Quote from: cypherdoc on October 02, 2011, 09:53:59 PM

you want data? here's some data:

Alright, progress. Excellent chart - it shows more information than price charts alone can offer. It's impossible to see where the COMEX could potentially be in default just by looking at the price of gold. Monitoring the TED spread is good as well, but less direct of a factor in regard to the main topic of gold.

I assume you consider the chart to show a collapse in demand for gold? Please correct me if I'm wrong.

Also, do you have a link to the article the chart is from? For now, I've added some information based on the assumption that the data is from the CFTC CoT report, with the gold OI scale on the left side and silver OI on the right side. It doesn't appear that the chart includes the "nonreportables" category, which is a good portion of potential delivery requests.

Keep in mind the potential for options to be executed and stand for delivery. That activity has been increasing, putting additional pressure on COMEX warehouse stores. It's much harder to estimate options execution, though. Futures options serve as a target for these price declines to prevent just that option execution wave from taking place and draining COMEX registered gold.

It would've been nice to have 2008 visible to show the similarity in pattern formation, but that's available elsewhere. I'll post a chart if I have the opportunity.

Quote from: cypherdoc on October 04, 2011, 01:57:58 AM

http://theautomaticearth.blogspot.com/2011/10/october-3-2011-commodities-and.html

"This does not represent our position, which is based on the powerful impact of bubble psychology, rather than on supply and demand. In contrast, we would argue that for commodity price to fall a long way, and very quickly too, it is not necessary for demand to exceed supply, especially by any significant margin.

Changes in supply and demand do not typically occur rapidly, but changes in perception certainly do, and it is perception that drives markets. If the fundamentals of supply and demand were responsible for setting prices, we would not see price collapses over a matter of months, yet this is exactly what we saw in 2008."

this is the type of non linear thinking i employ.

Article tl;dr. The gist is that credit is contracting and commodity prices will fall with it. If I'm not mistaken, this thread is about gold, not oil. Oil is primarily a consumable commodity; gold is not.

Gold is reasserting a monetary role: it is being propelled to act as cash, especially in reserve capacity, and therefore will provide a basis for pricing rather than having a price attached to it; relative pricing will be determined by the base of available gold the same way we currently use the USD base money supply.

It doesn't matter if the average person doesn't use gold in daily exchange. Large businesses, cross-regional or international transactions may be conducted in grams or ounces instead of dollars and Euros. That would provide the solid golden base layer upon which fiat acts as a representative instead of the backward system today.

This is psychology in conjunction with supply & demand; non-linear. Reco'nize, son!

Quote from: cypherdoc on October 04, 2011, 02:11:28 AM

Misreality's Emerging Market Update:

All equity markets have been tumbling, what's your point? We already agreed that contraction is the flavor of the month. The charts are just prices yet again (at least with volume, but that's decreasing which suggests the downtrend is slowing) and the point of contention is still gold. I consider news of insatiable demand for gold as far more relevant to the topic.