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Why are gold stocks tanking right now?

Why are stocks like CEF and GTU ... both gold bullion holding companies (Which is essentially investing in gold bullion) tanking right now?

I can somewhat understand gold mining mutual funds (Like TGLDX) tanking because you're investing in companies operations which are indirectly related to gold (Although, I'd think gold mining would be up right now).

I don't get it .... could someone shed some light for me?

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Because its just paper gold

Because its just paper gold and everyone knows there is not enough gold to back it up as the Germans are now finding out about their gold. It probably been gone for decades...

Buy real gold only at this stage and and take possession of it...

End The Fat
70 pounds lost and counting! Get in shape for the revolution!

Get Prepared!

If I could have I would have ...

.... I'm referring to my IRA. I suppose I could forcefully withdraw my IRA money and take the big tax and penalty hit chewing up half of it in the process and then use the remaining to buy physical gold.

You'd be better off most

You'd be better off most definitely by doing that. I Know it's hard for people to rap their minds around this fact as they still feel like they would be loosing money because of the taxes and penalties. They will loose it all by staying in their IRA's and pensions as they are all invested in the house of cards and there is a big storm on the horizon...

End The Fat
70 pounds lost and counting! Get in shape for the revolution!

Get Prepared!

There are a few factors at play that I am aware of

First off, many of these companies over stated their cash cost situations in order to add value to their stock previously.

Secondly, the quality of ore is lessening year by year. So what this means is that it costs more to refine the gold from the earth and this moves into my final point.

Third, it's costs again. Fuel and energy costs costs have skyrocketed since the balance sheet doctoring from point one. This figures in to all aspects of mining from transporting the dirt, operating the refinery machines, etc etc. Costs of placating the EPA and other Government oversights. Obamacare has increased insurance premiums. Costs of everything have gone up up up.

Ultimately the price of the metals has to go up to in order to keep getting any gold at all. When this happens, many gold stocks will rise for obvious reasons. Some mines like to run like banks though and ultimately that will be their demise since they're already overdrawn on their potential future incomes and the officers already ran off with big paychecks before profit.

Here is a link relating to costs of mining silver. Same same.

That explains TGLDX (Mining industry mutual fund) ... but ...

... It doesn't explain pure bullion holding company stocks. Companies like GTU:


and CEF:


are tanking, and all they do is hold bullion so essentially your investing in the bullion.

I wish I knew everything

But not even the most expert of experts have that. However, what I would say is to look at the current repatriations that are starting to occur. Countries and independent investors are pulling out of these paper represented holdings and taking home the phyzz so they know they have it when the skirts get blown up in the winds of change.





I also wonder where these holding banks get this gold. In many cases it's not even 'their' gold. They are holding a lease on it from Central Banks, when in all reality in my mind these banks are leasing gold to storage facilities that is already owned by someone else. Kind of reminds me of the fiat currency system...

Yeah, I really didn't want to invest in the holdings but ...

... it's the closest to gold that I can get in an IRA short of withdrawing my money and taking all the tax and penalty hits just to use the remaining money to buy the physical stuff.

I crashed my 401K

to pay off a house and took the hit. I won't go into detail but the timing wasn't good... I was just starting to wake up in that time period.

Anyhoo, here is some info on taxable and non taxable PM's. I don't know that it will help you situation at all, but maybe more ammo for future moves you might make.


Kotter..super nice metaphor!

Kotter..super nice metaphor!


One day I thought to myself, arguing with MSM fed people made me feel like Mr. Kotter trying to convey reality to the Sweat Hogs and oila. :)