John, IMHO, the cause/effect is the following:
Those nations which sold gold because their economy
at the time is relative weaker than the US and higher
deficit, thus devaluating their currencies. Selling
gold is part of the plans to reduce their deficit
(i.e., they believe bond will give them better returns)
I don't think it is because they sold gold, their
currencies are devaluated, just my opinion.
I heard on TV that the shorts outstanding on gold is so
great that it exceed the totals of past ten years of
CB dumpings! Hopefully someone can verify this
in printed source.
Short screeze + producer stop forward selling + increasing
commercial demand + possible investor sentiment change
for insurance = ??? (I begin to see some patterns here)
regards, Keith
===========================================================
from Bridge News:
New York--Jly 18--COMEX Aug gold settled up $4.90 at $329.60 per ounce in a continuation of Thursday's short-covering
rally. Also supporting the market were rumors of a move by Soros Management to sell up to $800 million in Treasuries and
buy gold. * * *
Other precious metals were also sharply higher, with COMEX Sep silver up 2.5 cents at $4.270 per oz as the strength of
gold forced short-covering in the silver ring. The NYMEX metals were also sharply higher, with Sep palladium settling up
its $6.00 limit at $166.35 per oz and Oct platinum settling up $5.60 at $399.30
Gold lead the complex, spurred higher by declining open-interest numbers, indicating strong short-covering in the metal. In
addition, gold has begun to look stronger technically, with the metal stringing together two strong days and piercing strong
resistance at $325-26.
Gold's strength added support for silver, which also climbed in technical trade. Silver was up strongly in its own mid-day
rally before giving up its gains on book-squaring after gold's burst of short-covering.
Gold strength was an extension of gains Thursday, when the metal gained $6.00 to settle at $324.70, a strong showing
from a market which has seemed destined to test support at $300.
The market has been pressured by the overwhelming short interest in the market, looking to push prices lower in recent
weeks; however, the downside has been limited by strong demand in Asia and bargain-hunting at the lows, keeping the
metal from returning to its low of $314.60 on Jly 7.
Gold has also been supported by rumors in the Treasuries markets that Soros Management sold up to $800 million in
2-year notes and 30-year bonds to go long in gold. A Soros spokesman refused comment on these rumors today. (See
story .12991)
While the rumors began in the Treasuries markets, they quickly spread to the gold markets. "I heard it, but I disregarded it.
Anytime anything happens, someone's going to say Soros is behind it," one market source said.
The move would make sense, the source said, given the relatively short market. The market is short and forcing traders to
covering now could push the metal to $335.00 or higher after the Jly 7 12-year low.
"The market's really short now. If you had enough money, you could go long and just sell to the shorts on the way up," the
source said. "They'd be clamoring to get out of the squeeze." |
