Why is Gold (Prices) Going Down Today?

Why is Gold Dropping?

Gold is under pressure in light of expectations that the Fed may start removing accommodations soon. On May 1, 2013 the Fed announced they were prepared to “increase or reduce the pace of its purchases to maintain appropriate policy accommodation.” Hinting at the possibility of an increase in asset purchased resulted in a U.S. stock market rally to new hights and outflows from gold backed ETPs (since gold is a hedge). However, investors were not completely willing to short gold knowing there is a massive pent up demand for precious metals just below the market.

Will Stocks Continue to Soar in 2013?

The very outspoken Hong Kong hedge fund manager William Kaye spoke recently about disappearing gold inventories, financial destruction and the Fed. Kaye is the founder of Pacific Group, who worked for Goldman Sachs in mergers and acquisitions 25 years ago.

Kaye: “Stocks in our opinion have been driven higher by all of this cocaine from the Fed and the other central banks. So we live in this financial Potemkin village in which stocks are overpriced. I can’t give you a date as to when they will collapse, but I can tell you with great certainty that they will….”

“Bonds are tremendously overpriced with the obvious reason that the Fed itself is 70% of the US Treasury market. So stocks and bonds are overpriced and everyone is printing money. Just in the last week the ECB lowered rates and told you in the narrative they would lower them further….”

Expiration of the Debt Limit

Treasury Secretary Lew said last week that the government would be able to continue operating through the summer. “The debt limit will be reached in just a few days when it expires on May 18 but because of the cash flows we can predict that we will be okay until Labor Day,” said Lew.

The Treasury Secretary also stated, “People shouldn’t relax, Congress should deal with this right away. The uncertainty caused by putting this off is not good. The anxiety caused to the U.S. and world economy by putting this off until the last minute is not good.” Which will translate that Congress will delay dealing with the debt ceiling until another crisis comes looming over the horizon

There’s a great wealth transfer taking place right now. Are you on the losing end or the receiving end?

Wealth Transfer Planning

Precious metals have always been a safe haven for investing in high inflationary times. Historically speaking, a recurring cycle that always seems to repeat itself is periods of high inflation as a precursor to the crash of paper currencies. Those who understand this wealth cycle and position themselves in gold and silver are those who prosper.

Precious metals are assets that will never lose their value. They are not subject to systematic risks as paper money and serve as a hedge against inflation and other threats of devaluation. Cornerstone Asset Metals was established to help guide investors safely in and out of the precious metals market.

The Great Wealth Transfer

Watch Terry Sacka: The Wealth Transfer show on the Christian Television Network discussing the financial and influential decline of the Western world and the simultaneous wealth increase of the East. With the wealth of nations shifting, it’s imperative to understand moving forward how hard tangible assets will allow you to maintain a quality lifestyle.

Visit the Wealth Transfer archive for more episodes.

Learn more about how buying gold and silver today is a smart move for your investment portfolio.

» Contact Cornerstone Asset Metals today to learn more about buying gold and silver as an investment.

» Read our article: Why Silver is Going Up Today?

» Read our article: Why Gold is Going Up Today?

Past performance is not an indication of future potential values.