrel (bbl) for much of the past year, and closed at $90.16 /barrel
on April 16. That's about $10 /barrel below the current spot market price at $100 /barrel.
This inverted price curve signals that traders expect a gradual erosion of oil prices over
the next five years, regardless of the amount of paper money that central bankers are
printing under their QE schemes. The inverted price curve also differs considerably from
most of the prior decade when the back end of the oil market closely followed spot prices
higher. In 2008, in particular, the five-year forward price of oil rallied to $140 per barrel
as the front hit $140, because no new supply source was evident to anchor expectations.
Since the first week of February however, the price of Brent crude oil has been tumbling
from as high as $119 per barrel to as low as $98 /barrel on April 15. Likewise, the slide
in crude oil prices chipped away at the underpinnings of the gold market. The apparent
trigger for gold's stunning collapse of roughly $230 /oz to $1,330 /oz was a warning by
Goldman Sachs, which predicted on April 10 that gold would tumble towards $1,350 /oz
sometime in 2014. But in today's world of lightning fast computerized trading, what GS
expected to happen over the next 12 months, was instead condensed into just a few
days. Combined with sharp declines for the prices of base metals, gasoline and
agricultural commodities, such as corn and sugar, the baseline of support for the gold
market became un-hinged.
Even central banks were caught wrong footed by gold's downward spiral. Last year,
central banks were net buyers of 532 tonnes of gold – their largest investment since the
mid-1960s. Before the 2008 financial crisis, central banks were net sellers of 400-to-
500-tonnes a year. In December, Russia added 20 tonnes to raise its gold reserves to
958 tonnes, propelling the country up two places to sixth in the world gold holding
rankings. Over the last decade Russia's central bank acquired 570 tonnes of gold, and
now makes up 10% of the Kremlin's foreign currency reserves. In November, Korea
upped its gold holdings by 14 tonnes to 84 tonnes. Still, traders watch the economies of
China and India – the top consumers of gold, generating 55% of global jewelry demand
and 49% of global demand.

19. News that China's economy grew by +7.7% in the first quarter, far less than its double-
digit pace in the past three decades, pummeled commodity markets, especially industrial
raw materials, such as aluminum, crude oil, copper, and rubber. China is the world's top
consumer of nearly all major commodities in its race to build factories, offices and roads,
voraciously consuming everything from copper to coal. Thus, a slowdown in Chinese
economic growth, together with the deepening recession in the Eurozone, led to a huge
build-up of unsold supplies of commodities in Shanghai warehouses, including those for
copper, and rubber.
Traders have deep doubts about the credibility of China's economic statistics. Part of the
reliability problem is Beijing's near-total control over economic numbers, in some cases
meaning an outright ban on all others collecting competing data. China's economic data
is now coming under even greater scrutiny, since China's growing clout in the global

20. economy, means that its reporting of key data can roil global commodity and equity
markets.
Still, traders can observe the price of key industrial commodities trading at the Shanghai
Futures Exchange, and the size of unsold inventories, to draw more reliable appraisals of
the health of the Chinese factory sector. On April 15, the price of natural rubber,
dropped by more than -5%, skidding to 19,520 Yuan per ton, coming under pressure
from a -10% slump in Tokyo rubber prices to ¥249 /kg.
Inventories of rubber in top importers China and Japan are at multi-year highs and
demand from the automobile sector, the major rubber-consuming industry, is slumping.
This suggests that Chinese and Japanese rubber users may choose to use up existing
inventories in coming months rather than continue importing.
The sharp slide in rubber prices is all the more remarkable, considering that Thailand,
the world's biggest producer and exporter of natural rubber, together with Malaysia and
Indonesia agreed last year to cut exports by 300,000-tons between October and March.
The three nations account for 70% of the world's exports of natural rubber. Aluminum
prices fell to their lowest level in 3-½-years, tracking falls across base metals tumbling
to $1,818 /ton.
If commodities prices continue to drop much below current levels, some high-cost
producers would start losing money, forcing them to shut down production. Moreover,
base metal miners and shale oil producers could respond to the drop in prices by
curtailing their expansion projects. For example, analysts estimate that the highest cost
Canadian heavy-oil producers need US Light crude to be trading at least at $85 a barrel
to cover their costs, triggering talk in the market of imminent output cuts. In due course,
lower capital outlays would translate into less supply growth, and eventually lift prices
higher.

21. Until then, the Fed and other G7 central banks are sitting in the drivers' seat, enjoying
the renewed slide in commodity prices and subdued inflation pressures. Meanwhile, the
meltdown in the gold market, -21% year-to-date (y-t-d) has sent shockwaves through
the commodity markets. So far this year alone, silver is -28% lower, platinum is -10%
lower, copper fell to its lowest level in 1-½ years, and is -11% lower, while aluminum hit
a 3-½-year low. Unleaded gasoline plunged 45-cents /gallon from a month ago to $2.76
/gallon today. Wheat is -11% lower, and sugar is -8.8% lower, and Arabica coffee fell to
$1.34 /lb, a three-year low.
Weighed down by an across the board sell-off, the Rogers Int'l Commodity Index (RICIX),
is -5.6% lower today, compared with a year ago. The RICIX remains mired in negative
territory, despite the doubled barreled money printing binges by the Bank of Japan and
the Fed, that's expected to pump as much as $2 trillion of freshly printed paper currency
into the world markets in the year ahead. Instead, the deepening economic recession in
the Eurozone, the world's largest trading bloc, and stalling economies in Canada and
Russia is trumping the effects of QE, and weakening the demand for industrial
commodities.
Although a majority of analysts profess to be wary of a dangerous bubble that's brewing
in the in G7 bond markets – the Fed has successfully enforced its policy of "Financial

22. Repression," with purchases of $45 billion per month of US T-notes. Offered at a yield at
2.88% today, the Treasury's 30-year bond is yielding -25-basis points less than a year
ago. The Fed is simply following the blueprints of the Bank of Japan. Although the US T-
bond market is a ticking time bomb that could explode at any time, for now, the Fed is
doing a masterful job of rigging the T-bond market at ultra-low yields, a job that is made
a lot easier because of "fracking." In turn, America's transformation into an energy
exporter is expected to enable the Dow Jones Industrials and the Transportation index to
significantly outperform the gold market – no matter which way the winds blow – in the
years ahead.
Gary Dorsch, 18 Apr '13
GARY DORSCH is editor of the Global Money Trends newsletter. He worked as chief
financial futures analyst for three clearing firms on the trading floor of the Chicago
Mercantile Exchange before moving to the US and foreign equities trading desk of
Charles Schwab and Co.
There he traded across 45 different exchanges, including Australia, Canada, Japan, Hong
Kong, the Eurozone, London, Toronto, South Africa, Mexico and New Zealand. With
extensive experience of forex, US high grade and corporate junk bonds, foreign
government bonds, gold stocks, ADRs, a wide range of US equities and options as well
as Canadian oil trusts, he wrote from 2000 to Sept. '05 a weekly newsletter, Foreign
Currency Trends, for Charles Schwab's Global Investment department.
Today Mr Dorsch is the editor of the SirChartsalot.com website, an outstanding source of
technical and fundamental analysis of the global investment markets.
Trade smart, not with Greed
Pierre A Pienaar
Blog: http://www.resourcesindependenttrader.blogspot.com

23. Pierre A Pienaar retired in 2011 from business.
I would like to share my passion, my interests, knowledge & experiences in Forex,
Options, Gold Investments, Futures, Stocks, Binary Options, Economics, Stamp
Collection, Sports, Gardening, Reading, Photography, and Politics
Substantial risk of loss
There is a substantial risk of loss of stocks, forex, commodities, futures, options,
and foreign equities are substantial.
You should therefore carefully consider whether such trading is suitable for you
in light of your financial condition. You should read, understand, and consider
the Risk Disclosure Statement that is provided by your broker before you
consider trading.