So what's up with gold?

[CountDeMoney]

Even with all the Cypriot bullshit, you'd think stuff like Korean tensions would keep it afloat.
Is it really as simple as running from the hen house, as the trader suggests?

Gold Settles Down 9.3%, Lowest Since February 2011

Gold plummeted more than 9 percent on Monday, and was down more $140 per ounce, as investors ditched the precious metal en masse in search for better returns in other assets.

Gold's drop triggered a broad based commodity sell-off and was mirrored by a 10 percent plunge in silver. Platinum and palladium also fell sharply.

Bullion's harrowing sell-off caught many veteran investors by surprise. In percentage terms, it has fallen 13 percent over the past two days.

There has been no drastic changes in gold's supply/demand picture in the last week although numerous factors have kept gold from rising while investments like U.S. stocks took off.

While last week's news that the Central bank of Cyprus might sell gold reserves to finance its European Union bank bailout did trigger a rush for the exits when bullion slid below the pivotal $1,500 an ounce threshold, few saw it likely to usher in a round of other official disposals.

"The pressure from proposed sale of Cyprus gold is one of the factors, and once one of them start they all run from the hen house,'' said Robert Richardson, senior account executive and trading officer at Canadian broker-dealer W.D. Latimer Co. Ltd.

The big question is whether the gold bull market is over after 12 years of consecutive yearly gains. Gold has now halved its rally since the 2008 economic crisis, leaving the metal $550 below its record high of $1,920.30 set in September 2011.

Weaker-than-expected Chinese economic data earlier on Monday simply gave investors another excuse to slash holdings as U.S. equities and other key industrial commodities including oil and copper fell. But Monday's selloff in the Dow Jones industrial stock average comes days after stock indexes hit record highs.

Recent signs that Fed officials appeared to be nearing a decision to start winding down their bond purchases to end stimulus contributed to the negative tone for gold, even though inflation has failed to materialize as feared during its rounds of post-financial crisis quantitative easing.

The yellow metal has been a traditional hedge against inflation and safe haven in times of economic turmoil.

Gold dropped as low as $1,355.80 an ounce before recovering slightly to $1,369, still down 7.4 percent.

U.S. gold futures settled down $140.30 at $1,361.10 per ounce at the lowest level since Feb. 11, 2011. The drop was the largest fall in dollars on record and the biggest percent decrease since March 17,1980.

Gold ETF Outflow, Cyprus

Investors cut exposure to gold, with total holdings at the world's major bullion gold-backed exchange-traded-funds falling to their lowest since early 2012.

Investors have been dumping gold for the past three weeks.

Even escalating tensions on the Korean peninsula and Japan's aggressive monetary stimulus have failed to burnish its safe-haven appeal.

"We are entering a phase of additional long liquidation by ETF investors and short-selling from hedge funds, which will continue in the foreseeable future,'' Saxo Bank senior manager Ole Hansen said.

Among other precious metals, silver was down 8.6 percent to $23 an ounce. Spot palladium dropped 4.7 percent to $667.72, while platinum was down 4.7 percent at $1,415 per ounce.

[Ideologue]

It's worthless and its value has been propped up artificially by crazy people, now the bubble is deflating, as tag-along investors realize that hyperinflation worries are for retards and crazy people can't keep a valueless commodity valuable forever?

[derspiess]

I cashed in my high school class ring last year because it meant nothing to me and I forgot I even had it until I dug it out of a box in the basement.  Ka-ching.

[CountDeMoney]

I wouldn't call the Chinese "crazy people".  They've been sucking it up like it's been going out of style for quite some time.

[Ideologue]

I wouldn't call the Chinese "crazy people".  They've been sucking it up like it's been going out of style for quite some time.

They're probably building empty apartment complexes in Sinkiiang out of it.

[CountDeMoney]

I cashed in my high school class ring last year because it meant nothing to me and I forgot I even had it until I dug it out of a box in the basement.  Ka-ching.

LOL, I remember when I got my high school class ring.  Never wore it;  it was promptly turned over to the girlfriend the day I got it. 

Ah, the protocols of high school.

[OttoVonBismarck]

I think college class rings are pretty lame, I can't imagine an adult wearing a high school class ring in public.

[derspiess]

I think college class rings are pretty lame, I can't imagine an adult wearing a high school class ring in public.

No shit.  Like Seedy it was just something for my girlfriend to wear.  So silly.

I just can't tell mom I sold it.  She'd probably cry-- it was a big deal to her back when I got the ring.

[MadImmortalMan]

It doesn't trade like a hedge anymore. This is not crazy people and preppers. The market seems to be using gold as an indicator and stocks are following. Partly because a lot of the selloff was from margin calls, and when those come in, you have to sell whatever you have. Gold is a pure speculation vehicle. Not money. Not vault-fodder. It's no different now than corn futures or transportation etfs.

[Admiral Yi]

How is transportation a speculative play?

[Razgovory]

I never bought a school ring.  It was 70 bucks, and I wasn't going to waste cash on that.

[Ideologue]

I don't think I've ever owned any gold at all, unless electronic equipment has some gold in it.

We should've nationalized it years ago and used it for our transmission wires.

Here's a fun fact:

Virtually all of the gold that mankind has discovered is considered to have been deposited later by meteorites which contained the element,[4][5][6][7][8] with the asteroid that formed Vredefort crater being implicated in the formation of the largest gold mining region on earth – Witwatersrand basin.[9][10][11][12]

That's really neat.  I'd always known that most of the gold on Earth (just like most of the lead, uranium, and all heavier materials) is in the core, but I assumed that gold in the crust was from geological sources.  Now we know the real reason now why gold went so high--Tim was buying it because it came from OUTER SPACE, but I guess he ran out of money.

[MadImmortalMan]

How is transportation a speculative play?

If there's a riot in Barcelona, or Merkel has gas---anything like that can tank it. It's all on headlines now.

[Brazen]

Hopefully this will mean an end to all those "we buy your scrap gold" adverts.

[garbon]

Hopefully this will mean an end to all those "we buy your scrap gold" adverts.