Topic: Mexico buys 100 tons

[charlesoakwood]

of gold in two months.

[blockquote]

http://www.bbc.co.uk/news/business-13281716
The World Gold Council has said it expects central banks in emerging markets to be the biggest buyers of gold, with its price near record highs.

Banks are seeking to diversify their reserves out of US dollars.

Mexico now owns 100.15 tonnes of gold, data on the IMF website showed. At the end of January it held 6.84 tonnes.

Mexico's purchase is equivalent to...
...
India recently bought 200 tonnes of gold from the IMF.
...
China is the sixth largest holder, with 1,054.1 tonnes


http://www.marketwatch.com/story/bank-of-mexico-buys-100-tons-of-gold-in-two-months-2011-05-04
"Prior to this, they held very little metal, so it is a decent size change," Spall said. "People are going to view this as bullish, and will now be closely watching other countries in the region, and elsewhere, for further changes."

[/blockquote]

So what caused it to fall?

[John Florida]

Why are we sending them money?

[Weisshaupt]

So what caused it to fall?

Something very odd is going on-- gold shouldn't be going down in dollar price when the dollar is at a new low - especially when National entities are making large purchases.  Either there is a lot of trading in paper (not a actually backed by) gold going- where people aren't taking delivery, or there is a lot of selling because everyone got really optimistic about not needing gold because they are putting money into something else... SDRs? If people are selling real gold they would only be doing so to get in on the ground floor of a new currency -and given the dollars new low - it isn't the dollar they are flocking too..   

[Libertas]

Oh yeah, I forgot to post on this situation...a lot of the drop in precious metals is due to borkerages raising margin requirements...so many people were leveraging into positions they felt at these prices they needed to raise the requirements...it appears a lot of people had to sell of sizeable chunks to pony up.  I would expect the pull back in price to settle and then resume its steady climb.  I'm just not sure that once it resumes its march it will be at quite the dramatic rise we saw these past few years...a lot depends on the usual factors/wildcards...

ETA - With the drop, buying opportunities can be sought, especially in silver which has pulled back to a more affordable range for many.

[charlesoakwood]

[blockquote]

http://blogs.forbes.com/greatspeculations/2011/05/03/golds-goodness-sometimes-the-world-does-go-to-hell/?partner=yahootix
May. 3 201
Yesterday, gold changed hands at $1,557. If you bought when we first told you to, you’re congratulating yourself. Your life vest has gone up more than anything, except, investment grade wine! If you didn’t buy then, is it too late now? Now, it’s not so easy. You’ll be reluctant to get in now – the price is more than three times higher.

So what do you do? You wait for a correction. But the correction doesn’t come when you want it to. And then, when it does come, you hesitate. You check your bearings. You read the financial press. You read about all the “poor gold bugs” who are getting killed. You hesitate more. You wonder: maybe all the run-up in gold was just a fluke. Maybe the problem has gone away. You worry that it’s not a correction in a bull market, but a new bear market that will take gold back down for the next 10 or 20 years.

Then, before you know what has happened, the metal has swung up again. And soon it is more expensive than it was when you decided not to buy the last time.

So what should you do? We don’t give advice here in The Daily Reckoning. Giving advice is for our colleagues, who know what they are doing. But we will repeat the non-advice we offered for the last 11 years:  Buy gold on dips. Sell stocks on rallies.

You have a rally in the stock market, no question about that. But a dip in gold? *Not now. Not yet. Stay tuned. It will come.

[/blockquote]  *Note: this article was written just before the dip.


There is an article concerning government controls to "balance" the market from extremes.
They have raised margins on silver two times in the last week and intend to raise them again.
And Libertas analysis is the most credible reason I've read.
I don't know what caused and can't find a definitive article about why gold dropped unless
the margins were raised on them also.    Also an article that Soros sold his holding, which has some
influence on a market.

I expect Geithner & Co to continue as they have.

[John Florida]

[blockquote]

http://blogs.forbes.com/greatspeculations/2011/05/03/golds-goodness-sometimes-the-world-does-go-to-hell/?partner=yahootix
May. 3 201
Yesterday, gold changed hands at $1,557. If you bought when we first told you to, you’re congratulating yourself. Your life vest has gone up more than anything, except, investment grade wine! If you didn’t buy then, is it too late now? Now, it’s not so easy. You’ll be reluctant to get in now – the price is more than three times higher.

So what do you do? You wait for a correction. But the correction doesn’t come when you want it to. And then, when it does come, you hesitate. You check your bearings. You read the financial press. You read about all the “poor gold bugs” who are getting killed. You hesitate more. You wonder: maybe all the run-up in gold was just a fluke. Maybe the problem has gone away. You worry that it’s not a correction in a bull market, but a new bear market that will take gold back down for the next 10 or 20 years.

Then, before you know what has happened, the metal has swung up again. And soon it is more expensive than it was when you decided not to buy the last time.

So what should you do? We don’t give advice here in The Daily Reckoning. Giving advice is for our colleagues, who know what they are doing. But we will repeat the non-advice we offered for the last 11 years:  Buy gold on dips. Sell stocks on rallies.

You have a rally in the stock market, no question about that. But a dip in gold? *Not now. Not yet. Stay tuned. It will come.

[/blockquote]  *Note: this article was written just before the dip.


There is an article concerning government controls to "balance" the market from extremes.
They have raised margins on silver two times in the last week and intend to raise them again.
And Libertas analysis is the most credible reason I've read.
I don't know what caused and can't find a definitive article about why gold dropped unless
the margins were raised on them also.    Also an article that Soros sold his holding, which has some
influence on a market.

I expect Geithner & Co to continue as they have.

 Beck gave the same reason on his radio show and his TV show I believe yesterday.