Gold’s Biggest Quarterly Drop Since 1968: A Farce Or Sign of Times?

Gold’s Biggest Quarterly Drop Since 1968: A Farce Or Sign of Times?

[heading]Gold’s Biggest Quarterly Drop Since 1968: A Farce Or Sign of Times?/heading]

Gold and silver prices have hit their lowest points since August 2010.  But, are investors and pundits looking at all the wrong indicators? It wouldn’t be surprising if they were, thus leading to liquidation spurred by manipulation and more liquidation. It is the Ivy league types who have buried precious metals under a mirage of arbitrary data points.

With gold is on course for a record quarterly loss, US economic data is increasing fears of an end to Quantitative Easing. Some believe that prices could slip to below $1,000 per ounces. Indeed, metal spot prices have dropped by over a quarter this year and by 22.8 percent this quarter, their biggest quarterly loss since Reuters data began in 1968.

The head of the World Bank said Tuesday that the World Bank needs “to be ready to move” to ensure developing nations have access to capital as interest rates rise due to the end of monetary stimulus from the US Federal Reserve.

“We’ve already seen interest rates in some developing countries go up,” World Bank President Jim Yong Kim told reporters after a talk on the bank’s goal of reducing extreme poverty to 3 percent by 2030. “There’s a tremendous amount of concern about what could happen.”

“We just have to be ready to move and try even harder to make sure that capital is available for the kinds of infrastructure investments developing countries need,” Kim said.

But, will large monthly bond purchases real cease in the near future?

The World Bank sister institution, the International Monetary Fund, sees the Federal Reserve maintaining $85 billion monthly bond purchases until at least the end of the year and urged the central bank to careful manage its exit plan to avoid the disruption of financial markets.

There once was a time when gold investors looked towards real world events instead of a hyper-financialized set of data to know what would happen to precious metals in the future. But, since 2008, the financialization of the economy has resulted into too many academic-investors: in other words, an investor only concerned with the data.

But data can never tell the whole story. Data about our economic recovery does not quantify that the US and Iran both have troops on the border of Syria, signaling the potential beginning of a proxy war between the two nations.

The data also cannot tell us that relationships between US and Russia and China have never been worse.

Or that the US is experiencing mass layoffs.

None of this matters. All that matters if the data – that is, the data filtered via gov’t algos.