Stock market AND gold tumble at the same time??

Check this 6 month chart :
http://www.kitco.com/charts/popup/ag0182nyb.html

It is all a matter of perspective. If you recently purchased silver when a correction occurs it will take a longer time to go up if that is where it's headed.

Silver was 13 dollars in July. It was around 18 dollars recently. The correction points are getting higher like a step ladder so the increases will be incremental as some are predicting.

If the step ladder is coming the 10 year chart may show that it will shoot over its old highs.
http://www.kitco.com/charts/popup/ag3650nyb.html

Some silver or gold investors are anticipating hyperinflation that can send it to $4000 an ounce (those are not my numbers just what some predict as a ratio from hyperinflated economies such as German Weimar Republic and Zimbabwe).

Silver seems relatively inexpensive at these prices when people are talking about Trillions and Billions like it's nothing. I could see silver easily going up to $35 an ounce just based on the doubling of U.S. debt. To me $200 doesn't seem far fetched either but that is a long, long way off I'd imagine.

Additionally, people take profits on stock positions and commodities and it's the end of the month, holidays are coming, people need cash, most places don't take silver and gold as currency...yet.

Similarly, currencies such as the dollar are purchased and sold so they just may be riding their own waves from day to day but the long term trend is that the dollar has dropped 80% since 1971 (CPI adjusted). There is a chart here:
http://www.safehaven.com/article-14737.htm

I think the precious metals meme is just starting to grow. Chinese and Indian governments, the 2 biggest markets for gold in the world, are telling their citizens to purchase precious metals. India sells gold coins at their post offices! Those countries/civilizations have been around a long time. I think we may have somethings to learn from them.

On the other hand everything may be dandy in the world and silver will drop. I'd say watch the price of oil as precious metals may parallel that the most.

There is no worse tyranny than to force a man to pay for what he does not want merely because you think it would be good for him.
-Professor Bernardo de la Paz, The Moon is a Harsh Mistress
Robert A. Heinlein

Gold has been positively correlated to the stock market and other assets for a long time now. It's the dollar. The dollar index took a breather today from its long decent into oblivion.

Denninger thinks there may be another major forced asset liquidation coming. I followed his example today and bought calls on the dollar-index bull ETF, UUP, just in case.

our markets are controlled. Now that everything is just an electronic entry, the big boys with all their tools of deception (i.e. naked shorts, phantom buyers/sellors), can make the "winds" blow any way they want, when they want. The government even chimes in with the plunge team when they want too. Look at these big Wall st. firms, they'd just about all would be crashed had the gov't not shoved a boatload of cash on them. Do you think, just maybe, that might have been the plan all along? If you're a trader, trade fast and furious, take gains off the table when you got them. Forget long term. It's a concept of the past.

When the stock market drops, some people have to meet their margin calls, and may sell gold to meet margin. Then, the people who sold stock before the bottom are holding cash while they figure out what to do. If it looks like stocks will go up, soon, they may hold on to cash, but if inflation is a fear, or they don't trust the stock market, they may want the security of gold (which doesn't go up, really, but at least holds value).

You can't look at this as a one-day phenomenon. It will take 3 days for people to convert sales proceeds to cash to buy physical gold... By then, they may decide to jump back into the market.

Take a step back and look at a longer period of time.

IMissLiberty

When stocks fall sharply like this, leveraged investors will frequently liquidated profitable positions (like gold) to cover margin calls.

I usually get some very good information from here - http://www.usagold.com/cpmforum/

Don't forget some of the biggest investment banks hold short and long positions on a variety of different stocks and the commodities. Many times these positions are forced out through a buy or sell when the prices of those investments hit a certain price level.

Well timing is everything. Russian is currently selling gold to payoff some of it's international debt they owe, in dollars of course. So don't be too quick to get rid of your dollars. Diversify your portfolio, keep some dollars, and I suggest buying palladium.
grant

Gold has been moving with the market because any sign of recovery in the economy makes Gold go up because of expected inflation. IT actually makes a lot of sense when you think about it. High earnings means stocks go up and banks will lend more which means more money aka inflation.

below where it should be. Look at this article. Why would gold not go up after reading this?

Treasuries Fall as U.S. Begins Record $123 Billion Note Sales
By Cordell Eddings and Susanne Walker

Oct. 26 (Bloomberg) -- Treasuries fell, with 10-year note yields touching their highest level in two months, as the U.S. began to sell a record $123 billion of notes to fund its stimulus program and record deficits.

Government securities declined for a fourth day as the Treasury sold of $7 billion of five-year Treasury Inflation Protected Securities at a yield of 0.769 percent. The offering, which drew higher-than-average demand, will be followed by three auctions of fixed-rate notes this week.

“We are still at relatively low yield levels, which in front of so much supply and an economy that seems to be starting to turn the corner, don’t seem justified,” said Ajay Rajadhyaksha, head of U.S. fixed-income strategy in New York at Barclays Plc, one of the 18 primary dealers required to bid at Treasury auctions.

The yield on the 10-year note increased seven basis points, or 0.07 percentage point, to 3.55 percent at 2:48 p.m. in New York, according to BGCantor Market Data. The yield touched 3.58 percent, the highest level since Aug. 24. The 3.625 percent security maturing in August 2019 fell 18/32, or $5.63 per $1,000 face amount, to 100 19/32.

“The momentum suggests we could move higher in yields,” said David Ader, head of U.S. government bond strategy in Stamford, Connecticut, at CRT Capital Group LLC. “If we break 3.52 percent, then the next projection is 3.76 percent. Resistance is at 3.28 percent.”

The 10-year yield will increase to 3.56 percent by year- end, according to the average forecast of analysts in a Bloomberg survey, with the most recent estimates given the heaviest weightings.

http://www.bloomberg.com/apps/news?pid=20601087&sid=ayoaMKYA...

or this article.

Geithner Widens Bills-to-Bonds Gap With New Sales
By Daniel Kruger
Oct. 26 (Bloomberg) -- Treasury Secretary Timothy Geithner’s plans to lock in near record-low borrowing costs in 2010 may mean a second year of losses on longer-term bonds.

After selling $1.9 trillion of short-term securities to finance President Barack Obama’s efforts to end the worst recession since the 1930s, the Treasury plans to lengthen the average due date of its outstanding debt to 72 months from a 26- year low of 49 months. That may mean boosting sales of 10- and 30-year bonds by 40 percent over the next year to $600 billion, according to FTN Financial in Memphis, Tennessee, driving down prices of longer-term securities.

“The Treasury will want a longer debt duration before interest rates rise,” said Tsutomu Komiya, an investment manager in Tokyo at Daiwa Asset Management Co., which oversees the equivalent of $105.8 billion. “We have to deal with sales, sales, sales. The huge issuance will make Treasury yields go higher.”

Replacing bills with bonds may drive up the so-called yield curve as the Federal Reserve keeps its target rate for overnight loans between banks unchanged near zero until the second quarter of 2010, according to the weighted average of 67 forecasts in a Bloomberg survey. The gap between yields on 2-year and 10-year notes widened to 2.47 percentage points, compared with an average of 0.8 point since 1977.

http://www.bloomberg.com/apps/news?pid=20601087&sid=astqQ3k2...

Only a select few can consistently make money in the short term.

Golds long term trend over the last 8 years has been up. only a few months ago it was in the $ 700- $ 800 range and it's only been over $1,000 for an extended period for about 2 months.

The dollar since about 1999 has been in decline in value with occasional upward spikes.
That's the way recent market's { Last 50 years } have been working.

The recovery is absolute! Happy days are here again! The fraud continues....

who has any spare money?

Profit taking. Expect the metals to be real high tomorrow.