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The Reason Gold Has Been Declining Is Simply This…

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 This article is presented compliments of www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) and www.munKNEE.com (Your Key to Making Money!) andmay have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.

Who is liquidating?

If I am correct, the market’s movement is simply explained by John Paulson’s funds being forced to sell due to redemptions. SPDR Gold Shares (GLD) was Paulson’s largest position by far at the end of September 2012, amounting to 30.6% of his holdings. The GLD ETF is obviously the most important gold ETF in the market, indeed, the single largest factor affecting the market, so heavy selling of this ETF can easily move the entire market.

Visit FinancialArticleSummariesToday.comA site for sore eyes and inquisitive minds!

We also have public statements – for instance from Morgan Stanley and Citigroup – recommending that investors pull out money from Paulson’s funds, after horrible performances both in 2011 and 2012. If we know about these very public instances, we can be sure that there’s an entire iceberg below water, also redeeming its investments in Paulson’s funds.

Conclusion

This thesis cannot be much simpler. What got the whole giant ball of snow rolling down the hill was Paulson’s forced selling. Paulson was GLD’s largest holder, GLD was Paulson’s largest holding by far, and we have very public proof that Paulson is seeing heavy redemptions after horrid performance. Things can’t be much clearer….

*http://seekingalpha.com/article/1076631-a-very-simple-explanation-for-gold-s-weakness

Related Articles:

1. Bull Markets Always End With a Bang, Not a Whimper, So Gold’s Run Should Have More Legs

 

[Here is a summary of my]…thoughts on the 2011 gold price peak relative to the last time a long term bull market ended (back in 1980): Long-term bull markets almost always end with a bang, not a whimper, and last year’s price peak was clearly the latter. A 25% rise over a period of about two months last year [does not an] end-of-cycle, blow-off top [make]. No, I think there’s still some room to run for gold if for no other reason than that we haven’t even come close to the “mania” stage that characterizes the end of long-term market moves…[Let me explain further.] Words: 359; Charts: 1

2. John Paulson Now Has 44% of His Hedge Fund’s Assets in Gold Stocks/ETFs! How Much Do You Have?

Closely-followed billionaire hedge fund manager John Paulson, who famously bet against the subprime housing market in 2007,  released his 13F regulatory filing revealing that his hedge fund increased its stake in gold in the second quarter to 44% of his funds equity assets. How much do you have invested in physical gold, gold ETFs, gold mining shares and warrants?


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