from KingWorldNews:
Jeffrey Saut’s note regarding the carnage in the gold market:
Yesterday, however, I got some really interesting questions. One came
from a portfolio manager who wanted to know, “Have you heard any chatter
regarding margin calls within gold and or the gold miner sector?” Given
the carnage in the gold space, it is certainly a question to ponder. In
my view, gold entered a bear market in 2012, but the recent Gold
Gotcha’ began in earnest last June when the Chinese stock market lost
about one-third of its value.
As it turns out, Chinese brokerage firms were allowing gold to be used as collateral in margin accounts for participants to buy Chinese stocks. When the Chinese stock market started to melt down, not only were stocks liquidated, but so was gold. That exacerbated the decline in gold prices around the world with a concurrent “hit” to the gold mining stocks. As a sidebar, a 50% retracement of gold’s entire 2001-2011 rally comes in at $1088 per ounce.
Jeffrey Saut Continues @ KingWorldNews.com
Jeffrey Saut’s note regarding the carnage in the gold market:
Yesterday, however, I got some really interesting questions. One came
from a portfolio manager who wanted to know, “Have you heard any chatter
regarding margin calls within gold and or the gold miner sector?” Given
the carnage in the gold space, it is certainly a question to ponder. In
my view, gold entered a bear market in 2012, but the recent Gold
Gotcha’ began in earnest last June when the Chinese stock market lost
about one-third of its value.As it turns out, Chinese brokerage firms were allowing gold to be used as collateral in margin accounts for participants to buy Chinese stocks. When the Chinese stock market started to melt down, not only were stocks liquidated, but so was gold. That exacerbated the decline in gold prices around the world with a concurrent “hit” to the gold mining stocks. As a sidebar, a 50% retracement of gold’s entire 2001-2011 rally comes in at $1088 per ounce.
Jeffrey Saut Continues @ KingWorldNews.com
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