Oil and gold prices plunging

Heineken · Posted: Thu May 01, 2008 4:23 pm Post subject: Oil and gold prices plunging

Anyone noticing?

I keep reading stories about record oil prices, but they are falling fast, for now.

And gold has lost all support.

Why has the dollar strengthened? What basis is there for that?

Such a silly game.
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seahorse2 · Expert Joined: Oct 18, 2004 Posts: 1693

My reaction is that the "big money" is re-entering the equities, meaning leaving commodities, bc they believe the financial crisis is over, simply bc the Federal Reserve committed itself to saving the big boys like Bear Sterns.

Personally, I don't think the crisis is over. I do believe as Jim Sinclair says that this "belief" that the crisis is over is not based on fact, and as reality of higher energy prices, the continued downturn in housing and the rest of the economy all set in, there will be a move back into commodities.

I think the big run up in gold for sure, was an indication of what a market "panic" looks like. Remember Cramer and everyone screaming the whole system was at risk, everyone moved to gold. Now they think the crisis is over, they move back to equities.

If one believes in PO and the economic ramnifications of it, then, the markets will panic again, its only a question of time.

emersonbiggins · Posted: Thu May 01, 2008 4:48 pm Post subject: Re: Oil and gold prices plunging

A hint at no more rate cuts ("I'll never cheat on you again, darling...")

+

A global currency devaluation, or "race to the bottom" - lots of soft, dead bodies to cushion the blow
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joeltrout · Posted: Thu May 01, 2008 4:48 pm Post subject: Re: Oil and gold prices plunging

I actually think the dollar will regain its strength throughout 2008 therefore pushing gold prices quite a bit lower. Gold has lost more than 15% of its value recently even though people think we are going into a recession or already in a recession.

joeltrout
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mark · Posted: Thu May 01, 2008 4:49 pm Post subject: Re: Oil and gold prices plunging

Can't beat something forever. Temporary break for oil, gold and the dollar. Can't say how long, but am prepared to hit 'em again when the bloom fades.
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Twilight · Expert Joined: Mar 02, 2007 Posts: 2268 Location: UK

The dollar has its ups and downs. Maybe at 200bp the limit to further cuts seems closer?

Oil prices will not go anywhere in a straight line either. They should fall as the recession bites, but this time they could find themselves in a tug of war with export volumes. This will be a new factor for the market to wake up to. Who knows when?

Gold is just a metal. A useful tool for traders but not a great store for personal wealth. The people who think gold is money are little people who are probably going to get trampled.

What I would like to know is what the hell happened to the price of lead. OK, so China and the ME Gulf are buying a lot of industrial battery systems, but hitting $4000 per tonne last October and this latest bounce to $3500? I assume there is a bubble, but what is the story?

I expect Tin will absolutely crash though.
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americandream · Posted: Thu May 01, 2008 5:25 pm Post subject: Re: Oil and gold prices plunging

The demise of advanced capitalism will not be swift as some seem to anticipate here, but rather will be characterised by plateaus, within which the threshold for what is acceptable, in terms of expectations, will have trended downwards in effect.

Declines will be followed by bursts of euphoria, then negative consolidation, then more declines etc, until resource exhaustion enters an unpunctuated phase.

These are early days yet, and theres money still to be made.....money aplenty.
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dorlomin · Intermediate Crude Joined: Aug 05, 2007 Posts: 660

edited

jbrovont · Tar Sands Joined: Jun 16, 2006 Posts: 74

Kinda makes the Fed look like an innocent pawn in a commodity pump & dump scheme. Wait ... there's no way our pillars of society would make insider trades based on governmental action...would they?

Right - and a wet bird doesn't fly in the dark.

Makes the US look like Enron. If only I owned stock in America, I'd be selling it right now. Hmm, isn't that what the dollar is? Smile

I guess this is as good a time as ever to sell!

And so wealth completes yet another round of consolidation.
</end bitterness>

Tyler_JC · Posted: Thu May 01, 2008 6:18 pm Post subject: Re: Oil and gold prices plunging

This is a great time to expand one's gold stash.

I'm considering buying another ounce or two at these bargain prices.
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smallpoxgirl · Moderator Joined: Nov 08, 2004 Posts: 4220

Oil was down $0.94 today to close at $112.52. Not exactly what I would call a plunge. PM's OTOH, are definitely taking a beating over the last six weeks.

Revi · Fission Joined: Apr 25, 2005 Posts: 2778 Location: Maine

The price of oil seems to be slipping a bit. Good. Maybe it's time to pre-buy my heating oil for next winter. I hope it goes back below $100 a barrel, because once the "summer driving season" starts up it will probably go back up, and stay there.
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alokin · Heavy Crude Joined: Aug 24, 2007 Posts: 377

joeltrout why do you think that?

smallpoxgirl · Moderator Joined: Nov 08, 2004 Posts: 4220

How in the bloody h--l is the dollar regaining strength? If the fed cuts rates anymore, they're going to be paying people to borrow money. Low interest rates are supposed to drive a country's currency down. I'm baffled by this.

Is this just all about people that thought TS was going to HTF over Bear Sterns?
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Cashmere · Heavy Crude Joined: Mar 27, 2008 Posts: 232

The dollar is "gaining strength" because . . .

1. Several prominent figures, including the treasury secretary, have said in the last 48 hours that the credit crisis is over or near over.

2. The Fed has suggested that the rate cutting is over for a bit.

3. People will eat any ole donkey shit they're fed.

Combine the 3, money - previously seeking the inflation protection of metals, oil, and other commodities, flows back into equities where it is perceived that,

A. There will be a bull run up . . . and,
B. There is some protection from a commodity bubble pop.

To each his or her own -

Me? I look at this as an opportunity.

I hope the donkey shit eaters drop oil to 80 and gold to 500.

I've got the truck ready, idling, and in reverse.